When Hubert Joly led Best Buy in a remarkable turnaround, the employee manuals failed to mention sick dinosaurs.
Yet when a child and his mother showed up at a Best Buy store with a damaged dinosaur toy, two blue-shirted employees knew just what to do. The boy wanted the dinosaur cured, not simply replaced. So the employees stepped behind a counter and offered a full play-by-play of the “surgery” they were performing, then quietly swapped out the broken dinosaur for a new one.
Some CEOs might have objected to a worker handing a customer a free replacement item, but Joly, who was CEO and later executive chairman at Best Buy from 2012 to 2020, was overjoyed at the passion his employees brought to the job and their focus on leaving happiness in their wake.
Joly took over the company as Amazon was putting big-box chain stores out of business. He not only kept Best Buy from the same fate, but the company’s stock soared during his tenure. Joly, who was born and raised in France and named a Knight in the French Legion of Honor, also found ways to collaborate with competitors, including Amazon.
After 20 years as a CEO, he’s now sharing his knowledge in The Heart of Business: Leadership Principles for the Next Era of Capitalism (Harvard Business Review, 2021). Joly is also consulting, sitting on boards and teaching at Harvard Business School. He’s developing a curriculum based on the book’s premise that capitalism is broken and companies need to focus on pursuing a noble purpose and treat profit as an outcome, not the goal.
How do you convince people that making money should not be the primary goal for companies?
An extensive focus on profit is wrong and poisonous and unhelpful. Don’t focus at first on profit; treat it as an outcome. When I started at Best Buy, I got a lot of recommendations to cut, cut, cut. We did the opposite. We focused on people first. They are the energy of the company. First, try to increase revenue. Second, reduce nonsalary expenses. Third, optimize benefits. Then you go after headcount as a last resort.
Business and capitalism need an urgent refoundation. We have environmental problems, health problems, social justice problems, racism. The book outlines a vision of putting purpose and people at the heart of business. The difficulty is this is hard to do.
What can employers do to put people first?
One, help everybody at the company connect what drives them with the purpose of the company. At Best Buy, we’re in the business of enriching lives through technology that addresses key human needs. It’s about helping other human beings. Most of us can connect with this.
And two, create an environment where there are genuine human connections. If we can create an environment where every employee is “seen” and can be the best version of themselves, that’s magical.
Do many companies know what their “purpose” is—and how do they find it if they don’t?
What’s our reason for being? The answer can be found at the intersection of four circles, like a Venn diagram: what the world needs, what we’re passionate about, what we’re good at and capable of, and how we can make money.
How did you develop your focus on both diversity and sustainability?
It’s only by having every individual feel they belong that you can create good outcomes. This country is becoming more diverse, so who would dream of a business populated only by white males? You’re going to fail. You have to have an employee population and leadership that reflect the customer base and the community. It’s good business sense, and it’s also the right thing to do.
The environment is equally simple. If the planet is on fire, we’re not going to have a business.
What’s the best way to motivate employees, and how much of that equation involves offering financial incentives?
There’s research by MIT that shows that financial incentives don’t drive performance. I believe that even though companies spend millions designing the perfect incentive system, motivation is intrinsic—it comes from within. Ask your team members, “What drives you?”
What prompted you to step down from Best Buy, and do you have any regrets?
I had never attached my identity to being a CEO. I had accomplished what I set out to accomplish. I was not moving to Florida to play golf with aging men. I want the next 10, 15, 20 years to be impactful—to use the platform I have to make a positive difference in the world. Today, what I’m passionate about is this refoundation of business around purpose and humanity.
Tamara Lytle is a freelance writer in the Washington, D.C., area.