Hubert Joly - Unleash Human Magic (Former CEO of Best Buy) | The Learning Leader Show w/ Ryan Hawk

[Applause] what are the commonalities among leaders who sustain excellence over an extended period of [Music] time [Music] all right you bear jolie loved the name it brought me back to high school when that style i last spoke french and learned about the french culture so it's good to have a frenchman on the show welcome to the learning leader show thank you ryan are we gonna do this in french or are you thinking no way i know okay it was i got some of that stuff tr let's make it trey bien though okay we'll do our best to make it good um first i want to ask you even though you've accomplished so much in your life and you're still like at it trying to serve and help others i i have to ask you from an emotional perspective how do you feel when you see this this is the cover of your book how do you feel when you see this and ryan uh i got the first copy of the actual book what you have is the advanced readers copy i got it on friday oh this was emotional i mean i have it here yeah it was this was emotional i this is it writing a book is a ton of work i gave a lot of credit to caroline lambert who's worked with me on this book and i editor scott at hb opera so i'm super excited i i can't wait my dream is for the book to get into as many hands and heads and hearts as possible to make a positive difference in the world so this is it's really hard to describe it's very exciting that's what i would say isn't it amazing though after everything you've accomplished though there is just something special and unique about getting your words onto the page and seeing it all put together and seeing the cover design and it's like in your names the author of the book and it i i i find uh it's just such a cool moment it's such a cool thing regardless of anything else you've ever done like having your your your words and print i would imagine and maybe you can speak to this usually it is because of of of guys like you i can see behind you here your your bookshelf guys like you are so well read and you probably hold writers and authors who have shared so much of their soul with you even though they don't know it directly that that now you become part of that club it's just a different type of a feeling huh there's that and i was thinking as you were speaking it's also this idea this is a gift that i'm making to people out in the world and i put my i put in out of my soul my hearts we worked really hard because we wanted it not just the ideas to be right but we want it to be easy to read and we want it to be helpful so guys we've given it uh all so this is a gift to you as you lead as you seek to become a better leader which is what the journey that all of us are on this is my gift i've given everything i love it well let's start let's jump into it so as i cracked it open i have read about and actually talked to jim citron and jim is the leader of the ceo practice at spencer stewart it's an executive search company and so can you uh you bear take us back to may 2012 and you're talking to jim and i'll let you go from there so jim is an old friend of mine we've known each other for more than 30 years and in may we you know it talks to me about best buy and i said jamie you're crazy right it's okay you have to rewind back in 2012 every so i lived in minneapolis which is where best buy is headquartered everybody thought best buy was gonna die and jim tells me about so the ceo has just gone uh and he wants me to think about becoming the the ceo i was the ceo of another minneapolis-based company i knew nothing about retail and the place was a complete zoo at the time destined to die so i tell jim you're crazy they said no no no first they're not looking for a retailer they're looking for somebody to take a fresh perspective you're a great turnaround guy because i had done quite a few turnaround saving companies that were threatened by technology the internet digital and so forth and it tells me i think you'd be great i think this is for you and so do me a favor study take a look at it and so that's what i did i did i was a mystery shopper i visited stores i read everything i could about the company i spoke with alumni i watched every or listened to every earnings call that the company had done investor meetings and my mind i changed my mind because i thought the world needed best buy right because those of us who are interested in technology for some of our purchases we need to we need a place where to see touch and feel the stuff and get advice and then the vendors needed best buy because they need a place where to showcase the food of their billions of dollars of r d investment so i saw that and i saw that the issues that best buy had were all self-inflicted the the previous management team was complaining about headwinds you know on the earning calls they were doing great but there's these headwinds you know price deflation apple opening stores and so i told myself let's imagine that i would call tim cook and jeff bezos and say uh how's the wind where you're sailing i bet they would say oh my god you bear we're having the time of our life the wind is just fabulous so i would hang up and say wind's probably not the problem we that spike must be the problem and then that was great news because if it's self-inflicted then you can fix it you can fix the price you can fix the website experience the supply chain the customer you know and and the cost structure you can do it and that's what we did so i'm so glad so when we're done when the time came for me to meet with the board i told i want this job and this is how i would approach it i feel i've prepared my entire life for this and so that's the story is there a part of you from your upbringing or maybe just from your your career that was attracted to the fact that that best buy was in bad shape and that perhaps you could be the one to fix it yeah a lot of challenges right and let's agree at the time best buy was the all-you-can-eat menu of challenges you had strategic challenges with amazon and so forth you had operational challenges with the quality of service having gone down you had leadership challenges with this year having been fired you had in your shareholder challenges with the share price really down uh