New story in Business from Time: Target Temporarily Closing 105 Stores in 10 States as Nationwide Protests Continue

Target is temporarily closing 105 stores in 10 states after several were broken into during protests over the death of George Floyd in Minneapolis last week.

The company is closing 46 stores in California and 33 in Minnesota, where the company is based and where the protests over Floyd’s death began. Target is also closing some stores in Colorado, Pennsylvania, Illinois, New York, Georgia, Oregon, Michigan and Texas.

Floyd, who was black and handcuffed, died while being arrested by Minneapolis police for suspicion of passing a counterfeit bill on May 25. Cellphone video showed that a white officer, Derek Chauvin, pressed his knee into Floyd’s neck for several minutes while Floyd pleaded for air and eventually stopped moving. Chauvin now faces murder and manslaughter charges. The other three officers who took part in the arrest were fired, but they haven’t been charged.

Minneapolis-based Target didn’t say how it chose which stores to shutter or how long they will remain closed.

“We are heartbroken by the death of George Floyd and the pain it is causing communities across the country,” Target said in a statement. “Our focus will remain on our team members’ safety and helping our community heal.”

Target said employees at stores that are closed will be paid for up to 14 days, including premiums they are earning due to the coronavirus pandemic. They will also be able to work at Target locations that remain open.

New story in Business from Time: Accenture’s Julie Sweet Has The World’s CEOs On Speed Dial. Here’s A Chance To Listen In

(Miss this week’s The Leadership Brief? This interview below was delivered to the inbox of Leadership Brief subscribers on Sunday morning, May 31; to receive weekly emails of conversations with the world’s top CEO’s and business decision makers, click here.)

As CEO of Accenture, Julie Sweet is plugged into how the world’s CEOs are responding to the current moment. Accenture is one of the world’s largest consulting and professional services firms, and its clients include 91 of the Fortune Global 100. Sweet, 52, spends her days as something of a CEO whisperer, talking to chief executives around the world, both downloading and sharing key insights into how companies are adapting to the new reality. And much of what she is hearing (and advising) is surprising.

For one, she warns that companies planning to save money on office space by permanently having some portion of their employees to remote work may be making a big mistake. “Personal engagement remains essential for long-term success,” says Sweet. “Don’t fall in love with the savings on real estate.”

And despite anti-China national political rhetoric and Beijing’s tightening grip on Hong Kong, Sweet says there is a rush to invest in China and Asia, where the crisis hit earlier. “China is being very resilient,” says Sweet. (Accenture has 15,000 employees there and most are back to work.) “We have a lot of companies who are stopping investment here and trying to do more investment there. You see countries like South Korea, Singapore, and Taiwan address the crisis much better. This could be a real boon to the Asia markets.”

Also, she worries about the economy and how much the stimulus spending is masking the extent of the pain. “There’s this thing that’s coming around the corner where unless you believe the economic recovery is going to be fast enough, the stimulus money is going to end before there’s been a recovery, and we cannot predict how that is then going to affect things.”

Sweet grew up in Orange County, Calif. As a student, Sweet was a star debater and went on to Columbia Law School and became one of the early female partners in a New York law firm’s corporate law department. She worked on deals and advising boards, until joining Accenture in 2010 as general counsel. Lawyers are trained to be learners, she says, and each quarter Sweet sets herself a learning goal. Please read on to find what she is teaching herself now.

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(This interview with Accenture CEO Julie Sweet has been condensed and edited for clarity).

You talk to a lot of CEOs. What is the one thing you are consistently hearing from them about the path forward?

It’s how do you outmaneuver uncertainty. Every CEO would tell you right now that what is driving them crazy is real uncertainty that we can’t control.

So that’s the hardest thing for you right now?

The uncertainty. I was just talking to a CEO this morning in Europe. Right now, people are lulled a little bit because of the stimulus. A lot of it really smoothed things both in Europe and in the U.S. because the unemployment has been very generous. He was like, “Look, Julie, soon this is going to end. And people are going to start being laid off.”

