Target CEO departure watershed for IT, business alignment

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.

SHARE:
TOPICS: CXO, Security
14
target page

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

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

14 comments
Log in or register to join the discussion
  • looks like offshoring did not pay off

    some got their pockets lined up while lobotomizing the IT, and others have to foot the bill.
    LlNUX Geek
    • What?

      Exactly what part of the offshored infrastructure (if any) was responsible for allowing this breach?
      ReadandShare
    • I've seen that too many times

      fire a couple of highly paid professionals - hire a swarm of 'coders' (outsourced) - make the numbers look good - get your bonus and some payoff from the outsourcing company - depart - let the company pick up the pieces.
      ForeverSPb
      • What?

        Do you know for a fact that codes responsible for allowing this massive breach were done offshore?

        I have seen this too many times. Idiot Americans kneejerk blaming "foreigners" for pretty much everything. So we hire only our own kind to code from now on... would that have prevented the recent 'Heartbleed' fiasco? And we used to pay top dollars for American workers to make cars... and that got us a slew of junk cars...

        There's a lot more to ensuring quality than blaming 'foreigners'.
        ReadandShare
  • Would it happen with a Manfacturing Business?

    While the issues of IT Security is paramount, I have to wonder if would happen with a manufacturing business? Given the various 'design breach' stories in the defense industry over the years, it is not like we have seen CEOs from Boeing, Northrup, GE, etc. 'getting the chop' as it were.
    Matthew A. Sawtell
    • Different Industries

      Different industries will have somewhat different responses to data breaches. Some data breaches basically harm the company breached while others (Target, Michael's) affect innocent third parties. Both should cause C-level heads to roll but which ones should roll.
      Linux_Lurker
  • One time only

    And instead of decreasing offshoring and outsourcing, it will increase it as vulnerable industries implement IT departments as babysitters, and complicated bureaucracies and auditing "procedures" so the CEO can say they kept track of it. Then, if it blows up, just sever that tie and move on. No muss, no fuss. Someone else cleans up. They can say what they had documented was not what they got. The babysitter may take the hatchet, but the CEO and upper management - life will be just fine. Strategic separation.
    jwspicer
  • "IT isn't a cost center. It's an ass saver and enabler."

    Explain this to your average moronic beancounter.

    Many years ago Fram had an oil filter commercial with the tag line about paying the mechanic for a car repair: "Pay me now or pay me later". Change your oil, including a new oil filter, or pay for an engine rebuild. Excellent IT practices are proactive protection preventing potential massive loses later that even mean the company fails; pay for IT now or pay eventually massive amounts of money to clean up the mess.
    Linux_Lurker
  • What Choosing Microsoft gets you - FIRED!

    We all know Target's Point Of Sale systems ran on Microsoft and were responsible for the breach. Heck, MS even featured them as a "star of MS stuff".

    So let this be known, use Microsoft and get FIRED! "PEOPLE GET FIRED FOR BUYING MICROSOFT!"
    itguy10
    • I'm sure Microsoft invented OpenSSL, too...

      *rolleyes*
      HypnoToad72
      • Fired for buying XXX

        The problem alluded to is the tendency of beancounters and MBA to buy not on technical merit but because their preferred vendor is well known. I can remember when one said IBM instead of MS. What should happen is the beancounter and MBA who insisted on MS should be fired when the IT department recommended a different solution.

        I will not excuse the bug in openSSL but point out the latest IE exploit affected versions of IE released at least years ago.
        Linux_Lurker
  • Okay, trolls...

    Who's heart was bleeding...??? Huh!
    jwspicer
  • so his departure bonus ($55M) will allow him to live

    800 years at an annual pay that's higher than people who do less desirable work...
    HypnoToad72
  • Maybe the new CEO will know the difference between Few and Less.

    If so he will change the fast checkout sign from 10 items or less, to 10 items or fewer. Grammar 101 folks, and yes it makes a difference. Publix grocery stores have it correct why not Target?
    BubbaJones_