to 11 dollars at some points and then the founder you know the amazing dick schultz wanted to take the company private and all of my you know professional life i loved problem solving uh i did a few turnarounds at mckinsey and after that and also best buy was this iconic american company great success story right and when i was in the video games industry so here's the scoop ryan in 2000 i green lit world of warcraft when i was in the video games industry and they have credits on diablo 2. so anybody who is in video games that means something but they would visit best buy in minneapolis and they had seen how much better they were compared to their competitors to the point that i had asked brad anderson uh who was the ceo of best buy until 2009 to join my board at counseling companies and i felt that it was tragic that they had gone sideways and so yes saving you know who doesn't want to save the world in that case not saving the world i don't know i don't know i don't know though do you i mean was it um like was it just about the fact that like you love the challenge of it or what else was i mean i would imagine it was more money too or was it not about that at all you didn't care about no it's in fact if we slow down yeah that leads to a number of reflections right which are in in the book why do we work what's our purpose in life is work a curse or punishment because some dude sinned in paradise is it something we do so that we can do something else that's much more fun or is work part of our quest for meaning and something that enables us can enable us to be fulfilled as an individual is the invitation to do some good in the world or like the lebanese khalil gibran wrote you know is work love made visible clearly i'm in the second column and what drives me in this question of what drives you as an individual is essential in business right why are you here and so my purpose in life is to try to make a positive difference on people around me and use the platform i have at any point in time to make a positive difference in the world that's what drives me and i felt that best buy was a platform and and you know when you look at it and people have told me you know we we saved you know of course more than 100 000 jobs but we with the families and so forth we've impacted hundreds of thousands of people at the company the vendors uh the community the minneapolis community and the the communities in which we have stores it's it's uh we've changed lives you know after a gel manager studio manager meeting one of the gm's came to me and said uber thank you for saving best buy thanks to this my children will be able to go to college i told him oh my god let me go back to work i need to work harder and that's that in this idea of what drives us everybody many people now in business talk about corporate purpose you know the idea that contrary to what milton friedman wanted us to believe the purpose of a company is not to make money it's an outcome uh for me the magic and that's you know life part of what drives was driven the amazing results of best buy is when people can connect what drives them what's in their heart and their soul with the purpose of the company doing great things in the world that's where magic happens so for those people currently who have a fine job at a fine company and they earn a good living to support their family but they don't really care about the mission maybe they don't have a good boss who's not a good leader who doesn't care about listening to podcasts or reading books or not they're not in it to serve they're in it to see their bank account get bigger what do you what advice do you give to that person because i you bear the reason i say this because i feel like that's unfortunately it's it's it's more common than i wish it was what do you like do you say hey it's you gotta go find another place to work do you try to make it make make your current place great even if there's others around you who don't feel that like what is it what advice do you give to that person because it seems like you certainly went and made that change at best buy but you you led from the top as the ceo of the company and and then it kind of it went to the your leadership then flowed to the leaders within the business and on down to every single person that worked there but that's not the case other places what about the people who are in the middle what advice do you give to them there's a pandemic of disengagement at work right there's all sorts of statistics that show that vast majority of people are not fully uh engaged so what advice number one so it actually applies in this covet pandemic if you cannot go outside go inside so start about you know i think leadership starts from within being clear about how you want to live your life what's important to you what are some boundaries what matters how do you want to be remembered what kind of eulogy would you like to have in being clear about this and that's that's a journey for all of us to work on that we find this a lot of spiritual work and and personal work and then where you are in your life whether it's at work or in in any group of people where you're a member try to be the best version of yourself uh and make it you know do what you uh meant to be be the most beautiful biggest uh version of yourself sometimes bosses can be an excuse but i've seen that at best by so many of our store general manager i've learned you know ryan i've learned so much from these leaders so one of them for example in boston he would ask every one of the associates in his store what is your dream tell me about your dream at best buy outside of best buy say write it down in the break room and then he said okay my job is to help you achieve your dream now nobody told him to do this right i mean we created an environment where it was completely congruent to one of those but he was able to do this now having said that to your question if you feel that the environment in which you are does not allow you to be yourself and to be the best version the most beautiful biggest version of yourself and you know you've tried and it doesn't work and if you have the choice not everybody does right but if you have the ability then leave so as an example in the late 1990s after leaving mckinsey i was the president of eds