Target’s Post-Pivot Purgatory

Welcome back to Communication Breakdown, a weekly podcast from the Observatory on Corporate Reputation. Thanks for joining us. I'm Steve Dowling in Silicon Valley. And I'm Craig Carroll in New York City. Each week, Steve and I take a look at strategies companies are using to shape headlines and sometimes save their skins. It's a post-game show for PR Pros. This week, Target's post-pivot purgatory, trying to diffuse tension on multiple fronts in the wake of its turnabout on diversity.

It's been 14 weeks since the red and white retailer changed its stripes on some key social issues, days after Trump's inauguration and right on the eve of Black History Month. Not the first Fortune 500 company to pull a U-turn on diversity, but Target had built a strong reputation for supporting social justice. And for that reason, activists and former allies have painted a different kind of bullseye on the company.

But Target's stores fell for 11 straight weeks, especially among Black and Hispanic shoppers. And third party data shows that the Big Box rival Costco has increased over the same period. In mid-April, Target CEO Brian Cornell met with prominent civil rights leaders from the Black community, including the Reverend Al Sharpton and the Reverend Dr. Jamal Bryant, who has been leading a boycott against the retailer.

Then the Minnesota Star Tribune revealed that Target had given a million dollars to Trump's inaugural committee the first time they'd ever made such a donation. This week, Cornell sent a memo to his 400,000 employees acknowledging that recent silence from Target's management team has created uncertainty among the ranks. But reassuring workers, quote, "We are still the target you know and believe in," end quote.

Steve, you've talked before about what happened to an company that lets the story happen to them instead of telling it themselves. And that's kind of what this employee letter feels like. It's trying to reset the tone. But the messaging's fuzzy and it makes Target sound more like a passenger than a pilot. So I'm curious how you see it. Is this the first step that opens the door to something stronger or does it reinforce the sense that they're not quite in control of the narrative yet?

Well, I think it could be both. I mean, the letter to employees is a good first step. Right, the language did come in for some criticism. Folks called it jumbled, unfocused. One consultant said the tone implies that things are happening around and two target that

are out of its control. So I think you're right on that point. Cornell and his leadership team, they write, this is the quote, "The world around us is noisier and more complicated, but that doesn't change who we are." There's a lot of that in the letter. They also cover a number of pluses about the company. They talk about the quality of their products and experiences. They really are trying to wrap their arms around their employee base and give them a big warm hug.

The problem, I think, is that right now this all just feels reactive. They're acknowledging, but they're not taking responsibility for the situation they're in. They're right to own the silence, I think. It's a good first step. When they say they're going to make up for it, the question is what they do next. To me, the main challenge here is that people who are following this, especially the employees, have heard two different messages in the past six months.

In January, Target said they were changing their diversity programs in part because of the changing external environment, those are their words. This week, employees are now told, "We're still the target you know and believe in, but which is it and how do you reconcile those two different messages?" That letter was classic, "Acknowledge the environment language," which is the first move in our framework on alignment signaling of the access framework.

That's a strategy companies are using to navigate highly politicized environments, especially in a Trump without becoming political mouthpieces. Target admitted things were messy, but they didn't really say what they're doing about it, and that's why the letter, to me, came off a little passive, like they were cutting the weather instead of piloting the plane. Yeah, I'll use another metaphor. I think they have painted themselves into a corner.

If we think about how they ended up in this position, we've talked in the past about some of the trade-offs that companies are making to keep a seat at the table with the Trump administration. We've talked in an earlier episode about how one of the reasons we suspect that Target is doing this is to, as we said, stay at the table with Trump or at least stay out of the MAGA cross-airs, both at the federal and the state levels. We mentioned Cornell and Met with Reverend Dahl.

That was a Thursday in New York last month. The next Monday, he's in the Oval Office with the CEOs of Wal-Mart and Home Depot.

Warning Trump about the damage that the tariff policies will do. I think that meeting was pretty effective for a time because Trump came out and softened some of his rhetoric right after that. That was when he said the China tariffs would come down substantially from 145. If we boil it down, and this is admittedly a pretty crass calculation, I don't think it's far off though, do you want to fight El-Sharpton or do you want to fight Donald Trump? That's where Target finds itself.

I think they've chosen to endure the criticism from Sharpton and the Reverend Bryant rather than risk being dismissed by the White House as woke. Sharpton at least is engaging with them, even though his tone is critical understandably. Sharpton has not formally called for a boycott or joined the calls for a boycott. He comes to the table. He's met with them. I'm guessing they would not expect the same kind of dialogue from Trump if the right wing smells blood.