Pivoting comes up a lot now, with companies rightly proud of how quickly they have pivoted. Is there a danger in moving too quickly or is this an overdue correction?

On balance, this is good because there are many companies and industries where their survival long-term really required them to be moving faster than they were. So I think that’s great.

So fewer meetings and layers of approval will be one aspect of the new normal?

[CEOs] are saying ‘Wait a minute—my organization, when we were all together, they’d do five prep meetings before they came to talk to me. Now we’re not doing that anymore.’ So the organization is taking out layers and hierarchies. In a distributed workforce, it’s not as easy to say I’m going to have all these different meetings.

Any worries about the current speed of business?

Every CEO would tell you right now that what is driving them crazy is real uncertainty that we can’t control.Here’s my concern. We weren’t ready pre-crisis globally to address the re-skilling need that automation is going to bring. As a reaction to what’s happening, you’re going to have hyper-automation because you have to. If you have to bring your supply chain, your manufacturing, home because you’re now at risk, or for regulation, you’re going to do so in a way that’s highly automated. We are at 15 to 20% of what could be automated. We’re going to see the speed of that rapidly ramp up, and the worry I have is that we weren’t ready beforehand for re-skilling, and we now need to pivot. How are we going to bring government, companies, and not-for-profits together to address that, with equal speed? We’re not seeing that.

Reskilling is hard.

It’s really hard. And no one’s talking about that yet. We have to globally get real focused on this very fast.

Will the consulting model change? When will your teams start working for weeks on end in client offices again?

With density in offices going down, it’s very unclear how fast clients are going to want to be co-creating with their outside partners versus needing the space for their own people in a world where they can’t have as much density.

Will that be a lasting change?

I do think it will be permanently changed. In our mental model, we believe that for a prolonged period of time, what we’ve managed to do quite successfully, which is remote innovation and collaborating with our clients remotely, will continue, with the ability at times to get together. Our business is being changed because patterns of travel amount will be changed.

So remote work and a smaller real estate footprint is the future?

I say this to anyone who will listen, personal engagement face-to-face remains a critical part of success. And we should all be careful to not tilt too much: Don’t fall in love with the savings on real estate. While it was an incredible insight that you can innovate remotely, it is not a long-term answer. Personal engagement remains essential for long-term success.

So you are not ripping up your leases?

No, in fact, we went too far [cutting back on office space] in the ’90s in certain countries like the U.S., and over the last 5 years, we have steadily added to our real estate footprint in order to create innovation spaces with our clients.

Let’s talk about the new sexiest topic in business: supply chains. Do you think we took just-in-time, keeping inventories at low levels, too far? And how do you see that changing?

I don’t think we were wrong in just-in-time. What you now have is you’re going to have much more automation.

What changes are businesses going to make to ensure that they can get the parts and materials they need to make their products?

You basically are going to have four things happening. You’re going to have regulation that forces companies to bring certain things back. The second thing is you’re going to have a different relationship with the smaller suppliers, where you see more financing and more help with security because by definition, if you have to move to suppliers who are near your factories, and they’re not the scaled ones, they have security issues, they have financing issues. The third thing that’s going to happen is you are going to see an acceleration of what were kind of emerging technologies to address different ways of manufacturing, and change those supply chains. 3D printing is a different way of doing just-in-time, right? And the fourth thing that you’re going to see, I believe, is a revisiting of the trade alliances. Mexico became a very important place to manufacture. All the U.S. companies—it’s been there for years but they were using China. Now the conversation is, “We need to go to Mexico. Not move from China.”

What is your CEO network saying about the future of globalization and global trade? Is this a setback for globalization?

The pandemic just emphasized the critical interconnection of our economies, which no one believes is going to truly be unwound.

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Where does China fit in?

China is being very resilient. We have a lot of companies who are stopping investment here and trying to do more investment there. You see countries like South Korea, Singapore, Taiwan address the crisis much better.

