It can happen to you.
Joe Castaldo tells the tale of Target’s expansion to Canada. Less than two years after opening its first store, Target Canada filed for bankruptcy and closed. The episode cost the parent company some $2 billion, not counting the damage it did to its reputation.
Why? Read the article and you’ll have no problem finding the reasons. Lots of them. But what struck me is that the most critical problems were clear not just in retrospect but to many of the participants at the time.
We’re talking about one of the best companies in retail, with some of their most highly regarded people working their butts off for a couple of years to get ready. It shouldn’t have been that hard: They were cloning a successful business model into a culture as similar to that of the US as you can get, their first stores were closer to Target’s headquarters than many of its American stores, and they used many of the same suppliers.
If I had to single out a cause, at the risk of seeming a little simplistic, it would be that their Schwerpunkt was internal: the need to service the big real estate deal that Target made to jump start their expansion into Canada. This not only led them into a frantic rush to get the operation up and running as soon as possible but as Boyd forecast, such an internal focus increased confusion and disorder within Target Canada.
But the key point again was that much of this was clear to many of the participants even as events were unfolding. but it happened anyway. Perhaps Target Canada could be considered as a failure of what organizational psychologist Karl Weick famously called “sensemaking.” That is, lots of data, but no accurate, shared mental model of what it all meant. Weick related a gripping example of the phenomenon in his paper on the Mann Gulch Disaster, another situation where a group of highly talented individuals failed to take the available and in retrospect, obvious, steps that would have saved their lives.
While you’re reading these articles, chortling in Schadenfreude and saying to yourself, “What a bunch of idiots,” reflect that in both cases, these were talented people who gave it everything they had (in the case of Mann Gulch, 13 gave their lives) but failed. Imagine yourself in the middle of one of these. Why would you come out any better? Oh, really? Are you doing any of that today? What, specifically, are you doing to ensure that your organization sustains a common, implicit orientation of the situation both internally and externally, and that it is accurate? Are your measures working?
What we mean by “accurate,” incidentally, is that your orientation makes predictions that, for the most part, come true. It should have been clear from early in Target’s Canadian adventure that this was not the case up there. It was clear to some members of the team but not to the organization as a whole. So, why?
In memorium: The crew of the Challenger, 28 January 1986.