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January 21, 2015 By Samuel Dergel 4 Comments

Lessons Learned from Target Canada: Strategy vs. Culture vs. Leadership Talent

The closing of Target in Canada within a couple of years of the iconic US retailer expanding its business in an attempt to become multi-national in an attempt to complete and grow against its main competitor (small company based out of Arkansas) is sad.Strategy Culture Leadership Talent @DergelCFO

Sad because over 17,000 people lost their jobs and need to start over.

Sad because the brand of a true ironic American company has taken a big bruising.

Sad because, if the expansion was executed correctly, it would have changed, and probably improved, the retail landscape for Canadian consumers, not to mention the impact it could have had internationally.

And most importantly, sad because it didn’t have to turn out this way.

I have waited to share my thoughts on this news so it could allow me to think about how to comment on this property, while taking in the commentary and opinions of others.

There are those that come out and blame the logistical failure that led to empty shelves.

A number of people pointed to pricing differences between the US and Canada that had Canadian consumers scratching their heads at the perception that Target Canada’s pricing was inconsistent and unfair.

Pundits point to the poorly chosen locations ‎that Target chose after the demise of Zellers in Canada, as well as the strategy of opening too many stores at once while not learning this new and culturally different market.

In the end, while these may be reasons (excuses) for a series of failures, the failures of execution stem from the failure of leadership. And this goes all the way to the top, and every leadership level on the way there.

Imagine the scene in the boardroom at Target a few years back. Imagine executive management making a very slick presentation to the Board as to the Who, What, Where, Why, When and How of expanding into Canada. Imagine that everyone was giddy with expectations of success, profits and accolades. The strategy was set. All was needed was the execution of the strategy.

When I picture the final approval at the table, my childhood memory is of Captain James T. Kirk saying those famous words “Make it So, Number One”.

Obviously, “making it so” is a lot easier said than done. Target’s Canadian adventure is one more highly publicized misadventure for MBA case studies of the near future.

Leadership Talent is where this fell apart. All the actions or inactions, reasons or excuses, come from the fact that the right people were not hired or promoted to make this grand scheme work.

I continue to see, time and time again, situations where companies do not bring on board the best possible leadership talent to execute. Execution not only means following the original strategic plan, but making sure that the plan continues to evolve as the situation evolves. The mistakes we know about, as well as the mistakes we will never hear about, all contributed to the demise of this $4 billion dollar adventure for Target shareholders.

I also continue to see, time and time again, choices being made in executive hiring that are emotional, personal and illogical. Vested interests lead to decisions being taken without proper assessment of the true needs compared to the knowledge, skills and abilities of the best candidates for these mission critical roles.

The bright side of the Target foray into Canada is the impact that Target culture has had on a generation of Canadian employees. I enjoyed reading and hearing about the warm, motivating, employee excellence and recognition culture that permeated the organization. ‎I believe that employers and employees across Canada will benefit from the introduction of these ideas into businesses across Canada for years to come.

But to paraphrase Peter Drucker:

Culture may eat strategy for breakfast, but Leadership talent ensures that there is food on the table. 

Filed Under: Board, Companies, Failure, Hire your Next CFO, Leadership, Peter Drucker, Quotes, Risk Management, Target

October 3, 2011 By Samuel Dergel 3 Comments

Vote for your favorite CEO Story!

Thank you for following our CEO Story Contest!

It’s time to vote.

Before voting, you may want to review…

  • The original Contest Announcement
  • Story #1 – The CEO’s Son
  • Story #2 – Paper Thongs
  • Story #3 – Poof!

[polldaddy poll=5551490]

Voting runs through Friday October 7th. The Winner of the BlackBerry Playbook will be announced on Monday October 10th.

Good luck to our story contributors.

Filed Under: BlackBerry, Contest, Fraud, Playbook, Succession Planning, Talent Management, Talent Management, Team Structuring, Team Structuring, Training and Development

September 14, 2011 By Samuel Dergel 12 Comments

Negotiating your CFO Employment Contract

Congratulations! You have been offered the role of CFO at a company you are excited about. You’re buzzed, and pleased with yourself, and so you should be. However…

… keep the following in mind:

    1. From my experience, most CFO roles last an average of 3 years. The time to prepare for your next job is today.
    2. The best time to negotiate the terms of your employment is when you begin your employment.

