Speaker 1: M This is Mesters in Business with Very Results on
Speaker 1: Bluebird Radio. This week on the podcast, I have an
Speaker 1: extra special guest. You Bear Jolie is the man who
Speaker 1: helped turn around Best Buy when they were floundering about
Speaker 1: a decade ago. The stock has since returned ten x
Speaker 1: from when he joined as chairman and chief executive officer.
Speaker 1: He is the author of a fascinating new book, The
Speaker 1: Heart of Business Leadership Principles for the Next Era of Capitalism. Um,
Speaker 1: he's really a fascinating guy, has an amazing background, both
Speaker 1: as a consultant from Mackenzie and being on a number
Speaker 1: of different boards and and running a number of different companies.
Speaker 1: Everybody who's looked at his work always put some amongst
Speaker 1: the best. CEO's Top one, d this top thirty. That
Speaker 1: really just a tremendous, tremendous track record, ard Uh and
Speaker 1: I had a fascinating time speaking with him. I think,
Speaker 1: if you're at all interested in anything involving leadership or
Speaker 1: the next era of capitalism, or why the old school
Speaker 1: neutron jack approach to just firing everybody and and cutting
Speaker 1: costs as a way UH to restore profitability no longer works,
Speaker 1: You're gonna find this to be a fascinating conversation. So,
Speaker 1: with no further ado, my interview with you Bear Jolie.
Speaker 1: M This is Mesters in Business with Very Results on
Speaker 1: Bluebird Radio this week. My special guest is Hubert Jolie.
Speaker 1: He is the former chairman and chief executive officer of
Speaker 1: Best Buy. He is currently the Senior Lecturer on Business
Speaker 1: at Harvard Business School. He is on the boards of
Speaker 1: directors at Johnson and Johnson and Ralph Lauren and has
Speaker 1: been named one of the Top one good CEOs by
Speaker 1: Harvard Business Review, one of the top thirty CEOs by Barons,
Speaker 1: and one of the top ten CEOs to work for
Speaker 1: in the US by Glass Door. Hubert Jolie, Welcome to Bloomberg. Well,
Speaker 1: thank you, Barry very much. Forward to our conversation. So
Speaker 1: let's start with a little bit of your background. You've
Speaker 1: been the CEO of three major companies. Tell us about
Speaker 1: how that came about. Take us to the beginning or
Speaker 1: early days of your career they have, Barry, I studied
Speaker 1: in my career with McKinsey and Company in France and
Speaker 1: then also in the US. Essentially, I didn't know what
Speaker 1: I wanted to do so that I thought it would
Speaker 1: be a great training ground and I ended up saying
Speaker 1: a dozen years at the firm, done a great deal
Speaker 1: and had wonderful opportunities to lead great companies. You know.
Speaker 1: At first I left McKenzie to lead a client with
Speaker 1: E d S at a train Data Systems in France,
Speaker 1: and I ended up doing a number of turnaround and
Speaker 1: transformations of companies in industry sectors that were challenged by technology,
Speaker 1: so in video games, in travel, and then of course
Speaker 1: ended up with Best Buy. And I ended up working
Speaker 1: in a variety of industry sectors and those specialization there
Speaker 1: and every move was a move that was based on
Speaker 1: it was there was somebody with whom I had developed
Speaker 1: a relationship that played a critical role until for example,
Speaker 1: when I left vivent Universal to become the Sea of
Speaker 1: Counselance Aguity Travel, that was the sea of Acre, which
Speaker 1: was one of the true shareholders. I've been a height
Speaker 1: of mind, and you know, we had stayed with state friends,
Speaker 1: so very One of the key lessons is that, you know,
Speaker 1: try to minimize the number of people you annoy, your
Speaker 1: irritate along the way, and and try to focus on
Speaker 1: doing a great job where you are, and then you know,
Speaker 1: I hope that God provides in the end, which is
Speaker 1: I think the lesson for me of my career. So
Speaker 1: so I want to spend more time talking about your career,
Speaker 1: but I have to ask how did you find yourself
Speaker 1: moving from France to the United States? What led to that,
Speaker 1: and what was that transition like, because every time I'm
Speaker 1: in Paris, I always end up saying to myself, God,
Speaker 1: I could live here. Yes, thank you for that, Verry.
Speaker 1: So the first time I moved to the U S
Speaker 1: was it was with mckindian company. Had gone to school
Speaker 1: in France and they have been discussion of you know,
Speaker 1: should I do an NBA in the US, And after
Speaker 1: a while kin she said, no, you really don't need
Speaker 1: to do that, but if you want to spend time
Speaker 1: in the U S, will send you to one of
Speaker 1: our offices. So I ended up in the San Francisco
Speaker 1: office right the years where where the Niners were at
Speaker 1: the top of that game. Right, So that's it's quite fascinating.
Speaker 1: And then the last time I moved to the U
Speaker 1: S was oh eight two eight, when I became the
Speaker 1: year of counseling Companies. So moved there from Paris, France
Speaker 1: to Minneapolis, Minnesota. And you know, I love France. I
Speaker 1: think it's a great country. I love the U S.
Speaker 1: What I love about the U S is it's you know,
Speaker 1: since Jefferson, we've been optimistic. There's been the dream of
Speaker 1: a better life, and there's this optimism is let me
Speaker 1: tell you, it's in France. You know, you talk about
Speaker 1: a problem that has never been solved, people will say, well,
Speaker 1: who are you to talk about it? Nobody has been
Speaker 1: able to solve it? Right, So, but in the US,
Speaker 1: if a problem has never been solved, you know, immediately
Speaker 1: a frantic Oh, this is interesting, let's see whether we
Speaker 1: can solve it. So I love this optimism in this
Speaker 1: great country and I'm now the dual citizen there. Very really,
Speaker 1: really interesting. So so let's talk a little bit about
Speaker 1: how one becomes a good CEO. Is it effectively on
Speaker 1: the job training or is it a function of your
Speaker 1: experience and an ability that makes you a great leader? Yeah,
Speaker 1: there's a myth that you're born leader. I think that
Speaker 1: every leader was born, of course, but none of us
Speaker 1: were born leaders. And I think it's a it's a
Speaker 1: learning journey. And you know, for me, it's been learning
Speaker 1: by doing, learning on the job, learning from great mentors.
Speaker 1: One of things I learned that most about it when
Speaker 1: I was at McKinsey was you know, watching my clients leads,
Speaker 1: and I learned so much from the number of them. Uh,
Speaker 1: learning from colleagues, you know, I bet buy. I learned
Speaker 1: so much from the front liners and some of our
Speaker 1: great you know, executives, and then the coach. So let's
Speaker 1: slow down here, can we agree Barry that exactly one
Speaker 1: of the top one cup one hundred tennis players in
Speaker 1: the world have a coach being the same is true
Speaker 1: for the all of the NFL teams, all of the
Speaker 1: Champions League teams. What about us executives? All right, And
Speaker 1: so it's interesting that now for CEO is senior executives
Speaker 1: have a coach is much more popular, but kind of
Speaker 1: fifteen years ago not so much, and us benefited enormously.
Speaker 1: My first coach was you know the intimates of all uh,
Speaker 1: Marshall Goldsmith's after learned a time from Amy helped me
Speaker 1: deal with feedback and focus on getting better and asking
Speaker 1: for advice. And without Marshall, I would not be you know,
Speaker 1: it is infomercials and before and after a picture, it's
Speaker 1: most improved. Marshall Goldsmith was where was that at Mackenzie
Speaker 1: or it was the first time I worked with Marshall
Speaker 1: was in two thousand and nine. I just became the
Speaker 1: CEO of Calsum Companies. In my head of HR Elizabeth
Speaker 1: Best Tony, so would you like to work with a coach?
Speaker 1: And my first reaction was am I doing anything wrong?
Speaker 1: Is anything wrong with me? She said no, no, but
Speaker 1: I know Marshall he helps you know, great deals get better.
Speaker 1: You know some of these clients are where at the
Speaker 1: time Ada Malali or you know, a Ford and Jim
Speaker 1: came up the World Bank and said, oh that's cool.
Speaker 1: I want to be a member of that club. And
Speaker 1: Marshall was so hope because when I was getting feedback,
Speaker 1: you know, you know, you do a three sixty, and
Speaker 1: you know, you hear the good and then you hear
Speaker 1: a part. And my reaction traditionally was what's wrong with them? Right?
Speaker 1: What what are they talking about? And Marshall help me
Speaker 1: and the way he helped me with so he did
Speaker 1: the three sixty. He gave me first all the good
Speaker 1: things that people have said, and I said that spent
Speaker 1: the time to swallow this, you know, digest this. And
Speaker 1: then the next day he gave me the other stuff
Speaker 1: and he said, here's the scoop. You don't need to
Speaker 1: do anything with it. Right. There's no god that says
Speaker 1: that you need to get better at any of these stoks.
