Target Canada executives should be embarrassed with their business acumen, lack of strategy, inability to run logistics, and the incredibly irrelevant marketing that resulting in the Biggest Retail Failure in North America history. Former President of Canada was fired after the first Billion dollar performance loss year 1 and Mark Schindele took over to deliver an even worse performance, chalking up another Billion in losses in year 2.
Brian Cornell put the nails in the coffin after 6 months as CEO as he lost his support for Schindele follow his continued flawed strategy, poor performance and consistent excuses.
Target published they would not make a profit until 2021… In fact they realized they would never make a profit behind their strategy and didn’t want to move to a 3rd President in less than a year to find out.
Target Corp. had already spent 7 Billion propping up the money losing Canadian division, the court documents revealed.
We now hear all the 17,600 Target employees talk about how hard they worked and no doubt this is very true. In back years of business the game is on, and people rise to the challenge and put in the extra work to change poor results. The issue was the work went for not as you can run the fastest on the track but if you’re going the wrong direction you never achieve the results you desire. Target leadership never got it. They had no Footfall strategy and continued to consistently work on in store conversion initiatives signing one poor partnership brand after another.
Target Leadership failed to recognize signs of the demise, the signals that the business may need to be restructured in order to turn around the situation.
Internally here is what drove Target Canada’s Failure:
- Inept Leadership
- Poor Marketing Strategy & Execution
- Inability to deliver Flawless Logistic Execution
- Lack of Effective Strategic Management Team
Externally here is what drove Target Canada’s demise:
- Competition delivering a more relevant consumer solution
- Inability to listen to Canadian Research
- Labour issues, having rehired less than 10% of Zellers employees (26,000)
- Poor launch of stores and lack of relevant hook to drive store footfall.
- Continued apologizes publically for disappointing the consumers instead of delivering what they want.
Inept Leadership/Management Cause Business Failure
Target Leadership failed to identify the biggest challenges to move forward and failed to devise a coherent approach to overcome them. Leadership failed in providing vision, strategy or execution.
Let us strip away at the excuses, explanations, rationalizations, and justifications for business failure; in the majority of cases it is because of management just like Target Canada. In an honest analysis, it is plausible to say, “Poor leadership” can lead towards corporate insolvency. Leaders will accept the kudos of business success; however most will not take the blame for business distress, which goes with the territory. Target Canada executives should be embarrassed of their performance and impact on corporate losses and over 17,600 employees jobs.
The number one cause of business failure is management. And in most cases it is because the leaders are “in a state of denial.” Unfortunately Mark Schindele was in this state to the end. Brian Cornell came to the realization that Mark couldn’t deliver and Target Corp. could move to a third President of Canada in less than 2 years, so he cut his losses and shut the doors on all 133 Target Canada stores.
The leadership reasons for Target Canada’s failure, and the roles and responsibilities they play:
- Lack of Character: Without strong character attributes encompassing ethics, a leader cannot effectively lead without the trust, confidence, and loyalty required by employees. Character plays a key role in the viability of a business failure. Excuses will never deliver results…
- Lack of Vision: The CEO/President must clearly define and communicate the corporate vision. Without vision, a flawed vision, or a poorly communicated vision, executive leadership has a problem.
- Poor Branding: Poor branding generally means poor leadership. Brand equity, if declining, must be blamed on the leadership. You must question whether the leadership abdicated their responsibility while an erosion of brand equity is taking place. It is a failure in the alignment of vision with strategy for allowing the deteriorating of a brand’s promise. The Expect More Pay Less was flipped in Canada to be Expect Less Pay More by disappointed consumers
- Lack of Execution: It all comes down to execution; the implementation to ensure a certainty of execution is primary for executive leadership. Leadership must focus on deploying the necessary resources to ensure that the largest risks are adequately managed, and/or that the biggest opportunities are exploited to avoid failure. Logistic execution was a disaster at best and after two years they still didn’t get it.
- Flawed Strategy: A flawed strategy simply reveals weak leadership. While there are exceptions to every rule, companies tend to succeed by design and fail by default. Show me a company with a flawed strategy and I’ll show you an incompetent leader. The total lack of a successful Footfall Strategy was the reason for the demise. With no one in the stores, business is never sustainable.
- Poor Management: The choice of recruiting, mentoring, deploying, and retaining management talent is up to leadership. Thus it is leaders blame if it fails to act to correct mistakes, change direction, or effective execute of strategy. It is the job of leadership to recruit, mentor, deploy, and retain management talent. Target Corp is a large retailer with resources and was incapable of building a successful team inside and out which could right the business.
- Lack of Sales: The lack of coherent strategy, pricing, positioning, branding, distribution, or compensation impacts revenue. A lack of sales is ultimately attributable to a lack of leadership. Target Canada had all 133 stores failing which where effected by all theirs sales drivers above.
- No Innovation: Remember, even Kodak was innovative, but has faltered from global competition. Leaders must create a culture of innovation or they will fall on the innovation sword. Innovation must be mission critical. As an example, textile maker, Milliken & Co., leveraged innovation to effectively compete. The strong bias for innovation by great leaders constantly recreates businesses and generates new opportunities. Leaders that are slow moving towards innovation will doomed the business. Target was stuck on saying they wanted to deliver the Target Experience… When you failing, instead of giving the consumers what you want, try giving them what they want. You will be surprised on the success.
- Not Tackling the Market: Good leadership tracks sound market opportunities, however pursuing the wrong market, or even following the right market improperly will lead to disaster. But also sizing a business too fast, too slow, or yet at worst not designing a scalable business correctly lacks leadership. Target went full speed on the 133 stores locations driving a flawed strategy to the end.
- Poor Professional Advice: All entrepreneurs and CEOs require quality professional advice. “No man is an Island,” so there is no excuse to having a “blind spot” to support limitations or added recommendations to strengthen ones’ knowledge or wisdom in making informed decisions. It is pure arrogances not to recognize the need for advice that has led many companies down the wrong path. Targets inability to hire a Canadian market expert or add a Canadian to their executive board to help put them on the map was not only a poor decision but arrogance.
- Competitive Awareness: It is critical to understand the competitive landscape to navigate the enterprise successfully. Not understanding, acutely, what the competitors are doing can disable any competitive advantage the company may have, that can play an important role in business decline
Game Over… This goes down as the Biggest Retail Failure in North America History. Really sad for the 17,600 jobs lost due to a bad leadership.
Scott Bradley President – Retail Shark Group