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> what emerged is a story of a company trapped by an overly ambitious launch schedule, an inexperienced leadership team expected to deal with the biggest crisis

by mabbo 11y ago

> what emerged is a story of a company trapped by an overly ambitious launch schedule, an inexperienced leadership team expected to deal with the biggest crisis in the firm’s history, and a sophisticated retail giant felled by the most mundane, basic and embarrassing of errors. Big-bang launches aren't just bad in software. Imagine if they had opened one store, and then iterated on it until they got it right. Then a second store, maybe a third, and slowly spread out. They'd have built a successful organization in 5 years rather than one that collapses after 2.

joezydeco 11y ago
"Imagine if they had opened one store, and then iterated on it until they got it right" They couldn't launch just one store. That was the root cause of everything according to the article. Target Canada took over the leases on all that real estate at once - it was costing them money to leave those stores empty. That's what drove the insane schedule.
- mabbo 11y ago
  They didn't have to buy all those leases. That was their choice, they're decision for how to run the project. And that was their downfall.
  - teh_klev 11y ago
    The leases were more or less all from the same company so it's most likely they got a deal for taking them all at once: Fourth paragraph: "Under Steinhafel, the company paid $1.8 billion for the leases to the entire Zellers chain in 2011" Also later we read that Walmart were sniffing around the same real estate: Walmart approached him and offered to buy the Zellers chain from HBC. Baker realized there was more value to Zellers’ real estate than to the operation itself, since Walmart had soundly beaten the brand. An astute deal maker, Baker and his team reached out to Target to stoke the company’s interest. And they'd planned for a fast entry into the Canadian retail market: But the company had previously decided it wanted to grow as quickly as possible if it were to enter Canada, rather than pursue a slow, piecemeal expansion. The challenge was in acquiring enough real estate to make that possible. The Zellers sale provided just such an opportunity. And all because they thought they really could do this: But Steinhafel may have felt justified in making such a bold move. In the three years since he was appointed CEO, he’d boosted revenue 8.3%—not a huge number, but an impressive one, considering the U.S. was experiencing the worst recession since the Great Depression. Steinhafel had joined Target in 1979, and his entire professional career had been spent with the company. Target experienced steady growth during that time, and Steinhafel had simply become accustomed to succeeding. “The company had never really failed before,” says a former employee who worked in both the U.S. and Canada. There was no reason to think Target wouldn’t be able to pull this off.
    - sergers 11y ago
      Seems walmart is buying up some of these failed target leases. http://www.cbc.ca/news/business/walmart-to-buy-13-former-target-canada-stores-and-a-distribution-centre-1.3066182 http://www.cbc.ca/news/business/walmart-to-buy-13-former-tar... 2 of these locations are within 20km of me, and not too far from 3 other walmarts within 20 minutes apart.

by mabbo 11y ago

joezydeco 11y ago

"Imagine if they had opened one store, and then iterated on it until they got it right" They couldn't launch just one store. That was the root cause of everything according to the article. Target Canada took over the leases on all that real estate at once - it was costing them money to leave those stores empty. That's what drove the insane schedule.

mabbo 11y ago
They didn't have to buy all those leases. That was their choice, they're decision for how to run the project. And that was their downfall.
- teh_klev 11y ago
  The leases were more or less all from the same company so it's most likely they got a deal for taking them all at once: Fourth paragraph: "Under Steinhafel, the company paid $1.8 billion for the leases to the entire Zellers chain in 2011" Also later we read that Walmart were sniffing around the same real estate: Walmart approached him and offered to buy the Zellers chain from HBC. Baker realized there was more value to Zellers’ real estate than to the operation itself, since Walmart had soundly beaten the brand. An astute deal maker, Baker and his team reached out to Target to stoke the company’s interest. And they'd planned for a fast entry into the Canadian retail market: But the company had previously decided it wanted to grow as quickly as possible if it were to enter Canada, rather than pursue a slow, piecemeal expansion. The challenge was in acquiring enough real estate to make that possible. The Zellers sale provided just such an opportunity. And all because they thought they really could do this: But Steinhafel may have felt justified in making such a bold move. In the three years since he was appointed CEO, he’d boosted revenue 8.3%—not a huge number, but an impressive one, considering the U.S. was experiencing the worst recession since the Great Depression. Steinhafel had joined Target in 1979, and his entire professional career had been spent with the company. Target experienced steady growth during that time, and Steinhafel had simply become accustomed to succeeding. “The company had never really failed before,” says a former employee who worked in both the U.S. and Canada. There was no reason to think Target wouldn’t be able to pull this off.
  - sergers 11y ago
    Seems walmart is buying up some of these failed target leases. http://www.cbc.ca/news/business/walmart-to-buy-13-former-target-canada-stores-and-a-distribution-centre-1.3066182 http://www.cbc.ca/news/business/walmart-to-buy-13-former-tar... 2 of these locations are within 20km of me, and not too far from 3 other walmarts within 20 minutes apart.