Some Warnings:

    1. Be sure to have an employment contract. An offer letter may not be sufficient to protect you.
    2. Have the employment contract reviewed by competent counsel before signing.
    3. Do not resign from your previous role without ALL the details being worked out.
    4. A proper employment agreement not only protects you, it protects your new employer as well.

Now, let’s take a look at some things you should be looking for in an employment contract.

(Please note: I am not offering legal advice. I am reviewing points worth considering when negotiating your CFO employment agreement. For specific advice with regards to your employment situation, I recommend discussing it with competent counsel.)

Issues to consider for your employment agreement.

    1. Base compensation – you know how this works. You want more and they want to give you less. This is where all those years of sharpening your negotiation skills come into play.
    2. Upside – regular bonuses, special bonuses, stock based compensation etc. – many conflicts arise because of lack of clarity on how this works. Be sure it’s clear.
    3. Severance – you may be asked to leave. It happens. Having clarity on what happens if you are asked to leave is important not only for your cash flow after you leave, but for your reputation as well.
    4. Notice – you love your new job, but a better one might come along. What will your responsibilities be upon leaving?
    5. Restrictive covenants – usually includes non-disclosure and non-competition clauses, but may include others. It may be detrimental to your new employer for you to take your next job at a direct competitor. Ensure that the time limits on these restrictive covenants are reasonable, and get competent legal advice as to their reasonability.
    6. Relocation – there should be no guessing games when it comes to relocation for your new role. Will they cover moving expenses? Transition costs? Cover your ‘out-of-the-money’ mortgage? Clarity here is key.
    7. Other benefits – What will be offered in insurance (health, life, disability)? Will there be a car? Access to the corporate jet?

Issues outside your employment agreement that you will want to have a clear understanding of prior to accepting:

    1. Office – I have seen CFOs get off on the wrong foot when they get an office that was not what they were expecting. It can really sour the relationship.
    2. Resource support – Will you get an Executive assistant? Will you share one? Will you get to choose your own? (See Does a CFO need a PA?)
    3. Allowable expenses – What expenses will you be allowed to charge to the company? Is there a policy for executives?
    4. Professional Development – You should have a budget for allowing you to attend conferences you deem necessary to ensure you are on top of your game. You don’t need to be going hat in hand to the CEO each time.
    5. Coaching – Does your CEO have a Coach? If he or she does, then you should have the budget for one too. If your CEO doesn’t have one, you should recommend that he or she gets one. (See 5 Reasons why you need an Executive Coach)
    6. Team Headcount or Staff Budget – Before accepting the role as CFO, you need to know what the cost of your team is, and get clarity on the leeway you will have to make changes you feel are necessary to deliver to the rest of the company. (See A Strong CFO needs a Strong Finance Team)
    7. Onboarding – Ask what the plan for “Onboarding” is. You might get blank looks. Make sure that you have an onboarding plan that allows you to develop the internal relationships necessary for success. (If you want to know more about Onboarding, we will be posting a Blog on the topic soon. Click on the “Sign me Up” Button on the right to get blog updates directly in your email inbox).

Special situations.

In special situations, keep this in mind: When the company’s risk increases, so does yours.

    1. Restructuring – if you start off in a restructuring situation, or you are called upon during your mandate to turn the company around – you need to address the following situations.
      • Bonuses. If you accomplish the goals set out, you should have potential for an upside. Be clear on what the upside is.
      • Getting paid. You’re working hard for the company. If the company has no cash, and you’re busting your chops, what is the guarantee you will get paid.
      • What happens on bankruptcy, buy-out, new investment etc. How do you protect yourself and your career? Work these things out in advance.
    2. CEO leaves permanently or temporarily – It is time to renegotiate. (See Are you a CEO in Training?)
    3. Poison pills and takeovers – time to renegotiate.
    4. Where the CEO or other executives are getting special compensation privileges, it may be time for you to ask for more as well.

Remember, a key reason your new company is hiring you because you are supposed to be a great negotiator! Show them how you negotiate a win for all sides.

Filed Under: All of Samuel's Blogs, All of Samuel's Blogs, All of Samuel's Blogs, Board, CEO, CEO, CEO, CFO, CFO, CFO Coach, CFO Coaching, CFO Compensation, CFO Consulting, CFO Relationships, CFO Search, Contracts, Executive Coaching, Executive Search, Executive Search, Finance Team, Negotiation, OnBoarding, Personal Assistants, Recruiters, Restructuring, Speaking and Training, Successful CFO

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