Hubert Joly teaches at Harvard Business School. He is a former President and CEO of Best Buy Co., Inc. Speaking to Srijana Mitra Das, he explains why companies need to rework their focus and their capitalism today:

Q. What is the core of your research?

A. I strive to help MBA students and executives become more effective at their jobs. Most people now recognize that the excessive pursuit of profit and top-down management approaches don’t work – we need a new model. I believe this new approach should be about companies pursuing a noble goal, putting people at the center and embracing all stakeholders. I wrote “The Heart of Business: Leadership Principles for the Next Era of Capitalism” as a practical manual for leaders who want to move in this direction.

Q. You turned around a struggling Best Buy starting in 2012 – what was your greatest challenge and most important learning?

A. In 2012, everyone thought Best Buy was going to be gone. There was not a single buy recommendation on the title. People thought Amazon would destroy us. They also believed that Microsoft and Apple opening their own stores would ruin us. There were strategic, leadership and operational challenges, as the quality of our services also declined. At the same time, the share price fell precipitously. So there was an unlimited challenge menu. Investors have recommended that we close stores and fire people – like people are the problem. But I felt that people were the source of the solution, so I decided to take a human-centered approach.

From a strategic standpoint, we started to match Amazon’s prices, invested online, strengthened the supply chain, started shipping same day products, strengthened our stores and partnerships with key suppliers. But that was the ‘what’ – the key point was the ‘how’. It came from people. We listened to our front-liners, rebuilt the team at the top, and cut non-salary expenses rather than laying people off – thus creating an energy that inspired our people to focus on growing the business. A business can define its purpose, but to bring it to life you need your employees to feel leadership from the inside out. As our employees began to talk about customer feedback and independently think about innovations and solutions to business problems, we entered an environment of growth. At the same time, we started to think about how to relate the dreams and aspirations of our people to their work.

The result was more energy, created by releasing human magic. Another lesson I learned is that the all-knowing superhero CEO is a myth: People look for leaders who are genuine, vulnerable, honest, empathetic, and able to listen to them. I also discovered a strong connection between a happier workforce and a thriving business – in 2012, the Best Buy stock price was $ 11. Today it’s $ 123.

This 11-fold rise in the share price was motivated by human magic being harnessed in the company. A business is a human organization made up of individuals working together towards a goal – if you have teams that are happy to be with you, it leads to happy customers and shareholders. A determined human organization achieves this.

Microsoft, led by Satya Nadella, promotes a people-centered approach. Ralph Lauren focuses on sustainability and diversity while Unilever led by Paul Polman has done groundbreaking work for the environment – the Milton Doctrine Friedman is definitely over “

– Hubert Joly

Q. In the face of digital marketing, how did you get a physical business like Best Buy to be friends with customers?

A. Technology, digital marketing, etc. can be great tools. But these are tools for something – as a business you have to have your value proposition. With Best Buy, we have set out to enrich the lives of our customers with technology. It was a good move because companies find their raison d’être at the intersection of what the world needs and what they are particularly good at. At Best Buy, we’ve created teams to help customers set up units like a home office. Supporting our customers became our goal – profit was the result.

Q. The world today is facing a pandemic and climate change. Faced with such challenges, what leadership principles should companies adopt?

A. These are multifaceted crises that require a completely new approach. We need to change the way we think about doing business – after all, the definition of insanity, as Albert Einstein said, is to repeat the same thing and hope for a different outcome. Businesses must embrace all stakeholders with a declaration of interdependence now. Look at the instability that happened after George Floyd in the United States – if a city is on fire, the stores can’t open. Likewise, with climate change, if the planet is on fire, businesses cannot work. We must now conduct our business not only within their four walls, but embracing all stakeholders and working for mutual welfare.


Q. Are there any companies that you find inspiring from this perspective?

A. There are a lot of them and that’s good news: Microsoft, led by Satya Nadella, promotes a human-centric approach. Ralph Lauren, of which I am a part, focuses on sustainability and diversity. Unilever, under the leadership of Paul Polman, has done groundbreaking work for the environment. Many companies now realize that by investing in all of our stakeholders, we can help create a better future. The Milton Friedman doctrine is definitely over.

(Opinions expressed are personal)

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