This could be a real boon to the Asia markets and people having to pivot to growth and do more investment there. To take advantage of the consumer base there. And so a lot of CEOs—we’re having discussions on what might be some underlying competitiveness changes, and how do we make sure that Europe remains a viable market, right? That the U.S. stays on top of innovation.

You speak Mandarin. You’ve done a lot of business in China: What are you hearing from your sources on the ground there?

We have 15,000 people there. Our operations there are almost completely back to normal. That being said, there’s been a big shock to the system and China manufacturing is heavily dependent still on demand outside of China.

It’s certainly been resilient, and we are seeing demand to access that market.

How do you manage in this stressful, anxious environment?

Calmness is absolutely critical. At the end of the day, we can’t control a lot, and so I’m very direct: “Here’s where I need you to do this because it is within our control.” And then I respond to the other things as “You’ve got to be calm when you get the bad news that you can’t control because it doesn’t help to add more stress.”

Do you get discouraged at being the only woman in meetings? Are you in the room a lot where you’re the only woman in a meeting?

It very much depends on the country. It’s just vastly different in Japan versus the U.S. versus various countries in Europe. Right? So, in the U.S. I’m often not the only woman. The only time I get discouraged is if in fact no one’s talking about it.

How are you doing on gender balance at Accenture?

China is being very resilient. We have a lot of companies who are stopping investment here and trying to do more investment there.We set a goal for 50-50 (of the total work force) by 2025, and we’re on track. We set a goal for 25% of our managing directors to be women by 2025, which is industry leading, and we’re on track. And remember, we’re tech. This is not a walk in the park.

You were a champion debater as a student. Did you like arguing for or against a proposition?

I did like negative more than affirmative. It was more fun. When you’re doing the negative, you have to respond on your feet because the affirmative lays out the case and I just loved the challenge of having to quickly digest and respond. And it’s probably a bit of my DNA, and why I became a lawyer and why I’ve thrived in a world of so much change because I like that challenge.

Speaking of learning, I understand that you assign yourself a learning goal each quarter. What have you focused on previously and what is your current focus?

My first quarter was all about digital manufacturing. The second quarter was 5G, which is a very important technology that just got more important. And right now, I’m going deeper on Cloud because the crisis has so accelerated the journey to the Cloud. I’m learning about hybrid Cloud.

What was your life like growing up and what lessons from your parents do you still find yourself relying on today as you lead a big organization?

I grew up very modestly. My dad did not graduate from high school. My mom graduated from college my freshman year in college. My dad painted cars for a living. But they had an amazing optimism and belief that if you worked hard, you could do anything. And I think that sense of optimism, with a work ethic, has been a really big part of my life. I once coined the phrase, “fearless but prepared.” You don’t just take risks for risk-taking. I’d say that though as a leader today, one of the most important lessons was the one my father gave me when I left school to go to college. I grew up in a very different environment and my dad said, “Don’t be afraid you’re leaving us behind and you’re going to go experience these things. That’s what I want from you. But never forget where you came from.”

And the way I translate that today as a business leader is that we all have to go into these new places: We’ve got to digitize. It’s going to have tough effects on our workforce, on our communities. But we have to do that. But the equivalent of “don’t forget where you came from” is “you cannot forget our people.”


SWEET’S FAVORITES

BUSINESS BOOK: Colin Powell’s It Worked for Me: In Life and Leadership. It’s one of my favorite leadership books.

AUTHOR: Martin Gilbert.

APP: Waze. I am terrible at directions.

[newsletter-leadership]

New story in Business from Time: Infected Workers and Supply Shortages: Why America’s Auto Industry Is Slow to Restart

(DETROIT) — The U.S. auto industry’s coronavirus comeback plan was pretty simple: restart factories gradually and push out trucks and other vehicles for waiting buyers in states left largely untouched by the virus outbreak.

Yet the return from a two-month production shutdown hasn’t gone quite according to plan. For some automakers, full production has been delayed, or it’s been herky-herky, with production lines stopping and starting due to infected workers or parts shortages from Mexico and elsewhere.

