Best Buy’s Hubert Joly on Redefining Your Company’s Purpose
Feb 7, 2024
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Hubert Joly, former CEO of Best Buy, re-defined the company's purpose by prioritizing fair pay and employee advancement. He found ways to work with competitors like Amazon. Joly discusses the challenges of leadership and the importance of embracing stakeholders and pursuing a noble purpose.
Redefining a company's purpose and aligning incentives can turn around a struggling organization.
Embracing stakeholder capitalism and pursuing a noble purpose can lead to long-term success.
Collaborating with competitors can create mutually beneficial outcomes and address customer needs effectively.
Deep dives
Best Buy turnaround through holistic strategy
When Hubert Joly became CEO of Best Buy in 2012, the company was struggling as online retailers like Amazon were gaining popularity. Joly turned the retailer around by prioritizing fair pay for workers, opportunities for employee advancement, and collaboration with customers, the community, and even competitors. By redefining the organization's purpose and aligning incentives, Joly transformed Best Buy into a successful company.
Embracing stakeholder capitalism and noble purpose
Joly emphasizes the need for businesses to embrace stakeholder capitalism and pursue a noble purpose. He believes that all companies have the potential to find a noble cause that goes beyond mere profits. Joly highlights the importance of defining a company's purpose based on addressing human needs, being uniquely good at it, and ensuring profitability. He argues that purpose needs to be accompanied by concrete strategies and a focus on creating an environment where employees feel connected to the purpose.
Shifting leadership approach towards purposeful leadership
Joly advocates for a shift in leadership approach towards purposeful leadership. He emphasizes the importance of leaders being authentic, vulnerable, and curious about the purpose of their teams. Joly believes that leaders should focus on creating an environment where employees feel seen, valued, and provided with a path for growth and development. He challenges the traditional notion of the leader as a superhero and emphasizes the need for leaders to embrace their own purpose and connect it with the purpose of the organization.
Collaborating with competitors for mutual benefit
Joly shares his strategy of collaborating with competitors, such as Amazon, for mutual benefit. He believes that instead of focusing on competition and trying to beat rivals, companies should focus on being unique and finding ways to collaborate. Joly cites examples of partnerships with tech companies that allowed Best Buy to leverage their products and showcase them in their stores. By embracing collaboration, companies can create a win-win situation and address customer needs more effectively.
Creating a culture of humanity and fairness
Joly emphasizes the importance of fair pay and creating a culture of humanity in the workplace. He discusses Best Buy's approach of increasing the starting wage and eliminating commissions and bonuses for frontline workers. Joly believes that creating an environment where employees feel valued, invested in, and have opportunities for growth is crucial for their engagement and motivation. He argues that fair pay, along with a focus on humanity, are key aspects of creating a positive employee experience.
When Hubert Joly became CEO of Best Buy in 2012, online retailers like Amazon were exploding in popularity, and Best Buy was facing a sea change.
But Joly famously turned around the struggling electronics retailer by changing the organization’s holistic strategy. He prioritized fair pay for workers, opportunities for employees to advance, and working with consumers, the larger community, and even competitors.
In this episode, you’ll learn how Joly re-defined Best Buy’s purpose and aligned incentives with that larger strategy. You’ll also learn how he found mutually beneficial ways for the company to work with competitors and suppliers, including Amazon, the e-commerce giant that once threatened the company’s survival.
Key episode topics include: strategy, business management, corporate social responsibility, leadership and managing people, retail strategy, leading through change, leadership transition, innovation, customer service.
HBR On Strategy curates the best case studies and conversations with the world’s top business and management experts, to help you unlock new ways of doing business. New episodes every week.
