How Target's CEO Inspires Teamwork At A Massive Scale

Attention: Do you want your staff to collaborate as seamlessly as Target's 365,000-strong workforce? Take a listen to what works for Gregg Steinhafel, Target's CEO.

Gregg Steinhafel is one of those leaders who never uses the word “I.” In a recent exclusive interview with Fast Company, the CEO of Target Corporation peppered his conversation with “we" without once referring to that tired chestnut that there is no “i” in team. Instead, Steinhafel takes his place out in front of several hundred thousand Target team members, insisting that “we”--meaning the discount retailer’s top brass--“are the coaching staff that help design the playbook, but implement it at the same time.”

Teamwork and collaboration are terms often tossed casually into the optimistic mantras of small startups, but Target’s managed to roll out these concepts on a massive scale. Consider: Beginning with just one discount general store in 1962 (the same year it earned the affectionate moniker Tar-zhay), the chain now employs 365,000 team members (a number that heads north of 400,000 during peak holiday season) scattered across the U.S. and 30 other countries; operates 1,772 stores and counting; and rang up $68.5 billion in sales last year. Says Steinhafel: “At Target, nothing happens without a large, collaborative effort.”

And he’s well aware that that effort starts with him. A veteran of Target’s rank and file, Steinhafel joined the company back in 1979, worked his way up over the next two decades to become president, and eventually took the corner office in 2008. Through it all, he says, he’s tried to keep his eye on the ball, er, bullseye, by keeping collaboration central to Target’s culture.

Collaborative Communication--At Scale

Though he says that Target uses all types of formal and informal means to communicate internally, Steinhafel prefers email and face-to-face exchanges (in the collaborative meeting space known as Target Hall) with his staff. A self-professed early riser, Steinhafel gets up before 4 a.m. and gets through his email inbox before many of his employees have had their fourth round of REM sleep.

That doesn’t mean staff is required to wake in the wee hours to reply to a summons from their boss. “We have a sense of urgency, but we have a respectful culture not predicated on those types of responses,” Steinhafel says. “We don’t call people at night.” He’ll says often refrain from pressing "send" on one of his pre-dawn email messages until later in the day, just to reinforce that.

Team members at all levels from stores, distribution centers, and headquarters are encouraged to use Target’s array of social media tools to share news and stay connected. Facebook-like internal platforms allow staff to post comments, respond to others’ and “like” posts. One platform, Redtalk, allows team members to “follow” other team members, join groups, and receive announcements. Then there’s the Target Wiki, an internal corporate encyclopedia that builds on product and procedure knowledge with a Quora-esque Q&A functionality.

Not only do all these investments serve to cement the collaborative spirit, but also to make the team better equipped to sell more of everything Target flogs, from Marc Jacobs-designed fashion collaborations, cosmetics, and groceries to electronics and toothpaste--no matter what job they’re in.

According to Steinhafel, these “highly collaborative and dynamic merchants” must not only be innovative, but operate with “entrepreneurial spirit and creativity combined with great operational discipline.” Sound unattainable for a huge corporation? Steinhafel’s proven it can happen.

Mentoring And Feedback Are Not Left To Chance

Mentorship is baked into Target’s playbook, he contends, to develop leaders that really invest in their own teams. There are customized one-on-one programs that begin at the point of hire that Steinhafel argues have been perfected to a science. “Everyone is a mentor and mentee. It is one of the fun and exciting parts of [any] job.”

There are also company-wide initiatives to gather feedback and improve things at a granular level. For the latter, Steinhafel says each year, all 365,000 team members are encouraged to complete a survey about what’s working and what’s not. “We get well over 300,000 responses,” Steinhafel asserts.

Some 15,000 of those come with written suggestions on everything from strategy to tools. Each are personally read by the head of HR and culled for larger ideas to be presented to the executive team. Then says Steinhafel, “It’s our responsibility to act and continue to support the teams.”

Likewise, national sales “meetings” are gala events replete with recognition for special achievements and star-studded performance bills to rally the team members in attendance, which at last count topped 13,000.

Despite its overall size, Steinhafel says that thanks to all these initiatives, Target’s teams are able to move at Mach speeds, taking risks and iterating just like the tech whiz kids. He points to a lesson learned back in the early 1990s when Target was evolving its store formats and shifting the placement of apparel, electronics, and housewares to make room for grocery items--a gambit that failed, and badly.

