Hubert Joly took over Best Buy in 2012 and now teaches at Harvard Business School. The sequencing he insists on is the least fashionable part of his story. The purpose work came about four years after he arrived, and the first three or four years were operational repairs. The principle he borrowed from a fellow director, the chief executive of Cargill, organizes the whole conversation: operational progress creates strategic degrees of freedom.
Key findings
- Joly’s due diligence before taking the job found strategic, operational, leadership and shareholder problems at once, with Amazon threatening the business and the share price falling. His conclusion was that the damage was self-inflicted: prices were too high, the e-commerce experience was horrendous, shipping was slow and the cost structure was bloated. Self-inflicted problems, he argues, have nobody else to blame and can therefore be corrected.
- He spent his first week on the job working in a store in St. Cloud, Minnesota, wearing a Best Buy blue shirt and khakis. An associate told him the site’s search engine did not work: type Cinderella and you get Nikon cameras. A fifty billion dollar retailer, he concluded, was running without a functioning search engine.
- The decision that defined the turnaround came out of the same store conversations rather than from analysis. Customers were showrooming, asking associates about products and then buying on Amazon, so Joly empowered the blue shirts to match Amazon prices and made competitiveness a policy rather than a case by case call.
- He rejected the standard turnaround prescription that analysts pressed on him, which was to cut costs, close doors and fire people. His position was that people were not the problem but the solution, and the bulk of the savings came from non-salary expenses instead, alongside a push to grow revenue.
- The moment the market changed its mind was a modest number. In January 2013 Best Buy reported that holiday sales had been flat, which would be no accomplishment anywhere else. It mattered because everybody had expected the company to die, and flat meant the decline had stopped.
Declaring the turnaround over
The second phase began because a director said the first one had to be closed out loud. Patrick Doyle, then chief executive of Domino’s Pizza, told Joly at a board meeting to declare the turnaround officially over and to announce a move to growth. Joly’s reason for taking the advice is about appetite. A turnaround is played not to lose, so new things do not get tried and tolerance for failure stays low.
The turnaround years had been spent regaining credibility with investors, which kept the company focused on its say-do ratio and made it conservative by design. The first strategy was called Renew Blue and the second Building the New Blue, both named for the blue shirts worn by store associates. Joly treats the naming as substance rather than decoration: without a name for a strategy, there is no strategy.
Four circles, and the one usually left out
Joly locates a corporate purpose at the intersection of four circles. What the world needs, meaning human needs that are not properly satisfied. What the company is uniquely good at, because otherwise the exercise is imagination. How it can make money. And what its people are passionate about as individuals, which is the circle he dwells on, because he treats an individual search for meaning as the foundation of a corporate one.
What Best Buy landed on was that it is not a consumer electronics retailer at all but a company in the happiness business, enriching lives through technology by addressing key human needs. Joly gives the commercial consequence in the same breath as the inspirational one. The definition vastly expands the addressable market, which is not usually the order these arguments run in.
Bring a photograph of yourself as a child
At a quarterly offsite Joly asked the ten members of his executive team to bring a photograph of themselves as small children, and the group spent the evening sharing life stories and what drives them. Two things came out of it.
Every member turned out to be a human being rather than a CMO, a CFO or a CHRO. And with a couple of exceptions, all of them named the same purpose in life: the golden rule, do something good for other people.
The conclusion the group drew was that Best Buy was where they were investing their lives. The platform should therefore be used to make it a force for good, for employees, customers, communities and shareholders alike.
Joly’s gloss is a rebuttal of the line from The Godfather about business being nothing personal. Business, he says, is very personal, and anchoring corporate purpose in individual purpose is what changed the trajectory.
Why a purpose announced from the top does not land
Joly tests any purpose statement in a store. Walk in, assemble the staff and tell them the new corporate purpose is to enrich lives through technology by addressing key human needs. The reply he expects is that they have no idea what to do at ten the next morning. The rule he draws is unequivocal. Communicated top down, a purpose will not work, and he does not care how good it is.
Between forty and sixty directors and junior officers, chosen as respected people who knew the company, worked with the New York firm Red Scout on making the purpose understandable by front line staff. The result was not an internal communications campaign.
One day in June the company closed every store for a few hours of training, with no PowerPoint and no glossy video. The two prompts small groups worked on were personal: share your life story, and share the story of someone in your life who is an inspiring friend.
Joly, in a store in New York, was paired with a young woman who had been homeless and for whom Best Buy had become her home. He describes seeing her as a human being rather than a blue shirt. The reframing the whole exercise was built to reach is one line: treat each other and the customers not as a walking wallet but as an inspiring friend.
The dinosaur
The proof Joly points to is a story from 2018. A young boy came into a store with a dinosaur toy whose head had come away from the rest of the body.
At most stores he would have been pointed at the toy aisle and, with luck, sold a replacement. Two blue shirt associates instead took the sick dinosaur behind a counter, performed a surgical procedure on it, substituted a new one, and handed the cured dinosaur back.
Joly asks whether a standard operating procedure covered this, or better still a memo from him, and answers that of course neither did. The two associates had the desire and the freedom to act, which are the conditions a company actually controls. Comparable sales had been accelerating at the time, and the story is what convinced him the company had unleashed human magic at scale.
Five ingredients, and the one that had to be individual
The five ingredients start with connecting dreams. A store general manager in Boston asked every associate what their dream was, at Best Buy and outside it, and had them write it down in the break room. Helping them reach it, he told them, was his own job.
