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Target’s Post-Pivot Purgatory · Communication Breakdown

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Welcome back to Communication Breakdown, a weekly podcast from the Observatory on Corporate
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Reputation.
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Thanks for joining us.
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I'm Steve Dowling in Silicon Valley.
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And I'm Craig Carroll in New York City.
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Each week, Steve and I take a look at strategies companies are using to shape headlines and
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sometimes save their skins.
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It's a post-game show for PR Pros.
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This week, Target's post-pivot purgatory, trying to diffuse tension on multiple fronts in
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the wake of its turnabout on diversity.
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It's been 14 weeks since the red and white retailer changed its stripes on some key social
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issues, days after Trump's inauguration and right on the eve of Black History Month.
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Not the first Fortune 500 company to pull a U-turn on diversity, but Target had built a strong
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reputation for supporting social justice.
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And for that reason, activists and former allies have painted a different kind of bullseye
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on the company.
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But Target's stores fell for 11 straight weeks, especially among Black and Hispanic
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shoppers.
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And third party data shows that the Big Box rival Costco has increased over the same period.
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In mid-April, Target CEO Brian Cornell met with prominent civil rights leaders from the Black
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community, including the Reverend Al Sharpton and the Reverend Dr. Jamal Bryant, who has
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been leading a boycott against the retailer.
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Then the Minnesota Star Tribune revealed that Target had given a million dollars to Trump's
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inaugural committee the first time they'd ever made such a donation.
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This week, Cornell sent a memo to his 400,000 employees acknowledging that recent silence
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from Target's management team has created uncertainty among the ranks.
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But reassuring workers, quote, "We are still the target you know and believe in," end quote.
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Steve, you've talked before about what happened to an company that lets the story happen
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to them instead of telling it themselves.
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And that's kind of what this employee letter feels like.
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It's trying to reset the tone.
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But the messaging's fuzzy and it makes Target sound more like a passenger than a pilot.
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So I'm curious how you see it.
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Is this the first step that opens the door to something stronger or does it reinforce the
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sense that they're not quite in control of the narrative yet?
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Well, I think it could be both.
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I mean, the letter to employees is a good first step.
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Right, the language did come in for some criticism.
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Folks called it jumbled, unfocused.
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One consultant said the tone implies that things are happening around and two target that
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are out of its control.
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So I think you're right on that point.
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Cornell and his leadership team, they write, this is the quote, "The world around us is
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noisier and more complicated, but that doesn't change who we are."
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There's a lot of that in the letter.
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They also cover a number of pluses about the company.
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They talk about the quality of their products and experiences.
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They really are trying to wrap their arms around their employee base and give them a big
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warm hug.
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The problem, I think, is that right now this all just feels reactive.
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They're acknowledging, but they're not taking responsibility for the situation they're
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in.
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They're right to own the silence, I think.
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It's a good first step.
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When they say they're going to make up for it, the question is what they do next.
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To me, the main challenge here is that people who are following this, especially the employees,
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have heard two different messages in the past six months.
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In January, Target said they were changing their diversity programs in part because of the
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changing external environment, those are their words.
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This week, employees are now told, "We're still the target you know and believe in, but
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which is it and how do you reconcile those two different messages?"
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That letter was classic, "Acknowledge the environment language," which is the first move in our framework
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on alignment signaling of the access framework.
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That's a strategy companies are using to navigate highly politicized environments, especially
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in a Trump without becoming political mouthpieces.
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Target admitted things were messy, but they didn't really say what they're doing about it,
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and that's why the letter, to me, came off a little passive, like they were cutting the
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weather instead of piloting the plane.
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Yeah, I'll use another metaphor.
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I think they have painted themselves into a corner.
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If we think about how they ended up in this position, we've talked in the past about some
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of the trade-offs that companies are making to keep a seat at the table with the Trump administration.
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We've talked in an earlier episode about how one of the reasons we suspect that Target
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is doing this is to, as we said, stay at the table with Trump or at least stay out of
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the MAGA cross-airs, both at the federal and the state levels.
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We mentioned Cornell and Met with Reverend Dahl.
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That was a Thursday in New York last month.
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The next Monday, he's in the Oval Office with the CEOs of Wal-Mart and Home Depot.
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Warning Trump about the damage that the tariff policies will do.