Speaker 1: But you can this that you get to decide what
Speaker 1: you want to work on and get better at right,
Speaker 1: and think about this. So here is a question that
Speaker 1: we should ask right. Think about things that you'd like
Speaker 1: to get better at. Right, and if you cannot think
Speaker 1: about anything, try humility right as a potential area. And
Speaker 1: then you know what Marshall made me do is talk
Speaker 1: to my team and said, thank you very much for
Speaker 1: the feedback you've given me. And then, based on what
Speaker 1: you've said, as they say, to work on three things
Speaker 1: and the one that the two number was great. And
Speaker 1: I'm going to follow up with each of you to
Speaker 1: ask you for advice on how I can get better
Speaker 1: at these these three things, and then a few months
Speaker 1: from now I'll follow up to see how I'm doing. Now,
Speaker 1: believe me, Barry, first time I did this, this was
Speaker 1: excruciating pain. I think to admit to my team that
Speaker 1: I was not perfect. Yet they knew it, they knew
Speaker 1: it was not perfect, but having to say it out
Speaker 1: loud that I wanted to get better at something, but
Speaker 1: this getting better at something makes it very positive. And
Speaker 1: then so later on when I joined best Buy it,
Speaker 1: I repeated that, signaling to every one of the executives
Speaker 1: it was okay to want to get better at something.
Speaker 1: And so later on everybody at best Buy head coach
Speaker 1: and we were all helping out each other and getting
Speaker 1: better at our job, which is you know what I
Speaker 1: think you need to do. So coaching, executive coaching played
Speaker 1: a key role in my life, very interesting, and I
Speaker 1: recall seeing martiall goal Smith's name on a book what
Speaker 1: Got You Here, Won't Get You There? And a quick
Speaker 1: Google search shows me that, like you, he also is
Speaker 1: a professor. He teaches at Dartmouth's Talk School of Business
Speaker 1: and has quite an impressive CV. But I want to
Speaker 1: stick with the concept of of coaching and mentors. What
Speaker 1: did you learn at McKenzie who helped you when you
Speaker 1: were there sort of develop into the CEO that you
Speaker 1: are today? Yeah, so it was for me it was
Speaker 1: two phases barrier at McKinsey. There was before the partnership
Speaker 1: and then the partnership. So in my first say six years,
Speaker 1: you know, as an associate and then a manager, I
Speaker 1: learned a lot about problems solving communications, you know, circums,
Speaker 1: functional matters and so forth. So you can say I
Speaker 1: learned a bunch of technical skills. But when I became
Speaker 1: a partner, the opportunity I got was, you know, sit
Speaker 1: down next to the CEO of the clients, you know,
Speaker 1: watch them, do they a thing, and listen and learn
Speaker 1: from them. And that makes so I got a great deal,
Speaker 1: right because they were paying us and I was learning
Speaker 1: from them, right, I couldn't get a better deal than that,
Speaker 1: And so I will always remember it was, say a client,
Speaker 1: you know, Jean Hite de Carpont, He was the CEO
Speaker 1: of the the computer company Horney World Ball. And this
Speaker 1: is the guy who told me that the purpose of
Speaker 1: the company is not to make money, right, it's an outcome. Right.
Speaker 1: In business, you have three imperatives. You have the people imperatives,
Speaker 1: each from the right teams. You have the business imperativity
Speaker 1: to have customers or clients, and then great products and services.
Speaker 1: And then there's a financial imperative. And of course you
Speaker 1: have to understand that excidence on the financial imperative is
Speaker 1: the result of excellence on the business imperative, which itself
Speaker 1: is the result of excellence on the people imperatives. So
Speaker 1: it's people business finance, and finance is an outcome. And
Speaker 1: by the way, it's not the ultimate goal because if
Speaker 1: you think about a company as a human an organization,
Speaker 1: a bunch of people working together, you know they're they're
Speaker 1: probably in there to create something in the world, right
Speaker 1: and you know, we can dig into this. But that's
Speaker 1: and believe that that's was thirty years before the VRT
Speaker 1: statement of twenty nineteen. You know, we've celebrated in August
Speaker 1: the second anniversary, and so then it was practical implications
Speaker 1: around this. When you do your monthly review with your team,
Speaker 1: start with people an organization. Don't start with financial results.
Speaker 1: If you start with financial results, you're gonna spend your
Speaker 1: entire time on financials and you won't understand what's driving
Speaker 1: these results. Was. If you start with people an organization,
Speaker 1: you'll have a chance to spend time on that. Then business, customers, products,
Speaker 1: and then the CFO will make sure that you'll spend
Speaker 1: enough time on the financial results. So that's for me,
Speaker 1: that's what the game changer, and I applied this throughout
Speaker 1: my career, and you could say, you know, whether it's
Speaker 1: was in video games or in travel or hospitality or
Speaker 1: less buy. You know, this focus on people first and
Speaker 1: treating prophet as an outcome was was a big driver
Speaker 1: of performance. And this is not I've not smoked anything
Speaker 1: illegal when I said, it's very you know, as you
Speaker 1: know that the share rights of best Buy went from
Speaker 1: sing out low with eleven daughters, and you know recently
Speaker 1: it's been between hunted and ten and hunt and twenty.
Speaker 1: So you know, time standing nine years, that's that's not bad.
Speaker 1: Maybe you could have done better, Barry, but you know,
Speaker 1: I don't think I could have done better than ten x.
Speaker 1: And ps no longer legal in New York, so you
Speaker 1: could smoke whatever you like. We're gonna by the way,
Speaker 1: those those three steps that you just mentioned are right
Speaker 1: from the book, and we're gonna talk a little more
Speaker 1: about the book in a few minutes. But before we
Speaker 1: get to that, I have one last question to ask you,
Speaker 1: which has to do with the fact that best Buy
Speaker 1: you mentioned it's up ten x, it's a publicly traded company.
Speaker 1: Before you were a best Buy, you were also at
Speaker 1: a giant company, but it was privately held. Tell us
Speaker 1: a little bit about what that transition was like, having
Speaker 1: to answer to shareholders in Wall Street. How did you
Speaker 1: manage that? Very different experience from everybody I've spoken with
Speaker 1: over the years. Yeah, very so. I've worked so in
Speaker 1: a public company based buy. I've worked in a family
Speaker 1: owned company which was counseling company. Have worked in a
Speaker 1: partially private equity owned company Calson U only Travel, one
Speaker 1: of equity partners of JP Morgan was a forty five
Speaker 1: percent shareholder. And frankly, I think it's pretty much all
Speaker 1: the same. You know, you have shareholders, whether they're you know,
Speaker 1: large entities like Delity or Wellington, or it's a private
Speaker 1: equity player, or it's a family, they have expectations and
Speaker 1: need and by the way, that all of them are
Speaker 1: human beings right by the way, not focused on the
Speaker 1: you know, the high intensity trading, the more the longs
Speaker 1: and and all the shorts. There are human beings. And
Speaker 1: I have had that. Even though I say profit is
Speaker 1: an outcoming, it's not the uptionate go. Shareholders, even in
Speaker 1: stakeholder capitalism, are a very important stakeholder. You know, they're
Speaker 1: taking care of our you know, there's they take care
Speaker 1: of our retirement. So we love them for that. And
Speaker 1: so when I was a CEO of best Buy, I
Speaker 1: so enjoyed speaking, spending time with our shareholders, sharing with them,
Speaker 1: with doing answering their questions. They're smart and it was
Speaker 1: always taking things away, um and you know, the key
Speaker 1: was pay attention, listen, and then pay attention to the
Speaker 1: say do ratio. Best Buy had lost its credibility because
Speaker 1: they were saying a lot but not doing much right.
Speaker 1: So with with my waterfall CFO share in Boccalog, we said,
Speaker 1: all right, we're gonna say less and do more, and
Speaker 1: that's how we're gonna build our credibility. And we would,
Speaker 1: you know, be very transparent, share our situation, the opportunities,
Speaker 1: we saw what we're gonna do, and then we updated
Speaker 1: them in our progress until I really enjoyed the conversation.
Speaker 1: But in many ways, Barry, I think public privatically or
Speaker 1: a family, it's largely the same. It's people yet to
Speaker 1: respect them and take care of their needs. My extra
Speaker 1: special guest this week is Hubert Jolie. He is the
Speaker 1: former chairman and chief executive at best Buy, a company
Speaker 1: that he helped turn around over the course of his
Speaker 1: tenures there. Let's let's talk a little bit about that.