They figured there would be no recovery. I don't think they're the only company making that kind of calculation. This is just a target has this legacy of steadfast support for diversity and social justice, which made that shift so much more pronounced and drew the critics out of the woodwork so vocally. Right. Look, this is not an AC position of being a target's team, especially in corporate communications is doing everything they can to hold a very complex situation together.

Meeting with Reverend Sharpton one day in the Trump camp the next day, it's not contradiction, it's navigation. I would say they're trying to stay balanced in an environment that is tilting in all directions. We've talked about in another podcast episodes. This is where the access framework comes in. It's about staying close to power without losing your identity. I think that's what targets trying to do.

They're trying to stay in the policy conversation, avoid the culture or cross hairs and still honor the values that the brand built. But where they still got work to do is connecting words with action. When you say, "We're still the target you know, people are going to be looking for proof." Right now that proof might not be so obvious. The letter was a tone reset.

It hits the first part of the access model, which is to acknowledge the environment. But it didn't really offer a way that we could say is a credible signal, something tangible to close the gap between message and behavior. A gap between what they said in January and what they're saying now. Look, it can look like hypocrisy, but I'm going to say that there's another way that we could look at it in the CSR world, at least in the academic world of CSR. It's called aspirational talk.

This is an idea developed by some of my colleagues at Copenhagen Business School. It's the idea that talk comes before action, not after. It's not about pretending you've arrived. It's about publicly naming the future that you're trying to live into. I don't know. It reminds me of something my ministry used to say when I was a little kid from the pulpit. It'd say, "Hip regret is someone who has no intention of becoming who they say they are." For me, that's sort of a line here. That's the test.

If the intent is real, even if the execution is messy, that's not hypocrisy. To some degree, it's leadership and motion. But if there's no follow-through, that's certainly where trust is going to work. The thing for me is that an aspirational talk, and I wouldn't call them hypocrites, but I'm sure some people are doing that. The thing is that target didn't just make aspirational talk. They took action. They weren't just talking about the future.

They started to build that future with the programs that they had put in place. They were really bringing people along and gaining a lot of respect. They were setting expectations that they were going to continue in that direction, and they ended it abruptly. And honestly, without a very satisfactory answer or explanation. I think that this is the problem that they find themselves dealing with. Cornell really just seems to be trying to keep all the plates spinning.

And that's, I think, what has led to this uncertainty that he talks about in his letter. The problem is they haven't cleared anything up. Like you said, they mentioned we're still the target you know and believe in. They mentioned inclusivity in that letter, but there's no change in policy. And so again, like how do you reconcile the words with the actions? I don't know. Companies don't always have the luxury of clarity.

You know, they have to signal enough alignment to stay in the room without becoming partisan.

So Cornell showing up at a White House, that was policy. It wasn't personality. You know, that's engaging via policy, not endorsement. But if you don't connect it to a clear internal narrative, it will certainly read like contradiction. I think that's the challenge that targets facing right now. I don't think they're being disingenuous. I think that they're trying to lead through this symbolic environment where even showing up can be misread. You know, they haven't finished the thought yet.

And until they do, they'll just stay in this gray zone where good intentions don't quite translate and trust stays a little bit wobbly. Yeah, but again, they didn't just signal alignment. I think if they had done signal alignment signaling in January, if they had just sort of said, well, we believe in the objectives here, but we're taking a different path to it or we don't believe it. They didn't do that.

They didn't go all in, but they took some pretty significant steps and they were very significant for target because of their previous track record. So I think this is what I mean when I say they're trying to keep all the plates spinning. On the one side, you've got a management team that is trying to stay engaged on tariff policy and that's a critical risk for their business to put it mildly. I think they figure we suspect that to do that, they've made these sacrifices on the values front.

And that stirred up a whole other problem internally. And with a, I think, pretty important customer segment and they're having trouble explaining that. So that's why it really feels to me like they're trying to keep all these plates spinning. But let's take the employee outreach for now and then we can move on to the policy engagement. When I read this letter, I thought to myself, in situations like this, sometimes the calculation is that we'll let people get it off their chests.

Let's an air out of the balloon and maybe that will solve it. People want to be heard. The longer they go, though, without some kind of action solution, I think they're increasing the risk to their reputation internally and also externally. People criticize the Cornell letter as a mission mash. And I think that probably reflects this messaging crisis that they're in. They've got to make some decisions and commit.

So if I were in target shoes, they've bought themselves some time by promising more communication.

