Target CMO responds to employee rant over culture

A week after Gawker published an anonymous rant from a Target corporate employee that further revealed the extent to which the retailer's massive data breach has affected both employee and customer morale, the retailer's Chief Marketing Officer Jeff Jones responded with a LinkedIn post titled "The Truth Hurts."

In the employee letter, which Gawker says was e-mailed to the website by a current midlevel employee at Target headquarters in Minneapolis, the employee writes about Target's unproductive staffing strategy, which the employee says rewards socializing in the office above producing results, and Target's copy-cat tendency to follow what other retailers are doing instead of innovating. The employee calls for a leadership overhaul.

In an excerpt highlighted by Gawker, the employee writes, "If Target doesn't make a serious change in their leadership and culture, it will end up being a Kmart, a Sears, or even worse, a Circuit City. The Twin Cities would be devastated — around 15,000 people work for Target HQ at one of their numerous sites in the Twin Cities."

The letter put Target's deteriorating workplace culture into the public eye two days after CEO Gregg Steinhafel resigned last week, as the company struggles to regain its luster five months after a massive data breach drove a wrench into customer satisfaction and took a toll on the company's fourth-quarter results. Target's Chief Information Officer Beth Jacob resigned in March, replaced last week with Target outsider Bob DeRodes, a rare move for a company that typically promotes from within.

Target Chief Marketing Officer Jeff Jones, the only person the anonymous Target employee said should stay at the company, responded to the letter on LinkedIn Tuesday with a post titled "The Truth Hurts."

Jones says, "While we would have preferred to have a conversation like this with the team member directly, speaking openly and honestly, and challenging norms is exactly what we need to be doing today and every day going forward."

He also calls out other beloved brands that were once in jeopardy, but recovered, including Apple, Starbucks and J.Crew.

"Target is not the first brand in history to hit a rough patch," he says. "And we won't be the last brand to do what it takes to recover."

For a "very insular corporation" that's typically been resistant to change, Edward Jones analyst Brian Yarbrough says he's impressed with Jones' honest response.

"He didn't deny some of the stuff the employee said," Yarbrough says. "At least he recognizes it."

Others are applauding Target for taking to social media to address the employee's concerns. The company wisely bypassed any media intermediary "and went straight to the public," says public relations guru Katharine Paine.

"I'm sure that social-media heads of a lot of corporations will be talking about this today and probably trying to convince their bosses to do something similar in the next crisis," says Paine, CEO of Paine Publishing, which is a marketing and PR measurement specialist.

That said, investors don't typically love this kind of public airing of dirty laundry, she says. "It could freak out the investment community, which likes things calm and quiet."

Target shares ended Wednesday down 0.5%, or 29 cents, to $59.27.

But Paine doesn't think the latest volley will have any impact on whether shoppers go to Target. Paine is also impressed with the letter's honesty. "It's so honest," she jokes, "it's almost like Target made up the letter from the disgruntled employee" just so it could do the LinkedIn post.

Target still has a lot of work to do to revamp both its company culture and operations, Yarbrough says. The retailer needs more product offerings online and needs to integrate technology in stores, as Nordstrom and Macy's have done — employees are equipped with iPads and mobile phones for instant check-out, stores have interactive displays, and online and in-store inventory are connected for a more seamless experience.

But Yarbrough says at least Target isn't facing a large-scale turnaround problem à la J.C. Penney.

"It's not like this is a retailer that's just totally damaged and you have to do a 180-degree turn," he says. "It's still a strong brand. It just needs some tweaking."

Contributing: Bruce Horovitz