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Best Buy: How Human Connection Saved a Failing Retailer

In 2019, a three-year-old boy walked with his mother into a Florida Best Buy store, clutching a toy dinosaur that Santa had given him for Christmas. Only, the dinosaur’s head had broken, and now tears were streaming down the boy’s face as his mother explained to two sales associates that he was desperate to get the toy fixed.

“At any other store, they would have been directed to the toy aisle to buy a replacement,” says Hubert Joly, Best Buy’s former chairman and CEO, who is now a senior lecturer of business administration at Harvard Business School. “But that’s not what happened in that store.”

Instead, the sales associates—nicknamed “blue shirts” after Best Buy’s trademark royal-blue collared shirts—brought the injured T. rex to a service counter and performed “surgery” on the toy as they surreptitiously traded it out for a new one.

“You can imagine the joy the child felt?” Joly asks. “But, do you think that was standard operating procedure? No! What happened that day is that the two blue shirts found it in their hearts to do this, and felt they had the latitude to do it.”

Stopping Best Buy’s freefall

Creating such a human-centered connection among employees and customers is at the core of the near-miraculous turnaround Joly spearheaded at the company during the 2010s. Joly stepped in as CEO of Best Buy in 2012, just after its quarterly profits plummeted by 91 percent and its stock price hit a nine-year low. With Joly’s focus on customer service, aggressive price-matching, and new offerings like the Geek Squad, the company’s stock tripled in 2013.

The same human connection Joly cultivated at Best Buy can be found in the pages of his new book, The Heart of Business: Leadership Principles for the Next Era of Capitalism , co-written with Caroline Lambert. The book, which published May 4, aims to reverse some of the damage done by other cutthroat leaders who have taken a slash-and-burn approach to business.

“So much of what I learned when I was at business school, or in my early years as an executive, is either wrong or dated or, at best, incomplete,” Joly says. At the top of his list of leaders who imparted the wrong lessons are Milton Friedman, who believed companies should prioritize their stock prices, and Bob McNamara, the inventor of top-down management, who measured his way to success with ruthless efficiency.

“They figured a company is owned by shareholders and is a money-making machine,” he says. “But no, a company is a human organization made up of individuals working together in pursuit of a goal.”

Leading with purpose and humanity

Based on his own track record in transforming Best Buy, Joly wrote this book to help leaders who value the role that employees play in delighting customers and growing their businesses.

“The book is really constructed as a guide for leaders who are eager to abandon the old ways and are ready to embrace leading from a place of purpose and humanity,” Joly says. “I really wanted to share a thoughtful and practical architecture of what, in my view, we need to move the world forward.”

Of course, pulling off such an ambitious effort is easier said than done. At Best Buy, Joly didn’t start with the traditional turnaround playbook of laying off employees and closing unprofitable stores. Rather, he took measures to boost revenues: matching prices at Amazon, and speeding deliveries by shipping directly from stores. He also cut costs by reducing waste and streamlining processes.

“We were breaking $200 million-worth of TVs every year,” he says. “By improving packaging, we reduced that [number] by 50 percent.”

Fewer slides, more soul-searching

Perhaps what’s most important, he instituted a training program that cast aside PowerPoint presentations and videos and replaced them with soul-searching conversations between both executives and front-line employees about their purpose in life.

“We discovered that we were colleagues, yes, but we were also human beings, and most of us were aligned on this idea of doing something good in the world. So we said, ‘Let’s use Best Buy as a platform for that.’”

Instead of seeing the company as a consumer electronics retailer, Joly and his team refocused the company’s purpose as “enriching people’s lives through technology by addressing key human needs.” Best Buy’s competitive advantage had always been the unique customer service provided by its sales associates, but that only mattered if they truly wanted to help customers. So, in trainings, blue shirts were asked to think of an inspiring friend in their lives.

“For me, it’s my brother Philippe,” Joly says. “He is such a generous soul and a great life coach, always focused on finding the best in you and bringing joy to life.”

Sales associates were then asked to be that “inspiring friend” for their customers—helping them solve their problems and improving their lives through technology. “Then, when a customer walks into the store, they’re not a walking wallet. They are a human being, and you can help them,” says Joly.

Five steps to harnessing human connection

That mindset shift took hold across the company, giving employees a greater sense of joy and autonomy in their work, and attracting customers with a new service-oriented approach. Along the way, the company’s share price grew from a low of $11 in 2012 to $110 by 2020.

In his book, Joly says the guide is one any company can follow, and he distills the formula down to five key ingredients:

• Connecting employees with what drives them , and this is usually focused around finding ways to make the world a better place;
• Creating genuine human connection among employees and customers;
• Giving autonomy to team members , as much as possible, rather than scripting what to do;
• Instituting one-on-one coaching to give employees individual training and feedback; and
• Creating a growth mindset to continue to improve.

“That’s the recipe,” says Joly, who reinforces it throughout the book with exercises that readers can use to guide themselves through the process. “It’s all about humanity. Changing the world starts with changing ourselves.”

At HBS, Joly is now working with other faculty to create a new program for senior executives to help them unlearn some of the toxic profit-focused lessons of a traditional business education and replace them with new lessons centered on human connection.

“The mistake that many leaders, myself included, have made is that they lead with their brains,” he says. “But what’s at the heart of business? Well, it’s the heart. It’s people.”

About the Author

Michael Blanding is a writer based in the Boston area. [Image: iStockphoto/Elijah-Lovkoff]

How can companies connect with customers and employees better?

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Book Excerpt

Bringing the purpose question to work.