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I think that meeting was pretty effective for a time because Trump came out and softened
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some of his rhetoric right after that.
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That was when he said the China tariffs would come down substantially from 145.
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If we boil it down, and this is admittedly a pretty crass calculation, I don't think it's
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far off though, do you want to fight El-Sharpton or do you want to fight Donald Trump?
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That's where Target finds itself.
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I think they've chosen to endure the criticism from Sharpton and the Reverend Bryant rather
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than risk being dismissed by the White House as woke.
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Sharpton at least is engaging with them, even though his tone is critical understandably.
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Sharpton has not formally called for a boycott or joined the calls for a boycott.
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He comes to the table.
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He's met with them.
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I'm guessing they would not expect the same kind of dialogue from Trump if the right wing
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smells blood.
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They figured there would be no recovery.
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I don't think they're the only company making that kind of calculation.
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This is just a target has this legacy of steadfast support for diversity and social justice,
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which made that shift so much more pronounced and drew the critics out of the woodwork so
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vocally.
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Right.
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Look, this is not an AC position of being a target's team, especially in corporate communications
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is doing everything they can to hold a very complex situation together.
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Meeting with Reverend Sharpton one day in the Trump camp the next day, it's not contradiction,
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it's navigation.
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I would say they're trying to stay balanced in an environment that is tilting in all directions.
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We've talked about in another podcast episodes.
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This is where the access framework comes in.
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It's about staying close to power without losing your identity.
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I think that's what targets trying to do.
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They're trying to stay in the policy conversation, avoid the culture or cross hairs and still
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honor the values that the brand built.
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But where they still got work to do is connecting words with action.
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When you say, "We're still the target you know, people are going to be looking for proof."
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Right now that proof might not be so obvious.
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The letter was a tone reset.
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It hits the first part of the access model, which is to acknowledge the environment.
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But it didn't really offer a way that we could say is a credible signal, something tangible
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to close the gap between message and behavior.
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A gap between what they said in January and what they're saying now.
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Look, it can look like hypocrisy, but I'm going to say that there's another way that we
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could look at it in the CSR world, at least in the academic world of CSR.
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It's called aspirational talk.
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This is an idea developed by some of my colleagues at Copenhagen Business School.
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It's the idea that talk comes before action, not after.
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It's not about pretending you've arrived.
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It's about publicly naming the future that you're trying to live into.
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I don't know.
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It reminds me of something my ministry used to say when I was a little kid from the pulpit.
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It'd say, "Hip regret is someone who has no intention of becoming who they say they are."
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For me, that's sort of a line here.
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That's the test.
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If the intent is real, even if the execution is messy, that's not hypocrisy.
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To some degree, it's leadership and motion.
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But if there's no follow-through, that's certainly where trust is going to work.
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The thing for me is that an aspirational talk, and I wouldn't call them hypocrites, but I'm
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sure some people are doing that.
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The thing is that target didn't just make aspirational talk.
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They took action.
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They weren't just talking about the future.
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They started to build that future with the programs that they had put in place.
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They were really bringing people along and gaining a lot of respect.
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They were setting expectations that they were going to continue in that direction, and
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they ended it abruptly.
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And honestly, without a very satisfactory answer or explanation.
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I think that this is the problem that they find themselves dealing with.
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Cornell really just seems to be trying to keep all the plates spinning.
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And that's, I think, what has led to this uncertainty that he talks about in his letter.
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The problem is they haven't cleared anything up.
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Like you said, they mentioned we're still the target you know and believe in.
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They mentioned inclusivity in that letter, but there's no change in policy.
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And so again, like how do you reconcile the words with the actions?
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I don't know.
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Companies don't always have the luxury of clarity.
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You know, they have to signal enough alignment to stay in the room without becoming partisan.
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So Cornell showing up at a White House, that was policy.
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It wasn't personality.
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You know, that's engaging via policy, not endorsement.
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But if you don't connect it to a clear internal narrative, it will certainly read like contradiction.
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I think that's the challenge that targets facing right now.
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I don't think they're being disingenuous.
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I think that they're trying to lead through this symbolic environment where even showing
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up can be misread.
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You know, they haven't finished the thought yet.
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And until they do, they'll just stay in this gray zone where good intentions don't quite
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translate and trust stays a little bit wobbly.