Speaker 1: If you would have asked me a decade ago what
Speaker 1: the future looked like for best Buy, I would have
Speaker 1: said they were toasts that Amazon was going to eat
Speaker 1: their lunch, and they were heading to the to the
Speaker 1: garbage pile. Tell us what the key was to turning
Speaker 1: the company around so successfully? You're great. Everybody thought there
Speaker 1: was zero by recommendation on the stock in twelve and
Speaker 1: what A found as there was examining the opportunity to
Speaker 1: become the CEO, because my first action when I was
Speaker 1: approached was, you know, this is crazy, right, there's just
Speaker 1: the same reaction as you described. But what I found
Speaker 1: is that there was nothing wrong with the backets or
Speaker 1: the business out outside. All of the problems were self inflicted.
Speaker 1: In fact, your customers needed best Buy because we needed
Speaker 1: a place where to see and touch and see all
Speaker 1: the parts and ask questions. And the vendor is importantly
Speaker 1: needed best Buy. It needs a place where to showcase
Speaker 1: there are products, the food of the billions of dollowers
Speaker 1: of R and D investment. The problems were self inflicted.
Speaker 1: You know, prices were not competitive, The online shopping experience
Speaker 1: was terrible, speed of shipping was bad, The customer experience
Speaker 1: in the stores had deteriorated, the constructure was bloated, and
Speaker 1: and and that's great news because if the problem yourself inflicted,
Speaker 1: you can fix it. And so the first phase was
Speaker 1: all about fixing what was broken. And the advice I
Speaker 1: had been getting Verry was cut cut cuts, you know
Speaker 1: you're gonna have to close to or head count. Really
Speaker 1: the opposite. All of the stores were profitable, so frankly,
Speaker 1: it was no point in closing stores in a significant passion.
Speaker 1: It was the first place was a very people centric approach.
Speaker 1: Listening to the front liners. My first week on the job,
Speaker 1: I spent it in the store in Saint Cloud, Minnesota.
Speaker 1: I think in France we would say sat glue, but
Speaker 1: over there is some clouds, so there you go, and
Speaker 1: really listening to the front liners. They had all of
Speaker 1: the answers about what needed to be done, and so
Speaker 1: my job was pretty easy was do what they had
Speaker 1: to do, what they said we needed to do, like
Speaker 1: a fix of website mixture. The prices were competitive, and
Speaker 1: and so forth. The second elemount of you know, the
Speaker 1: people centrica, build the right team at the top and
Speaker 1: then instead of focusing on haccount reduction, focus on growing
Speaker 1: the top line by leading the customer needs and fixing
Speaker 1: which was broken in the customer experience and treating headcount
Speaker 1: reduction really as a last resort, and then focus on
Speaker 1: mobilizing the team on what we need to do for
Speaker 1: the for the customers. That sounds tough, but that was
Speaker 1: you know, that's was our opportunity, and that's what we
Speaker 1: did for the first two or three or four years.
Speaker 1: And then once we had saved the company, it was about,
Speaker 1: you know, how do we know where do we go
Speaker 1: from here? How what kind of company do we want
Speaker 1: to build for the future, And that's where we focused
Speaker 1: on designing our purpose as a company. We said, we're
Speaker 1: actually not a consumer ectronics retailer, where a company that's
Speaker 1: in the business of enriching lives through technology by addressing
Speaker 1: key human needs, which in we'll talk more about this,
Speaker 1: but this was transported because it's extended our addressable market
Speaker 1: and help just mobilize everybody at the company. We had
Speaker 1: to work on making this come to life in all
Speaker 1: of our activities and really creating an environment where you know,
Speaker 1: I think that the summary of the term around which
Speaker 1: we unleashed human magic. We had under than her thousand
Speaker 1: people plus. I think the spring in their steps, connecting
Speaker 1: what drives them in life with their job and doing
Speaker 1: you know, magical things for for for customers. And frankly, Berry,
Speaker 1: I learned so much along the way. And again all
Speaker 1: of this sound stuff, but go back to went from
Speaker 1: eleven Daughters too and Antenn twenty. That's was the That's
Speaker 1: was the key, to say the very least. So let's
Speaker 1: talk a little bit about what you guys had done
Speaker 1: in the physical stores. You know, the big threat to
Speaker 1: Best Buy was was people show rooming, meaning showing up
Speaker 1: to look at a product and then buying it for
Speaker 1: a little cheaper at Amazon. How did you and this
Speaker 1: is a line from the book, quote how did you
Speaker 1: kill show rooming and turn it into showcasing? Unquote. Yeah,
Speaker 1: so everybody was talking about show rooming at the time.
Speaker 1: The frequency was not that high actually, but of course
Speaker 1: it was incredibly frustrating for the Blue Shot associates in
Speaker 1: our store to spend time with you know, with you, Barry.
Speaker 1: You know, we love you, but we spent the minutes
Speaker 1: with you asking nswering all of your questions about their
Speaker 1: TVs and then you buy online too. We we we
Speaker 1: after thirty days of the company, we actually decided that
Speaker 1: we were going to take price off the table by
Speaker 1: aligning up places with Amazon and giving the Blue Shirt
Speaker 1: the authority on the spot to match Amazon prices. And
Speaker 1: so that took the price off the table and the
Speaker 1: customers once they were in our stores, there were hours
Speaker 1: to to lose now, right when you want to drive
Speaker 1: home with your TV in the back of the car
Speaker 1: instead of waiting a couple of days from it to
Speaker 1: come from Amazon. Immediate gratification has to be a huge
Speaker 1: benefit you guys have as as the physical store exactly.
Speaker 1: And then yet of course the investors of you, that's cute,
Speaker 1: but you're stig to die because your constructure is too high.
Speaker 1: It's higher than Amazon or Walmart. So we did take
Speaker 1: two billion dollars of cost down. But the way we
Speaker 1: the way we want in the end, was with this
Speaker 1: harm moment of you know, this idea of showcasing. If
Speaker 1: you are a Samsung or you know, HP or even
Speaker 1: Amazon and Google mail with products, you need a place
Speaker 1: where to showcase your products, right because you spend billions
Speaker 1: of dollars on R and d uh. And if it's
Speaker 1: just a vignette on a website or a box on
Speaker 1: a shelf, you know you're not going to excite the customers.
Speaker 1: So you need a place where to showcase your your products.
Speaker 1: And so we did deals. The first one was with
Speaker 1: Samsung where we had a meeting in December of twelve.
Speaker 1: Barre j k C in the vency of Samsung Electronics
Speaker 1: came to visit us in Minneapolis in December of twelve
Speaker 1: and over dinner, we did a deal where in a
Speaker 1: matter of months you would have one thousand Samsung stores
Speaker 1: within our stores where it could showcase these products, which
Speaker 1: was just across the item. We already had an Apple
Speaker 1: store within the store, and it was good for the
Speaker 1: customer because they could see the products, it could compare
Speaker 1: with Apple. It was good for Samsung, right because the
Speaker 1: alternative for them was to build one thousand stores in
Speaker 1: the US. Takes times difficult, you know, And of course
Speaker 1: we have this great location and great traffic and good
Speaker 1: for us because it was part of our opum strategy,
Speaker 1: other people's money strategy. Right, of course, there was some
Speaker 1: good economics for us, and so that allowed us to
Speaker 1: upset you know, the cost advantage and the Walmart or
Speaker 1: or an Amazon would have. And then over time we
Speaker 1: didn't deal with all of the world's for almost tech companies,
Speaker 1: including Amazon c hanging out loud, and that was the
Speaker 1: game changer. And we look at you look at our
Speaker 1: stores today, you know they're they're they're shiny because you
Speaker 1: have all of these shiny objects and you can see
Speaker 1: an experience all of these fire. So let's goes ding
Speaker 1: a game changer. So let's let's talk a little bit
Speaker 1: about both Samsung and Amazon. First, I'm always surprised that
Speaker 1: people don't realize what a giant product company Samsung is.
Speaker 1: It's not just phone, but its phones, it's TVs, it's washers, dryers,
Speaker 1: I mean Samsung basically anything in your house there's a
Speaker 1: product that Samsung makes, and not just entry level washer
Speaker 1: dryers or refrigerators. I think that was it last year
Speaker 1: or two years ago. They bought the Core, which is
Speaker 1: like a sub zero high ends um manufacturer of of
Speaker 1: kitchen appliances. So when you set up the store within
Speaker 1: the store with Samsung, tell us about what that did
Speaker 1: and how did that impact Samsung's sales at Best Buys,
Speaker 1: So yes, I mean you're right to highlight this. There's
Speaker 1: a great company. The first deal we did with them
Speaker 1: was focused on songs and tablets and cameras. So in
Speaker 1: a in a matter of months, they had these you
Speaker 1: know stores within our stores, and it really put them
Speaker 1: on the on the map. And it's interesting if you
Speaker 1: go back to the nineties, Empson was not the same company.
