Management Case Study

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Leading Through Change. Situation Analysis. This case presents a scenario with a hypothetical challenge. Approach it as if you were a Target team member.

You are the consulting firm team assigned to a particular Target store. Your assigned client store is launching a pilot program where their organizational hierarchy will be completely different than what we use in stores today. Instead of having an average of 150 team members all split into teams that each complete different functions, the 150 team members will be split into 4 core teams and assigned an area of the store and each team member will be trained to do every job function for their designated area (from stocking the shelves to selling the product). Your headquarters partners have already created the structure, operational guidelines and rollout process for you; however it is up to you to get your building of 150 team members, 10 Team Leaders and 4 Executive Team Leaders and 1 Store Team Leader (store manager) on board with this change. This new structure will change the way in which all of these team members learn, lead, work, follow up, get scheduled, interact with the guest and develop. Some will jump at the chance to try something new while others will be resistant to change and disengaged.

The Company. Founded in 1902, Target Corporation (NYSE:TGT) is an upscale discount retailer that provides high-quality, on-trend merchandise at attractive prices in clean, spacious and guest-friendly stores. With 2015 revenue of $73.8 billion, Target has over 1,750 stores and 38 distribution centers in the United States, and 341,000 team members worldwide. Its online business can be found at www.target.com. The first Target store opened in 1962 in the Minneapolis suburb of Roseville with a focus on convenient shopping at competitive discount prices. Target currently is the second largest general merchandise retailer in America, with Target.com consistently ranked as one of the most-visited retail websites. The company continues to deliver on its brand promise of “Expect

case study

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More. Pay Less.” Since 1946, Target has given 5 percent of its profit to communities, that giving today equals more than $4 million a week. Corporate Responsibility magazine has named Target on its “100 Best Corporate Citizens List.”

Target is recognized as a leader in innovation across the retail industry. From pioneering the concept of designer partnerships to consistently being best in class in store design, Target remains focused on not only meeting, but exceeding its guests’ needs. To remain relevant to its guests over time, Target continually reinvents its stores, including layout, presentation and merchandise assortment, to create an engaging shopping experience and fulfill our Expect More. Pay Less® brand promise. Target stores are currently organized in a basic hierarchy that allows for reasonable amounts of cross training across workcenters. The Store Team Leader (STL) runs and has responsibility for everything within the four walls of the store. Stores also have Executive Team Leaders (ETLs) who function as departmental supervisors for large portions of the store; for example: the salesfloor, or logistics. Each department has an hourly supervisor called a Team Leader and finally, we hire Team Members into primary departments and then cross-train as needed.

The Guest [Consumer]. It’s not just about Mom anymore; it’s about the Demanding Enthusiast. These are Target’s core guests, and they’re digitally connected families who enjoy shopping and demand great value. Typical guests have kids in the household and lots of demands on their time, and are likely to live in urban areas. These guests actively shop in-store and online and are early adaptors of new technology, shopping with one hand on their cart and one hand on their smartphone. They enjoy shopping and want to tell their friends, remaining engaged with social media while shopping and sharing their feedback and experiences online. They are often influenced by others and share their findings to influence others. Guests love Target for its newness, its product assortment and its value.

While browsing and making decisions are a large portion of the guest experience, today’s consumers demand great value as well as convenience. They have a wide range of retail choices, and are willing to hunt to take advantage of the best price, and are comfortable making spontaneous purchases. Retailers have answered this trend by partnering with mobile payment applications and shortening the number of steps required from browse to checkout, both digitally and physically. In terms of obtaining the purchased product, free shipping and in-store pick up are becoming increasingly important for online transactions, as well as length of time until product is received.

For Target, the guest is at the center of everything. The company is continually developing new ways to serve the guest anytime, anywhere. Target’s purpose is to fulfill the needs and fuel the potential of our guests. Target today remains committed to providing a one-stop shopping experience for guests by delivering differentiated merchandise and outstanding value with its Expect More. Pay Less® brand promise.

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The Competitive Landscape. Other retailers take various approaches to leading their teams through change. We look to the company’s core values, leadership principles, internal culture and the foundation upon which their teams are built as an indicator of how they will navigate their teams through change. Competitors are announcing new initiatives on a weekly basis that will transform and lead retail innovation, keeping them competitive and appealing to consumers. With continued emphasis on remaining a desirable employer with happy, diverse teams, consider the following competitive set of retailers while developing a transformational leadership strategy.

