So, by all accounts a really good retailer in the USA, Target is a bust in Canada!
Who would have thought that Target would have to close up shop, literally, and leave the country? As all the reports say, Target’s missteps into the Canadian market will become case studies for many future students of retail management.
And, rightfully so. However, while many are busy listing the reasons why Target Canada failed and are suggesting various solutions that would have saved them there is really only one thing that went wrong and it is critical that the case studies focus on this or nothing will be learned.
Target Canada was a victim of bad management. Everything else stems from that fact.
Yes, the supply chain was an issue, and they didn’t do a good job managing expectations regarding pricing and they didn’t have a web presence, and some of their Zellers locations were duds (and better management would have realized which ones they were and steered clear of them for a while) but none of these things would have happened if Target Canada was managed by someone with better skills.
It’s really that simple. The things that went wrong were not natural disasters, nor were they things that were impossible to foresee. The fact that they were not foreseen means someone (or everyone) was asleep at the wheel…or the switch, or whatever you want to call it.
I have seen no end of reports written – and sometimes pictures -about the empty shelves and the missing Canadian Target website. I even saw one report that said Canadians simply haven’t taken to one stop shopping yet. Excuse me? In the great, white north where cold winters are long and harsh…Canadians would rather run all over town getting in and out of their cars to shop in several different places? I think not.
And, even if it were so, then it would follow that Wal Mart is leaving Canada also, right? No?
That’s what I thought.
There are the reports that Target couldn’t compete with Wal Mart and Costco. And, in the USA these competitors do not exist?
Oh, and according to some…they couldn’t compete with Sears Canada and Giant Tiger. Seriously?
When Target first announced that it was coming to Canada, Canadians were thrilled with the prospect. Many of us have done lots of shopping in the USA and are no strangers to Target.
Naturally, expectations were high…we knew what to expect of Target based on our experiences in their stores south of the border. So, when they showed up in the lousiest of old Zellers locations…with empty shelves and higher prices, it was disappointing.
Quite a big let down, actually.
So, what is it? Are they just lucky in the USA? Why do they do well there and tank here in Canada? And, no one should settle for a list of all of the ‘things’ that went wrong being the answer to that question. It’s, at the same time, more straight forward and much more complicated than that.
Some more important questions: Who made the decision on who would be in charge of the move into Canada? And, what was that critical decision based on? There are some who say it was arrogance – that Target USA saw the move into Canada as a slam dunk…or like taking candy from a baby. Either way, bad management is still the issue.
The big questions have to be answered by people at the highest levels of Target. It would be a huge mistake for them to list the reasons why things went wrong, clean up the mess, take their financial lumps or write offs, and leave it at that. If they do, they’ll be none the wiser in future and this multi-billion dollar lesson will be wasted.
The case studies that are developed must not only focus on the ‘things’ that went wrong. They must focus, first and foremost, on the quality of management and how the lack of high caliber management was, in fact, responsible for the disaster that was Target Canada.
I can hear it already. Some people will quote Murphy’s Law and others will say “stuff happens… you can’t put all the blame on management”. Well…why not? Is it not reasonable to expect the management of a company to know what they face when undertaking something as important, and expensive, as a launch in a new market that just happens to be in another country?
Should they not have examined the supply chain situation just a bit closer seeing as so much would be riding on it? Should they not have sought out better intel from knowledgeable resources, about Canadian shopping habits; about the importance of a Canadian web presence; about locations that are dead or dying? And, so on?
It’s understood that hindsight is 20/20. And, if a couple of things were overlooked and then identified as problems and corrected quickly enough to save the day, then we might just be able to say that management did its job. After all, no one is perfect.
But, that is not the case here.
Do not be tempted to make excuses for poor management. We must insist that management be accountable. Always. Everything else being equal, caliber of management makes the difference between the success or failure of a company. This is where the case studies need to focus.
Too many retailers and, in fact, companies in general just do not pay enough attention to who they give the keys to. Or, the major projects… the tough but exciting jobs.
I had major surgery once. Do you think I chose the Doctor by asking who had been around the longest? How do you suppose that moon landing teams are chosen? Seniority? I seriously doubt that. Just about any serious endeavor requires good people…some would say the best people. Never the ones that happen to have been here the longest with that being their only qualification or claim to fame. And, certainly, never the ones that just happen to be willing to relocate.
A major project with a lot of shareholder money riding on it is serious business. Target executives, I’m pretty sure, are aware of this. So, how could they fall into this trap?
It does seem that retailers, in particular, tend to promote, and keep promoting, the employees who have seniority – whether they’re any good or not. Sometimes, the only reason they have been around so long is because they aren’t really that great and they know it. Of course, they stay. Usually, these individuals are serious ‘yes’ people because to be anything else would be detrimental to their long term career plan. Often, they do not have the knowledge to be anything other than ‘yes’ people, either. Remember, I did say sometimes.
There is no doubt that experience counts. If a long term employee has proven him/herself to be a great leader and has the other attributes that make him/her a good choice for the big project – like taking your business to a new country – then that person may be the perfect choice. If the person was the perfect choice, or even just the right choice, then the team s/he chose would also have been, at bare minimum, competent and in all likelihood strong players and we would not be talking about Target Canada in these terms today.
It appears that key management players who were involved in this unmitigated failure were (some still are) long term Target employees. Whatever the case, someone who should have known better, wasn’t thinking all that clearly when they put Team Target Canada together.