Gregg Steinhafel's commitment to teamwork has allowed him to help build a collaborative culture at Target.  Photo © Target Corporation

With teamwork, Gregg Steinhafel '79 hits the bull's-eye at Target

By Matt Golosinski

It has to be, given the market competition confronting him as president of Target, the fifth-largest retailer by sales in the U.S. and the nation's second-largest general merchandise discount retailer.

Ranked No. 33 in the Fortune 500, Target operates more than 1,500 stores, including SuperTargets that carry a full line of groceries. Inspiring more than 350,000 team members to communicate effectively across this enterprise demands the talents that Steinhafel, 52, says his Kellogg School education helped provide.

"Kellogg was a life-shaping experience for me," he says. "The school was way out in front as an innovator in the team concept."

That concept defines the Minneapolis-based company, says Steinhafel, noting that Target's success is rooted in a cross-functional approach that helps drive its brand promise: "Expect More. Pay Less."

"Our content has to be distinctive, unique and right on track with specialty stores," he says, adding a tricky qualifier: "at half the price."

For that to happen, Target's merchandising, product design and development, global sourcing, supply chain and marketing teams must work together seamlessly.

"One of the things we hear we do well from our vendor community is take initiatives and move them through our organization quickly," Steinhafel says. "The only way we implement so effectively is to work as a team."

For example, he says Target's "GO" apparel program — which features limited-edition women's fashion created by internationally renowned designers — demands cross-functional talent.

It's a collaborative effort that requires coordination across many areas, including teams in merchandising, marketing, design, communications, presentation, supply chain and stores. "All of them must be engaged in bringing this concept to life," says Steinhafel, also a Target board member.

Knowing how and when to change its inventory is another team challenge. It can be tempting to hang onto last year's best-selling product, instead of moving the market forward. But moving too fast is also dangerous.

"We constantly push our teams to move ahead, but not too far ahead," says Steinhafel. "You can make as many mistakes by being too slow as by upgrading too fast and getting into quality levels and prices where our guests aren't ready to go. But if we don't bring our guests along and constantly update our assortments, we become just another retailer."

To win, Target's leadership engages the power of all its team members. "We're an organization focused on innovation," says Steinhafel, who has been with the company since 1979, "so we encourage everyone to think about what's next. Everyone has an obligation to scour the marketplace to discover the next great idea, whether it's in supply chain, financial services, merchandising or marketing."

But Target doesn't jump at just any idea, he says. "We take a very deliberate approach: We pick fewer, but bigger, initiatives that are really going to make a difference for our guests and that are aligned with our 'Expect More. Pay Less.' strategy."

One such effort was the massive undertaking that began in 1995 to add groceries to select Target stores, transforming them into SuperTargets. Other "transformational initiatives" have included Target's commitment to global sourcing and owned brand development.

While pursuing these initiatives, Target has remained committed to the larger community, says Steinhafel. Since it first opened its doors, Target has given 5 percent of its income to the communities it serves. Today that equals more than $3 million every week to support education, the arts and social services, such as United Way. Target also encourages its team members to be involved in their communities. Each year, team members donate hundreds of thousands of hours to community projects around the world where they live and work.

"We're identified with integrity and strong corporate citizenship," says Steinhafel. Such values, he adds, are anchored in the company's long Midwestern history: The first Target store opened in 1962, but the company traces its origins to 1902, as Dayton's Dry Goods store.

"We attract performance-oriented people who understand the values that we live every day," says the Kellogg alum. "We have a very healthy, vibrant, aggressive and honest company — guided by our moral compass."