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Innovation Agents

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.

How Target's CEO Inspires Teamwork At A Massive Scale

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 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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