In 1994, Doug Scovanner found himself listening to recruiters’ calls for the first time in his career as he began to consider leaving his job as senior vice president for a Supervalu Inc. competitor called Fleming Cos. Inc.
One day he received a call from a headhunter who described an opportunity with an undisclosed company. Scovanner quickly guessed the identity of the prospective employer, even though the caller wasn’t allowed to reveal it.
“That sounds like the Dayton Hudson Corp. … That’s in Minneapolis, right?” said Scovanner, a Florida native. “Call me back if you have any other opportunities.”
Fortunately, the recruiter was persistent. She called back a month later, insisting that he come to Minneapolis to interview for the job.
The rest, as they say, is history. Scovanner joined Dayton Hudson, now the retail giant known as Target Corp., as senior vice president of finance in early 1994. Four months later, he was promoted to chief financial officer, a role in which he spent 18 years before retiring at the end of March. (That’s a near-eternity at a Fortune 500 company, where the average CFO spends less than five years.)
“I remained as fired up about what we were trying to accomplish year after year because every season presented new challenges and opportunities and required new ways of thinking through solutions as the corporation grew and became more complex,” Scovanner said. “It stayed as fun in the 18th year as it was in my first because of all of the change, not in spite of it.”
At the beginning of Scovanner’s tenure, the company’s shares were trading in the mid-$60s and paying a dividend of 42 cents. Today, the stock is still trading in the mid-$60s with a dividend of 44 cents. Of course, the stock has split 12-for-1 during that time.
The key to Target’s success, Scovanner said, has been the company’s dual commitment to creativity and fiscal responsibility. “We have never, at least in modern history, been forced to make a tradeoff decision because of the lack of available capital for a great idea.”
Over the years, Scovanner has played a key role in many major initiatives, including Target’s recent relaunch of Target.com, the sale of its credit card receivables portfolio and its upcoming expansion in Canada.
However, when reflecting on Target’s top fiscal accomplishments during his tenure, Scovanner instead pointed to financial decisions that rarely grab headlines, such as the company’s commitment to its fully funded, defined-benefit pension plan.
“It may seem like a strange example to someone outside of the geeky financial discipline, but I think it is an accomplishment that is emblematic of how the whole enterprise goes about accomplishing its objectives in a disciplined framework.”
But there have also been challenges along the way, including a failed hostile takeover attempt by J.C. Penney Co. early in Scovanner’s time at Target.
“I believed then, and continue to believe today, that it would have been a tragic error to have allowed that marriage to occur,” he said. “The numbers since then speak for themselves.”
Scovanner also was part of the leadership team that made the difficult decision to sell the Marshall Field’s and Mervyn’s department-store chains in 2004.
While Scovanner shied away from talking about personal accomplishments, preferring only to speak in terms of his team or the company as a whole, Target CEO Gregg Steinhafel was quick to praise Scovanner for the key role he played in the company’s success during the past 18 years.
“He’s been instrumental in developing our road map to building the right team and ensuring we have the right capital structure,” Steinhafel said. “He’s been a great thought leader to me as the CEO for the past four years. He has a deep understanding of the business and has a tremendous gift in terms of how he communicates, both internally and externally.”
He also noted Scovanner’s encyclopedic knowledge of the retail industry.
“He knew everyone’s business model, cold,” Steinhafel said. “You’d ask him some obscure question about some competitor of ours and he would go into this recitation of their business model and their profit formula, what they’re good at and what they’re not — and it’s like, ‘How do you know that?’ He’s just full of factoids and surprises.”
Target’s new CFO, John Mulligan, who worked under Scovanner for 16 years, praised him for his leadership and mentorship, particularly during the transition.
“It’s hard for me to think about all of the things Doug has taught me about Target and this role,” Mulligan said. “He has been so gracious and thoughtful, always willing to provide his perspective.”
After his retirement in the spring, Scovanner stayed on with Target in a part-time role through October to assist with the transition. He’s not yet sure what he’ll do next.
“I have watched a lot of others make decisions that I think were made in haste, so I’m taking my time to figure out what’s next in terms of my own personal engagement,” he said. “Whether that might lead to something in the not-for-profit sector or a completely different role in some other place remains to be determined, but I have no interest in trying to replace the role I had here. If I wanted to be the chief financial officer of a large corporation, there would be no better place to do that than to have continued to do that here.”