Improving Workflow Efficiency: How Target Wastes $4,959,466 Per Year

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Improving workflow efficiency is crucial for building a sustainable business. I’ll highlight a mathematical case study of how human capital is wasted.

Improving Workflow Efficiency: A Case Study on Target Corporation

If you work online as an entrepreneur, it’s absolutely vital that you have an efficient workflow. As a solo entrepreneur, I like working by myself because I can control the outcomes.

By working solo, this comes with natural ways to improve efficiency and automation. Making a living online has never been easier.

What better ways to improve your self-efficiency than looking at a behemoth company filled with inefficient processes?

I wanted to highlight a case study that will illustrate how you can work more efficiently. What better place than Target Corporation?

Why?

Target has split office locations in downtown Minneapolis, which requires significant time spent walking between offices just for meetings. This results in wasted money and productivity.

How much money? $4,959,466

Yes, Target wastes $4,959,466 per year just by having split offices.

Target should take action to solve this ongoing inefficiency to remove redundancies. Click To Tweet

How Target is a Great Case Study for Workflow Inefficiency

Target Corp. is a prime example of workflow inefficiency. They are currently wasting significant sums of money just by not controlling their corporate office functions, workflow and communication.

Split Office Locations

For those of you that don’t know, Target Corporation has two split corporate office locations in downtown Minneapolis. You can see the office locations in the map below.

The office location for Target Corporation at 33 S 6th Street is designed for the following work functions:

  • Compliance
  • Legal
  • Accounting
  • Finance
  • Risk

The “Target Headquarters” location at 1000 Nicollet Mall hosts the following function:

  • Marketing
  • Buyers
  • Supply Chain
  • Management
  • Executive Offices

Between these two offices, you can imagine there is quite a bit of overlap and requirement for in-person meetings between the two offices.

Having offices split by approximately 5 blocks is not really a recipe for productivity and efficiency.

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Target’s Workplace Inefficiency

According to a Minneapolis Business Journal article, there are approximately 7,500 Target corporate employees in downtown Minneapolis (in total between the two offices).

This is down from a staggering 12,582 employees since 2014. This is when they had 3 CORPORATE OFFICES.

Don’t even get me started there.

The recent Minneapolis Business Journal article was from 2016.

2016 wasn’t exactly a banner year for Target… I’d bet they have since hired more employees since then.

Target has since expanded the team, so let’s conservatively estimate that there are 8,000 Target corporate employees between the two offices.

To walk from Target’s offices at 33 S 6th Street to 1000 Nicollet Mall is approximately 4 blocks or 8 minutes.

That might not seem like a lot. That’s only one way.

To go to a meeting, you most certainly will need to go back to your office after commuting by foot to the other office.

Target Corporate Offices Walking Distance
Target Corporate Offices Walking Distance

So, that’s 16 minutes of wasted time just to have a meeting… That doesn’t even count elevator time.

Let’s tack on another 4 minutes. That would mean a respectable 2 minutes each way waiting and riding the elevator.

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The Math Behind Target’s Wasted Human Capital

This means that, in total, it takes every Target employee 20 minutes of their time just to have a meeting.

Don’t think this happens often? Well, it does…

People are constantly moving between the two corporate offices to have meetings and it is a workplace efficiency killer.

20 minutes per employee (see above: there’s 8,000 of them) to hold a simple meeting that could otherwise be done in the same office building.

Imagine if Target had just one corporate office…

Let’s calculate how much wasted human capital there is as a result of having 2 corporate headquarters.

  1. 20 Minutes Divided By 480 Minutes (assumes an 8-hour workday) = 4.1666666667%
  2. The Average Target Corporate Employee’s Salary is $74,392, according to Payscale
  3. Not Everyone is Having a Meeting Everyday, So Let’s Assume 20%, or 1,600 employees, Have Meetings Between Offices Daily (Out of 8,000 Employees)

Here is the calculation…

4.166667% x $74,392 x 1,600 employees = $4,959,466.67 Per Year

The funny thing is the beginning part of the equation on a per employee basis… It costs each employee annually $3,100 (4.167% times $74,392) to have these meetings.

