Managing Change, Starting With the CIO

By Jim Nash  |  Posted 10-22-2012

Managing Change, Starting With the CIO

The conventionally smart company wanting new IT leadership for this degree of tumult, brings in a grandly pedigreed CIO. Target didn't see it that way. In 2008, as strategies were being formed, it brought over Beth Jacob from an operations post at Target.

Jacob first worked for Target, in 1984, as an assistant buyer, leaving after a couple years. Just about two decades later, in 2002, she returned to rise through Target's guest-relations division. Jacob was vice president of guest operations when she was tapped to lead IT as executive vice president and CIO with a budget of over $1 billion.

She oversaw Target.com's switch from Amazon.com's e-commerce platform to one that was home-grown. At the other end of the big-project spectrum, Jacob has introduced projects that capitalize on mobile computing, such as smartphone coupons.

Hers is a custom shop, yet she knows Target won't move into Canada before Y3K, much less by 2013 as planned, if the firm can't be flexible on that point. So, Jacob will throw the switch on its Great White North locations using a package implementation.

The technology team will be working with its internal partners on a business-process architecture design that's more off-the-shelf than it would ordinarily prefer.

In the run up to the opening, Jacob says, her department is examining and re-examining how work gets done to find the most efficient and, yes, standard, methods of accomplishing goals. That is, she says, "where doing so doesn't drive a different result for the guest or drive a different result for our business."

Jacob is at least as qualified as any of her colleagues to describe the state of change management in 2012, so we asked her to do just that.

CIO Insight: The nature or change has changed, hasn't it? It seems that change isn't always iterative any more, and antecedents are rare. You can't attack fires the same way because the fire's never the same.

Jacob: You're spot on. I don't think the topic of change management is dog-eared at all. I think it's going to be more important than ever. As a topic, I think it's fascinating. By way of background, four years ago, I took over being CIO for Target after a career based mainly in operations, so, personally, I went through a huge change. With the Target Technology Services [TTS] team, we really have undertaken a whole lot of change.

Target is a fast-paced, dynamic, innovative company. Change is something we lean into. Because of that, the TTS team has had to change almost everything, including the way it partners [internally and externally]. And the way it approaches different organizational change initiatives.

We've had to develop skills where we can operate at a couple different levels. From my leadership position, I'd say it's a different kind of strategic partnership that's needed compared to the past. It's a different skill set for the TTS team. You're managing for the long term and manage change for projects that have very short life cycles.

In the last year or so, the pace of change has significantly increased. We're making changes where [project] life cycle is a matter of days or weeks - think about the mobile capabilities we've implemented.

CIO Insight: Life cycles of days and weeks. Can you expand on that?

Jacob: We have to be ready to bring a company offering to our guests and staff, both of whom are more tech savvy. One example for guests would be mobile capabilities, like mobile [device] coupons. Last holiday, we created a mobile-coupon program tied to our toy catalog in just a few days. It's an amazing capability. The coupons are very easy for guests to use, very easy for our team members to work with.

[Ed. note: Target claims to be the first national retailer to offer a scanable mobile-coupon program, in 2010. Shoppers who opt in get a text-message link to a mobile Web page that can contain multiple with offers, all accessible through a single bar code. Coupons are then redeemed by a cashier scanning the bar code on the shopper's phone at checkout.]

CIO Insight: You must have a huge incentive to continually educate your team members.

Jacob: That's true. We need our team members to feel like they have the same knowledge and insight into tools and opportunities that our guests do.

Managing Change, Starting With the CIO

CIO Insight: Do you have large-scale IT education and training support?

Jacob: In the early part of some of our team members' careers, we have the Technology Leadership Program where we move them throughout the organization in a series of assignments to give them diverse experience.

And we're really great, I'd say, at inviting in [vendor partners] to discuss technology and trends to help our team members stay current.

CIO Insight: How much does formal education play into improving change management?

Jacob: I don't have a percentage in terms of how much education plays into effective change management. I think experience plays into preparing for change management more than anything else. Target is a learning culture, and I think that's the mindset you need to be effective with change management.

CIO Insight: Is there is an intersection of change management and ROI?

Jacob: We always factor in ROI even if there isn't a specific ROI associated with a task. We do think about the cost of making a change in terms of the time it takes to do good training, about the cost of ramp-up time, of new tech, the cost of retiring technologies.

CIO Insight: Given how IT is at the nexus of big change, you have to make some hard choices. Not everyone benefits from changes, after all. Ultimately, the CEO signs off on major projects, but how do you decide who's going to take the brunt of a change?

Jacob: I think of change in categories: people, process and technology. It's a fairly common way to think of it. But very, very seldom does technology sit on its own. It's when you marry the people, process and the technology that you really drive wholesale change.

That's how we got the TTS Transformation done.