friends electronic data system the old ross borough company and we were you know doing a lot of great stuff we were running around the business growing the business and then there was a change of leadership in plano texas and it felt that the new regime was really focused purely on profits that was the only thing that matters and the only way they were thinking about it it felt to me rightly or wrong and they were centralizing a lot of decisions in plano texas so in france we were growing and we had to have a hiring freeze i said how can you grow a service business if you ever have you just can't it's crazy so i said that's okay the world is big they can have eds i can explore the rest of the world and i left and uh because at the time i was president of the french business wow okay uh big job yeah big job but small on the global scale and i didn't feel that the environment made it possible for me to do what i aspire to do and so it's like you know we're the captains of our life so we have to decide what are the boundaries and if we feel that uh we cannot uh you know create the right environment now that doesn't mean that we have to look for the perfect environment there's always problems there's always people who are that you think should behave different so you know this is not about looking for perfection but if the environment is beyond the boundaries that you've defined um and if you have a choice then then leave you'll you'll be happier because you know when you ask people how they want to be remembered and what's going to be important when they retire or during their eulogy it's rarely oh i made vp by the age of 30. or my banking account was bigger than my neighbors right that's not that's not the source of happiness right i i read something that you you said you picked up from i believe a mentor might have been at mackenzie where you said profit and you just you briefly touched on it profit should be an outcome not a goal and yet so did was was there no profit goal at best buy uh and you just said hey okay go ahead let's talk about this this is fundamental so i learned this from a client when i was at mckinsey yeah it was the ceo of a french client and he said the meeting i had with him he said the profit of a corporation is not to make money it's an imperative it's not the ultimate goal in business he continued you actually have three imperatives i think it's gotten even broader since then but he said you have a people in parent you need to have good people who are well trained well-equipped able to do a good job then you have a business imperative you need to have customers who are happy and want more and then you have a financial imperative which is you need to make money and his view was that excellence on the people imperative is what leads to excellence on the business imperative which leads to excellence on the financial imperative and and it draws some immediate implications saying for example when you have your monthly business review don't start with financial results start with people and organization continue with customers in business and finish with finance you will always have enough time because your cfo will make sure but if you flip it you're never going to have time for customers and people and so i think the role of business leaders at any level whether you're a store channel manager or a ceo it's the same is to manage um you know all of the stakeholders of your organization you have to see the the company or your organization as a human organization made of individuals working together in pursuit of a goal which i think to me has got to be to do something good in the world and you have to work with all of the stakeholders so employees customers vendors community and shareholders to create extraordinary outcomes and you have to refuse so here's a trick to remember 98 percent of the questions that are asked us either or in business are better answers as uh better answered as ends so should we take care of our customers or the shareholders both should we take care of the short-term or the long term both you know should we focus on revenue or cost both you know it makes life so much easier and so of course you have targets in terms of employee engagement customer satisfaction your carbon footprints you know the growth of the company the long-term financial return and you your job is to orchestrate that in a way that is congruent and harmonious and that's what we did at best buy so you do have goals that are of the financial nature because shareholders are really important they take care of our retirement ryan you care about retirement yes you do for sure so that's how we're going to get our retirement is who would they do so you have the goals but it's just your your method for achieving them may look different than than others and there's a big difference between an imperative and the ultimate goal the true north like my friend bill george likes to say your noble purpose i think that you know in my vision because let's again slow down can we agree ryan that the world today is facing a multifaceted crisis health crisis economic societal justice systemic racism environmental you know you got the list and then what's the definition of madness right for einstein doing this the same thing expecting a different result exactly so i think the last big number 40 50 years have been dominated by the thinking of two individuals so you can summarize it like this one milton friedman with the idea of shareholder primacy and that profit was the only thing you cared about and two bob mcnamara with the idea that you know the former secretary of defense in the 60s that the approach to business is you you take a bunch of smart people they create a smart strategy implementation plan you communicate you track you maybe you put incentives in place and hope that good things happen none of this happens i think we need to so the conclusion for this is we need a refoundation and that's the purpose of my book right we need a refoundation of business and i think capitalism and it's around two or three key ideas it's and that's the philosophy that was behind the turnaround and resurrections of best buy number one it's about pursuing business but pursuing a noble purpose doing something good in the world and we'll use examples right but