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Yeah, but again, they didn't just signal alignment.
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I think if they had done signal alignment signaling in January, if they had just sort of said,
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well, we believe in the objectives here, but we're taking a different path to it or we
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don't believe it.
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They didn't do that.
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They didn't go all in, but they took some pretty significant steps and they were very
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significant for target because of their previous track record.
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So I think this is what I mean when I say they're trying to keep all the plates spinning.
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On the one side, you've got a management team that is trying to stay engaged on tariff policy
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and that's a critical risk for their business to put it mildly.
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I think they figure we suspect that to do that, they've made these sacrifices on the
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values front.
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And that stirred up a whole other problem internally.
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And with a, I think, pretty important customer segment and they're having trouble explaining
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that.
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So that's why it really feels to me like they're trying to keep all these plates spinning.
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But let's take the employee outreach for now and then we can move on to the policy engagement.
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When I read this letter, I thought to myself, in situations like this, sometimes the calculation
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is that we'll let people get it off their chests.
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Let's an air out of the balloon and maybe that will solve it.
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People want to be heard.
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The longer they go, though, without some kind of action solution, I think they're increasing
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the risk to their reputation internally and also externally.
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People criticize the Cornell letter as a mission mash.
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And I think that probably reflects this messaging crisis that they're in.
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They've got to make some decisions and commit.
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So if I were in target shoes, they've bought themselves some time by promising more communication.
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That's good.
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I would say first, it's got to be two-way communication.
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And maybe that's what they mean.
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But I would use some of this time to listen, let people really know you're listening and figure
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out what you need to do to write the ship.
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And I do believe that's going to have to include some sort of course correction.
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They can't just spend the summer telling people the stores are great.
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The world is noisy and nothing has changed that.
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That's going to fall flat.
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I agree with all that.
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And to me, this is where alignment signaling has to evolve in alignment clarity.
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It's not just enough to promise more communication.
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You've got to reconcile the messages because, you know, what the employees heard in January
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was we're scaling back because the environment changed and now they're hearing nothing's changed
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for the same target and those who just can't coexist without explanation.
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This is exactly where the access model calls for what would label a credible signal.
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It doesn't mean doing everything that could exaske.
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It means choosing one or two meaningful course corrections that show that your values are
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still driving the ship and not just the political winds.
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And I'm with you, I think, did buy a little time.
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You know, like you said, if that time is just spent celebrating stores and brushing off
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the noise, they're going to risk winding the trust gap, especially inside.
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So the summer really shouldn't be about smoothing things over.
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I think it should be about rebuilding coherence.
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Even if a partial pivot could do a lot of work if it feels real.
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If we gain this out for target, I think there are a few options in front of them.
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And again, we're dealing with this challenge of matching your internal and your external messaging
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because I think that may be where they're running into trouble there.
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They've messaged externally that they've made these changes because of shifting externalities.
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They're telling people internally that nothing has changed.
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So how could they approach a solution here?
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The first one is to sort of stay the course, keep the plates spinning.
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That's not working.
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It boils down to just trust us, but I wonder if the calculation somewhere is that they can
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kick the can with the employees until the tariff situation resolves itself.
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And then maybe they start to make things up with the employees.
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That feels like a real high-wire act to me.
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I would not want to advise that.
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I think the second option is to find some kind of common ground.
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You've talked about alignment signaling.
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It could be tough, but it could be out there.
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Next week we talked about Ford and Amazon messaging to show they share goals with the White House,
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even if they have concerns about how to get there or they may even disagree on certain
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policies.
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Target has 400,000 employees in all 50 states, I think.
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They're one of the largest employers in the country.
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They're a jobs engine.
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It's one of the messages in Cornell's letter.
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They could be testing that one.
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Maybe that's where they start.
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I think on economics, there's commonality.
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And that's where they should probably be focusing their message just like Ford did last week.
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Ford declared itself the most American company, the most American carmaker could target
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be the most American retailer.
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I think by some of the same sort of metrics, they could take a run at that.
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The key question is can you align with the White House goals without sacrificing your values?
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On diversity, I don't think you can.
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I think they tried that and they overswung.
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But maybe there's a way for them to do, as you say, alignments signaling on economics that
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keeps them in the conversation with the White House.