"We thought the shopping experience was far superior,” he says. “What we didn’t anticipate was that though we were selling more food, we lost sales in apparel.” The customer apparently, was unwilling to walk the extra aisle to peruse the latest threads after she picked up her snacks and sundries. Though expensive, Steinhafel says the stores were remodeled to maximize browsing. That's why you'll often find women's and children's apparel taking up prime real estate close to the entrance of many stores. The experience also helped Target shape its recent foray into fresh foods, both from a buying perspective (how many bananas and chopped meat to stock before they go off) to the placement of the expanded grocery section, which was installed at the rear of most stores this summer.

Meeting Customers Where They Are--Online

Now, Steinhafel says, he’s anticipating adding Wi-Fi to all stores this fall so customers can complete their shopping trip either at the cash register or on Target.com via their smartphone. Thanks to the e-commerce snafu last year when the Missoni designer collaboration generated overwhelming demand for its signature zig-zag goods, Target should be well equipped to handle online transactions.

“All the senior leaders like to sit down and forward think, and anticipate where the puck is going,” Steinhafel says. Part is a whiteboard exercise and part is observing the competition. “We benchmark against the world’s best to develop ideas for future growth,” he adds. Though strategy is communicated once a year, Steinhafel invokes the iterative process again, “We are constantly checking in.” Indeed, it’s going to take each and every team member to realize Target’s $100 billion sales goal within the next five years. But Steinhafel sounds calm and focused when he promises that "it all comes together.”

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20 Comments

  • Lauren Raglan

    I simply hate the whole culture that they've procured at target. A lot of young, naive leadership. Sorry Mr. Steinhafel, but theorists are theorists. Theoretically something may be predicted to work a certain way, but YOU must be in the field to observe that the theory is correct.

  • Robert Slaughter

    I don't shop at WalMart or Target. I read a lot of these articles just to get an idea of what people are thinking and we all talk about being customers of those business that are good corporate citizens and what many times gets missed on that assessment is how that company behaves on the wholesale side of their business. Walmart is a monster and will happily grind all of their suppliers into dust to get the last penny. I've seen this happen MANY times. The new dog in town is Target and they are now every bit as ruthless with their suppliers.
    Put your money where you want to. For me, I won't give either of these companies a dime.

  • positivity is a plus

      '1,772 stores and counting'...... reading through these comments.....my page says 15 comments and a few were complimentary so....even 15 bad experiences out of customers in '1,772 stores and counting' is not too bad.  I know, I know many others probably have bad experiences but don't write in about them.   BUT.............how many people write in when they have a good experience.....I think not nearly as many as write about bad experiences.  I have personal experience with the way our local Target store is run and I must say that I have been VERY IMPRESSED with the way the customers (guests) are treated as well as the employees.  Many, many times items are returned that have obviously been used and a refund is given because "if you don't have happy guests, then you don't have sales". Customers are pretty gutsy to return some of the things that they obtain refunds for.   And, the employees ARE listened to for ideas, problems, and how to remediate any problems.  There ARE mentors and mentees officially established, but any employee can speak with any superior when they feel the need.
    Horrible if that lady called other stores and told them to watch out for this customer, but that is ONE person out of the employees in ' 1,772 stores and counting'.  I hope that readers don't just "target" all of the Target stores because of negative comments that are posted on the internet. And, if you have a gripe, be sure to contact the HR personnel at the place that is at fault so that you might spare others of having the same negative experience.

  • Frankbeaty

    you should go on under cover boss and see how your employees are really treated . try the stuart fla store !!!!