Speaker 1: They were really low ends and the chairman at the time,
Speaker 1: so that the father of the current of j y
Speaker 1: Le now came to the US and said, at some
Speaker 1: point I wanted I want Best Buy to carry us,
Speaker 1: that it would be the ultimate goal. And now they're
Speaker 1: one of our top five vendors, probably better than top five,
Speaker 1: and so it really gave them the physical presence and
Speaker 1: the proof that it worked for them was then we
Speaker 1: did the same in the TV department and then in
Speaker 1: the appliance department. So it's been a series of wins
Speaker 1: for them. And once we had announced the the deal
Speaker 1: with SAMs and other events, we had the similar conversation
Speaker 1: with you know, uh, Microsoft, Steve Barmer. We had a
Speaker 1: conversation at CS and the Timath later with the Microsoft
Speaker 1: stores within the Stove and then it went on and on,
Speaker 1: and you know, Timko at Apple told me that he
Speaker 1: didn't really like what condering. It understood it, but it
Speaker 1: didn't really like it. And Apple has been a very
Speaker 1: important vendor to to best buys. So what we decided
Speaker 1: to do with them is do more and so it
Speaker 1: was a stronger partnership. So based by just not it's
Speaker 1: not simply carrying products with partners with the world's almost
Speaker 1: tech companies and with some of these companies and partners
Speaker 1: on product developments, new product introduction. Uh and because there's
Speaker 1: so much innovation that drives the business, it's it's a
Speaker 1: critical role we play. We also partnering service. Best By
Speaker 1: sells Apple Care and is an authorized Apple service provider.
Speaker 1: So these partnerships really changed the game. And in the US,
Speaker 1: I think it's not arguing that the only player with
Speaker 1: which you know, these large companies can do these meaningful deals.
Speaker 1: So this really changed the the trajectory. You know, I
Speaker 1: have to ask you about the geek squad. Who's idea
Speaker 1: was that and how significant is it to to the company.
Speaker 1: So Robert Stevens, it was a student at the University
Speaker 1: of Minnesota, was the founder of of Geek Squad in
Speaker 1: very creative guy that the Navy itself is good is
Speaker 1: called the logo and and so forth, and and the
Speaker 1: base by acquiring the company in two thousand and two,
Speaker 1: and it was quite still quite small, and now of
Speaker 1: course it's it's become really big. It's twenty thou employees.
Speaker 1: And and it's the key elements of this by differentiation
Speaker 1: because you know, bas by it's not just in the
Speaker 1: business of selling you something with a target customer, people
Speaker 1: who are you know, excited about technology. You need technology
Speaker 1: but also needs help with it. And so with the
Speaker 1: Geek Squad and the Blue Shirts were able to advise
Speaker 1: you when you're looking at what to do, but also
Speaker 1: helps you implement in your home, helps you, you know,
Speaker 1: figure out if it's something is not working across a
Speaker 1: right your parts. Let's take an example, if if Nextlix
Speaker 1: is not working tonight at your house, bearer is it
Speaker 1: because of Netflix? Is it the pipe into the home?
Speaker 1: Is it the router? Is it the streaming device? Is
Speaker 1: it the TV? Honey? What is it? Right? And we're honey,
Speaker 1: all right, and we're gonna be able to help you
Speaker 1: across a lot of these vendors and so that's a
Speaker 1: big differentiator for for the company. So pretty genius. My
Speaker 1: extra special guest this week is Hubert Jolie. His new
Speaker 1: book is called The Heart of Business. Let's talk a
Speaker 1: little bit about writing a book, which is quite an endeavor.
Speaker 1: What what motivated you to sit down and say, sure,
Speaker 1: I'll write a book. Well, this is not a traditional
Speaker 1: seal of book. And I said, this is not a memoir.
Speaker 1: This is not about the story of the best by
Speaker 1: turnaround per se. It was a reflection barring. It's really
Speaker 1: been something that's been thinking about for the last thirty years.
Speaker 1: And so much of what I've learned at business school,
Speaker 1: what McKinsey and the earlier of my career is wrong,
Speaker 1: dated or incomplete. And you know, when I stepped back
Speaker 1: today or in the last couple of careers, you know,
Speaker 1: even though I'm the internal optimist, I have to say
Speaker 1: it out loud. The world as we know it is
Speaker 1: not working. Right when this multi faceted crisis you have
Speaker 1: of course a health crisis, an economic crisis, societal issues,
Speaker 1: racial issues, environmental problems, geopolitical tension, it simply is not working.
Speaker 1: And what's the definition of madness, right, It's doing the
Speaker 1: same thing and hoping for a different outcome. And for me,
Speaker 1: on my the I Most wanted list, there's two people,
Speaker 1: you know. One is Milton Friedman, you know shareholder primacy,
Speaker 1: and two is Bob mcnamarathy, former Secretary of Defense, an
Speaker 1: executive at Ford who is the almost the inventor of
Speaker 1: tub down scientific management. These approaches don't work, and I
Speaker 1: think they got us in trouble. And they say growing
Speaker 1: number of us, right, I'm certainly not the only one
Speaker 1: to believe that there is a better formula that business
Speaker 1: can be a force for good. That you know, it's
Speaker 1: the idea that you know, business should pursue a noble purpose.
Speaker 1: Uh and and to take care of all of the
Speaker 1: stakeholders that you put people at the center. You embrace
Speaker 1: all stakeholders in some kind of declaration of interdependence. There's
Speaker 1: no need to choose between you know, employees and customers
Speaker 1: and shareholders. It's like taking care of customers and employees
Speaker 1: and and and the community that generate great returns for shareholders.
Speaker 1: You treat profit as an outcome. And this formula, you know,
Speaker 1: people call it stakeholder capital exam or purposeful leadership. I
Speaker 1: think everybody now talks about and embraces you post people
Speaker 1: to still a few, which is a great uh. But
Speaker 1: the challenge that is how do you do this? How
Speaker 1: do you make this happen? And very I felt that
Speaker 1: with my experience UH and and the credibility of the
Speaker 1: Best by tournament, I could add my voice and my
Speaker 1: energy to what I call this necessarily foundation of business
Speaker 1: and capitalism around purpose and humanity and provide like a
Speaker 1: guide for any leader at any levels frankly who is
Speaker 1: keen to move in that direction, but like the rest
Speaker 1: of us, needs help. And so that's what the genesis
Speaker 1: of the of the book, and the subtitle of the
Speaker 1: book is Literacy Principles right for the next era of capitarism.
Speaker 1: In the book is full of very concrete examples and
Speaker 1: stories and illustrations. There's questions at the end of each
Speaker 1: chapter that people can use to to reflect and and
Speaker 1: act at their at their companies. So that's the that's
Speaker 1: the book. Speaking of the book, it got a terrific
Speaker 1: review from all of all people, Amazon's Jeff Bezos. How
Speaker 1: did that come about? How did Bezos give you a review?
Speaker 1: And what's the relationship like between best Buy and Amazon
Speaker 1: these days? So based By as always sold Amazon products.
Speaker 1: Of course we think about Amazon as a retailer, of
Speaker 1: course as a cloud company, but everybody's also a product
Speaker 1: company right there. They've had you know, the Kindle and
Speaker 1: of course all of their eco products, and based By
Speaker 1: had always sold you know, Amazon's products and the stores.
Speaker 1: Other retailers decided otherwise, but we thought these were great
Speaker 1: products and we're here to serve customers. I got to
Speaker 1: know Jeff personally who the Business council. Both of us
Speaker 1: were members there on the executive committee. And once I
Speaker 1: was invited to discuss turnaround, how we approached that transformation,
Speaker 1: and Jeff was in the first row and and being
Speaker 1: very kind. But then we did this significant partnership where
Speaker 1: I think it was in Amazon gave best Buy the
Speaker 1: exclusive rights to the fire TV platform, which is their
Speaker 1: smart TV platform to be embedded into smart TVs and
Speaker 1: any smart tv with the fire TV embedded in it.
Speaker 1: Best Buy is going to control that it's only going
Speaker 1: to be sold at best Buy or by best Buy
Speaker 1: on mzone. And when we need the announcement for this deal,
Speaker 1: we did it in the in a story in Bellview, Washington,
Speaker 1: and Jeff came and we had some media there. Uh,
Speaker 1: and you know, Jeff said, a TV is a considerate purchase.
