THE HEART OF BUSINESS

LEADERSHIP PRINCIPLES FOR THE NEXT ERA OF CAPITALISM

by HUBERT JOLY

Try proposing a business turnaround that will convert the loss-making company into a profitable one, by introducing all the ‘soft stuff’ HR people sprout straight after graduation. In response, at best, you will get ‘the look’ – which translates into ‘don’t worry, just one year in the real world of business you will shed all that nonsense.’

Author Hubert Joly began his career in the highly analytical environment of a McKinsey consultant, and later served as the president, CEO and director of Carlson, a global hospitality and travel conglomerate. When he left Carlson, he was offered the leadership of Best Buy, a chain of electronics retailers.

At that time Circuit City, a one-time giant in the same industry, had filed for bankruptcy and Radio Shack was headed that way. Best Buy’s operational performance had been deteriorating in the US market for several years.

Having realized that the attack from Amazon’s low prices was not the problem plaguing Best Buy, nor was the market or digital disruption, Joly agreed to take over the leadership. At the time, Best Buy’s shares were trading in single digits. By the time Joly left, it was trading at $75. In the 7 years he was at Best Buy, they recorded 6 straight years of growth, and earnings had tripled!

The most important part of the book is not the strategy he adopted, which proved to be on mark, but the way he achieved superb performance from all levels of his staff – most specifically the people at shop floor level. ??What is most impressive is that he wasn’t dealing with 100 staff members who needed to be motivated to do superb work, but over 100,00o.

Three important messages emerge from the book that is sound advice to every leader.

The first is the answer to the question, why do we work? For some it is because work affords one a modicum of power, for others, it may be the accumulation of money for itself, or because the earnings will enable you elsewhere.

If these common reasons were good reasons, why did research on 19,000 people over 19 countries indicate that only 16% of workers are fully engaged in their work? If you thought disengagement only applies to lower-level staff, know that only 25% of C-suite occupants are fully engaged in their work. And there is little difference across generations.

If you are inclined to dismiss not being fully engaged at work as no big deal, because we are productive anyway, consider this. Disengagement cost $7 trillion in lost productivity globally!

Pause and consider this. How would having all your staff fully engaged, doing their very best, improve your business?

Best Buy turned large numbers of disengaged people into engaged employees, inspired to care for their customers. They did this by crafting the company’s purpose in a meaningful, human, and authentic way.

To get this point, think of how you would help your mother, father, or young sister to choose a computer or TV. Your focus would be on doing what’s best for them, not on where you would earn the biggest commission, or how to get done with them quickly.

Best Buy explicitly articulated a “people-first” philosophy. Staff must see themselves as being actively involved in enriching lives through technology, by addressing the human needs of someone’s mother, father, sister or brother. People are celebrated for doing good in the world through their efforts at work without the distraction of chasing the highest commission. That part of the reward system was done away with. ?

Stories of “moments that matter” are captured and shared, and role modelling is encouraged. This spreads the ‘meaning’ of the work one does.

How could you motivate your staff in the accounts department to feel good about themselves because of their work? If it works for selling computer games or modems, then your context could surely benefit as well.

Best Buy has added another dimension to humanizing work, focusing on the individual staff member. Managers are encouraged to get staff to articulate “their dream.” ?This is an expression of something that matters deeply to them. An example is a woman who said she dreams of having her own apartment so she can have independence from her family.

Her manager’s response to that was “Let’s work together to help you achieve it.” What would it take? What skills did she need to develop to get promoted? How could he help her get there? Having staff sharing their dream with you, requires developing a real, human, connection, one that drives engagement and performance. That level of engagement treats everyone as an individual and ensures everyone feels they belong and matter. In such a place, employees give their best, which is in their best interests, too.

Joly reports taking a trip to visit the Best Buy’s operations in Denver, because something special was happening there. Over the course of a year, the average revenue per hour for each salesperson had improved by 10%. Why this stood out and Joly thought it worth investigating, was that level of improvement was unmatched anywhere else and had occurred without any more customer traffic than other regions.

What Joly noted was that Best Buy had always looked at improving productivity and performance in aggregate. The manager in Denver had focus on mastery for every single individual, one person at a time. He was developing individuals rather than the mass. He was coaching rather than training, and each person met with their manager once a week to work on practical skills in real-life situations. The focus was on one metric and how to improve it.

“We rolled out (the Denver manager’s) approach nationwide,” Joly explains. Until this trip he had believed, as I am sure many of us have, that training was for beginners, and coaching was for remediation.

Of course, this is nonsense. Rafael Nadal and Roger Federer didn’t fire their coaches when they became tennis champions. A coach can be there to help successful people, even CEOs, to become even better at what they do. This approach is treating learning as a lifelong journey.

“Who doesn’t want to keep getting better at what they love doing?” Joly asks.

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?·????????Ian Mann of Gateways consults internationally on leadership and strategy and is the author of Strategy that Works. ?Views expressed are his own. ?Ian Mann is on linkedin.com &[email protected].

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