Target's CEO Steps Down. But Why Now?
Nearly five months after a hack job plundered the personal data of millions of shoppers, Target is giving its CEO the ax.
Effective today, 35-year company veteran Gregg Steinhafel will step down, the company’s board announced in a statement. CFO John Mulligan will serve as interim chief until a replacement is named.
Given that the board’s statement praises the way in which Steinhafel “held himself personally accountable” for the data breach, its conclusion that “now is the right time for new leadership at Target” seems curious -- five months after the precipitating incident, and also considering that the company’s CIO, Beth Jacob, already took the fall.
His resignation today raises questions, however, about whether mere accountability is enough.
To explain the board’s delayed reaction, Joel Trammell, CEO of Khorus, which creates business management software for executives, said that “it’s never wise to dismiss a CEO in the midst of a crisis unless they themselves triggered it.”
Though he might’ve handled things differently, Trammell said, Steinhafel was obviously not the source of the issue.
Trammell also explained that, for the sake of landing a well-suited replacement, “it’s better to let things die down a little” before any hiring decisions are made.
“Most incoming CEOs wouldn’t want to accept a job in the throes of a crisis anyway,” he said -- specifically one like Target’s requiring highly technical security skills in order to resolve.
Ultimately, however, Trammell believes Steinhafel’s resignation was less about placating consumers in the face of the breach than a signal of underperformance. “I don’t know that Target shoppers care who the CEO of the company is,” he said.
“It’s my belief that CEOs have a lifespan of five or six years,” he continued. (Steinhafel became president of Target in 1999 and CEO in 2008.) “After that point, you’ve had time to form a team and implement your best strategies and ideas. It’s very rare to find individual who can continue to innovate beyond that timeline.”