Speaker 1: You've got to see the TV best, you know, best
Speaker 1: by the best, best place in the world where you
Speaker 1: can do this. That's why we're doing that. The partnership
Speaker 1: and you know, we build the stress based relationship. And
Speaker 1: of course the media was this was a jaw dropping
Speaker 1: moment and Jeff is a very generous man. It's it's
Speaker 1: interesting because it raises another question, which is, how do
Speaker 1: you think about competition as you lead a company. Do
Speaker 1: you obsessed about competition or do you obsessed about your
Speaker 1: customers and what you can become. And that's one of
Speaker 1: the things that Jeff and I share, which is you
Speaker 1: you're obsessed about your customers and becoming the best version
Speaker 1: of yourself you can be. Of course, at Best Bye,
Speaker 1: we looked at Amazone. We wanted to actually in a
Speaker 1: sense we neutralize them, right because the same prices, same
Speaker 1: great shopping experience that we ship as fast as they do.
Speaker 1: So let's call it a draw on the online business.
Speaker 1: And maybe we have our unique assets and so you're
Speaker 1: not you don't obsess about your competition. In fact, in
Speaker 1: some cases, your your your your partner with them, and
Speaker 1: I think the world and other than the COVID pandemic,
Speaker 1: there's another pandemic in the world, which is the fear
Speaker 1: or the obsession about zero sum games. You know, the
Speaker 1: only way that Amazon could win is that best Buy
Speaker 1: loses or vice versa. The only way this podcast can
Speaker 1: be successful berries if you win and I lose. That's crazy, right.
Speaker 1: You get to collaborate and create great outcomes. And I
Speaker 1: think in this world, as leaders, we have to think
Speaker 1: about how we can create win win win outcomes for
Speaker 1: our customers, are employees, are vendors, the community, and ultimately
Speaker 1: the shareholders. And to put some flesh on those bones,
Speaker 1: some numbers on it. In two thousand and seven, before
Speaker 1: the financial cry, as best Buy had done about thirty
Speaker 1: five billion dollars in revenue in they were somewhere in
Speaker 1: the neighborhood of forty seven billion. And this year, I
Speaker 1: think the company is looking for an access of fifty billion.
Speaker 1: So clearly that's been heading in the in the right direction.
Speaker 1: Let's talk a little bit about your experience on other boards.
Speaker 1: You're on the board of directors of Johnson and Johnson,
Speaker 1: and we're on the board of directors at Ralph Lauren.
Speaker 1: What have you learned from those firms that were applicable
Speaker 1: to Best Buy and what do you bring to the
Speaker 1: table for those companies? Yes, so I joined the first board.
Speaker 1: I joined with Rafflin in two thousand and nine and
Speaker 1: it was the CEO of Calclon Companies, which was you know,
Speaker 1: can you travel t g I Fridays? And then a
Speaker 1: bunch of hotels rejoined and Regisson. The reason why I
Speaker 1: was interested in joining another board was to try to
Speaker 1: become a better CEO in the relationship with boards and
Speaker 1: sitting on somebody else's board, you can see the needs
Speaker 1: of the board and then you can see how the
Speaker 1: CEO and their team dealing with you. So that was
Speaker 1: a great experience because when you become CEO and you
Speaker 1: deal with the board, yes, dear, experience right, dealing with
Speaker 1: the board. So that's one of the things you learned
Speaker 1: on the job. So that was a great way for
Speaker 1: me to to learn. And these two companies Jen J
Speaker 1: and Raffa and there two amazing companies, you know, J
Speaker 1: and J. I joined recently. I joined about eighteen months
Speaker 1: ago into watching Alex Gorsky and his team navigate the pandemic,
Speaker 1: their credit based approach. I mean that they they're the
Speaker 1: inventor of stakeholder capitalism before it had a name, right
Speaker 1: with their credo that they are created in three that's
Speaker 1: focused on all of the stakeholders. They're one of the
Speaker 1: most innovative companies. So they showed the value of doing
Speaker 1: meaningful innovation for the benefit of you know, in their case,
Speaker 1: their patients. You know, this is a wonderful entrepreneur. Company
Speaker 1: was founded in sixty seven and it's a great copy
Speaker 1: one of the most iconic brands on the plant. So
Speaker 1: how do you drive this and how do you balance
Speaker 1: left brain and right brain? And of course enjoying cooperating
Speaker 1: with Patrico Vey, the CEO, who's a terrific guy, and
Speaker 1: so you know learning. You know, I'm like a sponge.
Speaker 1: I love to stand some others what I bring. I
Speaker 1: would frame it along the lines of what I was
Speaker 1: looking for my board to do when I was CEO,
Speaker 1: And I was not looking for the board to give
Speaker 1: me all of the entries and do my job right,
Speaker 1: but I used the board. I wanted to build a
Speaker 1: board that would give me complimentary skills. So I wanted
Speaker 1: to have the best people on the board that would
Speaker 1: have skills that could be additive to our management team
Speaker 1: and use the board as a sounding board too. I
Speaker 1: would get any percent of the value of the board
Speaker 1: meeting in the preparation to the board meeting, and then
Speaker 1: you know, getting reaction the sounding board. You know, when
Speaker 1: you're in the weeds, sometimes you're you're missing something, and
Speaker 1: the being able to access you know, unique expertise from
Speaker 1: our board. So you know, what I tried to bring
Speaker 1: on these boards is tried to be a resource for
Speaker 1: the management team as sounding board and helping them with
Speaker 1: the most important issues. I really enjoyed that. I'm at
Speaker 1: the state now studied a new chapter as you highlighted
Speaker 1: on other CEO. But it's a matter of giving back
Speaker 1: and helping the next generation of leaders, you know, be
Speaker 1: the become the best version of themselves they can be.
Speaker 1: So I do that through boards and through executive education
Speaker 1: at Harvard Business School, also coach and mentor never CEOs
Speaker 1: and executives. So it's I just love doing that. So
Speaker 1: let's talk a little bit about what you're doing. Now,
Speaker 1: tell us about the class you're teaching at Harvard. So
Speaker 1: on Monday, August, early years that's that's what was the
Speaker 1: first day of school for the incoming NBA class. And
Speaker 1: one of the professors in the first year at teach Marketing,
Speaker 1: which is about focused with you on how do you
Speaker 1: grow up pretty focusing on the customers. So that's one
Speaker 1: of the things I do. Most of part of the
Speaker 1: faculty that as a program for new CEOs, so twice
Speaker 1: per year with a small bunch of new CEOs that
Speaker 1: I did this when I became CEO that come here
Speaker 1: for three days and we tried to help them out.
Speaker 1: And also part of the faculty that doing a program
Speaker 1: called Leading Global Businesses. And last but last this I'm
Speaker 1: really passionate about this. We're designing and we're gonna pilot
Speaker 1: a program for companies and then also in the NBA
Speaker 1: program called putting Purpose to Work and Unleashing Human Magic. Right,
Speaker 1: so many companies on on this purpose journey today, and
Speaker 1: so it's gonna be a series of workshops for the
Speaker 1: top thirty people's custom programs, one company at a time,
Speaker 1: and we're gonna try to support them in their journey.
Speaker 1: We're doing our first fight as this fall and look
Speaker 1: forward to learning from that experience. And and I think
Speaker 1: we're just in the early innings of that new era
Speaker 1: of capitalism, so so much to learn. U. We're excited
Speaker 1: to be part of that journey with the Never companies.
Speaker 1: Quite quite interesting. I have to ask you the obvious question.
Speaker 1: Is your book a book you assigned to your students?
Speaker 1: What what do you have them read? The so HBS
Speaker 1: is a school where there's really not for the most part,
Speaker 1: men that to be reading of any books. So I
Speaker 1: know that last year, before the book was established, my
Speaker 1: wonderful section A from the NBA program. They all got
Speaker 1: a copy of the manuscript and we had great conversations too.
Speaker 1: Sometimes the book gets distributed, yes, to the participants of
Speaker 1: the executive education programs, but in the NBA there's little
Speaker 1: men that story reading. It's it's all about the as
Speaker 1: you know, the case study methodology, which is a wonderful
Speaker 1: way to to learn, because it's hard to learn just
Speaker 1: from reading reading. I mean, I encourage people to read
Speaker 1: the book, for sure, but it's by practicing that you
Speaker 1: really learned, right. So that's the that's the HBS way, uh,
Speaker 1: to say the very least. And one of the things
Speaker 1: that Bezo specifically mentioned was that he thought your turnarounds
Speaker 1: at best Buy was going to eventually become a Harvard
Speaker 1: Business School case study. What what are your thoughts on that. Well,
Speaker 1: we're actually working on that with Professor Gupta, and it's
Speaker 1: gonna be taught for the first time. This is gonna
Speaker 1: be started, right, This is gonna be the last case
Speaker 1: of the marketing class in December, and so, of course,
Speaker 1: in my sex is gonna be ironic. I'm gonna be
Speaker 1: Professor Jolie and I'm gonna be one of the protagonists.
