One Successful Product

Have you ever noticed that when you go to your neighborhood Target in search of paper towels, you often leave with candlesticks and a throw rug that you didn't even realize you needed?

That's largely because of the ability of Target's merchandising departments to stock stylish and attractive items that are also affordable. And if you want to know who's responsible for that candlestick and throw rug you've now acquired, meet Kelley graduate John Butcher, Vice President of Merchandise Planning for Target. His teams purchase Apparel & Accessories, Home products and Healthcare items for Target stores.

Butcher came to the Kelley School as an undergraduate in 1992. He chose Kelley because of the School's strong national reputation for generating business leaders of the future. "I weighed my options against many other top business schools but, in the end, Kelley was not just the best but also the best value."

Butcher attributes his success at Target to the strong functional foundation in business that Kelley provides. "A career in a Fortune 50 company tends to take people in directions not previously dreamed and I can say that in my past seven jobs at Target that I've needed an understanding of finance, operations, marketing, technology, entrepreneurship, international business and a host of other skills that I learned at Kelley." Butcher says he learned things from Professors Richard Canada and David Rubinstein that he still finds applicable, even twelve years after taking his last Kelley class.

In addition, Butcher points out that Kelley's strong emphasis on teamwork prepared him for the extraordinary amount of collaboration and diversity that he experiences on a daily basis.

As Vice President of Merchandise Planning, Butcher oversees teams that buy and manage the inventory for almost 1,700 Target stores, so that guests find everything they need in stock. Butcher's biggest challenge is maintaining optimal inventory levels in stores—a delicate balancing act that is essential to profitability. Overstocking leads to items being marked down and sold at minimal or no profit; understocking means that guests leave the store without being able to buy what they needed.

Butcher explains that he has two roles in increasing profitability: "First, we are diligently managing our inventory. By ensuring there isn't excess inventory in the supply chain, we reduce markdowns and therefore drive profitability. Second, we are focused on increasing our owned brands like Archer Farms and Mossimo, which have a greater profit margin for Target. In my division, Merchandise Planning, we support this initiative by ensuring our owned brands are in stock. If they aren't in stock, we lose the sale and the profit."

The Merchandise Planning team faces another challenge, according to Butcher. In October, Target opened its first stores in Alaska, and will open its first Hawaii locations in March of 2009. Both locations pose major challenges for Target. "My responsibility is to help change how we manage inventory levels for these stores for reasons like the longer transportation time needed or the unique markets and seasons," Butcher points out.

Target isn't alone in facing new and evolving challenges. Butcher says that students entering business schools are likewise facing a number of challenges. First, Generation X is moving into leadership roles as Baby Boomers retire and Millennials enter the workforce. All three groups have very different working styles and will have to adjust to working with each other.

Second, Butcher observes that race, culture and ethnicity have dramatically changed and enriched the workforce. "Spanish is already the primary language of millions of Americans. Appreciating the differences of co-workers and leveraging them to drive better results will be key."

Finally, Butcher points out that technology and current economic issues are causing companies to change faster than ever. He argues that dealing with change will be important not only to help younger people confront these challenges, but to ensure that they can move upward in their career.

Addressing these challenges requires leadership from employees at all levels of the Target Corporation. To meet its future leadership needs, Target has partnered with the Kelley School to train students to be future business leaders through the Target Excellence in Business Leadership Program. The program connects Kelley students with mentors who coach them on leadership skills and connect them to leadership development opportunities. It also brings leaders from Target and other companies to speak to students, and supports electronic skill assessment and a portfolio documenting the development of leadership skills. Butcher worked with Kelley Marketing Professor Theresa Williams to launch the program. He observes, "Theresa is dedicated to developing future leaders and I've been consistently impressed with her level of student engagement."

Butcher is confident that the Kelley School has provided him with a foundation for addressing the business challenges he faces as a leader at Target, and he thinks that students considering Kelley for their business education can count on similar preparation. Not only does the Kelley School provide a well-rounded understanding of business taught by top-rated professors in a world-class facility, the School is located in the heart of the most beautiful campus in the Midwest. "What's not to love?" Butcher asks.