that's the first thing two is put people at the center a company is a human organization made of individuals working together so it's all about the people and what they do and i don't care whether you're a tech company or a professional services firm in both cases it's people that do things nothing happens other than through people the third idea is embrace all stakeholders and the fourth idea is your job as a leader is to create an environment where people can do amazing things that this idea of unleashing human magic that i talk about in the book and then you treat profit as an outcome rather than the goal that's the architecture now what's interesting ryan is that today i would say that most people agree that this is the right approach i think there's been a sea change frankly after last year you would need to be blind not to see that we need to change our ways and that this is the right approach you know if you live in minneapolis when the after the murder of george floyd when the city is on fire do you think we can open the stores of course you cannot if the planet is on fire do you think that you can run a business of course not so we have to change our ways i think that's the approach and the challenge today is not convincing people that this is the right approach it's it's how to do this this is it sounds soft it's really hard to do and the purpose of my erasing this book is to provide a based on what everything i've learned in the last you know 10 20 30 years is to create a guide for leaders who are interested in getting rid of the old ways and you know progressing on this journey of leading from a place of purpose and with humanity which i think can create extraordinary results in a much more sustainable future and back to your point a lot more happiness with employees right yeah uh uber can i ask you a question or two about mckinsey i've read read about mckinsey a lot i've worked with people from mckinsey that come into a previous company i worked at you worked there for i believe 13 years at the beginning of your career right so i'm i was always fascinated about you you you're very highly educated went to great schools that to go into a consulting role without a ton of real world experience seems like it would be really hard how how did you be a value-added resource to your clients at mckinsey when you didn't have that much experience yeah so i have very fun memories of my time at mckinsey and all of my friends there and everything i've learned the emphasis in the these early years of my career was around problem solving so that's what you did as a consultant you didn't go in and say i have 30 years of experience in retailing let me tell you what's key in retailing i mean i had zero experience but you take a problem you analyze it you break it down you do some fact-finding some analysis you look at all sorts of facts and so you work collaboratively with the client who's got a lot of the ideas you you manage your process to get to a great outcome uh so uh you know the consulting profession whether it's mckinsey or others has grown significantly because there is value in directness what i say in the book though is that for me personally as a human being i've had to make a journey frankly from you know the hard charging very analytical really oriented towards problem solving kind of guy who believes that being smart is really what matters and sometimes he's a bit too driven to add too much value and wants to make sure that everybody knows how smart i am you know we've all seen some of these right it was one of them for sure uh and there was an evolution you know there's an arc in my life moving from that to today somebody who believes in human magic and believes that the role of the leader is not to be this the 20th century image of the leader is the superhero who is here to save the day very smart very powerful uh so often times driven by power fame glory or money right no we don't want that and today the role of the leader is much more somebody who can create the environment in which others can be successful and that means you know being clear about again why are you here what's your purpose how you want to be remembered that also goes through vulnerability you know it took me years ryan to understand that the quest for perfection was evil and that being able to say my name is uber and i don't know or my name is zubair and i made a mistake with the right approach you know it's hard but i'll tell you a story to make it concrete right because uh so back to 2012 right when i joined best buy before joining best buy i started to work a few years before that with a with an executive coach in 2009 when he was ceo of calcium companies before that if somebody had told me you know jack or mary they're working with the coach they would say what's wrong with them right are they in trouble are they going to be fired who needs a coach right but then it hit me that exactly 100 of the top 100 tennis players in the world have a coach exactly 100 of the nfl teams nba you know major league baseball you know champions league in soccer everybody's got a coach so what would be you know so special about executives are they demi gods that they don't need a coach and so i started to work with the coach the fabulous the one and only marshall goldsmith who's like the father of is that the man he's the man yeah he's the man and you know he was at the time working for successful leaders like anna milali and dr jim kim at the world bank and i say oh i want one of those right yeah and he taught me about feet forward he made it he made the process of getting better a very joyous process and so fast forward so when i joined best buy three months after that i told my team look let's agree this turnaround is going to be hard right everybody thinks we're going to die so we can't agree it's going to be hard so that means each one of us is going to need to be the best version of ourselves the best possible leader we can be and that starts with me so i have a coach his name is marshall he's going to come in i would really appreciate it if you could spend time with him and give him some feedback about how i'm doing and at the time things were going great that don't get me wrong but i would really value that so i got the feedback and marshall one of his trick is