That's good. I would say first, it's got to be two-way communication. And maybe that's what they mean. But I would use some of this time to listen, let people really know you're listening and figure out what you need to do to write the ship. And I do believe that's going to have to include some sort of course correction. They can't just spend the summer telling people the stores are great. The world is noisy and nothing has changed that. That's going to fall flat. I agree with all that.

And to me, this is where alignment signaling has to evolve in alignment clarity. It's not just enough to promise more communication. You've got to reconcile the messages because, you know, what the employees heard in January was we're scaling back because the environment changed and now they're hearing nothing's changed for the same target and those who just can't coexist without explanation. This is exactly where the access model calls for what would label a credible signal.

It doesn't mean doing everything that could exaske. It means choosing one or two meaningful course corrections that show that your values are still driving the ship and not just the political winds. And I'm with you, I think, did buy a little time. You know, like you said, if that time is just spent celebrating stores and brushing off the noise, they're going to risk winding the trust gap, especially inside. So the summer really shouldn't be about smoothing things over.

I think it should be about rebuilding coherence. Even if a partial pivot could do a lot of work if it feels real. If we gain this out for target, I think there are a few options in front of them. And again, we're dealing with this challenge of matching your internal and your external messaging because I think that may be where they're running into trouble there. They've messaged externally that they've made these changes because of shifting externalities.

They're telling people internally that nothing has changed. So how could they approach a solution here? The first one is to sort of stay the course, keep the plates spinning. That's not working. It boils down to just trust us, but I wonder if the calculation somewhere is that they can kick the can with the employees until the tariff situation resolves itself. And then maybe they start to make things up with the employees. That feels like a real high-wire act to me.

I would not want to advise that. I think the second option is to find some kind of common ground.

You've talked about alignment signaling. It could be tough, but it could be out there. Next week we talked about Ford and Amazon messaging to show they share goals with the White House, even if they have concerns about how to get there or they may even disagree on certain policies. Target has 400,000 employees in all 50 states, I think. They're one of the largest employers in the country. They're a jobs engine. It's one of the messages in Cornell's letter. They could be testing that one.

Maybe that's where they start. I think on economics, there's commonality. And that's where they should probably be focusing their message just like Ford did last week. Ford declared itself the most American company, the most American carmaker could target be the most American retailer. I think by some of the same sort of metrics, they could take a run at that. The key question is can you align with the White House goals without sacrificing your values? On diversity, I don't think you can.

I think they tried that and they overswung. But maybe there's a way for them to do, as you say, alignments signaling on economics that keeps them in the conversation with the White House. The third option, I think is mostly focused on employees and the customers who are upset is they can say, we screwed up. We made some changes, believing it was right for our business, but we've heard you and we realize we went too far. It's out of step with our values.

Right now they talk about their values, but they've changed the policies that grew out of those values and the sounds of it, they're losing confidence or support among employees. So I think they are going to end up changing course at some point and they can really put some effort into how they present it. But you don't have to meet every demand.

I think of them right now by the critics, but I think they've got to have to find a way to walk back some of those January decisions in a way that's thoughtful and defensible. Yeah. I think I have a little different point of view on them. I'm going to frame it a little bit differently, something that I've shared with you called, it's a model I've been working on about prioritization. It called crucial to crux.

It's sort of a way of thinking about how we prioritize and it's a way really cutting through the noise and focusing on what's the decision that's actually going to define the moment.

And here's how I would break it down. I've got three options. I've laid out myself. The first option I see is to own the January decision, not spin plates, not wait it out, but say carefully, this was a business decision made in a specific environment and we stand by it. I think where you and I agree is that if they stop there without more clarity or explanation, it just lands like just trust us. And that's certainly not going to be enough.

I mean, one of the things I liked about Stephen Covey's work was his expression, you know, you can't talk your way out of a problem you behaved your way into. And I think that's a little bit of how I see that here. The second option I'd see is what I'd call a narrative pivot. You said, find the message. I would say reframe the story, position target is a jobs engine, you know, a pillar of 2,000 communities, one of the largest employers in the country.

Try to avoid this chest beating of who's the most American. But I would say, you know, if they play this from a community angle, being one of the largest employers in the country, I think that's alignment signaling done right. Knowing shared goals with policymakers without crossing the line into partisanship. And it moves the conversation away from ideology and back to outcomes. And here's the thing, you don't need just a message.

You need a narrative infrastructure, you know, a story that can absorb tension and still hold together because when the narrative collapses and even good decisions start to look like contradictions, that's when companies lose the room. So they have to think about this idea of infrastructure in their narrative. And the third option, I would say is not apologizing, but course correcting. And I think we're aligned here in this sense, right?

