October 6, 2005
Storch Out at Target
By George Anderson
The man who said “the stupid era of the Internet is over now,” described Wal-Mart as “vicious predators” and was widely viewed as the CEO-in-waiting
at Target has left the company.
Gerald Storch, now former vice chairman at Target, was known for saying what was on his mind and helping to build the retailer’s business since
first joining it in 1993 as senior vice president of strategic planning.
With Mr. Storch now gone, many believe Gregg Steinhafel, president of Target stores, is the heir apparent to current chief executive Robert Ulrich.
Moderator’s Comment: What does Gerald Storch’s leaving mean for Target? Consider the talk about who may eventually replace Robert Ulrich at CEO of the
company, how important is succession planning to Target and other retail organizations? –
George Anderson – Moderator
BrainTrust
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Discussion Questions
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I agree totally with Mark. Succession planning is something that has to be viewed throughout the organization. CEOs guide, but middle managers execute. Make sure a strong team is in place.
On another note, if anyone out there has the skinny on Target and why Storch left so suddenly, I’d love to hear it.
Succession planning is always important, for businesses of every size, and not just at the top of the organization. The manager of a fast food restaurant needs to train the assistant managers to succeed him/her, the district manager needs to train a couple of store managers to succeed him/her, and the CEO needs to train a couple of high-level executives, too. If succession planning is done well, it can be a motivator and it can reduce stress too, since there is a backup and cross-training for everyone. Great organizations thrive after the founder is gone. Too many retailers decline after the founder burns out or goes away.
Perhaps Gerald Storch offered his “vicious predators” comment after hearing the following from Tom Coughlin, the former vice chairman at Wal-Mart: “At Wal-Mart we make dust. Our competitors eat dust.”
Either way, the guy didn’t get to where he was at Target by being a loud mouth. Those who know him say he is blunt and outspoken. They also say he has been brilliant in keeping himself and his company focused on what they were attempting to accomplish and how they went about doing that.
Gerald Storch’s methods were effective, so regardless of what he has said, his actions spoke louder.
Few companies have a succession plan that will go as planned. Look at Nash Finch. It looks like not only will the CEO leave but 16 VPs along with him. What kind of a plan is that?
A good plan, or no plan at all —- probably each is equally effective. As a country, we do this every 4 or 8 years. The president and his cabinet are booted out and a new crew moves in. Live goes on.
For the past 12 years, Mr. Storch was a key player in the strategic direction of Target Stores. To underestimate his contributions as well as the future loss of his leadership is foolhardy. While he has certainly been outspoken, no one can argue with the success Target has enjoyed in building an extraordinarily successful business. Even Wal-Mart is now trying to copy Target’s success in capturing the hearts and dollars of upscale consumers. The retail industry and companies that aspire to greatness need more people like Gerald Storch, not fewer.
“The stupid era of the Internet is over now.” Wal-Mart as “vicious predators” — I guess he let his mouth overload his gravitas. His first statement is stupid and his second statement certainly isn’t very wise. Football coaches pray for “vicious predators” type comments from the players on opposing teams. They do nothing! Nothing but beg the competition to pay particular attention to you. I can see minds working in Bentonville (heart of the USA). “Well if he wants predation, let’s show him how it’s done down south!” Maybe this executive had too much exposure to French ownership. He knows how to pick a fight; he just doesn’t how to win one! Target is a fine company, with a solid marketing plan. I don’t think succession will be a problem.
Apparently it was a problem for Gerald Storch.
Leadership is everything – Target has undergone an enormous maturing process over the past twelve years. Their store branding has been personified through their methodical remodel program – quite impressive. Their name is ubiquitous with intelligent design, contemporary fashion, and intriguing marketing. The Wal-Mart vs. Target mantra is really outdated since 43% of Target’s guests hold a college degree. Frankly, you can’t compare the school of hard knocks to educated savvy shoppers.
When Storch made his comments about the Internet Bubble, he was stating the obvious at that point. Just because he had the intestinal fortitude to call Wal-Mart what everybody else was thinking, “vicious predators”, does not make him a visionary. Target has a plethora of talent and much of it is coming from local universities straight into store management. Their strategy has been to put educated decision-makers into the frontlines and embrace value-added technology which has improved productivity substantially. In-stocks ratios on basics are the highest in the company’s history and import warehouses have mitigated costs in addition to procuring seasonal goods for circular promotions.