to say on the good stuff digest it and the other stuff you bear you don't need to do anything right there's no god that says you need to address any of this it's your decision so i decided based on what i heard that there was two or three things i wanted to get better at i went through so i gathered the team and this was this is excruciating pain right make it sound easy this is excruciating pain thank you for the feedback i really appreciate it there's two or three things i've decided to work on number one number two number three you have to say it i'm going to follow up with each of you to ask you for advice on how i can get better on these three things and then three or four months from now i'll follow up with you to check how i'm doing and ask for more advice so is that making yourself vulnerable i think so that's that's how it felt but what it does then is that it's signaled to first it helped me frankly uh because we all need to get better every year ever since i was when i was ceo of best buy every year we would repeat rinse and repeat because you always working and if you run into somebody from best buy ask them what are you working what are you working on to get better at but the other thing is it's related is that it's a signal that it was okay to want to be better at something in it creating an environment where uh we could be vulnerable we could help each other right because if you're jack or ryan you're working on three things and i'm uber and i'm working on three things so you're gonna ask me for help and of course i'm gonna have so we're gonna help each other so the idea of the all-powerful superhero is gone right you don't imagine you know superman or batman my name is batman i need help he doesn't do this and so that's uh i think that's a critical point you bear i think that all leaders i have yet to meet somebody that either wouldn't benefit from a coach or isn't currently benefiting from a coach i that person in my mind doesn't exist okay in fact it's it's it's amazing to me personally the people who reach out to me to help with this this line of work and part of my business the the the cool thing about uber is they are in a lot of cases ultra successful as far as business and home life is concerned uh their their people for the most part are really impressed with the way they lead they're very humble they're like the last people who seem to need it and yet they're the ones consistently reaching out and the ones who i've looked out upon in the world who definitely need it and should be reaching out they don't ever seem to be doing that and so i think it's like a signal in itself from a great leadership perspective are you raising your hand to say absolutely i want to coach absolutely it's worth it to invest i know marshall is not cheap he told me how much he charges when he was on the show right it's a big investment but it shows from your end how committed you are to working on yourself to get better so what message is that sending to the rest of the team it's amazing yeah exactly and one of the greatest joys i have now that i'm no longer a ceo is that together with my wife thomas who's written this great book that you also see behind me right aligned we are working together in coaching ceos and senior executives it's awesome and bringing the very personal side of personal development ends the business side together because as leaders one of the lessons for me of the last 12 months if it was not obvious before is as leaders we need to lead with all of our body parts right not just the brain but the heart the soul the guts the ears the eyes it needs to be integrated and the mistake i made for too long ryan was i had my head cut off from my body right and i thought that the only thing that mattered was the head and it's not true you know when i in fact it struck me you know you know when you lead a large organization you have big meetings suddenly before covered right and after i would make a speech about you know where we are as a company where we're going and so forth do you think that people in the audience truly remembered everything i said and were so impressed by how smart i was no it was all about how i made them feel and um you know again a company is a human organization made of individuals working together in pursuit of a goal and it's a it's a human adventure when you're hiring for a leadership role you bear what are some of the must-have qualities and maybe even what are some of the i'd love to go inside your interview process when you're when when somebody's meeting with you to get a big job a big leadership job that's that's that's obviously important what are maybe some questions you ask and some absolute must-have qualities in that person and so there also have evolved ryan i used to place a lot of emphasis on expertise and experience so i would want you know the best e-commerce person or the the best supply chain person or the best whatever marketing person and then of course you know see whether the person was a good person but really place a lot of emphasis on expertise and experience over the years when people got to my you know my office usually we had assessed their expertise and experience and you use search forms that help you with that my main focus was understanding the person who is this person what drives them is it about themselves uh is it about their success how do they want to be remembered what kind of a leader do they want to be so when i was when i was interviewed for the ceo job at calcium companies uh another minneapolis-based company uh i was interviewed on the long pla so this was on our plane coming back from paris going back to minneapolis so this was an eight-hour interview so she was the daughter of the founder and i was you know a candidate to replace her as the ceo of the company one of the questions she asked me is uber tell me about your soul tell me about who has this question what do you say well i told her about my soul and you know what my inner life was and what mattered to me and you know the meaning of my life and things of that nature deep man i thought now i don't i don't use these words because marilyn is you know special fabulous of the chat but i asked a used question such as what drives you how do you want to be remembered you know what would you like people