Steering Through the Business Storm: Leadership Lessons from Best Buy's Former CEO, Hubert Joly
Hubert Joly, once a novice in a blue polo shirt tagged "CEO in Training," navigated Best Buy from the brink of extinction to a beacon of success, surging its share price by an impressive 270%. Joly's journey at the helm of what is now one of America's favorite employers mirrors a captain's struggle to steer his ship amidst a raging storm. In the face of an evolving retail landscape in the Amazon era, a clear sense of direction and unified purpose are crucial to survival. Lacking these, any leader could easily lose their way. However, Joly confidently took the helm, guiding Best Buy through the uncertain path of retail transformation, and safeguarding the company's future against all odds. The secret to his success? A unique approach he calls "human magic".
Creating your own eulogy is a challenging task, but also a transformative one that keeps your guiding star constantly in view. For Hubert Joly, the essence of his life would be best summarized by the phrase, "the lives and hearts I have touched."
Joly’s triumphant leadership and dramatic transformation of Best Buy from a struggling retailer to a beacon of innovation and sustainability have distinguished him as a "man for difficult situations." His unique business philosophy, which uncovers the power of "human magic," has inspired countless leaders around the globe. Joly delves into these leadership lessons in his 2021 bestseller, "The Heart of Business: Leadership Principles for the Next Era of Capitalism." We've compiled a selection of his key principles for those seeking direction in the shifting seas of the business world.
From McKinsey to Best Buy: a journey driven by purpose
Hubert Joly, renowned former Chief Executive Officer of Best Buy and presently a senior lecturer at Harvard Business School, is an alumnus of HEC Paris, class of 1981. His significant contributions to the HEC Foundation as a Major Donor and his involvement as a member of the International Advisory Board led to the creation of the Joly Family Endowed Chair in Purposeful Leadership. Celebrated as one of the top 30 CEOs worldwide by Barron's and voted among the top 10 CEOs in the US by Glassdoor, Joly's journey to becoming a leader worth emulating is inspiring. How did he transform into a beacon for executives looking to break free from outdated practices and lead with a truly noble purpose? His seven-year reign as CEO at Best Buy, during which he revived the electronics retailer, gave him an enlightened view of corporate purpose and the philosophy of "business as a force for good".
"After a solid run of over a decade at McKinsey, Joly reached what he terms as "the top of his first mountain". However, he found his mission of solving business problems as a consulting partner to be devoid of meaning. His most profound revelations, he reveals in an interview for the "Love in Action" podcast, stemmed from inspiring interactions.
One such encounter was with a client, Jean-Marie Descarpentries, former CEO of CarnaudMetalBox and Bull.
"Profit was not the goal," Descarpentries told him three decades ago. "It was an imperative, and an outcome, but not the goal."
Another profound influence was the spiritual exercises of St Ignatius. This practice of contemplating one's life and discovering one's calling became a significant turning point for Joly. Today, he imparts these insights as part of his leadership teachings at Harvard Business School, guiding the next generation of leaders on their path to finding their purpose.
"Once we know our calling in life, how can we make it real?" Hubert Joly ponders, echoing the sentiments of his wife, Hortense le Gentil, who encourages clients to craft their own eulogies. This exercise prompts individuals to contemplate the legacy they wish to leave behind.
Joly poses the question, "Do you want to be remembered for achieving the title of VP at the young age of 30? Or perhaps for reaching a specific earnings milestone?"
He emphasizes that discovering the true meaning of our lives and our purpose is a gradual and profound process. Reflecting on a pivotal moment in his own leadership journey, Joly recalls a significant dinner with Jean-Marie Descarpentries. It was during this gathering that Descarpentries imparted a powerful insight, challenging the conventional belief that the sole purpose of a company is to generate profits. In contrast to the teachings of economist Milton Friedman, Descarpentries stated that there is more to a company's purpose than monetary gain.
Putting people at the center of the business
He outlines three key imperatives in business, stating, "There is a sequence: a business imperative, a people imperative, and a financial imperative."
