StarTribune article: Target’s challenge is to reinvent workplace culture

Schafer: Target’s challenge is to reinvent workplace culture
Written by:  LEE SCHAFER, Star Tribune, March 7, 2015

Target’s investor meeting last week in New York quickly became a story about layoffs of up to “several thousand” employees at the corporate offices in and around Minneapolis.

What made it an odd job cuts story is that the big layoff hasn’t even happened yet.

Those jobs will go away starting now and over the next couple of years as Target’s top leaders rethink what headquarters people should be doing. The goal is to simplify, to have folks accomplish most tasks faster and to just stop doing a bunch of others.

This means it’s not really an example of a company letting people go because it can’t afford to pay them. It’s more the case that several thousand people who report daily for work at Target need to leave because they are mostly just getting in the way.

It’s a stunning admission, part of what CEO Brian Cornell called “tough truths.” It’s certainly not what we usually hear when a company cuts jobs.

Cornell and his colleagues didn’t go to New York to talk about layoffs, but about a “transformation.” It’s an ambitious agenda, and grouped under five priorities are so many changes that it is difficult to know where to start a list.

Only one of the five priorities even touched on lower costs, although a spokeswoman confirmed that it’s certainly true that saving headquarters payroll dollars is part of why jobs will go away. The savings will help fund investments in e-commerce technology and other initiatives.

Target spends a lot of money maintaining a big bureaucracy in its hometown, as all organizations that size do. Bureaucracy has turned into such a negative word that it’s probably hard to understand that at one time they were considered a brilliant corporate innovation, with their rules to ward off the kind of chaos that bankrupts entrepreneurial companies.

Target even calls its organizational groups “pyramids,” what some other companies might call departments.

A pyramid, of course, is the classic shape of the organization chart in a top-down bureaucracy. A boss sits on top above layers of vice presidents and directors and managers spreading out, down to the associates filling out the broad base of the pyramid.

The pyramid is how the Army organizes its 82nd Airborne Division, too. It’s the antithesis of a flat and innovative organization.

Cornell and his team in New York didn’t even hint about a re-imagined Target with the org chart of a Silicon Valley start-up. Instead he and his colleagues peppered their remarks with the need for greater speed and simplicity.

Chief Financial Officer John Mulligan reminded the room of Target’s reputation for taking forever to get any new idea in the stores, saying, “You certainly know the story about Target ironing its underwear.” An investor apparently said that about Target several years ago, and it wasn’t meant to compliment Target for its extraordinary service.

“There’s a cost to doing that,” Mulligan said, “and there’s a cost to making sure that everything is correct to the last 15 decimal places.”

The company’s spokeswoman said Target has made progress in just the past two years at cutting the time it takes to implement innovations. But a penchant for perfection at the cost of speed doesn’t begin to encompass all the recent criticism directed at Target’s headquarters.

One memorable example is a blistering e-mail published last year on the website Gawker that went after Target’s insular headquarters culture. This note reportedly came from the inside, and among the litany of complaints was the bureaucracy’s completely misplaced priority of making sure employees were “fast, fun and friendly.”

This little tagline seems harmless enough, a way to let people know what’s really good about working there.

But as the malcontent observed, it’s not harmless if so much attention gets paid to making sure you are genuinely fun and sufficiently friendly that it’s difficult some days to actually do the job. The writer talked about having to sneak out of the building with a laptop computer just to find a place to get anything done.

For an outsider, it’s impossible to know if the whole program really did completely run off the rails. But I caught a little glimpse of it at the Caribou Coffee shop in U.S. Bancorp’s headquarters, just up the street from Target’s main office in Minneapolis.

From my daily observation at the shop several years ago, a lot of fun and friendly conversations between millennials with Target employee badges seemed to go roughly like this:

“Hi! How are you? ”

“Hi! I’m super! How are you?”

“Super! Is your team dysfunctional, too?”

“Totally!”

“I so enjoyed this! Let’s have coffee again really soon!”

“Super!”

Bashing a productive employee in her performance review for skipping a few fun and friendly chats like that is a classic example of a problem a sociologist named Robert Merton first identified about bureaucracies decades ago. Merton called it “displacement of goals.”

That’s when the only thing that matters is making sure the rules get followed, with no one giving any real thought to obtaining the results that the rules were set up to achieve in the first place.

Target’s senior leaders have clearly concluded that a lot of goal displacement has been going on inside their headquarters building.

How the news of what’s coming has been received by the people working there can’t be known, although there’s no reason to think it’s anything other than with dread and dismay. It’s fair to assume that many soon-to-be-on-the-street employees came in early and stayed late to get their jobs done in a cumbersome environment, and they sure weren’t the ones who designed it.

It’s an extraordinary time for everyone there, not least because their boss went to New York and said the biggest challenge for the company wasn’t out there in the marketplace, in the fast-moving swirl of suppliers, customers and competitors.

The message is that the problem at Target lies inside our building. It’s us.

And yes, that is one very tough truth.