to say at your you know in your eulogy and uh i placed a lot of emphasis on this because the the the most i believe the most important decision we get to make as leaders is who do we put in positions of leadership so if you share this vision of purposeful leadership and purposeful human organization having a purposeful leader is critical so back to your question about criteria so at some point in our journey at best buy the team executive team encouraged me to be more explicit about our leadership expectations we had been implicit but they wanted me to be explicit and so i developed the five b's of purposeful leadership that's that's the last chapter in the book so i'm gonna share it with you uh the first bee is about being purposeful so being clear about your own purpose which is what we've been talking about being clear and curious about the purpose of people around you and and if you have time i'll tell you a couple of stories there and to be able to do a good job of connecting these individual purposes with the purpose of the company making the link which is where magic happens second be clear about your role as a leader we talked about this it's not about being the smartest person in the room and making sure everybody knows how smart you are but it's about creating this environment where others can be successful it's about being clear about who you serve so i told the officers at best buy you know if you're here to serve yourself or your boss or me as the ceo of the company it's okay i don't have a problem with that except you cannot work here you can be you can be promoted to being a best buy customer which is a fabulous thing will take care of you it's going to be great but you cannot work here on the other end if you're here to serve people on the front line then we're good the fourth b is you know be values driven of course integrity is foundational in the fifth piece be authentic be yourself be human be vulnerable be the best version of yourself because that's how you're gonna connect with others right if you're if you're perfect you cannot love somebody who's perfect you can admire them but you cannot connect with them if in order to in bernie brown of course talks about this beautifully in order to connect to somebody else you you they need to be vulnerable and in fact to love somebody else it's well known that you first need to love yourself if you don't love yourself you cannot love others and loving yourself starts with accepting your imperfections and your vulnerabilities and making peace i'm not perfect i'm doing my best but i'm not perfect and i blew this and i blew that and so that's a very so these are the five bees and we were very explicit about this in our selection of leaders you know promotion of leaders in our development of leaders [Music] it matters you also i think that um we're known for someone who used layoffs or reducing head count as an absolute last resort and i feel like there are places i've i've i've been where it didn't feel like it was the last resort it felt like it was a yearly tradition yeah uh because you got to hit profit for the quarter or the year or whatever maybe and i realize ceos have really tough jobs that i haven't had yet but um it feels like there's got to be a better way than just having the yearly tradition of where are we going to cut in order to hit the number there has to be a better way in your this is one of your this is something that you're known for yeah the the my turnaround manual [Music] is several chapters one of the chapter is four levers you pull and the last one last resort is headcount reduction the first one is grow the business find out how to grow the business growth can you know will do marvelous things as relates to cost and i do believe that companies on an ongoing basis basis need to improve efficiencies right that's what human beings do we we try to be better and better at things and at best buy every year we would take out two or three hundred million dollars of cost to be able to fund our investments right you that's something that's healthy to do but you focus first on uh what i call non-salary expenses which is everything in the cost structure that has not there's nothing to do with people and um that is usually at most companies the majority of the cost structure so let me take an example uh so at best buy do we sell a lot of tvs ryan yes we do they're large they're thin so they break we used to break about 200 million dollars worth of tvs every year wow that's a lot but you know presumably we maybe we sell i don't know 10 billion dollars worth of tvs or something like this if you can reduce what we call the tv junk out by 50 you save 100 million dollars good for the customers right because we've done a survey zero percent exactly of customers want to buy a broken tv that's how you know it's and it's good for our vendors it's good for us and so that's what you do and continuously look for ways to live we call it waste and efficiencies so reduce waste and reduce inefficiencies in all of the processes now the third lever is optimized benefits so an example of this is healthcare costs of course in the u.s most companies are self-insured so if your workforce is healthy guess what your healthcare costs go down that are good for the customer good for the employees good for the p l if one plus two plus three so revenue growth non-salary expenses benefits is not sufficient to drive the necessary remember financial performance as an imperative the necessary you know financial performance sometimes you have to go after a head count but you do it as a last resource so you don't see employees as the problem you usually see them as the solution and yet even when you reduce head count you try to redeploy people so let me take an example at some point in our journey we decided to close the best buy mobile stand-alone stores these are mole-based smallish 1 000 square foot stores that were just focused on selling smartphones essentially at some point when we opened them around 2006 the launch of this of the iphone they made complete sense uh 12 years later not so much so for good business reasons we decide to close them down it's about two or three hundred stores one thousand people out of 125 000 people at the time we tell the employees uh why what we're going to