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The third option, I think is mostly focused on employees and the customers who are upset
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is they can say, we screwed up.
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We made some changes, believing it was right for our business, but we've heard you and
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we realize we went too far.
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It's out of step with our values.
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Right now they talk about their values, but they've changed the policies that grew out of those
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values and the sounds of it, they're losing confidence or support among employees.
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So I think they are going to end up changing course at some point and they can really put
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some effort into how they present it.
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But you don't have to meet every demand.
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I think of them right now by the critics, but I think they've got to have to find a way
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to walk back some of those January decisions in a way that's thoughtful and defensible.
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Yeah.
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I think I have a little different point of view on them.
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I'm going to frame it a little bit differently, something that I've shared with you called, it's
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a model I've been working on about prioritization.
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It called crucial to crux.
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It's sort of a way of thinking about how we prioritize and it's a way really cutting through
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the noise and focusing on what's the decision that's actually going to define the moment.
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And here's how I would break it down.
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I've got three options.
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I've laid out myself.
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The first option I see is to own the January decision, not spin plates, not wait it out,
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but say carefully, this was a business decision made in a specific environment and we stand
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by it.
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I think where you and I agree is that if they stop there without more clarity or explanation,
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it just lands like just trust us.
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And that's certainly not going to be enough.
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I mean, one of the things I liked about Stephen Covey's work was his expression, you know,
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you can't talk your way out of a problem you behaved your way into.
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And I think that's a little bit of how I see that here.
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The second option I'd see is what I'd call a narrative pivot.
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You said, find the message.
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I would say reframe the story, position target is a jobs engine, you know, a pillar of 2,000
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communities, one of the largest employers in the country.
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Try to avoid this chest beating of who's the most American.
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But I would say, you know, if they play this from a community angle, being one of the largest
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employers in the country, I think that's alignment signaling done right.
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Knowing shared goals with policymakers without crossing the line into partisanship.
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And it moves the conversation away from ideology and back to outcomes.
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And here's the thing, you don't need just a message.
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You need a narrative infrastructure, you know, a story that can absorb tension and still
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hold together because when the narrative collapses and even good decisions start to look
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like contradictions, that's when companies lose the room.
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So they have to think about this idea of infrastructure in their narrative.
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And the third option, I would say is not apologizing, but course correcting.
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And I think we're aligned here in this sense, right?
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I mean, it's got to be thoughtful, defensible, grounded, and principled, and not a transaction.
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But this is also where the opportunity lives, you know, if Target puts business performance
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and stakeholder needs front and center, not as a response to the noise, but as a first
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thing's first reset, they don't just patch the optics.
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They start rebuilding trust inside and out.
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So, so yeah, I mean, I think we both agree that, you know, something's going to have to shift,
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but my take is that whatever they change, it needs to be anchored in performance like a
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team on the field, not performance like a show in the stage.
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You know, this isn't about theater, it's about execution, trust, and delivering under pressure.
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You know, coming back to the Covey Quote, you know, you can't talk your way out of a problem
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you behaved your way into, you know, the companies that survive moments like this, they're
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the ones who remember that the purpose of the game is to stay in the game.
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And that means making smart, values align moves that keep you credible with employees, policymakers,
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and the public.
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Yeah, no, I agree.
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And I agree with you on owning the decision that's certainly an option.
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The thing for me is that they haven't done that so far.
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And they didn't do that in January.
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Yeah.
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They made some, I feel kind of hand-wavy sort of explanations about data and learnings,
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but they never really shared it.
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And so, you know, I'm still on the table.
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Yeah, we're not in their heads, but I've got to believe that if they had a really strong
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argument, business focus that they felt good about, then they wouldn't have pointed to
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this changing external environment was the words that they use.
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It reminded me of Mark Zuckerberg's Metacyeos comment that it feels like we're in a new era
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now.
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The thing is, we need to, this is an important data point that has come up, you know, just
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in the past few weeks.
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The data just doesn't back that up, doesn't back up what target set in January about a changing
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external environment, it doesn't back up what Zuckerberg said about a new era.
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If there was a pendulum, it has swung back.
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NBC News did a poll at the end of April nationwide, 61% of Americans disapprove of Trump's
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handling of diversity, equity and inclusion efforts, 29% of that's like almost two to one
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against Trump's position on DEI.