I mean, it's got to be thoughtful, defensible, grounded, and principled, and not a transaction. But this is also where the opportunity lives, you know, if Target puts business performance and stakeholder needs front and center, not as a response to the noise, but as a first thing's first reset, they don't just patch the optics. They start rebuilding trust inside and out.

So, so yeah, I mean, I think we both agree that, you know, something's going to have to shift, but my take is that whatever they change, it needs to be anchored in performance like a team on the field, not performance like a show in the stage. You know, this isn't about theater, it's about execution, trust, and delivering under pressure.

You know, coming back to the Covey Quote, you know, you can't talk your way out of a problem you behaved your way into, you know, the companies that survive moments like this, they're the ones who remember that the purpose of the game is to stay in the game. And that means making smart, values align moves that keep you credible with employees, policymakers, and the public. Yeah, no, I agree. And I agree with you on owning the decision that's certainly an option.

The thing for me is that they haven't done that so far. And they didn't do that in January. Yeah. They made some, I feel kind of hand-wavy sort of explanations about data and learnings, but they never really shared it. And so, you know, I'm still on the table. Yeah, we're not in their heads, but I've got to believe that if they had a really strong argument, business focus that they felt good about, then they wouldn't have pointed to this changing external environment was the words that they use.

It reminded me of Mark Zuckerberg's Metacyeos comment that it feels like we're in a new era now. The thing is, we need to, this is an important data point that has come up, you know, just in the past few weeks. The data just doesn't back that up, doesn't back up what target set in January about a changing external environment, it doesn't back up what Zuckerberg said about a new era. If there was a pendulum, it has swung back.

NBC News did a poll at the end of April nationwide, 61% of Americans disapprove of Trump's handling of diversity, equity and inclusion efforts, 29% of that's like almost two to one against Trump's position on DEI. So I think there is some room for target to say, maybe we misread the vibes. Maybe we overshot, maybe we went too far. What words they choose is up to them. It doesn't have to be an apology apology.

I don't know, but I think an acknowledgement, just as they're acknowledging their silence now, I think is something that they can get comfortable with, but I don't think you have to look at it as a loss or something that you are going to suffer from with your employees or the communities who are very upset with you. It's really just about making things right and moving forward.

And again, the really hard part in all of that is reconciling that with your relationship with the White House. But at least in this moment now that we have some actual data, it was that there never really has been a strong swing against diversity. There is risk, certainly political risk because of the current environment. But for me, it comes back to you put policies in place years ago that were in keeping with your values, you set expectations with really key constituencies.

And then you made a really sharp turn. And I think that course correcting is probably the right solution on this one. Yeah, I hear that. And you know, look, public opinion numbers, they're important. They tell us that the country broadly speaking isn't with Trump on DEI. And I'm just going to get it on the table. I'm not saying I believe this 100%, but it's part of the conversation. And that is that public opinion isn't the same as political power, right?

The approval doesn't change tear policy, doesn't stop red state attorneys general from launching investigations. So when target sites are changing external environment, I don't think they're misreading sentiment. I think they were reading power. And that's the world of symbolic governance, right? You know, where it's not about who's popular, it's about who can make your life difficult. And I think that's what makes alignment signaling so tricky.

You're signaling just enough proximity to stay out of the blast zone without abandoning the values that built your brand. It's not always about being on the right side of the pole. It's about staying in the game long enough to still have a strategy. Yeah. If they have a choice about who's going to make their life difficult, it can be Reverend L. Sharpton or it can be Trump and the White House.

And they are making a calculation that it is at least for the moment easier to endure the difficulties that that Sharpton and others are bringing. Okay. Question for you. With numbers like this, you know, when do you break with Trump? There's a fair question. When do you break with Trump?

I think if you're with Trump in a way that's hurting your reputation or hurting your business, if you're making compromises in ways that make you uncomfortable, that's a good time to start thinking about making a break.

I think target should be able to change course here without picking a fight. They'll be rushing back into the arms of their employees and a significant segment of their customers who are just holding them to a standard that target set for themselves. Now, those folks just forgiven forget, no, target's going to have to work to rebuild trust. But the trust was there before and they know how target knows how to talk about these values of inclusion.

And people believe them when they do, which is why these past few months have been so painful, it just like seemed like such an abrupt departure. So I think they can, they can still make adjustments if they feel they need to, especially if they're showing that they're being consistent with those values. But breaking with Trump, you know, it's probably not going to be target, but someone in the business community is going to have to do it.