Joly firmly believes that excellence in the people imperative leads to excellence in the business imperative, ultimately resulting in excellence in the financial imperative. He emphasizes that the ultimate purpose of a CEO's mission should revolve around people. But there's also a sense of the "meaning of work", which should be a first-hand reflection subject, according to Joly.
"Is work part of our search for meaning? Is work part of our fulfillment as human beings? Is work love made visible?"
For Joly, the modern leader in the 21st century differs from the traditional notion of "heroic leadership." Instead, today's leader focuses on creating energy within the organization.
Joly explains, "It's all about creating the right environment, being someone caring, vulnerable, and very human." This new breed of leader is clear about their purpose and strives to foster an environment that nurtures and empowers their team members.
When examining the struggle of perfectionism in leadership, Hubert Joly views it as a hindrance to the human nature of the organization. He explains,
"You're probably not perfect, so you're not going to like yourself. That's the first thing. Second, you're going to be working in teams. On that team, there are going to be other human beings. They're probably not perfect either.
As they demonstrate their lack of perfection, you're going to get angry." Joly reflects on his own experiences, confessing, "I would get angry, disappointed, or agitated because I saw these imperfections as an obstacle to the goal, which was perfection.
So that creates an inhuman environment that can have the appearance of something that's uplifting because you're driving for perfection. You're always improving, but you're destroying the heart of the organization, the heart of the people around you, and your own heart."
For a CEO, receiving honest feedback from their teams can be a transformative and eye-opening process. Joly believes that employee feedback is a vital element that contributed to his successful leadership in Best Buy's remarkable turnaround. By adopting an advice-oriented approach to the executive function and embracing constructive criticism, Joly was able to guide the company from a struggling state to a thriving organization.
"The first time I had to ask for my team's help, it was excruciating pain for a perfectionist. I'm here telling my team I'm not perfect. And they were so kind to help me. And this is not about correcting bad things. This is about getting better. How can I get better at becoming a more effective delegator or at creating a growth environment? It was like improving my forehand."
A playbook for "unleashing human magic" to thrive during challenging times
What transpired is a captivating playbook that empowers retail companies to thrive in the age of Amazon. Hubert Joly outlines the five pillars of Best Buy's Renew Blue transformation journey:
1. Increasing revenue: By enhancing the shopping experience, forming vendor partnerships, and reducing non-salary expenses, Best Buy sought to boost its revenue.
2. Unleashing human magic by aligning individual dreams with a collective purpose: As leaders drive transformation, they must consider how to ignite the energy needed for the company's renewal. Joly explains,
"Connecting dreams, it's the idea that something magical happens if we can connect what drives us individually with our work and with the overall purpose of the company. That's when we have a spring in our step."
3. Fostering autonomy at all levels of the company: One of the policies Joly implemented as CEO was "Don't do anything stupid, crazy, or goofy." This approach allowed for freedom of action while maintaining boundaries.
4. Growing employees' mastery: Best Buy aimed to create an environment where mastery became second nature by providing individual and professional training. Joly emphasizes the importance of personalized coaching, stating, "As a supervisor, we need to become an individual coach to every member of our team, and there can be mass training, but it's individualized coaching that makes a difference."
5. "Putting the wind at your back" or in your sails: Joly encourages leaders to take control of their own destiny rather than succumbing to external circumstances. He believes that growth is vital for both the organization and its members:
"Life is about growth. If the organization and the people in the organization are not growing, there's something wrong."
Reflecting on the Covid crisis, Joly highlights the importance of leadership from within. He advises leaders to spend time introspecting, understanding their leadership style, desired legacy, and how they want to be remembered. This self-reflection acts as a true north, guiding leaders to become their best selves.
Interested in Learning More? Check out these resources on purposeful leadership:
- Book: "The Heart of Business. Leadership Principles for the Next Era of Capitalism"
- HEC Talk: Purposeful Leadership - The New Business Revolution with Hubert Joly
- Academic research and teaching: Joly Family Chair in Purposeful Leadership.
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