Imagine if you factor in coffee breaks, lunches, etc. At Target, an 8-hour workday would be considered a busy, long day.

If you factor in shorter days, the ratio of time lost relative to what they are being paid gets worse.

Additionally, there are employees that have to do this multiple times per day. That’s 1 hour of just walking time!

Collaboration isn’t spending 13% of your day walking. Click To Tweet

It’s completely wasted air. And each time it happens there’s nothing you can do to get that human capital back.

It’s important to carry a mindset like a solopreneur and their KPIs. Stay lean and dynamic.

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Why Improving Workplace Efficiency is Crucial

I think any entrepreneur can learn from a case study such as the above. Being a lean and mean growth machine is crucial to any business.

Nowadays we are armed with a number of different tools that enable us to avoid glut and work more productively. You can use multiple tools such as Trello, Evernote, Slack and more for collaboration.

Additionally, you can simply have video conference meetings. If you are committed to success, you need to extract every minute out of your day to accomplish your responsibilities.

We are moving to a more freelance based economy.

There could be more functions that could be outsourced to freelancers or external service providers that certainly won’t spend 10-20% of their day walking. Spending your time walking is the ultimate need for improving workflow efficiency.

It’s not even part of the workflow at all. No matter the function!

Use our freelance rate calculator to determine how much you need to charge hourly to meet your annual income goals.

See Related: Best Freelance Business Ideas to Consider

How to Become More Efficient With Your Work

The above case study on how to be inefficient with your work brings up a few outstanding points and lessons learned on how to be more efficient with your work.

This includes the following ways to be more efficient.

1. Remove Excess and Inefficiencies

Do you want to manage your employees like Michael Scott from The Office? Or, would you prefer to work in an efficient manner that accomplishes multiple things at once?

Start removing redundancies in your work. Take more time to map our your daily work plan for accomplishing tasks and projects. The excess could easily be eliminated if Target had one consolidated headquarters.

This is a step better than when they had a third campus building! Imagine spending your day driving between offices as an office employee.

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2. Pick Up the Phone

Talk to people. I can speak with a person on the other side of the world in 5 minutes if I want to. Target goes and spends 20 minutes of each person’s time by sending them to another office for a meeting.

Coffee break? Tack on another 10 minutes to that. Simply talk to people on the phone to discuss an email or something directly. No need to loop in unnecessary team members.

Use a rule of thumb of is this meeting worth $1,000 or more. If not, discuss on the phone or not at all.

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3. Efficient Collaboration is the Future

Target clearly needs to have a coming to Jesus moment where the retail industry is now more competitive than ever and workflow collaboration/efficiency is paramount.

You simply can’t afford to waste another dollar of human talent on walking.

It would drive me completely nuts if I had to carry my laptop 5-6 blocks every day just to have a meeting. Online video chat is easier than ever before.

Why not just interact face to face with your peers?

See Related: How to Make $200 Per Day

Conclusion on Improving Workflow Efficiency

Target’s inability to consolidate corporate headquarters will continue to waste workplace productivity and efficiency.

By having one centralized office, the company can improve workplace efficiencies instantly and start saving money for the company.

A much more collaborative approach is key in today’s workplace. Look at some of the largest, most innovative companies in the world:

  • Apple = Consolidated Work Campus
  • Google = Consolidated Work Campus
  • Facebook = Consolidated Work Campus
  • See a Trend?

Innovation and collaboration are key for the above companies and there’s something to be said about industries that need a changing perspective such as retail, industrials, etc.

Don’t be like Target. Be a wolf. Join the community of other Financial Wolves.

Are you ready to start improving workflow efficiency? Please let us know in the comments below.

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