Fast Five Shorts | Buy Or Sell: Target’s New Acceleration Office?
Takeaways:
- Target has initiated a new enterprise acceleration office with the intention of enhancing decision-making speed to facilitate growth.
- The company's recent performance indicates a concerning trend, marked by a decline in net and comparable store sales for three consecutive quarters.
- The establishment of the acceleration office has been met with skepticism, particularly regarding the effectiveness of leadership in driving growth strategies.
- Critics express that the creation of the acceleration office is indicative of a larger failure in strategic planning by the current CEO and board.
- There exists a sentiment among Target employees that the initiatives are perceived as too little, too late in addressing ongoing challenges and declining morale.
- The podcast emphasizes the need for a more innovative approach that aligns with Target's original vision to rejuvenate the brand's market position.
Thanks to Alvarez & Marsal Consumer & Retail Group, Simbe, Mirakl, Ocampo Capital, ClearDemand and Infios for making this episode possible. For the full episode, head here: https://youtu.be/Ujbv_kIGzUk
This podcast uses the following third-party services for analysis:
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Transcript
Target is betting on a new acceleration initiative to turn around its performance, according to Retail Dive.
Speaker A:Target announced the establishment of an enterprise acceleration office, which is, quote, aimed at removing friction and enabling the team to make faster decisions in support of our growth, end quote, said Target CEO Michael Fidelke, who will also reportedly oversee the initiative.
Speaker A: Target kicked off its fiscal: Speaker A:Not comp sales, but net sales results.
Speaker A:Chris, are you buying or selling Target's new enterprise acceleration office as the key to this turnaround?
Speaker B:Let me say this and pump the brakes.
Speaker B:That's, that's the expression I'm saying on the acceleration office.
Speaker B:Pump the brakes and I'm going to get out of the gate quickly on this, on this headline today, no one's surprised.
Speaker A:No one's surprised.
Speaker B:No one is surprised.
Speaker B:But I'm going to get pretty, pretty pointed, too.
Speaker B:I mean, the number one thing I would say, or the question I would ask is how feckless can the CEO, Brian Cornell, and more important, the board, actually be with this announcement?
Speaker B:The last time I checked, what the acceleration office is, the acceleration office is charged to do is basically the main job of the CEO.
Speaker B:Now, I've railed on this show for the past two years about how what happened last week was coming, you know, talked about it very regularly, honestly, and it's because Cornell never had a growth strategy.
Speaker B:Never.
Speaker B:He's never had one in place.
Speaker B:And now, you know, everything's coming home to roost.
Speaker B:And so the board, the other part about this is the board is just sitting there almost like they've been caught off guard to this whole thing when, yeah, lots of us have been talking about it.
Speaker B:And now they sign off on an acceleration in office when the culture is dying on the vine from everyone we talk to and Cornell is just sitting there like a lame duck.
Speaker B:The quote unquote acceleration office will also no doubt be the first thing the new CEO cuts whenever he or she comes in, because it's just plain stupid.
Speaker B:I mean, there's no other way to put it.
Speaker B:So I'm going to say it out loud.
Speaker B:I'm going to say it out loud.
Speaker B:I've said it.
Speaker B:I don't think I've said it on this show, but I've said it in private circles.
Speaker B:But I'm going to Say it out loud.
Speaker B:Today, I think Brian Cornell is going to go down as the worst CEO in Target's history.
Speaker B:And he should.
Speaker B:Because when numerous articles and news outlets and social media are making comments comparing Target to Kmart, it's just gotten that bad an.
Speaker B:In my opinion.
Speaker B:And like I said last month, it's only going to get worse until the board gets rid of him and.
Speaker B:And brings in someone that can bring back what Target's all about and re enliven it's.
Speaker B:Expect more, pay less promise.
Speaker B:Because when Target is running well, that is what it's known for.
Speaker A:Yeah, it's just really sad.
Speaker A:I mean, Target being compared to Kmart makes my.
Speaker A:That just is.
Speaker A:I don't know, makes me feel awful.
Speaker A:Like that's not where Target should be.
Speaker A:It's really.
Speaker A:It is a brand that holds or held a lot of equity in people's hearts and minds.
Speaker A:And I.
Speaker A:Yeah, it's just.
Speaker A:I, Again, I cannot say it enough.
Speaker A:I just feel for every one of our friends and family members who are at Target right now and who are trying to navigate these waters, I think the only thing I would.
Speaker A:I would add into the rant, Chris, would be, I don't.
Speaker A:I don't hate the concept of an acceleration office, but it feels like something that should have been done during the pandemic several years ago when Target was riding high during that time to figure out how to continue that momentum.
Speaker A:Right now, it just feels like it's too little too late.
Speaker A:And I feel like that's the sentiment that I keep hearing from friends who are still at Target is like, Cornell's email that went out about the DEI initiatives.
Speaker A:Too little too late.
Speaker A:Like the.
Speaker A:This acceleration office.
Speaker A:Too little too late.
Speaker A:You're.
Speaker A:You're 100% right that this just should be the role.
Speaker A:Acceleration should be part of the CEO's role.
Speaker A:And I, I will just end by saying one of the funniest things I heard to turn this around is that Target insiders are calling the acceleration office Target Doge, which.
Speaker A:Which I thought was, like, not improving morale by any means inside, but.
Speaker A:But it was.
Speaker A:It gives you a sense of how those internal employees are feeling, and it's past time for someone new to take the helm and just clean house over there.
Speaker B:Yeah.
Speaker B:And you know what's funny?
Speaker B:And I didn't think about this until you just said it, we were part of the previous, quote, unquote, acceleration office when we were part of the innovation portfolio, which Brian Cornell and the board abruptly shut down and said, we are not going to focus on innovation.
Speaker B:We're going to stay core to what Target is, which in reality is antithetical to how Target originated.
Speaker B:Target was a standalone concept created by the Dayton Hudson Corporation as an innovative idea.
Speaker B:And so Cornell shut all those things down, and now he and the board are trying to bring this idea back.
Speaker B:You're 100, right.
Speaker B:This is an.
Speaker B:These are ideas that could work as long as they were interwoven in the DNA and they were thought about and done consistently year over year over year, and money and capital was devoted to them.
Speaker A:Yep.
Speaker A:All right, let's talk about something more fun.
Speaker B:Yeah.
Speaker B:Because I.
Speaker B:I deliberately put this headline number two in the order.
Speaker A:Get it over with.
Speaker B:Get it over where we would be.
Speaker B:Yeah.
Speaker B:But the other thing I want to say, too, is for those fans out there are listeners that are always like, yeah, you're.
Speaker B:How do I target?
Speaker B:It's because I care.
Speaker B:I wanted to have people see what was coming ahead of time so you wouldn't find themselves in this situation.
Speaker B:But anyway.