do and why and then we tell them we love you we think the world of you you have great these great skills that together we spend years you know you spend years developing and we've got this great company called best buy probably there's a big box you know best buy store not far from your best buy mobile standalone store and we're going to work we're going to do our best to see what uh opportunities exist at the at the company and we're going to take the time we're going to take three months i think it was to do that now if for whatever reason you decide that you know you want to move on or you know there's actually not a good opportunity for it that's okay you know you can decide to leave and it will give you severance and whatnot but we'd like to keep you and you know at most companies it's the opposite we're eliminating your job here's the check because there's a legal obligation to offer severance but you know the legal profession should not drive how we deal with people if you tell them if you want you can have severance but we frankly we would love for you to stay because we love you you know and so that's the philosophy and yes when i joined best buy a lot of people were telling me cut cut cut you're gonna have to close stores reduce head count massively and i looked pretty much all the stores were profitable that was not the problem you know the problem is that our prices were not competitive our website was terrible our supply chain was helpful and our store experience was not great so all things we could we could fix so these are fundamental points about how to lead uh you know there's a chapter in the book that's how to turn around a business without everybody hating you because the principles we're talking about about purposeful human leadership it's not just for the good times it equally applies when things are tough in fact even more so because you need the heart and soul and the the energy of everybody at the company to save the company as opposed to treating them like you know the problem and hitting the way we're gonna hit earnings is we're gonna you know cut jack and mary you know that's crazy the one of the other aspects that was going on as you get the role is amazon's becoming just a behemoth they're taking over the world um i've bought a tv on amazon and i've also bought one at best buy um and i and it seems pretty easy to buy one on amazon you get reviews you could even go look at them at best buy and then buy it on amazon maybe it's cheaper so you're facing this challenge that i think some would say is just this is inevitable this is the end and yet when you look at look at the kind of the pub for your book one of the top blurbs is from jeff bezos himself um what did you decide to do and how did you work with jeff bezos and amazon in order to thrive when i think a lot of people thought it was going to put they were going to put you out of business the the first thing we did because the phenomenon you described orion was called showrooming yeah right people coming to our store talking to ourselves i think i've personally done this a lot of people probably yeah of course and then buy online particularly at the time remember there was no sales tax when you bought online it was a bit of an unfair advantage that amazon had and then prices you know were perceived to be lower so uh if somebody asked you who killed showrooming in america you said well i met him it's uber how did we kill show rooming well we decided that our prices were going to be the same and number two that blue shirts would have the power the authority to match online prices no question asked right because ryan you've spent 30 minutes with mary to talk about this beautiful sony tv or samsung whatever and then you you leave empty-handed mary can say no no if you think about buying everything i'll match the price and then you'll have it everybody will deliver it for you so we took price of the table number one number two amazon you know is amazon good online yes they are was best buy good online no we were terrible but the blue shirts the week one told me better the search engine on the bestbuy.com site is not working i said what what do you mean start working wow type cinderella in the search bar you'll get nikon cameras it rhymes but it's not quite the same so we fixed the website we also invested in the supply chain so now we deliver as fast as amazon so in many ways we actually neutralize amazon's same price buy online great supply chain you can either ship or pick up in store so very convenient and then we invested in our own strengths so i was not obsessed by amazon so i want to be obsessed by the customers and so we created a whole series of things great for the customers you know we improved the customer experience we created these partnerships with the the vendors come to amazon in a second but you know apple samsung lg sony canon nikon atnt verizon you know and so on and so forth and we gave them the opportunity to showcase the fruit of their billions of dollars of r d and showcase that in our stores that's that's something they needed so it was good for the customers right because you could look at apple versus samsung and then integrate right there's no home there's no home in america with a single brand tim cook's home has non-apple products in it right because apple doesn't do tvs or refrigerators right i've checked and so you need somebody to integrate the the whole thing so we work with that as relates to amazon so there's a disease in the world which is the idea of zero-sum gain ryan if you're going to win that means i lose i think that's a terrible disease you know if you take amazon and best buy together in the u.s uh uh collective market share of the consumer electronics market is about 25 so what i would use to tell our investors is yes amazon is growing oh we're growing too and there's this other 75 percent that we can go after oh and by the way we can grow the market as well so it's not a zero-sum game second amazon of course you know is multiple facets they have amazon web services their retailer and their product company you know remember they have the kindle all of the echo alexa products and so forth so we made the decision early on it started before my time and i decided to continue to sell amazon products in our stores other