“There’s a lot that can go wrong in bringing people back into the plants to try to build very complicated assemblies,” said Kristin Dziczek, vice president of industry and labor at the Center for Automotive Research, an industry think tank.

Most automakers closed factories in mid-to-late March when workers began to get sick as the novel coronavirus spread. The factories started to reopen on one or two shifts in mid-May as state stay-home restrictions eased, with automakers touting safety precautions that include checking workers’ temperatures, certification by workers that they don’t have symptoms, social distancing, time between shifts and plastic barriers where possible to keep workers apart.

Still, some workers got COVID-19, although it’s not known where they were infected. In some cases they still came to work, forcing companies to close plants temporarily for cleaning. In at least one case, a worker at a seat-making plant near Chicago got the virus, forcing a shutdown and cutting off parts. General Motors had to delay adding shifts at truck plants because the Mexican government wouldn’t allow full parts factory restarts until June 1.

Ford seemed to be hit the hardest, pausing production a half-dozen times in Dearborn, Michigan; Chicago and Kansas City, Missouri; to disinfect equipment and isolate workers who may have come in contact with those who tested positive.

Honda and Toyota each reported brief production pauses to disinfect equipment when a small number of workers became infected. GM and Fiat Chrysler said they have not shut down production lines due to infected workers.

None of the automakers would give exact numbers of workers who have become ill since plants were restarted. The United Auto Workers union said Ford and GM have had at least a half-dozen cases, while Fiat Chrysler has had five. At least 25 UAW members employed by the Detroit Three have died from the virus this year, but it’s not clear where they caught it.

Dziczek says the on-and-off work stoppages will make it difficult for automakers to meet any increased demand.

“I think this is the way this is going to be for a while,” she said. “You need to have the confluence of healthy workers, a healthy supply chain and healthy demand all at the same time.”

U.S. auto sales have tanked since the virus began spreading in March, with sales in April down 46% from a year ago. Analysts are forecasting an improvement in May, but still a year-over-year decline of more than 30%. Cox Automotive predicts that May pickup truck sales will be down 18% from a year ago.

Despite those declines, automakers are reporting depleted supplies at some dealers, especially for pickup trucks in the Midwest.

Assembly lines at Ford’s 4,000-worker pickup factory in Dearborn, Michigan, have been closed twice due to workers with the virus or union fears that the shutdowns weren’t long enough.

The UAW local at the plant filed a grievance against the company seeking a full shutdown and testing of every worker, said Gary Walkowicz, a local bargaining committeeman. The local also wants a 24-hour waiting period after equipment is disinfected to restart the plant.

GM spokesman Brian Rothenberg said it’s being vigilant about making sure companies follow safety protocols.

“We have advocated for as much testing as possible and full testing when it’s available,” he said.

Ford procedures, following newer recommendations by the Centers for Disease Control and epidemiologists, say equipment is safe within minutes of being disinfected. In some instances the company has waited several hours before bringing workers back.

“We are requiring our workforce to follow these protocols in our facilities – and encouraging them to do the same outside of work,” Ford spokeswoman Kelli Felker said.

GM announced that production will get closer to normal starting Monday as it adds shifts “to meet strengthening customer demand and strong dealer demand.” A company statement said three pickup truck assembly plants will go from one to three shifts, while three SUV plants in the U.S. and Canada will go from one shift to two.

At GM’s pickup truck factory in Fort Wayne, Indiana, worker Andrea Repasky was waiting for the call to return to work on the third shift.

“I’m ready to go back, as long as everyone is cautious and stays safe,” she said. “We have to go back sometime, right?”

Fellow workers have told her that GM is doing all it can to protect workers from the virus as they return to work, Repasky said. Yet she knows infected people might unintentionally spread the virus if they don’t have symptoms.

“I don’t know that anyone anywhere can really make it so we don’t catch it,” she said.