{"id":12479,"date":"2014-05-12T07:58:24","date_gmt":"2014-05-12T06:58:24","guid":{"rendered":"http:\/\/www.beyondphilosophy.com\/?p=12479"},"modified":"2019-10-03T11:49:49","modified_gmt":"2019-10-03T15:49:49","slug":"target-ceo-resigns-will-catalyst-renewed-employee-engagement","status":"publish","type":"post","link":"https:\/\/beyondphilosophy.com\/target-ceo-resigns-will-catalyst-renewed-employee-engagement\/","title":{"rendered":"Target CEO Resigns: Will This Be a Catalyst for Renewed Employee Engagement?"},"content":{"rendered":"

Target announced the resignation of the Chairman, President and CEO, Gregg Steinhafel yesterday following the data breach that compromised the credit and debit card information of over 110 million customers last December. Target\u2019s attempt to win back the confidence of their customers has been referred to as a \u201cclean slate\u201d strategy to regaining customer\u2019s trust. But I argue that this move wasn\u2019t as good for customers as it was for Target\u2019s employee engagement.<\/p>\n

Since the breach, Target has been struggling. Fourth quarter sales were down in the period just after the breach, which is the biggest quarter for most retailers. In addition the stock price is down. Needless to day, Steinhafel has been under increasing pressure over the past few months.<\/p>\n

But Steinhafel is the latest of the senior management of the US\u2019s third largest retailer to step down. Earlier this year, Chief Information Officer Beth Jacob resigned. Steinhafel was quoted in the LA Times<\/a> from a letter to the Associated Press:<\/p>\n

\u201cThe last several months have tested Target in unprecedented ways. From the beginning, I have been committed to ensuring the Target emerges from the data breach a better company, more focused than ever on delivering for our guests.\u201d<\/p>\n

In my second book, I talk about how people in an organization will follow what the leader does. This applies for both good and bad behaviors. So sometimes the leader truly values his employees and what they contribute, like Julian Richer<\/a>, Founder of Richer Sounds, who put his company in a trust that turns over to his employees after he dies. Then there are other who don\u2019t really understand or value the customer experience<\/a>, like the CEO Michael O\u2019Leary of Ryanair<\/a>, and as a result the customer experience at the airline is, in a word, wretched.<\/p>\n

My impression of Stenhafel is that he was focused on presenting Target\u2019s customers the best experience possible. Cnet.com<\/a> reported that he felt he was personally accountable for the data breach and that his top priority was to fix the problem. In the past five months, the company has been working to improve the trust issued that Target shoppers have with the organization, which includes being the first major retailer to implement the chip technology next year that would prevent the type of data breach they experienced last December.<\/p>\n

I have been following this story closely since it broke in December. My first post speculated that Target would suffer a hit to their loyalty since customers were feeling neglected and disappointed, two emotions that the breach evoked and also two emotions that destroy value for an organization. My second post argued that the efforts following the breach were draining Target\u2019s emotional bank account, which is another way of describing the emotional engagement<\/a> and loyalty that you have with your customers based on the customer experience you provide.<\/p>\n

So my question here with this post is will this \u201cclean slate\u201d strategy with Steinhafel\u2019s resignation be what Target needs to put this experience behind them? Will the changing of the guard at the top be what the organization needs to regain the trust of the average shopper? Honestly, I don\u2019t think so, but it does send the right message to the Target team, which can be great for employee engagement.<\/p>\n

One thing I haven\u2019t really discussed in any of my posts so far is the effect this data breach may have had on employees. When you work at a company when something big like this goes wrong, it hurts morale. Employees that may be unhappy before are likely to only get worse and those on the fence morale-wise to move to the dark side. This kind of trend is terrible to an organization and as a result to the customer experience. If happy employees make happy customers, you can certainly ascertain what kind of customers disgruntled employees make!<\/p>\n

But Steinhafel\u2019s resignation shows Target employees that the leadership expects every member of the team including themselves to do whatever they can to promote an environment where customers are \u201cguests\u201d and can trust that their transactions are safe at the check out. And if they are in charge when that situation is compromised, you do what you can to set up the solution and then step down so that the rest of the team can fix it.<\/p>\n

Trust is tricky. It takes a long time to build and just one data breach of millions of customers\u2019 personal information to destroy. Target knows this. They have made several good moves to show customers that they know it. Yet, the stock price is down 3.45% at the time I am writing this (and still dropping) and sales recovery has still been slow since December.<\/p>\n

As it pertains to corporate culture, however, Steinhafel was wise to step down. So was Jacob. This tells the others in the organization that rather than blaming others for the problem, leadership takes responsibility.\u00a0 Responsibility is critical to good leadership and speaks to the quality of the organization they lead. It tells employees that the \u201cbuck stops here\u201d with senior management and they expect the same kind of responsibility from their team.<\/p>\n\n\n\n
\nColin Shaw<\/a> is founder & CEO of Beyond Philosophy, one of the world\u2019s first organizations devoted to customer experience. Colin has been recognized by LinkedIn as one of the top 150 Business Influencers<\/span><\/a> in the world. \u00a0He is an international author of four best-selling books on Customer Experience. Colin\u2019s company,\u00a0Beyond Philosophy<\/a>\u00a0provide consulting, specialised research & training from our Global Headquarters in Tampa, Florida, USA.
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\nFollow Colin Shaw on Twitter: <\/span>@ColinShaw_CX<\/a><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n","protected":false},"excerpt":{"rendered":"

Target announced the resignation of the Chairman, President and CEO, Gregg Steinhafel yesterday following the data breach that compromised the credit and debit card information of over 110 million customers last December. Target\u2019s attempt to win back the confidence of their customers has been referred to as a \u201cclean slate\u201d strategy to regaining customer\u2019s trust. […]<\/p>\n","protected":false},"author":12,"featured_media":12482,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[99],"tags":[],"class_list":["post-12479","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-employee-experience"],"_links":{"self":[{"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/posts\/12479","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/comments?post=12479"}],"version-history":[{"count":0,"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/posts\/12479\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/beyondphilosophy.com\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/media?parent=12479"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/categories?post=12479"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/tags?post=12479"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}