Another example of how corporate executive's strategy of meddling in political waters instead of focusing on profit backfires. Idiots. More Top Execs Fired at Financially Troubled Target Corp. by Warner Todd Huston22 Apr 2017Minneapolis, MN1293 Over the last few months, retail giant Target Corp. has been desperately cutting costs and canceling long-planned growth programs to regain profitability. As part of its scrambling to finally get into the black, the chain has also been firing top executives, and last week yet another top officer’s scalp was taken. On Thursday Target announced that chief innovation and strategy officer Casey Carl was leaving the company after 20 years on the job. Casey is at least the fifth top executive to leave the company recently, according to the Minneapolis Star-Tribune. Despite firing its top innovation officer, Target CEO Brian Cornell released a statement insisting that “Innovation is alive and well at Target.” The move might not be a complete shock considering that as its stock price and profits tumbled, early this year the company abruptly canceled two once highly touted innovation and growth projects aimed at bringing Target into the future of retail. Despite these moves, Cornell still claims that “Innovation must be a mind-set, an essential component of every business, every strategy and every team.” Carl joins a growing list of top officers shown the door at the nationwide retailer. Also fired in the last two years has been Target’s head of stores, head of marketing, its human resources boss, and its chief digital officer. The scrambling comes after Target suffered three disastrous quarters of sales declines in a row and a loss of over $15 billion this year. The losses came after its April of 2016 announcement that it intended to allow men pretending to be women to use any bathroom or changing room they want to use at any given time. The announcement sparked millions of people to boycott the company. In one particular case a #BoycottTarget petition organized by the American Family Association has surpassed 1.5 million signatures. Since April of last year, the company’s brand name has taken a drubbing, and its stock has fallen from a high of $84.14 to $54.78 a share. The fall was bad enough that many investment advisers downgraded Target to a “strong sell” even as its falling price might seem to make it an attractive buy. This April Target’s CEO was reported as having opposed his own company’s transgender announcement, saying it “frustrated” him that his diversity department made such a fuss over the decision and that they didn’t clear the announcement with him first. Cornell thought the whole situation was mishandled and caused a massive backlash against the company. Insiders say he ultimately backed the policy but felt “stuck” with it. Target’s focus on transgender rights has prompted it to end the use of single-sex bathrooms and changing rooms. The same trend is underway nationally, where pro-transgender laws are eliminating single-sex facilities and institutions. In December, a poll showed that only 22.7 percent of respondents endorsed the transgender claim that people should be allowed to change their recorded sex or “gender identity” on government documents whenever they wish. In contrast, 44.6 percent of respondents said people should be allowed to switch their legal sex, but only after first complying with medical or government criteria for male and female characteristics. Twenty-three percent opposed any sex-related change to identity documents, and 17.1 percent declined to answer. Follow Warner Todd Huston on Twitter @warnerthuston or email the author at igcolonel@hotmail.com.
I'm not sure I buy it. There's plenty of lefty and right-leaning companies who are vocal politically and turn a profit. I always saw Target as an uppity Walmart who kept things a little neater. Unlike Walmart, they've failed to capitalize on online sales and haven't realized brick & mortar retail is a failing market unless they are realistic about pricing (again Walmart). If you are a sinking ship, yeah, it doesn't help to isolate your customers.
I actually think that Target's financial performance has very little to do with the bathroom controversy. There are broader business problems driving the executive turnover and stock price decline.
I would tend to agree there are other issues, but those losses from boycotts occur at the margin and drop straight to the bottom line.
Totally agree that there are some companies, left and right, that enter the political fray and get away with it. What I've been saying is that there's no upside to do this. Their job is to make profit for their shareholders, not to crusade. There's no upside to this behavior and a whole lot of risk.
I agree in theory. However, if I'm a hypothetical founder of some company I'd find it hard to separate from ideology if I find the company participating in something inherently evil. I'm not talking about some bathroom bs, but consider Firestone propping dictatorships in Liberia, Debeers buying blood diamonds, or a similar scenario in Russia.
Oh, I think if you're talking those things then there is little danger in taking a stand. There are a number of global issues that corporate leaders regularly take a stand on and are considered "safe topics". For example, most larger companies have a Sustainability Strategy which can take the form of green factories, or waste reduction efforts, etc. No one holds "good for the planet" initiatives against a company. Another big one is child labor. No one will go after a CEO or a company for taking a stand against forced child labor. The problem is when CEOs think to wade into far more charged political topics - like immigration, or black lives matter efforts, or the bathroom thing, etc. I think I've mentioned my corporate position before, but if I go in front of my board and recommend we adopt a social media or marketing stance that is on a topic people would consider highly charged, they're going to look at me like I'm crazy. And they'd be right to do so. The first thing they would ask is "What return do you anticipate from this stance that is worth the risk of taking it?" If it is just me saying "I think this is the right thing to do" they would congratulate me on my moral fiber- right after asking me to tend my resignation.
One would certainly expect that to be the reaction, but at many companies, they put politics above fiduciary duty. I suspect in may of these cases, either the CEO is a frustrated SJW, or his wife or daughter are or he has a gay son, etc. We saw this with congress. You had these pompous social conservatives who suddenly changed spots because of a family member. It's a hidden conflict of interest that is no less destructive than a financial conflict.
In the case of Target, the decision was made without going to top management or the board (according to the article in the OP). I'm sure they canned whoever did it, based on the hostility to the idea inside upper management. I'm sure the board demanded a scalp or two.