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So I think there is some room for target to say, maybe we misread the vibes.
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Maybe we overshot, maybe we went too far.
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What words they choose is up to them.
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It doesn't have to be an apology apology.
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I don't know, but I think an acknowledgement, just as they're acknowledging their silence
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now, I think is something that they can get comfortable with, but I don't think you have
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to look at it as a loss or something that you are going to suffer from with your employees
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or the communities who are very upset with you.
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It's really just about making things right and moving forward.
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And again, the really hard part in all of that is reconciling that with your relationship
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with the White House.
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But at least in this moment now that we have some actual data, it was that there never really
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has been a strong swing against diversity.
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There is risk, certainly political risk because of the current environment.
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But for me, it comes back to you put policies in place years ago that were in keeping with
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your values, you set expectations with really key constituencies.
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And then you made a really sharp turn.
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And I think that course correcting is probably the right solution on this one.
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Yeah, I hear that.
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And you know, look, public opinion numbers, they're important.
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They tell us that the country broadly speaking isn't with Trump on DEI.
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And I'm just going to get it on the table.
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I'm not saying I believe this 100%, but it's part of the conversation.
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And that is that public opinion isn't the same as political power, right?
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The approval doesn't change tear policy, doesn't stop red state attorneys general from launching
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investigations.
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So when target sites are changing external environment, I don't think they're misreading
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sentiment.
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I think they were reading power.
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And that's the world of symbolic governance, right?
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You know, where it's not about who's popular, it's about who can make your life difficult.
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And I think that's what makes alignment signaling so tricky.
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You're signaling just enough proximity to stay out of the blast zone without abandoning
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the values that built your brand.
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It's not always about being on the right side of the pole.
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It's about staying in the game long enough to still have a strategy.
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Yeah.
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If they have a choice about who's going to make their life difficult, it can be Reverend
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L. Sharpton or it can be Trump and the White House.
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And they are making a calculation that it is at least for the moment easier to endure
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the difficulties that that Sharpton and others are bringing.
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Okay.
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Question for you.
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With numbers like this, you know, when do you break with Trump?
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There's a fair question.
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When do you break with Trump?
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I think if you're with Trump in a way that's hurting your reputation or hurting your business,
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if you're making compromises in ways that make you uncomfortable, that's a good time to
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start thinking about making a break.
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I think target should be able to change course here without picking a fight.
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They'll be rushing back into the arms of their employees and a significant segment of
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their customers who are just holding them to a standard that target set for themselves.
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Now, those folks just forgiven forget, no, target's going to have to work to rebuild trust.
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But the trust was there before and they know how target knows how to talk about these values
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of inclusion.
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And people believe them when they do, which is why these past few months have been so painful,
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it just like seemed like such an abrupt departure.
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So I think they can, they can still make adjustments if they feel they need to, especially if they're
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showing that they're being consistent with those values.
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But breaking with Trump, you know, it's probably not going to be target, but someone in the
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business community is going to have to do it.
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Take a principled stand and say, I'm sorry, but you've got this all wrong.
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And if it's done correctly with the right messaging at the right moment, I think that's
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going to look like leadership from the business community.
24:52
So we said it before in a chaotic situation, clear and consistent voices can shape the debate.
24:59
I think consistency is your go to shelter from the storm.
25:03
As Trump's going to be all over the place, companies can chart their own path and I believe
25:08
they can be leaders.
25:10
And hopefully when somebody does step up, we'll see other companies follow suit.
25:15
In the meantime, I think target can get its own housing order and still show their aligned
25:20
enough with Trump so that he doesn't kick them to the curb.
25:24
You know, we share the same goals for the economy and for job creation.
25:28
But you need to listen to us on the tariff policy.
25:31
And also, we're going to move back closer to our original position on diversity because
25:36
it's good for our business and that's what people expect of us.
25:39
Yeah.
25:40
Look, I think this is where it really gets to the heart of it.
25:43
You know, it's not about whether a company agrees or disagrees on policy.
25:46
It's about knowing how to disagree without getting wrecked in the process.
25:51
And that's where alignment signaling really comes in.
25:53
It gives companies a way to say, look, we're here to talk policy, not pledge loyalty.
