What: Amid slumping sales and controversy over its diversity policies, Target is replacing CEO Brian Cornell with longtime executive Michael Fiddelke, signaling a strategic crossroads for the retailer.

Why it is important: This case illustrates the consequences of misaligned strategy and groupthink, showing how leadership choices and social responsibility can directly affect performance and reputation.

Target is entering a pivotal phase as it announces the departure of CEO Brian Cornell, who will be succeeded by internal candidate Michael Fiddelke in February 2026. The leadership transition comes as the retailer faces persistent sales declines, mounting competition from Walmart and Amazon, and significant backlash over its retreat from diversity, equity, and inclusion (DEI) initiatives. The rollback of DEI policies has led to consumer boycotts, a notable drop in store traffic, and reputational damage, highlighting the risks of abrupt changes in social responsibility strategy. Target’s heavy reliance on discretionary merchandise and higher tariff exposure have further pressured margins, while its decision to promote from within has drawn criticism for perpetuating groupthink and failing to address underlying strategic missteps. As Fiddelke takes the helm, the company’s ability to innovate, restore consumer trust, and adapt to evolving market dynamics will be critical for its long-term recovery and relevance.

IADS Notes:

Target’s CEO transition and recent strategic challenges are emblematic of the complex pressures facing major US retailers in 2025. As detailed by the Financial Times (February 2025), Target’s retreat from DEI initiatives triggered significant consumer backlash, a 9% drop in store visits, and reputational damage, contrasting with Walmart’s more measured approach as reported by From Day One (January 2025) and The Robin Report (January 2025). ESG Dive (April 2025) highlights Target’s subsequent efforts to engage civil rights leaders and manage the fallout, while The Economist (May 2025) and CNBC (July 2025) provide context on the company’s struggles with discretionary merchandise, tariff exposure, and intensifying competition from Walmart and Amazon. The appointment of Michael Fiddelke as CEO, despite investor calls for external leadership, underscores ongoing concerns about internal groupthink and the effectiveness of Target’s current strategy. Collectively, these developments illustrate how leadership, social responsibility, and operational agility are now central to navigating the evolving US retail landscape.

Target’s CEO is stepping down