Bryan Bedder/Getty Images for Target
- Michael Fiddelke, who started at Target as a finance intern, takes over the top job at the retailer on Sunday.
- He must deal with declining sales and civil unrest in Minneapolis, the city where Target is based.
- The company's outgoing CEO will stay on as executive chairman, raising questions about how much change is possible.
Target's new CEO won't get a honeymoon period.
Michael Fiddelke, the company's chief operating officer who started as a finance intern, is taking over at a moment when the retailer is under pressure on nearly every front, grappling with a weakening business, political backlash, and growing employee strain.
Fiddelke, who officially takes the helm this weekend, will have to contend with 10 of the past 12 quarters having flat or declining comparable sales, as civil unrest unfolds in Minneapolis, where Target is headquartered. Target's stock is down more than 25% in the past year.
Peter Schwartz, a CEO coach of 20 years, told Business Insider that Fiddelke is facing a classic leadership paradox. He must balance sensitivity to a politically and socially charged moment with the non-negotiable responsibility of running a business.
"This is incredibly complex," said Schwartz, particularly if turning Target's fortunes around and improving employee relations calls for significant changes.
A Target spokesperson declined to comment on this story.
Target's mounting problems
Beyond its financial struggles, Target has lost a lot of the goodwill and cultural appeal that once differentiated it from other big-box chains. After more than two decades on Fortune's list of 50 most admired companies, Target did not make the cut this year, even as competitors like Walmart and Costco landed in the top 10.
Fiddelke knows he has his work cut out for him. During the August earnings call after his promotion was announced, the incoming chief laid out a three-point plan to get Target back in the good graces of US shoppers: lean into Target's style bona fides, improve the in-store experience, and invest more heavily in technology.
"I'm stepping into the role with a clear and urgent commitment to build new momentum in the business and get back to profitable growth," he said.
But relations with Target's workforce and local communities have also been under strain, with several employees telling Business Insider that they are disappointed in the company's response to immigration enforcement activity in Minneapolis.
Last week, hundreds of Target employees signed a letter urging the company to bar ICE from its stores and outlined other steps they want the company to take in response to ICE's actions.
Taking the company in a new direction and implementing big changes will require Fiddelke to win over enough board members to support his vision for Target's future. This could be tricky because the board promoted Fiddelke while keeping longtime CEO Brian Cornell on as executive chairman, essentially preserving the status quo in Target's leadership.
Former Target Vice Chairman Gerald Storch told Business Insider that when a company takes on a new leader, the outgoing CEO should leave within about six months to make way for change.
"Otherwise, the new CEO is CEO in name only and doesn't have an opportunity to really thrive and exercise his own will," Storch, who left Target's board in 2005, said.
Fiddelke's tricky balancing act
Target under Cornell's tenure delivered some strong business results while also championing progressive and inclusive issues, such as LGBTQ+ Pride and Black-owned businesses. Cornell also spoke out forcefully after the murder of George Floyd in 2020, saying that Floyd "could have been one of my Target team members."
But as Target's financial performance faltered, the retailer retreated from social controversies, scaling back summer Pride collections and winding down some corporate DEI initiatives. The company also made its largest political donation, a $1 million contribution to Donald Trump's 2025 presidential inauguration fund.
With roughly 50 Target stores in the Twin Cities metro area and its headquarters in Minneapolis, Target has also been dragged into a national political firestorm. Corporate leadership did not comment publicly after federal agents detained two employees at an area store, as then-Border Patrol commander Greg Bovino marched through another with a heavily armed entourage, and as Target parking lots were used as ad hoc staging and detainee transfer sites.
After a second Minneapolis resident was killed Saturday by Border Patrol, Fiddelke addressed employees Monday. He said in a video message that the recent violence and loss of life in the community "is incredibly painful."
Leadership experts told Business Insider this was the right move, but that Fiddelke faces a tough road ahead. He needs to stabilize the business, honor the rule of law, and still acknowledge that employees and communities are under real stress, said Jennifer Eggers, president of executive advisory firm LeaderShift Insights in Pennsylvania.
"If he over-indexes on ideology, he risks fragmenting the brand and the workforce. If he ignores the human tension entirely, he risks disengagement and erosion of trust," she said. "Strong leaders navigate the middle with clarity and credibility and involve employees in the dialogue."
A chance to lead
Despite the headwinds, Fiddelke has some things working in his favor.
CEO insiders tend to produce better results than their external counterparts, according to a 2025 Yale study of leadership transitions at Fortune 500 companies over the past five years. The findings show that CEO successors from inside delivered higher total shareholder returns than those from outside at the one-, three-, and five-year marks.
Not only is Fiddelke a longtime Target employee, but he also has family ties to the Minneapolis community, which are advantages because they give him credibility, said Sarah Federman, associate professor of conflict resolution at the University of San Diego's Kroc School of Peace Studies.
Those attributes signal to the company's workforce: "I'm one of you, and I've been here a long time and so work with me," she said.
Federman sees crises as opportunities for leaders to build or reinforce relationships with stakeholders by using words or actions that show support.
"This emotional security and feeling that your company has your back is going to matter," Federman said. "It could create real company spirit."
Fiddelke could go even further by temporarily shutting down Target stores in Minneapolis or other areas where immigration agents are active, she said. "That's a huge cost, but that would show his commitment to their employees," Federman said.
Still, any radical moves could put Target in Trump's crosshairs, said Don Moore, a professor at the University of California-Berkeley's Haas School of Business who researches confidence. He described the incoming CEO's message to employees this week as a small act of bravery.
"It may be a sign that Fiddelke is finding his own voice," said Moore.