  • Southern/Northern Woman

    2 1/2 years ago, I moved from the South to the North East. Back home, Super Walmart was always my store of choice. We only have regular Walmart in my city. This year I was given a Target gift card for my birthday. So, I went to check the store out. I spent over an hour in the store and almost $80.00 over the value of my gift card. I was really impressed with the store, and had decided that this was my new favorite place to shop! After unloading my cart at the register, I stopped to look in my purse for my gift card. An older woman with short, red hair, (who looked to be in management) walked up to my cart and snatched a 10 pk. of Lever soap from under my cart that had been full just moments before. She then plopped the soap on the belt with my other items that were still being rung up by the cashier. Still looking in my purse, I told the woman "thank you"... because that's how we do it in the South! I then started talking to the woman manager, and the cashier. I was excited about my shopping experience, and thought they would be at least somewhat pleased to hear me say so.Instead, the woman manager started looking at me as if my head fell off and blood was squirting out of my neck... I don't know how else to discribe that look she gave!! She then walked away, and started writing something down. Sortly, and without going far, she returned to ask me what part of Texas I was from. I informed her of my hometown, which is not Texas. Again, she walked off, but her facial expression had changed.. she looked really angry. Should I have been worried? I wasn't because I hadn't done anything wrong.That good inner feeling that I had walked up to the register with left me quickly. I couldn't wait to get out of that store! A bad feeling soon replaced the good one.I made two more stops on my way home, Walmart and the grocery store. The exact same stores that I have been shopping at for the past 2 1/2 yrs. When I walked into Walmart, all eyes were on me! The greeter didn't greet me, in fact, she had a disgusted look on her face. I noticed that a lot more people were on the floor than usual, and they seemed to be studying me. Once I got to the registers, I chose the cashier with no people in line. Even though she looked as if ringing up my purchase was the last thing she wanted to do. My receipt came with a bipolar smile, and a psychotic "thank you!" I left without a word or glace in her direction. One more stop, Stop N Shop. As soon as I walked into the store, I was immediately followed around by some young guy, a stock boy, I guess. I was irritated at this point, but just wanted to get a few items and get back to my safe home! There were about 4 or 5 other employees (including the young guy ) who had gathered around to watch me as I checked out. I accidently left a small $3 lip gloss in my hand basket, which I had every intention of buying.  The young guy who had been following me, walked up to the basket that I had left on the register behind me. He pulled the lip gloss out and held it up in front of my face. The cashier asked me if I wanted to purchase it, I said that I did. There was a lot of under the breath mumbling coming out of the cashiers mouth, I could make some of it out. My enviroment started feeling slightly hostile at this point, I didn't deserve any of what had begun happening to me. I was followed to the door by the same young guy who had been following me around the store. He dropped off my basket, and followed me into the night parking lot. He stared me down as he circled my car, before heading back into the store.The only thing that I did differently that day, was try to give Target some business. Oh yeah, I also tried to compliment the manager on her store, but all she saw & heard was soap under my basket & a Southern "thank you" which she took as an admission of guilt. Prompting her to call the other open stores in the area on this Sunday, telling them that I was some kind of professional thief to watch out for? This is one Evil woman, she could have gotten me hurt. I've read a lot of crazy things lately about rambunctious employees taking customer situations in thier own hands. That manager did exactly what she set out to do, all because she presumed something that she was dead wrong about. She had no proof of what she claimed, and put other stores in a bad position with her false accusations! In addition to costing them revenue.  I am still watched when I go to the grocery store, but haven't returned to Walmart. And I will never set foot in the Hanover, MA. Target (or any other Target store) EVER again! All of my stores are going to change very soon! I refuse to spend hundreds of dollars a month in stores that treat me with disrespect! It's bad enough that before this, I was totally ignored by these same employees who 'I've had to thank' for spending my money in their store! But ya know what? I'm polite, and I make a habit of being polite when speaking with people. Sometimes I even make conversation with friendly employees when I'm out shopping. My norm is 2 to 3 stores when I do get out, and I drop around $100 per store. There, it's off my chest now! Remember this.. if it can happen to me, it can also happen to you! Be sure your cart (over & under) is unloaded before you go looking in your purse for anything! BTW... wasn't this woman doing her job when she made sure all of my items were rung up? She could have told me nicely, not to forget the item under my buggy. For some reason, she didn't care what happened to me as long as it was bad!? I live here, I'm not just passing through. Thanks for reading this.

  • Mommysofia

    sounds good to say teamwork but its not true at the team member level who are sent home after working only three hours.

  • Tweetybirdbarbie

    At the store in Amarillo Texas there is no team work. Employees that have been working for target for years are being harass into quiting. There is no "You did good to day" for some employees. Everyday is "You did not get done on time or you are not fast enough". An employee can be sweating and dripping with sweat and the ETL will inform the employee to step it up. Coaching is the next step to an employee's lack of production and this can mean anything from a baffle, a ghost, pulling merchandise and this is team leads and ETL'S opinion and not to mention the lie's that go into an employee's write ups. Worst of all HR and the STL
    defend the ETL'S and TL'S. The intergity line does not work at least not at this store. The employees only get harass more until they quit. I know it to well.

  • Ranay

    Update your customer service department in the Phillipines on this attitude Mr Ceo. They've lost you me as a customer even though you do sound good on paper.

