It was a close race, but a stumble at the finish line changed the outcome.
August 21, 2021
Heading into the final turn Walt Disney (NYSE: DIS) CEO Bob Chapek led the race for 2021 CEO of the year. He led his company through a time where its film and theme park business suffered massive disruptions due to the coronavirus pandemic yet it arguably emerged stronger due to the growth of its streaming segment.
Chapek, however, metaphorically sprained his ankle and lost the lead with a few steps left to go when he bungled the Scarlett Johansson lawsuit over compensation for “Black Widow.” Instead of settling the issue before it even got to court (and became a public dispute), Chapek should have made a deal with his star. Instead, he tried to shame her by releasing the details of what she had already been paid.
That wasn’t relevant info and did not change Johansson’s contract, which was written before anyone had ever considered that a film like “Black Widow” might not get a full, traditional theatrical release. There was a clear reason for the movie’s star to be upset over compensation and Chapek’s handling of the issue creates at least some questions as to whether Disney can maintain its ability to attract top-tier talent with Chapek as CEO.
This stumble, however, opened the door for another person — a CEO we don’t talk about all that often — to claim the title of 2021 CEO of the year. Target (NYSE: TGT) CEO Brian Cornell may not be as high-profile as some company bosses, but his long-range vision and smart planning laid the groundwork for his company to be a true winner of the past, very strange, year.
Cornell took over as CEO in 2014 after Target had suffered a massive breach of consumer credit card information. A breach like that would barely rattle consumers now, but in 2013 this was big news that threatened to undermine consumer confidence in shopping at the retailer.
Once he got the top job, Cornell quietly set about reshaping the company, which laid the groundwork for its pandemic-era success. He made a lot of strong public-facing moves like betting heavily on owned-and-operated brands as well as celebrity/name brand partnerships that helped make Target stores destinations for consumers. He also made deals with Disney and Ulta Beauty for store-within-a-store concepts that will drive customer visits once those partnerships are fully realized.
Cornell’s true genius, however, has been how he has invested in Target’s logistics and supply chain. He has methodically built up the capacity to make sure his company has the resources to compete with Amazon and Walmart when it comes to being able to get items to customers in the new omnichannel world.
In late 2017, Cornell quietly made a move that would prove to be the foundation for his company’s ability to compete with Walmart and Amazon for the long term. Target paid the now bargain price of $550 million to buy Shipt, a same-day shipping company that helped the retailer offer shipping on par with its key rivals. It, of course, wasn’t known at the time of the deal, but that purchase set the stage for Target to become one of retail’s big three during the pandemic.
Cornell did not plan for a pandemic, but his planning set his company up well for the misery that was the past year. Buying Shipt gave Target optionality when it came to delivery and the company was also quick to ramp up curbside pickup, a capacity it had been building up for years.
The chain’s CEO has smartly invested in infrastructure while also building up the things that make Target unique. Owned and operated brands have become a core part of the company’s offering and that’s something its rivals cannot easily replicate. In addition, the deals with Ulta and Walt Disney for store-within-a-store partnerships should keep customers flocking in.
Target has also smartly redesigned many of its stores and it has launched a small-format concept which has allowed it to enter markets where its traditional footprint would not work. Cornell deserves credit for leading these efforts and having a vision beyond the company he inherited when he took over as CEO.
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