Fair process at Best Buy

Fair process at Best Buy

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A conversation with Hubert Joly

Since his appointment as CEO of Best Buy, Hubert Joly has built an impressive record of turning around the leading consumer electronics retailer by ensuring price competitiveness, matching on-line prices, and by investing in the customer experience, on-line and in the stores.

Hubert has explained in an interview with "Investor today"...

... that his secret weapon lied in the leadership principles he describes as the "5 Be's":

1. Be a purposeful leader
2. Be clear about who you are serving (people in the front line)
3. Be clear about your role as a leader (a resource to your team)
4. Be values-driven leader (promoting integrity and diversity)
5. Be an authentic leader (be yourself, full self, be genuine)

When I read the article, I was struck by the resonance between Hubert's 5 Be's and the " Fair Process" model, which highlights amongst others the role of the corporate culture and the need for clarity and consistency.  I was intrigued, though, to understand if and how Hubert Joly had been able to go through the 5 steps of a properly lead "fair process" when he made his first major decision, 30 days after his appointment.

Having had the privilege of working with Hubert when he was a junior consultant at McKinsey, I have been able to interview him.

The topic of the decision was the introduction of a "price-match" guarantee, whereby Best Buy would commit to reimburse the price gap to customers who would find the product they had purchased at a lower price at key online and local competitors.

The stakes were high, as Best Buy staff felt handicapped by higher prices, but there was a fear that competitors, notably Amazon could start a price war that would ruin Best Buy.

Before he started his job, and in the first weeks, Hubert Joly did a lot of studying and listening, including spending his first week on the job in four stores working alongside sales associates, listening to their observations. He also held a number of workshops with the top 30 people of the company, looking at facts together in an organized fashion. Finally, he was able to look at the results of a partial test the company conducted on price matching effectiveness in the Chicago market. On this basis he and his management team decided to go ahead with a new price matching policy that was launched ahead of the holiday season on a temporary basis. When the results came in, Hubert and his team were able to make this policy a permanent one.

Hubert had all the arguments to explain the decision and could dedicate his energy to making the best of it through the “5 Be’s” driven execution?