There's a new man on top of the bull's-eye. After more than 40 years with Target, including 14 as chairman and CEO, Bob Ulrich is handing the reins of the nation's second-largest retailer to his longtime sidekick Gregg Steinhafel.
Target changed dramatically under Ulrich's reign, and his rise to the corner office boasts tinges of old-fashioned business clichés of climbing the corporate ladder. That's not to say spent decades working himself up from stock boy to head honcho, but he was faithful to Target and it paid off. Starting out as a merchandiser for Dayton's Stores (a branch he later jettisoned from the Target family) in 1967, Ulrich saw his role grow to president of Target in 1984, which only had 80 stores at the time, and CEO a decade later. Steinhafel, an Ulrich recruit, joined the Target team in 1979, and when Ulrich landed the top job in 1994, Steinhafel, 52, was promoted to Target's executive vice president, and last year was granted a seat on the board of directors.
During his time at the helm he bought up the naming rights to the Target Center, the store expanded rapidly into 47 states, he helped usher in a squadron of celebrity product lines, saw the concept of SuperTarget flourish, and sales quadrupled. I'm sure the company is kicking themselves for having a mandatory retirement age of 65.
As someone who used to work at Target -- for most of high school and breaks during college I could be found decked out in a red polo shirt and khaki pants, stocking shelves, wrangling carts in the parking lot, and demonstrating how to use digital cameras for the ignorant masses plaguing the electronics department -- I suppose I owe Ulrich some debt of gratitude for running the company so well.
Looking out for employees currently in the position I used to fill will be a challenge. Steinhafel is taking his mentor's job at a tricky economic time. With a recession either upon us or soon to be arriving, there are plenty of troubles waiting to happen. Here, in no particular order, are three.
A living wage. Of course a living wage runs counter to any big box store with thousands of employees. It's a simple fact that paying higher wages will mean lower profits. Still, it's probably actually in Target's best interest to pay their employees a little more. During the recession, slightly higher wages will keep internal morale high, make the company appear to be enlightened in the eyes of the media, and get labor unions off their back for a while. But most importantly to the hourly employees during times when the economy is in the tank, a living wage would help secure their finances when the inevitable cut back on work schedule hours arrives. Chicago tried to pass a living wage ordinance in 2006 for big stores, and target broke out the hyperbole pen and released a statement calling it part of an "extreme agenda." Just a bit over the top. There is nothing extreme about paying inner city employees, or retail workers anywhere for that matter, a slightly higher wage.
In defense of my idea, here's an anecdote from my time at Target: On breaks, I would read Red: The Team Member Magazine. As far as work-related publications go, it was pretty good. On these glossy pages was my only contact with Ulrich. Every month in the front of the magazine was a letter to me thousands of employees working in the 1,613 Target stores. Ulrich, whose mug shot showed his perfect graphite colored hair, and his controlled smile, told of some supposedly interesting tidbit of corporate information, which ended with Ulrich's phony signature scrawled across the bottom. One day, during a particularly hard shift, with my knees aching, I decided to calculate how long it would take for me to earn what Ulrich made. Warning: Math in ensuing paragraph.I will recreate here with his 2007 compensation. In 2007, Ulrich made $12.2 million, during most of my time at Target, I made around $7.85 per hour, and the store was open 14 hours most days. Here was my figuring: $12.2 million/$7.85= 1,554,140.12 hours of work. Divide that by 14 possible work hours in a day and I get 111,010 days. Divide that by 365 days in a year, left me with 304.13 years of working every possible hour to make what Ulrich made in a year. And I'm not saying he didn't deserve a big ol' hunk of cash -- his work probably kept me employed -- but if corporate salaries and compensation were shaved ever so slightly, even half a percent, and added to the salaries of hourly employees, they would benefit profoundly.
Rising food prices, especially organic food. Target is still relatively new to the grocery game, and it's about to get rough to maintain discount prices. News outlets have been pushing stories pointing out that ethanol's popularity is causing farmers to grow more corn, leaving wheat prices going up. And it's true. Target's organic brand Archer Farms will struggle to hold onto its affordable organic appeal, if it becomes prohibitively expensive for the thrifty organic consumer.