[Ed. note: Transformation, begun in 2009, was a strategy to create an organization that's continuously evolving to become more agile and efficient. The process is largely completed, and has impacted thousands of internal and external partners globally. The organization is reluctant to talk about any return on investment, given that the effort has influenced every project life cycle since Transformation's adoption, it has said improved team effectiveness and efficiencies and, thus how nimbly Target rolls with market changes.]

I was really looking at our resources so that we could drive a 20 percent increase in the productivity of our architecture team. We were changing the way people's jobs came together, and implementing change in a way that allowed us over the last couple of years to trend up on team member satisfaction, an internal measure that we have.

Another really great example that I think of is our going international, opening stores in Canada. That's another area where technology is a key element to our success.

But it's really about framing the move in terms of people, process and technology. We're figuring out how to operate differently given that we have roughly half of what most people's experience would suggest is needed to open the number of stores we're opening. We've untethered our team to allow them to run toward this goal, which is very different compared to how we operate traditionally.

CIO Insight: You're moving aggressively in a number of technological directions. Are there times when you are uneasy about a change you have to ask of your guests?

Jacob: I can't think of an example where we would knowingly make a change we didn't believe was right for the guest experience. We're absolutely focused on what the business strategy is, what the guest experience will be around that strategy and how we pull all that together.

So many people that I meet along the way, when I share that I work at Target, their first response is, "Oh, I love Target." That's further affirmation of the fact that we keep the guest experience front and center for us as we execute on our strategies or in our technologies.

CIO Insight: You took a big gamble there a couple years ago, when Target decided to abandon Amazon.com's e-commerce platform for one you built yourselves. How was that change go?

Jacob: It took us just over two years to get off the Amazon platform and onto our own. Overall, it went well.

Over a thousand team members were involved in the effort. We learned a lot and that goes back to the learning culture of target - the way we react to those bumps. We had a few site-stability issues, so we formed a dedicated team within our global team working to resolve those issues - literally 24/7. And we really rallied our vendors to our cause.

Managing Change, Starting With the CIO

CIO Insight: Any unique problems you faced?

Jacob: A month after launch, we participated in a promotional event involving Missoni, one of our clothing designers, that had literally unprecedented response and demand. It tested some of the assumptions we had gone into testing with. It forced us to learn very, very quickly about how you build in resilience when the key assumptions end up being something that surprises you.

It's the nature of the space. It's so dynamic. It was a learning for us to figure out how to put just as much energy, insight and experience into running the site as in building the site. The learning curve was very fast and very steep. The experience helped us think more about being multichannel and how target is evolving as a retailer.

CIO Insight: The term "status quo" has to be as dead as the Latin language itself.

Jacob: That's absolutely true.

CIO Insight: Were there missteps along the way?

Jacob: In changes this big, you communicate even more. Make sure your team is fully supported to make that change happen.

CIO Insight: IT has become the common ground between customers, the company as a whole and IT staff. Those are three totally different ways of talking about a change.

Jacob: Target is strong in terms of teamwork, support, focus and collaboration around key initiatives. The knowledge that supports the teamwork behind a project as big as changing our platform, or, currently, as big as getting ready to go into Canada, is larger than IT. Those initiatives truly are not IT projects. They're Target projects.

The partners on major initiatives that I have across the different areas of Target are completely integrated from a project-team standpoint, from a communications-team standpoint.

CIO Insight: What are the top challenges facing Target? My list would be social media, mobile, Canada and City Target.

Jacob: Your list is quite similar to the list I have made of our biggest initiatives.

Canada is one of our biggest priorities, as we prepare to open new stores in the spring of 2013. Hundreds and hundreds of team members are getting ready to do that.

Multichannel - and when I say multichannel, it's about Target.com, it's about mobile, and it's about the in-store digital guest experience. It's work that's really big in scope but also transformative for Target.

And then there's the shift in back-end systems. We have a plan in place to make sure we build the right retail systems foundation so that the next 50 years for Target are as great as the previous 50.

CIO Insight: Let's talk about Canada. What is your change-management role in that initiative?

Jacob: We're starting with a brand new Canadian operation. The change-management piece is that we're going in with a package implementation.

To do it really successfully in the time frame we have and with as large of a scale deployment as we're going to have, we're really looking for those off-the-shelf software capabilities that we can put in with little or no customization. Then, over time, we'll build our own solutions in key areas of differentiation.

CIO Insight: In just a few years, you've been rolling out a lot of change: updating the technology foundation, bringing the E-commerce platform in house, moving into Canada. That's a big message of change to tell the group.

Jacob: Yeah, it is a big message. It's a big agenda. We continue to grow the size of our agenda, but it's the right agenda. The way I would frame that for my team is, Target has to be the best at retail IT. We are a dynamic company. We have a great retail foundation to build on. The pace of change will increase. Target needs to be ready, and it is ready.

CIO Insight: Is there a return on helping your org being change-capable?

Jacob: Absolutely. Status quo is going away. Change keeps your team engaged, keeps your organization relevant an dynamic. There is a very real benefit to investing in the skills that allow an organization to be effective at change.