The second is an environment of genuine human connection where people can be vulnerable, which is where Joly places diversity and inclusion work rather than treating it as a separate program. The third is autonomy, tested by asking who likes being told what to do. No hands go up.
The fourth is mastery, and it carries the operationally hardest claim in the conversation. Training is interesting but too mass, so Best Buy built individualized coaching at scale for 100,000 people. The fifth is a growth environment where people can take risks and fail. Joly is explicit that the set is the opposite of traditional management approaches, and reaches for 1789 to say so: not a revolt, a revolution.
The disagreement with the study
Two Harvard colleagues published a seventy two page study arguing that the Business Roundtable’s revised statement on corporate purpose had changed little in corporate governance. Joly calls the piece articulate and thoughtful, then says it misreads the situation.
Their evidence is that in most companies the board never reviewed the chief executive’s signature. His reading is that those companies were already moving in that direction, so the signature followed the change rather than causing it.
The counter-evidence he offers is a Just Capital survey asking Americans whether large corporations work for the benefit of all Americans. Two years earlier 45 percent said yes; at the time of the interview it was 65 percent. He does not claim companies are perfect, or that the tensions and trade-offs have gone, only that a great deal is changing at the level of the individual enterprise.
Where he agrees with the critics is on the instruments rather than the intentions. Accounting does not take externalities into account, whether environmental or social, and proxy advisers judge a company purely on total shareholder return before telling shareholders how to vote on pay. His conclusion for the audience is two clauses long: if we do not act, who would, and if not now, then when.
Where the hard part actually is
Joly’s reading of chief executive opinion is that the argument has been won and the execution has not. The vast majority know the direction is right, and 181 of the world’s foremost companies, Best Buy among them, put their chief executives’ names to the Business Roundtable statement. The hard part is turning a written purpose into a reality that genuinely serves all stakeholders.
He points at the scars on his face as the reason the book exists, and describes it as a manual or handbook rather than another argument for the idea. The implications are wide in his account: whether work is a punishment or part of human fulfillment, what a corporation is actually for, and whether marketing is only about optimizing profit by serving customers. His summary of the moment is that much needs to be done but not much needs to be invented.
The head disconnected from the body
Joly names the mistake he made for many years and treats it as a general one rather than a personal failing. It is keeping the head, and the left brain in particular, disconnected from the rest of the body, with business life separated from personal life.
His objection to the phrase work life balance is grammatical. It implies that life sits outside work, and that work is what you do so you can afford to do something else that is more fun.
His alternative is an integrated life in which a person brings all the body parts to work, not just the head but the heart, the soul, the guts, the ears and the eyes. Asked at a conference for a large French financial institution whether any of this could work in France, he replied by asking whether the French are human. The desire to do good for others is the golden rule, he argues, and it is universal rather than a cultural preference.
The model he grew up with cast the leader as a superhero, the smartest person in the room, there to provide the answers and too often driven by power, fame, glory or money. Nobody wants to follow a leader like that now, in his view, and few want to be one. The replacement is frightening because it means dealing with emotions, which is part of why chief executives and their teams increasingly work with coaches.
You cannot open the stores if the city is on fire
Joly’s case for why companies cannot stay out of public questions is operational rather than moral. Best Buy is headquartered in Minneapolis, and after the murder of George Floyd a city on fire meant stores that could not open. A Harvard colleague’s version generalizes it: if the planet is on fire, you do not have a business. What follows, in his phrase, is a declaration of interdependence.
The era he thinks has arrived is named by analogy with the one it replaces: after shareholder activism comes stakeholder activism, which companies ignore at their peril. The condition he attaches, and assigns to the marketing side of the leadership team, is authenticity.
He cites Nike’s Colin Kaepernick campaign, where the internal practices at the time were not in line with the external statements, and companies that make voting easier for staff with paid time off.
What he would tell a marketing leader
Joly is not a marketer by training and says so plainly. He agreed to teach at Harvard Business School because the course was being redesigned around how a company grows by focusing on the customer, which makes it a course about growth rather than marketing technique. He treats the discipline as belonging across every function of a company rather than sitting inside a marketing department.
The work he assigns a chief marketing officer starts with the purpose definition, then making it the cornerstone of strategy, then the concrete product and market initiatives that bring it to life. That means not just advertising and product launches but a deep transformation of how the company operates. His instruction is to think big and act as an activist in what he calls a revolution. The interviewer adds the structural reason marketers fit: they are trained to find insights and build value propositions for every stakeholder.
Write your retirement speech
Asked what he wishes he had learned twenty years earlier, Joly names his own mistake again and then makes it actionable. Be clear about your true purpose as an individual and about how you want to be remembered, which he turns into an exercise: write your eulogy, or if not that, your retirement speech. Then connect what matters to you with your work and use the platform you have to make a positive difference in the world.
The concept he reaches for at the end is love brands, meaning brands that customers, employees and shareholders all love. He closes on a borrowed line from the Lebanese poet Kahlil Gibran, work is love made visible, which is the most compact statement of his whole argument.
Scope and limitations
This is a retrospective by the chief executive who led the turnaround, recorded in 2021 while he was promoting a book about it. The performance claims and the account of what caused them are his own, and his disagreement with the academic study of corporate purpose statements is an interpretation offered against theirs. His passing remarks about a US Senate leader’s opposition to companies engaging on voting rights are omitted here; the substantive argument, that a company engages because the issue affects its own employees, is kept.
Source
This page summarises HGS #34: Hubert Joly (former CEO, Best Buy) on creating an inspiring workplace and a profitable firm, by Marc de Swaan Arons, 2022-02-14.