WAY off Target

Gregg Steinhafel is the worst Minnesota CEO I've ever seen.  He's the epitome of what is wrong with today's corporate structure; CEO's and senior executives who feel the corporation only exists because of, and for, themselves.  This modern conservative business leader is greedy, Machiavellian, self serving, and arrogant, feeling as if the world needs to respect them without having to earn the respect.  They want to command people to do things, not because they want to lead, but because they can.  In their mind, the company lives for them, first and foremost.

Before I get to Gregg with two "g's," let me start with two disclaimers and a fact.  Disclaimer one - as much as we complain about the modern corporation and the modern corporate executive, most corporate executives are very decent people, working very hard to make the business they represent successful, while acting as an advocate for their customers, shareholders, employees and suppliers.  For every company which sells a product with toxic amounts of formaldehyde (see an earlier post), there are 20 other companies which will throw out a weasel who suggests they poison their customers for profit.  Disclaimer two - Good executives work their asses off.  They're at the office at 7 AM and leave at 10 PM.  They work a full day on Saturday, and usually six plus hours on many Sundays.  They rarely take family vacations.  Rather, they take working vacations, in which their families get dragged along, and they're lucky for a few hours of true family time.  They do a very difficult job and are required to make decisions which means success or failure for a company.  They deserve a decent paycheck.

But now a Fact - The modern senior corporate executive, in many cases, is grossly overpaid.  In the 1970's the senior staff of a major corporation could expect to make four to five times more than the middle managers they depended on to carry out their decisions.  Back then, if they did a great job, and the company had a record year, they might get a bonus check equal to up to 50% of their salary.  Today, depending on the company, they can make 50, 100, 200, or even 400 times their average worker pay (according to payscale.com:  http://www.payscale.com/data-packages/ceo-income), and their bonuses and exit buy outs are guaranteed, even if their their own negligence has cost the company dearly.  Corporate executives started to put forward the idea in the 1980's that they were more important than the company itself, and they created consulting firms to start touting their own wealth while negotiating contracts.  They kept pushing and pushing the envelope to where today (in some cases) the executive will have a 7 million dollar annual salary, all their major personal expenses covered by the company (house, car, most of their monthly bills, private school tuition for kids), a million dollar expense account which covers everything else they need, and bonuses in cash in stock options worth an addition 10 to 20 million, EACH YEAR!  That's over paid.

But let's get back to G.

I remember when it all changed.  Friends used to talk about how much fun it was to work in Target corporate.  They made everyone jealous, causing many people across the country to polish up their resumes when they heard there was an opening.  Then, one day, in 2008, almost in unison, I heard the same story over and over.  "I hate my job.  They have all these new rules.  It's no longer a relaxed environment.  We now have to wear extremely professional attire.  They make us swear allegiance to the executives!"  I asked if it wasn't over reacting against the new CEO.  They all said no.  Target's fun loving, internal corporate structure was gone, Steinhafel's first victim.

Steinhafel was known for some real doozies within the realm of corporate mismanagement and malfeasance.  There was turning the Target corporation into an extension of his personal political ideology by funneling Target money to Minnesota Forward, an organization which was supporting Tom Emmer in the gubernatorial race against Mark Dayton in 2010.  He forced loyal customers to have to choose between spending money at Target, only to see part of it go to help a political candidate they didn't endorse, or avoiding to the store in it's entirety.  They lost a total of $40,000 in sales from my family alone.

Then there was the destruction of Target's gay rights record.  You couldn't buy the reputation Target at one time had in regards to GLBT rights, but Steinhafel, through supporting anti-gay rights politicians, and then standing by his anti-gay political ideology, destroyed it.  Lady GaGa even refused to do a special Target exclusive CD with them because of the company's new anti-gay rights stance.  The message was clear; the executives beliefs were more important than the company making a ton of money.  That's broken corporate governance.

Gregg's true lack of competent oversight lead to a massive embarrassment, the data breach of their customers credit card numbers, something which hurt even more because 1) it happened during the ever important holiday shopping season, and 2) seems to have been something they might have been able to nip in the bud a lot sooner if not for the company's executives not paying attention.  If only their CIO, CFO, and CEO, or their minions, would have read the urgent bulletins coming from their monitoring service, they might not have had such a clusterf- on their hands.  It was the final straw against Steinhafel.  He was finally shown the door, but the true impact of his legacy was to be revealed, and it was worthy of a Maury Povich sweeps episode.

The unbelievable scope of Steinhafel's failure in regards to his Canadian expansion endeavor is something business schools will teach for years.  This is textbook corporate arrogance.  "Those Canadians will be so happy we are finally here!'  No they won't!  There was mismanagement to the extreme; bad pricing, inconsistent supply chain issues, incompetent execution, and, in the end, a massive failure which will haunt Target for years to come.  They lost two billion in two years, 2 BILLION!!!  How do you do that?  The company's only option was to close it all down and walk away.  Target is in survival mode right now, hoping these drastic cuts (20%!!!) will stop the bleeding, and prevent the death of the company as a whole.

He did all of this in six years...

Steinhafel seems to have been a real jackass of a human being outside of the office too.  He put pressure to stop the Emily Program, an eating disorder program, from getting a conditional use permit at a former private school near his house.  Whenever I do the arrogant wealthy jerk voice on the air (How dare you heathens...) it stems from what I imagine Gregg Steinhafel was like when he found out a treatment facility for individuals in need might be within eyesight of his property.

But the most bizarre and self delusional thing Gregg Steinhafel ever did was to name the largest Target corporate office in Bangalore, India the 'Gregg W. Steinhafel Center.'  Who does that (besides Bond villains)?  It should have been the companies first real big warning sign that this guy might be more concerned about himself than the well being of the company.  The only way that office building deserved that name is if it came crashing down to the earth on its own in 6 years.

Steinhafel gets the last laugh.  He got a 61 million dollar severance package for nearly destroying one of the bellwether companies in the United States.  The employees he looked down upon are the ones who get punished for his horrible decisions, with layoff notifications being printed freely.  In my mind, we should arrest him, or at least run him out of the country.

Corporate America, it's time to wake up.  These Gordon Gekko wannabes are not helping you, they are hurting you.  If the shareholders mentality is, "as long as they make money, I could care less," let me remind you of something.  The business model Steinhafel and his ilk work off of is one geared to using their companies as their personal Bacchanalian palace, and when the reality of their mismanagement starts to show, these same people came up with the concept of vulture capitalism to feast on the carcass of the once profitable company they helped destroy.  Good luck with that.