Take a principled stand and say, I'm sorry, but you've got this all wrong. And if it's done correctly with the right messaging at the right moment, I think that's going to look like leadership from the business community. So we said it before in a chaotic situation, clear and consistent voices can shape the debate. I think consistency is your go to shelter from the storm. As Trump's going to be all over the place, companies can chart their own path and I believe they can be leaders.

And hopefully when somebody does step up, we'll see other companies follow suit. In the meantime, I think target can get its own housing order and still show their aligned enough with Trump so that he doesn't kick them to the curb. You know, we share the same goals for the economy and for job creation. But you need to listen to us on the tariff policy.

And also, we're going to move back closer to our original position on diversity because it's good for our business and that's what people expect of us. Yeah. Look, I think this is where it really gets to the heart of it. You know, it's not about whether a company agrees or disagrees on policy. It's about knowing how to disagree without getting wrecked in the process. And that's where alignment signaling really comes in.

It gives companies a way to say, look, we're here to talk policy, not pledge loyalty. And I think it's a strategic capability, especially in an environment like this one. I'd love for companies to stand up and say, nope, we respectfully disagree.

But we have to be honest about the current environment. This is not a policy first system. It's a performance system. And in performance systems, you know, just not clapping loudly enough can get you labeled disloyal. So, but I'm, you know, I don't think companies are being timid here. I think it's that they're being tactical. The real question isn't when you break with the White House.

I think it's how you do it in a way that protects your integrity and keeps you in the game long enough to still matter. Yeah. And I think we saw some of that in this letter from Cornell to employees where he talks about, you know, a target being a job creator and things like that. I think as I said earlier, I think there's something there in the alignment signaling category is just a matter of how they do that and how they manage their internal changes that I think they probably have to make.

Yeah. All right. Final thoughts from the professor. So I have a couple. One is, I'm really struck by the question of what has to be true and what has to be true for a company to break with Trump. Cleanly, credibly, and without imploding in the process. That's one thing that I'm thinking about, not wishful thinking, not branding, just what conditions need to be in place. I'd say, okay, first of all, they need to be grounded in real principles, not just PR values.

The lines already drawn and boundaries already set. Second, I think they need to have stakeholder alignment, especially internally, you know, the board, the leadership employee base need to be on the same page about what the company stands for. And third, they need to have the operational strength to absorb the blow financially, politically, reputationally. That's, you know, your balance sheet, political capital and brand trust.

And I'd say finally, they need to have a narrative infrastructure already in place, one that doesn't rely on approval for whoever's in power and a story that's consistent, values driven and tested. And I think if those things are true, then you can make the break and not just survive it, but come out stronger, more trusted, more coherent. But I think the problem is, or the tension is, most companies aren't there yet.

And I think that's where this idea of where we're talking about aspirational signaling earlier comes into play. We need to be able to think about evaluating aspirational signaling based on whether it opens the door to better behavior and not just to whether it matches today's reality. Because if we don't give leaders the space to articulate aspirations, even once that they haven't fully achieved yet, then we might actually be closing the door on the very changes that we're hoping that they make.

Yeah, I agree with all of that. And I think that that is the lesson that's the cautionary tale from this episode with target and the changes that they made. I think they were just, the changes were just too dramatic compared to where target was. They may have gotten caught up in that, that vibe shift post election. But that's where they are.

I think that coming at it, a little more measured in the beginning, as you suggest, would have been the better approach, making sure that everybody was on board with whatever they were going to do. And maybe those conversations would have made them moderate a little bit. But as to where they are, messaging alone, I think is not going to get them out of this. And if you want to be a values led company, you've got to have the operational follow-through.

You've got to talk the talk and walk the walk. This isn't just a target story. It's a preview of how all companies are going to be tested in an environment where governance is increasingly symbolic, where the real pressure isn't just economic or regulatory. It's cultural, performative and political. And the companies that hold up won't be the ones with the best statements. They're going to be the ones who've done the internal work. Great point to end on, Craig. That's our show for this week.

We want to thank Shawn P Neal and the team at AdvoCast, as well as the people forward network for making our podcast possible. If you have comments or suggestions for the podcast we'd love to hear from you, our email address is podcast@ocrnetwork.com. Communication Breakdown is a production of the Observatory on Corporate Reputation. I'm Steve Dowling. And I'm Craig Carroll. Thanks for listening. We'll be back next week. [MUSIC] [BLANK_AUDIO] [BLANK_AUDIO]