retailers were not so enamored with the idea because they saw amazon as the enemy we said no it's these are great products customers want it why do we exist it's to help customers so we always sold their their products in fact to the point that if you go to an into a best buy store today there is an amazon store within a store there's a table with all of the alexa products next to the google table where you can test and see how all of the excel products work together right so we're showcasing so we could we killed showrooming and we invest invented showcasing we're showcasing amazon's fire and then what happened which was a jaw dropper uh amazon decided to give us the exclusive rights to the fire tv platform you know their smart tv uh platform which is fabulous to be integrated in smart tvs and these fire tv powered tvs would only be sold at best buy or buy best buy on amazon pretty amazing deal when we announced it uh we did a little event in a store uh not far from uh amazon's headquarters in bellevue washington and jeff came uh and we had a good conversation i knew him you know from business circles and from being a vendor of course and so we had media we had the wall street journal we had the star tribune variety and so forth and one of the things that jeff said is look uh a tv is a considerate purchase you know you need to see it and best buy is the best place in the world where uh to see it and uh and of course then it was complimentary about a turnaround and the the reporter from the star tribune which is the minneapolis newspaper i mean their job literally dropped and you use the word trust right one of the things that jeff told me is that because we had been working together for 10 years we had the two teams not he and i simply but the two teams that developed trust-based relationships we knew we could work together and that we could trust each other uh and so that led to the to the deal and so i love this idea of seeing possibilities and of going for win-win-win deals good for the customers good for the vendors and in good for us big lesson for me of the last you know of my time at best buy love it you bear uh one more question so there is um probably someone earlier in their career who is listening who really uh wants to live a purposeful purposeful life help others serve be an excellent leader um leave their mark in a positive way so that it impacts others what are some general pieces of life slash career advice you would give to that person um so i would highlight maybe a couple one is we've already talked about which is spend time it's going to take time you know if you're when i teach the mba students at harvard they they don't have the answer usually but spend time during the life trying to figure out why you're here and your purpose in life right and you can get help through meditation you know spirituality the coach your personal board of directors your spouse but spending time with yourself is really good on that my friend bill george he's got a men's group that he's been they meet every week on wednesdays at 7 00 a.m and they've been doing this for 35 years wow they support each other so that's a so really work on that the second thing is the advice from we mentioned them at the beginning right of my good friend jim citrin that spencer stuart and he wrote years ago in yahoo finance a column where he wrote the best leaders don't climb to the top they are carried to the top the best leaders don't climb to the top they're carried to the top so there's a big element of philosophy which is where you are today because the only moment where we are always living right is today try to be the best version of yourself and help others do a great job and assume good things will happen now i think his advice is primarily notably good for us boys i think the advice for women needs to be slightly different there's a great book by sadie hellerson called how women rise that she actually wrote with marshall goldsmith i may have it here i do actually i'll do a little infomercial for her so how women rise it's advice for women in their career and one of the things that she has noticed and i've noticed too is that when a boy is say a boy right a man is 80 ready for a promotion will tend to say oh we're ready when a woman is 125 ready for a promotion generally speaking not always true but off more often than not we'll say i'm not sure i'm ready plus i may not have finished what i was doing here and so that means as leaders and i gave study's book to all of our people leader at best buy notice the difference and when there is a promotional opportunity don't be fooled by what people the the men and the women are saying develop your own perspective potentially put your thumb on the scale so that you know the woman who's 125 ready actually has a better chance to have the promotion compared to the man who is 80 ready uh as opposed to the other way around so these would be some thoughts i love it well you bear i could uh listen to your stories all day man i really appreciate it the book is called the heart of business leadership principles for the next era of capitalism it looks great love the title man i know uh and i love the uh the cover you have of all the people because that's that's what you're really all about shaped in a heart um i encourage people to to check it out because it's really well done and i just appreciate your your investment of time and the way that you came to this and showed up uh i'll say it here publicly just that you came with such excitement and generosity towards me um and care and preparation man that means a lot to me so i just want to say thank you very much and acknowledge that well thank you ryan and for everybody who is on this journey good luck i hope that this book is a gift you know and that you can use it to uh as i've learned from others right along the way to try to get better that's our journey let's get better that's it that's it well you bear thanks so much again and i'd love to continue our dialogue as we both progress man look forward to that thank you thank you [Music]

Channel: Ryan Hawk

Views: 335

Rating: 5 out of 5

Keywords: Leadership, Learning, The Learning Leader Show, Learning Leader, Business, Entrepreneur

Id: hyv8h6nCeus

Length: 60min 25sec (3625 seconds)

Published: Sun May 02 2021