The Heart of Business with Hubert Joly – December 2021

Hubert Joly, former Chairman and CEO of Best Buy and orchestrator of the retailer’s spectacular turnaround, joined OG100 members to unveil his personal playbook for achieving extraordinary outcomes by putting people and purpose at the heart of business.

Leadership Principles for the Next Era of Capitalism
by Hubert Joly
Former Chairman & CEO of Best Buy
Senior Lecturer at Harvard Business School

In 1982, Joly was as a hard-charging McKinsey consultant and partner. A client told him that the purpose of a company is not to make money. Profit is a result, not a goal. People create outcomes, the outcomes are what make a business profitable, so you need to manage your company in that order. As Joly continued his career, he began to recognize that the maniacal focus on profit doesn’t ultimately deliver results. Businesses do well by doing good. In May 2012, he took over Best Buy and the situation was bleak, however most of Best Buy’s problems were self-inflicted (i.e. high pricing, slow shipping, poor e-commerce experience, etc.). He spent his first week on the job in-store, working with the front-liners, and saw they had all the answers. The people weren’t the problem, but rather the source of the solution and were a necessary component in the co-creation of the future strategy. His role as a leader was to create the right energy and environment for employees to be creative, affect change, and create exceptional outcomes. What he learned years ago in business school is now either wrong, dated, or incomplete.

Don’t start with business goals or strategy; start with the individual and personal purpose. Get to know your people at an individual and personal level. For example, one Saturday morning at Best Buy, all the stores closed and held small team meetings. Through sharing personal stories, the teams began creating an environment of meaningful, human connection. You need to create processes that allow for everyone to write themselves into the story. How do you do that at scale? Coaching and communications are critical. As we tackle stressful issues, we must also take care of ourselves and reflect on the kind of leaders we want to be so we can help others. It sounds soft, it takes time, but it’s critical. And clearly, it worked. Best Buy was transformed as Joly and his team rebuilt the company into one of the nation’s favourite employers, vastly increasing customer satisfaction and dramatically growing Best Buy’s stock price. Today, turnover at Best Buy is lower than it was before the pandemic.

How do you create the space for change when running the company is a full-time job? Joly attests that the process of change requires dedicated resources; creating the necessary capacity will pay off. Best Buy created the “strategic growth office” that made visions come to life through prototypes, tests, and pilots. Today, COVID-19 is like the asteroid that eliminated the dinosaurs. We must agree that things have changed, and we need to reset and reimagine ourselves. However, businesses are the strongest institutions that exist today and are a platform that can be used to do good. There is no playbook for the issues we are facing today, and no one has all the answers. We are recognizing our interdependence, and zero-sum games are a thing of the past. We must figure it out together.