  • Sarahdove0

    It's interesting that the comments below indicate a disconnect with the content of the article above.  

    What's your take on this, Bridgette?

  • Hheart124

    Sounds great, but there are a lot of things wrong in the Target HQ culture.  Hourly employees at corporate are treated as second-class citizens who are treated as "less-than" salaried employees. Hourly employees find it extremely difficult to advance to salaries positions (even though the vast majority have college degrees) and are not invited to those national sales meetings.  And this division between salaried and hourly employees is brought up time and again on the annual best team survey, without any changes made.  For being considered such a progressive, innovative company, they have some very ancient practices.
    Oh, and by the way, in the over five plus years at Target, I *never* saw Gregg having a "face-to-face exchange" in Target Hall.

  • A Hunt1

    I do not shop at WALMART because they have bad customer service I guess target is getting written off as well. As a consumer I expect to be treated better especially something your company is promoting and advertising. I have screen shots of my order and the "Seasonal Shipping" offer on your website.... Your company is actually placing the orders as if it was ordered tomorrow. I wonder how much money this "Tech issues" is saving your company by not having to pay the difference for your customers I am honestly disappointed by this experience. I called the and no one cared/helped or offered any resolve.

  • benthere...

    What a crock! If you buy into anything this guys says you are dumber than dirt. These so called "company wide initiatives to gather feedback" are simple online forms where you fill in the dot. There is no place to add additional comments. And mentors?? These guys can't even figure out new hire training let alone mentoring. ..."Senior leaders like to sit down and forward think"...most places call the projecting and Target is woefully deficient at that, the only thing this guys can project is their salary. "strategy is communicated once a year" really?? it never makes it past the hallowed walls of corporate than because we never hear about it. I'm sure their "national sales meetings are gala events" they are after all for corporate execs. Steinhafel claims he worked his way up thru the ranks, and maybe he did, but where did he start from? Target likes to pretend they are an environmentally respectful company yet the BoD doesn't want to start an electronics recycling program. I can only assume they are afraid it will cut in to corporate bonuses for the execs. Yes, execs get bonuses, regular employees that make sure sales goals (these forward thinkers come up with) are met get zip. Teamwork?? these guys wouldn't know teamwork if it came up and bit them in the butt.This is how teamwork works at Target. One team goes around and over stalks the shelves, then another team members has to take the overfilled product off the shelves and put it in the back room so that yet another team member can take it and but it back on the shelf in the backroom so that a member on the first team can take it out of the backroom and overfill the shelf again and so on and so on.Yep, that's team work at it's finest. 

  • Lucious

    I've never met such a genuine and approachable leader! Great job Gregg and keep up the wonderful job you and our senior leaders are doing.

  • Knoxlanding

    Did you know that a majority of Targets staff at the store level is part time! Most employees work 32 hours a week or less. They may be shown on paper as full time but this is a big revenue enhancer for the Ceo's wallet. All the nice initiatives listed in your article are kinda worthless when workers don't even get a full paycheck. It's corporate greed once again at its finest. You can polish a turd all you want but it's still a turd!

  • DH986

    Teamwork is just a buzz word. The reality is completely different.

    The only real "teamwork" is to work together to push overworked team members to take on the job of 2 or 3 people so they can cut payroll & dole out nice bonuses to those on top.

    Everything is geared towards their unrealistic reports & this only encourages ETLs to find ways to fudge the reports so they get good grades.

    In this economy, people are desperate to keep even low paying jobs so have no choice but to swallow their pride & put up with all kinds of abuse. It's so bad that many people will even work during their breaks just so they can finish a job & show their bosses that they are valuable enough to be scheduled for an extra day. And this benefits the ETLs who of course will get a bonus for officially cutting payroll expenses so of course many will gladly look the other way.

    Teamwork might be happening on the upper levels, but it's a fantasy to think the hard working people on the bottom are valued in any way.

  • Amber King

    One reason why Target succeeded is because they know how to handle and take care of their people. They understand the value of each one. Most companies have forgotten the importance of their employees.

    We have to remember, without our employees, the company will not go anywhere.

  • Hockeyguy21

    Great lessons nd example of what to do right. It is a shame the concept/model/experience only exists on paper.
    None of this culture is expressed to the store level.

  • ericbrody

    Good lessons on how to engage, inspire and mobilize teams to create value from the inside out. Testimony that teamwork and collaboration, regardless of how massive an organization, are still deemed to be key drivers of success.