Speaker 1: There's been other cases on best Buy, but this one
Speaker 1: is gonna be very much on the on the turnaround
Speaker 1: and transformation. So that's gonna be fun. And I've also
Speaker 1: taught it. We've also taught it in some of the
Speaker 1: executive education programs. So Jeff, as always, Jeff is right,
Speaker 1: there is the best by case now at Harvard Business
Speaker 1: School really really quite interesting. So you mentioned purposeful leadership.
Speaker 1: Let's delve into that a little bit. How does one
Speaker 1: become a purposeful leader who's focused on creating the sort
Speaker 1: of environment where others can flourish and perform at their best. Yeah,
Speaker 1: this is for me such an important transformation and point
Speaker 1: I grew up believing that as as the leader, which
Speaker 1: was important was to be smart. Right, we all went
Speaker 1: to school and to some of the best goals and
Speaker 1: in the early years of our career. You know, this
Speaker 1: is that the left brain is what highlight being the
Speaker 1: smartest person in the room. I've learned over the years
Speaker 1: that this is not what drives you know, great outcomes
Speaker 1: over time and an entire reflection and if we slow down,
Speaker 1: you know, one of the things that thing's important to
Speaker 1: do is reflect on why do we work? You know,
Speaker 1: is work but at a mixed reputation? Right? We work?
Speaker 1: Is working in punishment because some dude sind in paradise? Right?
Speaker 1: Or is work something we do so that we can
Speaker 1: do something else that's more fun? Or is work part
Speaker 1: of our fulfillment as a human being? Part of our
Speaker 1: quest for meaning? Right? To talk about Victor Frankel. And
Speaker 1: you know, one of the things that I really invite
Speaker 1: myself to do in every leader to do is reflect
Speaker 1: on this what could it be the meaning of my life? Professionally?
Speaker 1: How do I want to be remembered? One of the
Speaker 1: things we ask the CEOs to do in the new
Speaker 1: CEO promat however, it is write your retirement speech or
Speaker 1: with my wife when I when we coach or mentor CEOs,
Speaker 1: we asked them to write their eulogy. What would you
Speaker 1: like other people to say on that day when you're
Speaker 1: not here to listen? And I think this is so
Speaker 1: meaningful because people talk about the purpose of the corporation.
Speaker 1: I think it started with our individual purpose because motivation
Speaker 1: is intrinsic, right, and so how can you lead others
Speaker 1: if you cannot lead your life and yourself? For me,
Speaker 1: that's the that's the beginning, very practical, one of the
Speaker 1: turning point in our journey at does by Barry with you.
Speaker 1: Every quarter we would get together as an executive team
Speaker 1: for an out site and one day I asked every
Speaker 1: one of the executive team members to come to the
Speaker 1: out site with a picture of themselves when they were
Speaker 1: the all they two or three years old. We got
Speaker 1: some really cute pictures back in your that and over
Speaker 1: dinner we spend the evening sharing with each other a
Speaker 1: life story and what drives us in life? But what's
Speaker 1: the meaning of our lives? And you know what came
Speaker 1: out of that discussion, You know several things. One is
Speaker 1: we realized that all of us were human beings, not
Speaker 1: just a CFO or CMO or cchl uh in that,
Speaker 1: with a couple of exceptions, all of us at the
Speaker 1: same kind of goals in life, which is just the
Speaker 1: golden rule, do something good to other people. And that
Speaker 1: was very transformational because we said, well, where the executive
Speaker 1: team of best Buy at that time best but you know,
Speaker 1: we had saved best Buy and it was where do
Speaker 1: we go from here? Said why don't we use best
Speaker 1: buyers a platform to do something good in the w
Speaker 1: else and become a company that customers are gonna love,
Speaker 1: employees are gonna love, community is gonna love, and of
Speaker 1: course shoulders are going to continue to to love. And
Speaker 1: so there's a seminal idea in my mind which is
Speaker 1: connecting what drives us as individuals with the purpose of
Speaker 1: the company. And the thing is for companies that are
Speaker 1: embark on the purpose journey, they write down their purpose.
Speaker 1: But if they just try to cascade it down and
Speaker 1: communicate it to everybody and say why don't you why
Speaker 1: aren't you excited about this new purpose, it doesn't work.
Speaker 1: You really have to start with what drives every individual
Speaker 1: and the company, and then you realize that yes, what
Speaker 1: is your role. So in the book, I talked about
Speaker 1: the five best of purposeful leadership. The first be is
Speaker 1: to be clear about your what we were talking about,
Speaker 1: because about your own purpose, because about the purpose of
Speaker 1: people around you and how it connects with you know,
Speaker 1: what you're doing at the company. The second way is
Speaker 1: because about your role as a leader. You know, it's
Speaker 1: not to be the smartest person in the room. It's
Speaker 1: to create the environment in which others can you be
Speaker 1: the best version of of themselves. And of course you
Speaker 1: know if you're leading a significant company yet says by
Speaker 1: you know more than thousand people, is the only thing
Speaker 1: that happens. The things that you decide that you come
Speaker 1: up with, you're I'm going to go far right. So
Speaker 1: it's all about creating this environment. So it's a significant
Speaker 1: mind shift. It's also about I was gonna say, you know,
Speaker 1: I'm struck by your comments. And this comes through the
Speaker 1: book about showing vulnerability, inspiring people, embracing your humanity. I
Speaker 1: think back to the former CEO of General Electric, Jack Welsh,
Speaker 1: whose nickname was neutron Jack for how frequently he would
Speaker 1: lay off people and close divisions and fire other executives.
Speaker 1: When when you were putting your philosophy to work at
Speaker 1: Best Buy. Were you aware that this is a radical
Speaker 1: break from what had come before you? Yes, And to quote,
Speaker 1: so to go back to France in seventeen nine, at
Speaker 1: the moment of the storming of the Bastial, there's a
Speaker 1: Louis the sixteenth as Monsieur de la is this a revolt?
Speaker 1: And course response says that, no, sire, this is a revolution.
Speaker 1: And I think that's what it is, and it's it's
Speaker 1: really shifting things. You know, people are not the problem,
Speaker 1: there's a source, and they're also the ultimate goal. And
Speaker 1: I think that most people agree with this. Arry the
Speaker 1: challenge is not agreeing with this now. I think it's
Speaker 1: really doing it and it's a I can speak from experience.
Speaker 1: If you were to look at my face, you would
Speaker 1: see all of the scouts in my face. They're learning
Speaker 1: from experience and trying to get better at This is
Speaker 1: a lifelong journey of learning to be vulnerable. You know,
Speaker 1: I was raised being taught that you know, you couldn't
Speaker 1: say I don't know, and now the world we live then,
Speaker 1: did you have a manual for the COVID pandemic? Did
Speaker 1: you have a manual for back to the office. No,
Speaker 1: so it's clear that we don't know. So yeah, we
Speaker 1: have to be able to say my name is you
Speaker 1: bet and I need help, and we're gonna work together
Speaker 1: to figure it out. So that's a sea change in leadership,
Speaker 1: leading from a place of purpose and with humanity and
Speaker 1: a great deal of humility. So I want to talk
Speaker 1: about the pandemic in a moment. I want to stick
Speaker 1: with this revolution that you mentioned. There's a quote from
Speaker 1: the book that I really like. Quote the Milton Friedman
Speaker 1: version of capitalism got us here, but now this model
Speaker 1: is failing. Explain to us how it got us here,
Speaker 1: why it's failing now, and what comes next. I used
Speaker 1: this to highlight the idea which merely has been Milton
Speaker 1: Treatment's only idea. That was context when you spoke. But
Speaker 1: the obsession with profits being the only thing that matters
Speaker 1: has proven to be poisonous and an excessive focus on
Speaker 1: profits is reasoners And there's several reasons for this. One
Speaker 1: is when you look at the the reported profit of
Speaker 1: the company. By the way, if anybody believes that US
Speaker 1: gap really tries to equate economic performance, you know, study accounting. Again,
Speaker 1: it's not even trying to set of principles. There's many
Speaker 1: things that gap profit does not capture, including you know,
Speaker 1: your negative impact on the environment, or how well your
Speaker 1: salesforce is trained. The other thing is that it focuses
Speaker 1: on an outcomes to in medicines, be a little bit
Speaker 1: analogous if my empty was focused on my temperature, right,
Speaker 1: and I don't want a doctor that's purely focused on
Speaker 1: my temperature because maybe it's gonna put the some of
Speaker 1: it in the fridge or in the over the right, depending.
