Mixing discipline with Disney - Walt Disney Co - Dayton Hudson Corp. Target Stores; Growth Retailer of the '90s

Discount Store News, Sept 17, 1990 by Laura Liebeck

Mixing Discipline With Disney

Target is undergoing a major cultural transformation.

Shedding its rigid approach to operations and personnel management, the 413-store discounter is refashioning itself after the more relaxed style of the Walt Disney Co., making the chain a "fast, fun and friendly place to work and shop."

"We're putting some of the feeling back into an overly regimented company," said senior vice president Larry Gilpin.

The use of "fast, fun and friendly" was designed to generate sales and position the company for future growth.

"There's a direct correlation between how we treat our employees and how they treat our customers," said George Jones, executive vp, store operations. "It's not realistic to us to think our employees will treat our customers any better than we treat our employees."

The goal has been for the retail stores to exude a visible improvement in attitude and ability to serve customers, Gilpin explained.

The result so far has been better-trained store personnel through the chain's new Target University, more customer service people on the floor to directly assist customers, and employees who now make common sense decisions such as giving instant rain-checks and product substitutions, practices that were prohibited under the old system.

The process involves new and innovative recruiting, training and retention programs that Target execs think of as a cultural reorientation.

Over a year ago, Target decided that the company's greatest strength, its discipline, was becoming a weakness. Change was vital if the discounter wanted to move forward.

After months of studying the corporate culture of a wide range of companies, Target chose to adopt Disney's model. Disney is renowned for its superlative customer service and its dedication to training.

Last September, Target University was created to train Target's 83,000 employees to perform their jobs in a fast, fun and friendly manner.

By the end of 1990, over 40,000 Target employees involved in customer relations will participate in the one-day school that offers coursework on company traditions and customer service, with emphasis on "psyching up" to work with customers and "psyching down" for breaks, customer motivation and "schmoozing." The company's customer service personnel spend an extra half day at TU concentrating on issues directly related to their jobs.

The cost of the program has not been released, but Gilpin said the cost is more a question of "reprioritizing."

"We believe in this to make us better in the '90s. Cost is not a factor here. It's a necessity, one that would give us a strategic advantage," he said.

Toward that end, Target changed its mission statement. No longer a simple self-service company, Target now offers assisted self-service. Stores are now equipped with more customer service people at the desk and three to five customer service specialists who work the floor, actively looking to help customers.

The decision to add service specialists to the store was made to satisfy customer requests for more, better and faster service, said, Jones, noting that Target's marks on service had been consistently low.

"We made the decision this year that we can keep on like we are, disappointing customers, getting low marks on these areas of customer service, or we can bite the bullet and invest the dollars. And that's what we're doing," Jones said.

In addition to simply adding more store personnel to the payroll, Target had to remove some of its own rules that "made it impossible to serve the customer in a fast, fun and friendly manner," said Gilpin. One example of relaxed regulations is that store personnel are now permitted to make item substitutions on out-of-stocks rather than just issuing rainchecks.

"We feel like we are investing money to make money and we think that in the competitive environment that it is necessary to raise our service levels," said Jones.

Positioning the company for the retailing environment of the '90s and the next century is of prime concern at Target. Some of the challenges facing Target during this decade, according to Gilpin and Jones, include: * Trying to find ways to be flexible with people's lifestyles and changing values, such as flexible staffing and menu benefits. * Reducing turnover at the store level which has been about 100%; * Recruiting quality people to work and manage the stores, identify potential superstars,

A company weakness, noted Gilpin, is Target's very high turnover rate at the store level. Not pleased with its 1989 turnover rate of over 100% a year, Target has made a concerted effort to reduce that figure down to 90% by year-end. The eventual goal is 60%.

Gilpin said Target is not adequately balancing company and employee needs in scheduling work shifts. Supervision is a component of the problem, too, and is being addressed through recruiting and training efforts.

Another problem area that Target is addressing, said Jones, is store tours by headquarters personnel. In the past, these visits have intimidated store personnel and hampered an effective exchange of ideas between corporate and store-level associates. Now relatively little notice is given and, as a result, the tours are conducted in a more informal way.