Below are some insights to provide you a general feel of the leadership and cultural dynamics of a few of Target’s competitors. The leadership approach and cultural personality of a company will absolutely have an impact on how they lead their teams through change. Some companies cater more toward the needs/concerns of the employee, while others focus more heavily on what’s best for the business and the bottom line. Each approach has its unique set of consequences and payoffs. Amazon – On Amazon’s careers site they speak about the Amazon Leadership Principles. They paint a leadership culture that has a “customer obsession” and encourages leaders to challenge and disagree respectfully, but regularly. Additionally, these principles expect leaders to come forward with problems or information, even when doing so is awkward or embarrassing.

Nordstrom – Nordstrom’s career site states, “Happy employees lead to happy customers. That's why we took the traditional corporate pyramid (you know the one with the executives at the top?) and turned it on its head. With execs at the bottom and customers and those who take care of them at the top, we can focus on supporting our employees while they focus on creating great customer experiences.”

Kroger – To accomplish its mission, Kroger’s website states they have has six values provide guidance to its employees about how they do what they do every day. Those values are: Honesty - Doing the right things, telling the truth. Integrity - Living our values in all that we do, unified approach to how we do business and treat each other. Respect for Others - Valuing opinions, property and perspectives of others. Diversity - Reflecting a workplace that includes a variety of people from different backgrounds and cultures, diversity of opinions and thoughts. Safety - Watching out for others, being secure and safe in your workplace. Inclusion - Your voice matters, working together works, encouraging everyone’s involvement, being the best person you can be.

Wal-Mart – The Walmart career site states, “When you walk through the doors of our company on day one, you’ll be greeted by a dynamic and supportive team. That’s because Mr. Sam built our company on a foundation of integrity, innovative business ideas and servant leadership. Today, you’ll find that the same family- and customer-driven values he introduced still hold true. We simply couldn’t do the work we do, on the global stage we call home, without being able to rely on and challenge each other.”

The Challenge Ahead. How can Target leverage Transformational Leadership to drive this change while achieving results quickly and successfully? Create a “Team Support” strategy that would be used for this pilot team, with the intention of rolling this talent strategy out to the entire company in the future to aid in this transition.

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Suggest Topics

• How will you communicate this change (who, where, when, why and how)?

• How will you drive engagement and understanding?

• How will you drive retention and development?

• How will you motivate those who are not bought in to this change in their jobs?

• What impact do you need to have on the training process (for leaders and team members, respectively)?

What are the team-associated risks associated with this change?

Frequently Asked Questions. Q. What is Transformational Leadership?

A. http://en.wikipedia.org/wiki/Transformational_leadership

Q. Why are we piloting this?

A. This is similar to the structure that flexible format stores are using (but with approx. 25 Team Members). This change allows us more flexibility in scheduling, completing tasks and most importantly helping our guests with what they need when they need it. There is no need to wait on a task until someone who is trained can come and complete it.

Q. What resources do we have to roll this change out to the team?

A. Each Team Member will be allocated 20 hours of payroll to be trained in areas they are not familiar with. However, there is no structure or hours allocated to announce this change to Team Members. Remember that not every Team Member is scheduled at one time, so a mass announcement will not be possible.

Q. Will this change impact the Team Member’s number of hours they work per week?

A. Team members can maintain or increase the amount of hours they are currently working per week; however, the more open their availability, the more hours they will be scheduled. Hours that we are not able to cover with our current team members will create the need to do some external hiring.

Q. How will this change affect pay?

A. Since every Team Member will learn to do every function, all Team Members will be brought up to a new flat wage. Team members currently making more than that due to tenure or previous increases will not lose pay. Team Leaders will be paid on a higher scale as well.

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Resources. http://investors.target.com/phoenix.zhtml?c=65828&p=irol-newsArticle&ID=2019880

http://fortune.com/fortune500/target-corporation-36

http://www.thecro.com/files/100BestList.pdf

http://en.wikipedia.org/wiki/Transformational_leadership

Walmart -http://careers.walmart.com/about-us/walmart-sams-club/

Amazon - http://www.amazon.com/Values-Careers-Homepage/b?node=239365011

Nordstrom – http://about.nordstrom.com/careers/?origin=leftnav#/about-us/cultureKroger -

Kroger - http://www.thekrogerco.com/about-kroger/values

Interested in learning about what it’s like to work at Target? Read the latest Team Member stories at http://pulse.target.com or visit www.Target.com/careers to view current openings.