Speaker 1: I want somebody who's going to be interesting what's driving
Speaker 1: my health and try to help me get healthy. And
Speaker 1: so we got confused by this obsession and that's what's
Speaker 1: the only thing that matters. And of course there's extreme cases,
Speaker 1: you know, end Round is one of them that where
Speaker 1: where we lost track of while we're on this planet
Speaker 1: and responsibility with with doing the right the right thing.
Speaker 1: So this new model, the reinvention of business probably going
Speaker 1: back to some of our roots, right with the idea
Speaker 1: that business is here to pursue in noble purpose. And
Speaker 1: this is not about socialism. This is about doing something
Speaker 1: good in the world that's gonna be responding to needs
Speaker 1: of customers in a way that's responsible. It's about putting
Speaker 1: people at the center, embracing all of the stakeholders in
Speaker 1: a harmonious fashion, refusing zero some games and trading profit
Speaker 1: as an outcome. I think that's the formula. That's the
Speaker 1: formula that's employed by some of the best companies on
Speaker 1: the on the planet. And as leaders, we need to
Speaker 1: go back to that and and learn, you know, new
Speaker 1: things because we're so influenced by you know, some of
Speaker 1: the techniques we learned last century, including this toub down
Speaker 1: management approach and using centers. So that's not I think
Speaker 1: I learned over time. There's researched by the m I team.
Speaker 1: I chose that financial incentives deter your rate performance, which
Speaker 1: is the opposite h what we've learned. Right, But if
Speaker 1: you if you tread somebody with carrots and sticks, be
Speaker 1: aware because you've got to get a donkey. And in
Speaker 1: the world where you need to be ativity and people
Speaker 1: to be their best motivation is going to be in twinsing.
Speaker 1: So that's what you need to be able to touch
Speaker 1: and get pretty environment where people want to be their best,
Speaker 1: you know, and and make a meaningful contribution in their
Speaker 1: in their work. So I think this is a very
Speaker 1: exciting pace. This is an urgent face because I'm concerned,
Speaker 1: probably like you and many others, that we have a
Speaker 1: few ticking time bombs, you know, and three wonderful granddaughters.
Speaker 1: I want to do my best to try to quote
Speaker 1: unquote safe the planet right, that leave a better world, right.
Speaker 1: That's the current trajectory. And this is very consistent. You know,
Speaker 1: I have a fuller understanding of of your philosophy that
Speaker 1: profit should be an outcome and not just the goal
Speaker 1: in and of itself. You've really put some some meat
Speaker 1: on those bones. Yeah, thank you, Verry. And and there's
Speaker 1: practical implications of that again, and studying your monthly business
Speaker 1: meetings or your even your board meetings with people and
Speaker 1: organization and then customers and business and then finish when
Speaker 1: financial results, you know, the if you take care of
Speaker 1: the first two, you know, the profits will we will follow.
Speaker 1: And so it's a it's a significant practical and philosophical transformation.
Speaker 1: You're talking about quotes We quoted notes in treatment, but
Speaker 1: I love this quote from the Lebanese spot haliel Jibrand
Speaker 1: said that work is love made visible. M that's a
Speaker 1: wonderful quote. Um, and let's talk a little bit about
Speaker 1: visibility of some of the changes you you did. By
Speaker 1: the time you step down from the board of directors
Speaker 1: in June of last year, Best Buy's board of thirteen
Speaker 1: directors had, for the first time ever, a majority of
Speaker 1: women and three African American directors. Tell us how you
Speaker 1: brought about this increase of diversity, What about diversity throughout
Speaker 1: the rest of the company, and what was the impact
Speaker 1: of so much inclusion and um, you know, a shift
Speaker 1: away from the older homogeneous types of boards. I think
Speaker 1: very It's clear for every one of these today that
Speaker 1: I think diverse teams is going to get to a
Speaker 1: better business outcome. And you know, I do believe that
Speaker 1: if it had been Leman brothers and sisters instead of
Speaker 1: Lehman Brothers, we would have had a different outcome. But
Speaker 1: if you also take it a very practical fashion. In
Speaker 1: one of our stories in Chicago that's in the Polish neighborhood,
Speaker 1: if the blue shirts don't speak collars, you know they're
Speaker 1: not going to sell much. Or when we had Brazilian
Speaker 1: tourists in Orlando, you know the bullshers to speak Portuguese.
Speaker 1: You know they were not going to sell much who
Speaker 1: having diversity of you know, every dimension, talent, skills, profiles, gender, race.
Speaker 1: You know, the country's color is changing very rapidly. It's
Speaker 1: becoming black and brown, and we have to represent It's
Speaker 1: very simple. We have to represent the diversity of the
Speaker 1: customers we we serve. If we don't, bad things happen.
Speaker 1: It's it's It's very true. There's a business imperative. There's
Speaker 1: also a moral imperative, you know when we see the
Speaker 1: state of the country. Also from the gender standpoint, as
Speaker 1: you said of great Land daughters, I want them to
Speaker 1: have the best opportunities and why would it make sense
Speaker 1: to only recruit from the quarter of the population. And
Speaker 1: the boards uh I felt the boards composition was a
Speaker 1: great place to focus onus on the only one. When
Speaker 1: we rebuild the board studying in thirteen, we wanted to
Speaker 1: have the best skills we withd determined to be diverse,
Speaker 1: so we had an early focus on gender diversity, and
Speaker 1: then when I started to focus more on ethnic diversity.
Speaker 1: Will be studying in twenty seen and met a great
Speaker 1: meeting with Melody Hubson as know of Aerial Investment and
Speaker 1: she's start the chair of stabacks. Everybody knows, not that
Speaker 1: she's amazing, Uh it was. She told me that people
Speaker 1: cannot be what they cannot see. And so studying at
Speaker 1: the top and having a board that signaled the direction
Speaker 1: was important. So you know what we did. And changing
Speaker 1: the composition of the boy is not that shartment. It's
Speaker 1: only ten or twelve or thirteen people. How hard can
Speaker 1: it be. So we told the headhunter, don't bother giving
Speaker 1: us resumes of non black directors, right, and if you
Speaker 1: believe that you're unable to find great black candidates, we'll
Speaker 1: say that's okay, we won't have a problem with that.
Speaker 1: Could just work with another firm, you know, it's not
Speaker 1: a problem. And so we we fluded three amazing directors
Speaker 1: and no, I'm not long on the board, but they're
Speaker 1: continue it in this direction and I think it makes
Speaker 1: a huge difference. And of course Buys headquartered in Minneapolis,
Speaker 1: and you know, following the killing, the murder of George Floyd's,
Speaker 1: you know, it's pretty simple if you you know, if
Speaker 1: the city is on fire, right, if the community is
Speaker 1: on fire, you just can't open stores, right, you can't
Speaker 1: run a business. So in this country, we have this
Speaker 1: big racial issue that has been going on for centuries.
Speaker 1: I think this generation is the opportunity to end systemic
Speaker 1: rations and uh, and that's something we think business can
Speaker 1: can play a big role in this. So that's you know,
Speaker 1: and it was determined, and that's what we did. Let's
Speaker 1: jump to our favorite questions that we ask all our guests,
Speaker 1: starting with tell us what you're streaming these days? Give
Speaker 1: us your favorite Netflix or Amazon Prime. What what's keeping
Speaker 1: you entertained during the pandemic. You know, I have so
Speaker 1: much an electronic equipment in our place that I'm doing
Speaker 1: a lot of meaning I love I always listen to music.
Speaker 1: I'm a movie bob. I have a collection of probably
Speaker 1: eight hundred movies on my carriage escape. You know. Set up.
Speaker 1: Our favorite show, I would say recently has been you know,
Speaker 1: Good Doctor. I think that's season five is starting at
Speaker 1: the end of September. We're very excited about this. And
Speaker 1: then from a podcast standpoint, I like listening to hbr's
Speaker 1: Idea Cast. That's a weekly, great weekly podcast. Whitney Johnson
Speaker 1: has got a great leadership podcast called Disrupt Yourself or
Speaker 1: And then I have to mention is a young teenager,
Speaker 1: well teenager would be young anywhere, right, But let's call
Speaker 1: I'm a teenager logan Lynn. He's got a finance Z
Speaker 1: podcast that's focused on the Z generation. Oh my god,
Speaker 1: the guy is so cool. So everybody, everybody joins and
Speaker 1: down those finances spell fi n A n Z and
Speaker 1: that slogan. Then, huh, quite interesting. We hinted at some
Speaker 1: of your menators, but let's let's jump into that in
Speaker 1: more depth. Tell us some of the people who helped
Speaker 1: to shape your career. Oh, there's so many. Marrying you know.