From day one, Target has had a philanthropic culture. One of the founding fathers of Dayton Hudson said that the only thing the competition can’t take away from us is good will…5,000 lawsuits filed a year against the smiley face company…And that my friends is why David is beginning to take chunks out of Goliath’s armor.
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I agree totally with Mark. Succession planning is something that has to be viewed throughout the organization. CEOs guide, but middle managers execute. Make sure a strong team is in place.
On another note, if anyone out there has the skinny on Target and why Storch left so suddenly, I’d love to hear it.
Succession planning is always important, for businesses of every size, and not just at the top of the organization. The manager of a fast food restaurant needs to train the assistant managers to succeed him/her, the district manager needs to train a couple of store managers to succeed him/her, and the CEO needs to train a couple of high-level executives, too. If succession planning is done well, it can be a motivator and it can reduce stress too, since there is a backup and cross-training for everyone. Great organizations thrive after the founder is gone. Too many retailers decline after the founder burns out or goes away.
Perhaps Gerald Storch offered his “vicious predators” comment after hearing the following from Tom Coughlin, the former vice chairman at Wal-Mart: “At Wal-Mart we make dust. Our competitors eat dust.”
Either way, the guy didn’t get to where he was at Target by being a loud mouth. Those who know him say he is blunt and outspoken. They also say he has been brilliant in keeping himself and his company focused on what they were attempting to accomplish and how they went about doing that.
Gerald Storch’s methods were effective, so regardless of what he has said, his actions spoke louder.
Few companies have a succession plan that will go as planned. Look at Nash Finch. It looks like not only will the CEO leave but 16 VPs along with him. What kind of a plan is that?
A good plan, or no plan at all —- probably each is equally effective. As a country, we do this every 4 or 8 years. The president and his cabinet are booted out and a new crew moves in. Live goes on.
For the past 12 years, Mr. Storch was a key player in the strategic direction of Target Stores. To underestimate his contributions as well as the future loss of his leadership is foolhardy. While he has certainly been outspoken, no one can argue with the success Target has enjoyed in building an extraordinarily successful business. Even Wal-Mart is now trying to copy Target’s success in capturing the hearts and dollars of upscale consumers. The retail industry and companies that aspire to greatness need more people like Gerald Storch, not fewer.
“The stupid era of the Internet is over now.” Wal-Mart as “vicious predators” — I guess he let his mouth overload his gravitas. His first statement is stupid and his second statement certainly isn’t very wise. Football coaches pray for “vicious predators” type comments from the players on opposing teams. They do nothing! Nothing but beg the competition to pay particular attention to you. I can see minds working in Bentonville (heart of the USA). “Well if he wants predation, let’s show him how it’s done down south!” Maybe this executive had too much exposure to French ownership. He knows how to pick a fight; he just doesn’t how to win one! Target is a fine company, with a solid marketing plan. I don’t think succession will be a problem.
Apparently it was a problem for Gerald Storch.
Leadership is everything – Target has undergone an enormous maturing process over the past twelve years. Their store branding has been personified through their methodical remodel program – quite impressive. Their name is ubiquitous with intelligent design, contemporary fashion, and intriguing marketing. The Wal-Mart vs. Target mantra is really outdated since 43% of Target’s guests hold a college degree. Frankly, you can’t compare the school of hard knocks to educated savvy shoppers.
When Storch made his comments about the Internet Bubble, he was stating the obvious at that point. Just because he had the intestinal fortitude to call Wal-Mart what everybody else was thinking, “vicious predators”, does not make him a visionary. Target has a plethora of talent and much of it is coming from local universities straight into store management. Their strategy has been to put educated decision-makers into the frontlines and embrace value-added technology which has improved productivity substantially. In-stocks ratios on basics are the highest in the company’s history and import warehouses have mitigated costs in addition to procuring seasonal goods for circular promotions.
From day one, Target has had a philanthropic culture. One of the founding fathers of Dayton Hudson said that the only thing the competition can’t take away from us is good will…5,000 lawsuits filed a year against the smiley face company…And that my friends is why David is beginning to take chunks out of Goliath’s armor.