Target CEO departure watershed for IT, business alignment

Summary:The exit of Target CEO Gregg Steinhafel can largely be attributed to a massive IT failure. The lesson: IT is your business now and the two functions are intertwined and aligned.

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Target CEO Gregg Steinhafel's departure from the retailer following a massive data breach that damaged the company's reputation could be a watershed moment for information technology and business alignment.

Simply put, IT is your business and massive failures even cost the big dogs their jobs. Technology execs have worried about business alignment forever. Stop worrying because business and IT are aligned. If IT blows up---or 110 million customer accounts are breached---so does the business.

Previously:  Target CEO out after massive cyberattack; CFO to replace

Target names DeRodes CIO; Aims to rebuild security chops

Target said Monday that Steinhafel will step down from being chairman, president and CEO. Target CFO John Mulligan will be interim CEO.

While Target's statement thanked Steinhafel and noted that he took the company through "unprecedented challenges" such as the financial recession, proxy battles and the company's 2013 data breach, it's fairly clear that the last crisis cost the CEO his job. Steinhafel "held himself personally responsible" for the breach, said Target.

In other words, sacking CIO Beth Jacob wasn't enough . And adding Bob DeRodes , a long-time IT veteran, CIO wasn't going to be enough. Steinhafel's departure was needed to give Target a clean break. There's an argument that Target's response to the data breach was textbook: The company was upfront, transparent and took responsibility and outlined its next steps.

But the response only goes so far. IT failure led to Steinhafel's departure.

In recent times, it's hard to recall a corporate chieftain losing a gig over an IT failure. Typically, heads roll over IT failures, but the CEO is usually the one controlling the guillotine.

Steinhafel's exit may change that equation. IT is so intertwined with business success that the CEO can't be distanced from technology projects. The key takeaways here break down like this:

  1. IT is your business. 
  2. Every business is becoming digital. 
  3. Leaders need to know IT and be able to align with the business. 
  4. Enterprises all run on software and that's going to restructure industries. 
  5. IT isn't a cost center. It's an ass saver and enabler.
  6. Big data and the ability to use it for competitive advantage will rewrite industries.

Perhaps Steinhafel's exit is a one-off and not the beginning of a trend. But the business stakes are getting higher and IT is what will choose winners and losers. It's only common sense that other IT failures will cost titans of industry their gigs.

Topics: CXO, Security

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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