Walmart's Insider Edge vs. Target's Skeptical Shift: Retail's Leadership Divide

Walmart's CEO succession plan has drawn praise for its clean break with outgoing leader Doug McMillion, while Target's transition to Michael Fiddelke has sparked skepticism, highlighting divergent approaches to leadership change in retail. The contrasting trajectories of the two retailers underscore broader debates about internal vs. external CEO appointments and the role of institutional knowledge in navigating market challenges.

Doug McMillion, who took the helm at Walmart in 2015, is stepping down as CEO in February 2026 and will exit the board entirely by June 2027, according to a planned transition. His successor, John Furner, has spent three decades at Walmart, most recently leading the U.S. division-a role that drove $600 billion in annual revenue. Analysts credit Furner with preparing the company for the rise of AI-driven commerce, positioning Walmart as a tech-savvy competitor to Amazon. "This was a planned and thoughtful leadership transition from a position of strength," a Walmart spokesperson said, noting the company's deep talent bench and consistent operational execution .

In contrast, Target's appointment of Michael Fiddelke, its current COO and former CFO, has raised concerns. Brian Cornell, who led Target since 2014, will remain as executive chairman, a move some observers view as perpetuating the leadership that oversaw recent struggles. Target's shares have fallen 15% since the announcement, with critics arguing that Fiddelke lacks the fresh perspective needed to address supply chain issues, stagnant merchandise appeal, and customer service complaints. "This does not necessarily remedy the problems of entrenched groupthink," wrote Neil Saunders of GlobalData .

The divergent outcomes reflect broader trends in CEO transitions.

A Yale School of Management study found that internally promoted CEOs outperform external hires by a significant margin, with insiders achieving faster acclimation and stronger stock returns in the first year post-appointment. "Someone on the inside often gets disparaged too quickly because you know their successes, but you also know when they tripped up," said Professor Jeffrey Sonnenfeld, co-author of the study. The research supports Walmart's strategy, as Furner's deep institutional knowledge aligns with the findings .

Walmart's stock has surged 300% under McMillion's tenure, outperforming Target's 60% gain under Cornell. The retailer's focus on AI and e-commerce has bolstered its competitive edge, while Target's post-pandemic struggles-marked by empty shelves and shifting consumer priorities-have eroded confidence. Analysts like TD Cowen's Oliver Chen see continuity as a strength for Walmart: "We expect a continuation of current strategies under Furner," he wrote .

Market reactions to the transitions further highlight the divide. Walmart's shares remain near 52-week highs, with Wall Street lauding its robust earnings guidance and strategic pricing power. Target, meanwhile, faces pressure to articulate a clear turnaround plan, with activist investors urging board reforms. "Fiddelke has new ideas to rebuild Target's brand equity," said Quo Vadis Capital's John Zolidis, "but these have to be articulated" .

The debate over internal vs. external appointments remains unresolved. While the Yale study argues against the "savior" narrative of outside hires, some experts caution that rigidly favoring insiders risks complacency. Target's situation, however, has reinforced the risks of prolonged internal transitions, particularly when legacy challenges persist.