Speaker 1: Jean Marie de Caponsie kind of mine, had this big
Speaker 1: influence on me, teaching me so much about to put
Speaker 1: people first and treating profits as an outcome. There was
Speaker 1: two great friends, oh yes, who who happened to be monks,
Speaker 1: you know, in a religious congregation in the early in
Speaker 1: the nineties. That was the turning point. They asked me
Speaker 1: to write a couple of articles with them on the
Speaker 1: theology and philosophy of work, which is where I got
Speaker 1: a lot of my roots in terms of you know,
Speaker 1: work as part of our search for meaning as as individuals,
Speaker 1: as human beings. That changed my perspective on on on work.
Speaker 1: Another turning points, who you know in the my early forties,
Speaker 1: you could say, to quot out the books, I was
Speaker 1: at the top of my first mountain, right, had been
Speaker 1: a partner at mckindean company. I was on the executive
Speaker 1: team of the event Universal by many measures that had
Speaker 1: been successful, right except I think the top of that
Speaker 1: first mountain was very dry, you know, which was not fulfilling.
Speaker 1: There was no no real meaning. So we called it
Speaker 1: my midlife crisis. Right, So instead of going on to
Speaker 1: an island I did. I stepped back and I did
Speaker 1: the spiritual exercises. Wignessis of loyal that so you could
Speaker 1: say the founder of the Jesuits. Of course you could
Speaker 1: say he was one of my mentors. And that was
Speaker 1: really helpful to help me discern my calling in life,
Speaker 1: which today well since that has been to try to
Speaker 1: make a positive difference from people around me and use
Speaker 1: the platform they have to make a positive difference in
Speaker 1: the world, which is what I'm doing now teaching and
Speaker 1: mentoring and and and so forth. And then we mentioned
Speaker 1: Martial gold Smith, my first coach and good friends. Later
Speaker 1: on they also worked with Eric Kleiner. While you see
Speaker 1: when when the board so Marshall was doing my annual
Speaker 1: helping the board with my annual evaluation. And the board
Speaker 1: realized that Marsha when I were such good friends and said,
Speaker 1: now we need somebody more objective now. And we got
Speaker 1: Eric Planer, who is now the CEO of YFC, work
Speaker 1: with me, but also his firm works with every one
Speaker 1: of our executives and helped us with executive team effectiveness. Uh.
Speaker 1: And you know that was quite transformative. You know, I
Speaker 1: should have spent more time earlier on not just on
Speaker 1: building the right team, but enhancing our team effectiveness. And
Speaker 1: I learned a lot working with Eric in that. In
Speaker 1: that journey, let's talk a little bit about everybody's favorite question.
Speaker 1: Tell us about some of your favorite books and and
Speaker 1: what are you reading right now? I read three books
Speaker 1: this summer. The first one is by Rakish Karana, who
Speaker 1: is not the president of Harvard College in Scotland. Hire
Speaker 1: aims to hired Hands, which is the history traffic for me,
Speaker 1: the history of business education in the US over the
Speaker 1: last time in twenty years, and and how you know
Speaker 1: the business school curriculum was shaped and how and why?
Speaker 1: He believes and I do believe as well that we
Speaker 1: need to evolve it past just learning techniques, but also
Speaker 1: it's not just about learning you know something or learning
Speaker 1: to to do something. It's also learning to be, which
Speaker 1: is I think an entire journey. I also read That
Speaker 1: You Know Cast by Isabel Wickerson and a book by
Speaker 1: my colleague said Down Nearly Remote Work Revolution, which is
Speaker 1: of course a very timely, timely book, best book ever
Speaker 1: I've ever read. I have to mention the Maxell Push
Speaker 1: being French. You know, in Search of Last Time. It's
Speaker 1: only three thousand pages, so if you have a minute
Speaker 1: or two, encourage you to to get to it. Victor
Speaker 1: Frankel's Man's Search for Meeting is another favorite. And you
Speaker 1: mentioned that Martial Goldsmith, what got you here won't get
Speaker 1: you there? And finally I have to mention my wife's
Speaker 1: book called Aligned, Becoming the Leader You're Meant to Be
Speaker 1: and maybe it's art consili It's one of the best
Speaker 1: leadership books that I've ever read. But of course I'm
Speaker 1: a little bit biased, maybe maybe a little bit biased.
Speaker 1: Um So, so you work with grad students in college students,
Speaker 1: what sort of advice would you give to a recent
Speaker 1: college graduate who was interested in a career either as
Speaker 1: an executive or in leadership or or even in retail.
Speaker 1: I think the advice is the same as we give
Speaker 1: the u CEOs this write your retirement speech or even better,
Speaker 1: write your eulogy. And I know my good friends John
Speaker 1: Donahoe is now the CEO of Nike, did this when
Speaker 1: he graduated and he's always kept it, and I understand
Speaker 1: he goes back to it every year, and it's it's hard,
Speaker 1: you know, you know, I have children there between the
Speaker 1: ages of twenty six and thirty four. Early in your
Speaker 1: adult life, you don't know everything. But try to write
Speaker 1: it and see what journey you want to be on
Speaker 1: and how you want to be remembered. That would be
Speaker 1: one thought quite interesting. And our final question, what do
Speaker 1: you know about the world of leadership and executive management
Speaker 1: today that you wish you knew a couple of decades
Speaker 1: ago when you were first getting started. Well, there's so
Speaker 1: much of the years. I think it has to do with,
Speaker 1: you know, profits being an outcome, not the goal. It's
Speaker 1: about importance of looking at drivers of of performance. It's
Speaker 1: about you know, my role as a leader is that
Speaker 1: to be the smartest person in the room, but to
Speaker 1: create the right environment. It's not about being perfect nobody
Speaker 1: is perfect, and I think that the quest for maybe
Speaker 1: I'll finish with this. The quest for perfection, you know,
Speaker 1: can be very dangerous, can be evil, right because if
Speaker 1: you're if you're trying to be perfect, guess what, You're
Speaker 1: not gonna be successful. You're gonna be incredibly demanding and
Speaker 1: harsh with people around you because you're gonna expect them
Speaker 1: to be perfect. And so you have to relact and
Speaker 1: be kind with yourself and others around you and be
Speaker 1: able to open up and share what you're struggling with,
Speaker 1: understand what they're struggling with, and help each other out.
Speaker 1: That's the I think to me, that's a it's such
Speaker 1: an important, uh consideration. The quest for perfection can be
Speaker 1: very dangerous. Be kind, be kind of yourself. You know,
Speaker 1: during the pandemic, we learned so much right when we
Speaker 1: used to fly around very long time ago on planes, right,
Speaker 1: and we were told, you know, by the steward or
Speaker 1: the stewards, if the oxygen mask comes down, put it
Speaker 1: on yourself first before you help out it. So as
Speaker 1: we continue to go through challenging time, taking care of
Speaker 1: yourself as a leader, you can sure you meditate your
Speaker 1: flextor the exercise the ask will help you be from
Speaker 1: your personal board of director or your best friends. That's
Speaker 1: the key thing that's gonna be the way that you
Speaker 1: can then help others who take care of yourself first. Hmm.
Speaker 1: Quite quite interesting. We have been speaking with Hubert Jolie,
Speaker 1: former chairman and CEO at Best Buy and currently a
Speaker 1: lecture at Harvard Business School. Thank you, Hubert for being
Speaker 1: so generous with your time. If you enjoyed this conversation,
Speaker 1: be sure and check out any of our previous three
Speaker 1: seventy six former discussions that we've had. You can find
Speaker 1: those at iTunes, Spotify, a cast, wherever you feed your
Speaker 1: podcast fixed. We love your comments, feedback and suggestions right
Speaker 1: to us at m IB podcast at Bloomberg dot net.
Speaker 1: You can sign up for my daily reads. You find
Speaker 1: those at Rid Halts dot com. Uh follow me on
Speaker 1: Twitter at rid Halts. I would be remiss if I
Speaker 1: did not think that rac staff that helps put these
Speaker 1: conversations together each week. Charlie Vollmer is my audio engineer extraordinaire.
Speaker 1: Atika val Bronn is my project manager. Paris Wald is
Speaker 1: my producer. Michael Batnick is my researcher. I'm Barry Ritolts.
Speaker 1: You've been listening to Masters in Business on Bloomberg Radio