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BUSINESS

Schafer: Target's challenge is to

reinvent workplace culture
MARCH 7, 2015 —
10:56PM

Target's investor meeting last week in New York

TEXT SIZE quickly became a story about layoffs of up to
"several thousand" employees at the corporate
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 27 offices in and around Minneapolis.

35 What made it an odd job cuts story is that the big

layoff hasn't even happened yet.
Lee Schafer
@LEEASCHAFER

EMAIL Those jobs will go away starting now and over the
next couple of years as Target's top leaders rethink what headquarters
PRINT 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.
MORE

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

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 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 Top Stories
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 After feuding with the pope,
such a negative word that it's Donald Trump eases up
probably hard to understand that at Feb. 18

Target has said cutbacks, primarily in one time they were considered a
bureaucratic overhead, will allow brilliant corporate innovation, with
investment in e-commerce and other… their rules to ward off the kind of Pressure mounts for Sunday
chaos that bankrupts entrepreneurial retail liquor sales in
companies. Minnesota
12:12am
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 Hospitals' medicine mistakes
top-down bureaucracy. A boss sits on top above layers of vice presidents spike, but more mysteries
and directors and managers spreading out, down to the associates filling revealed
out the broad base of the pyramid. 12:09am

The pyramid is how the Army organizes its 82nd Airborne Division, too.
It's the antithesis of a flat and innovative organization.
Most Read
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
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1 Pressure mounts for Sunday retail liquor sales in

pdfcrowd.com
 colleagues peppered their remarks with the need for greater speed and
simplicity.
1 Minnesota• BUSINESS

Chief Financial Officer John Mulligan reminded the room of Target's

reputation for taking forever to get any new idea in the stores, saying,
2 Tokyo agreement threatens Delta's only nonstop
ight to Asia from MSP• BUSINESS

"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.
3 Unions wield limited weapon: the 24-hour strike
• BUSINESS

"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."
4 N.D. reports lower crude oil production, expects
further declines• BUSINESS

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
5 North Dakota sells Fighting Sioux items to satisfy
NCAA • BUSINESS

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.

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 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

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 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.

Lee Schafer came to the Star Tribune after 15 years as a corporate officer, consultant and
investment banker in the Twin Cities. He has been a columnist for Twin Cities Business
magazine and was senior editor for Corporate Report Minnesota.
lee.schafer@startribune.com 612-673-4302 @LeeASchafer

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