25:59
And I think it's a strategic capability, especially in an environment like this one.
26:04
I'd love for companies to stand up and say, nope, we respectfully disagree.
26:10
But we have to be honest about the current environment.
26:12
This is not a policy first system.
26:15
It's a performance system.
26:17
And in performance systems, you know, just not clapping loudly enough can get you labeled
26:21
disloyal.
26:22
So, but I'm, you know, I don't think companies are being timid here.
26:25
I think it's that they're being tactical.
26:29
The real question isn't when you break with the White House.
26:32
I think it's how you do it in a way that protects your integrity and keeps you in the game
26:36
long enough to still matter.
26:38
Yeah.
26:39
And I think we saw some of that in this letter from Cornell to employees where he
26:42
talks about, you know, a target being a job creator and things like that.
26:47
I think as I said earlier, I think there's something there in the alignment signaling category
26:53
is just a matter of how they do that and how they manage their internal changes that
26:58
I think they probably have to make.
27:00
Yeah.
27:01
All right.
27:02
Final thoughts from the professor.
27:03
So I have a couple.
27:04
One is, I'm really struck by the question of what has to be true and what has to be true
27:10
for a company to break with Trump.
27:12
Cleanly, credibly, and without imploding in the process.
27:15
That's one thing that I'm thinking about, not wishful thinking, not branding, just what conditions
27:20
need to be in place.
27:21
I'd say, okay, first of all, they need to be grounded in real principles, not just PR values.
27:26
The lines already drawn and boundaries already set.
27:29
Second, I think they need to have stakeholder alignment, especially internally, you know,
27:34
the board, the leadership employee base need to be on the same page about what the company
27:38
stands for.
27:40
And third, they need to have the operational strength to absorb the blow financially, politically,
27:47
reputationally.
27:49
That's, you know, your balance sheet, political capital and brand trust.
27:54
And I'd say finally, they need to have a narrative infrastructure already in place, one that
27:58
doesn't rely on approval for whoever's in power and a story that's consistent, values
28:04
driven and tested.
28:05
And I think if those things are true, then you can make the break and not just survive
28:10
it, but come out stronger, more trusted, more coherent.
28:13
But I think the problem is, or the tension is, most companies aren't there yet.
28:18
And I think that's where this idea of where we're talking about aspirational signaling earlier
28:23
comes into play.
28:25
We need to be able to think about evaluating aspirational signaling based on whether it opens
28:30
the door to better behavior and not just to whether it matches today's reality.
28:35
Because if we don't give leaders the space to articulate aspirations, even once that they
28:41
haven't fully achieved yet, then we might actually be closing the door on the very changes
28:45
that we're hoping that they make.
28:47
Yeah, I agree with all of that.
28:48
And I think that that is the lesson that's the cautionary tale from this episode with target
28:53
and the changes that they made.
28:55
I think they were just, the changes were just too dramatic compared to where target was.
29:00
They may have gotten caught up in that, that vibe shift post election.
29:04
But that's where they are.
29:05
I think that coming at it, a little more measured in the beginning, as you suggest, would
29:10
have been the better approach, making sure that everybody was on board with whatever
29:14
they were going to do.
29:15
And maybe those conversations would have made them moderate a little bit.
29:19
But as to where they are, messaging alone, I think is not going to get them out of this.
29:23
And if you want to be a values led company, you've got to have the operational follow-through.
29:27
You've got to talk the talk and walk the walk.
29:30
This isn't just a target story. It's a preview of how all companies are going to be tested
29:37
in an environment where governance is increasingly symbolic, where the real pressure isn't just
29:42
economic or regulatory.
29:43
It's cultural, performative and political.
29:46
And the companies that hold up won't be the ones with the best statements.
29:50
They're going to be the ones who've done the internal work.
29:53
Great point to end on, Craig.
29:54
That's our show for this week.
29:56
We want to thank Shawn P Neal and the team at AdvoCast, as well as the people forward network
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for making our podcast possible.
30:03
If you have comments or suggestions for the podcast we'd love to hear from you, our email
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address is podcast@ocrnetwork.com.
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Communication Breakdown is a production of the Observatory on Corporate Reputation.
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I'm Steve Dowling.
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And I'm Craig Carroll.
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Thanks for listening.
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We'll be back next week.
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