By Hubert Joly

“What drives you?” is not a question that gets asked often in corporate environments. Asking it more would be useful, as it can help us connect with a purpose, which in turn determines how we relate to our work. This is why Best Buy employees are encouraged to reflect on that question.

“What drives you?” has become a central element of the Best Buy Holiday Leadership Meeting, which gathers some 2,000 managers to kick off the holiday shopping season. I always find the simplicity and humanity of the answers striking. Often, managers talk about friends, family, and colleagues. For a market retail field trainer, it is “being able to see the corners of the world with Grandma Shirley, my favorite person on this planet.” For a district manager, it is “helping employees and customers fulfill their hopes and dreams.” For a senior HR manager: “teaching, developing, growing and inspiring [people] to do more than they ever thought possible.” Encouraging and inspiring everyone at Best Buy to reflect on what drives them may seem a small and woolly step, but it truly has been central to changing how we approach our work.

Understanding your own purpose is one thing. It’s just as critical for leaders to understand what drives the individuals around them—and how it connects to the purpose of the organization. To find out what drove each member of Best Buy’s executive team, I organized a dinner in 2016, in a room overlooking Minneapolis’s beautiful Lake Bde Maka Ska. It was part of one of our regular quarterly retreats. Everyone had been asked to bring pictures of themselves as babies or young children, and to tell a personal story about that picture and about growing up.

Earlier in the day, we had explored the notion of being “all in.” Being all in, I figured, has to connect with who we are and who we want to be. So, I wanted to understand what drove each member of our team and how it fit in their lives and their histories. Where did they come from? Why were they excited to work at Best Buy? How did their personal purpose connect with what they were doing at work? I did not feel I could lead our team if I could now answer these questions.

What might sound like a warm and fuzzy game became one of my most memorable and inspiring moments of my time at Best Buy. We truly connected with each other, as the 10 of us took turns talking about what gave us energy and what gave our lives a sense of purpose. I was moved while listening to each of them describe what drove them personally, from treasuring relationships through unconditional love, infinite support, and the constant fostering of growth, to watching colleagues grow beyond their own expectations by helping them do new things and take on more responsibility.

As inspiring as it was, it was also useful. For it made a huge difference in helping us shape our ambitious and meaningful purpose for Best Buy, a purpose that would drive our sustained success in the following years.

Reprinted by permission of Harvard Business Review Press. Excerpted from The Heart of Business: Leadership Principles for the Next Era of Capitalism by Hubert Joly with Caroline Lambert. Copyright 2021 Hubert Joly. All rights reserved.

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Case Studies

Best buy: a focus on delivering solutions and sustainability, june 3, 2011, the challenge.

In an industry facing growing concerns about e-waste, the “rapid obsolescence” of products, and continued supply chain human rights issues, the senior leaders at Best Buy aim to transform the company’s business model from one based on selling only products to one that focuses on delivering “digital connections”—those technologies and services that help “connect customers to people, knowledge, ideas, and fun.” Recognizing that sustainability is key to that future, Best Buy partnered with BSR to turn that vision into a practical strategy aligned with the company’s other key priorities.

Our Strategy

Our three-phase approach allowed Best Buy to set a clear direction for its sustainability objectives:

1. Assessment

Given Best Buy’s rapid growth in sales and its move into new services and businesses, we began by conducting interviews with 40 Best Buy executives and more than 20 external sustainability experts and stakeholders. We used this information to examine Best Buy’s business direction, management perspectives on sustainability, and current gaps in the company’s sustainability-related activities. Next, we mapped near-term trends affecting the consumer electronics industry, such as new regulations and the increasing costs of input materials. We also reviewed outside perspectives on Best Buy’s role in developing more sustainable products and the opportunities associated with the company’s desire to transition from products to solutions.

2. Materiality

We analyzed more than 60 sustainability issues—from digital privacy, to access to technology, to product safety, to transportation—based on how they affect Best Buy’s business and based on their importance to consumers, communities, governments, NGOs, and others. We presented the results to Best Buy’s Sustainability Team and Advisory Group, which used the presentation to agree on four priority areas: Product Stewardship, Sustainability Solutions, Access, and Inspired Workplace.

3. Strategy Development

Once Best Buy's senior leaders validated BSR’s conclusions, BSR and the sustainability team defined goals for each area:

• Product Stewardship: to lead the industry from product design to end-of-use solutions
• Sustainability Solutions: to provide products and services that allow customers to lead more sustainable lives
• Access: to build business models that enable people who don’t have it today to access all the benefits of the connected world
• Inspired Workplace: to become the preferred place of work because of sustainability efforts

We also helped Best Buy develop specific targets for each area, and we proposed a sustainability governance structure that creates clear leadership and accountability within the company and a structured review process that incorporates external input.

By nature, strategy projects set the direction for changes that come into practice fully over the medium to long term. Best Buy has made significant progress in establishing its sustainability strategy and a foundation for progress. To begin implementing this strategy, company leaders have started to develop relationships with consumer products manufacturers that are focused on sustainability and are key to the achievement of Best Buy’s sustainability goals.

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Let’s talk about how BSR can help you to transform your business and achieve your sustainability goals .

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Inside Best Buy’s Customer-Centric Strategy

• Ranjay Gulati

What are the challenges of doing business in today’s marketplace? A sampling of senior executives would probably come up with the same list: Competition is global. Companies are increasingly competing for the same wallet. With more choices and information, customers are choosing mostly on price. Even before the recent downturn, what former IBM boss Lou […]

What are the challenges of doing business in today’s marketplace? A sampling of senior executives would probably come up with the same list: Competition is global. Companies are increasingly competing for the same wallet. With more choices and information, customers are choosing mostly on price. Even before the recent downturn, what former IBM boss Lou Gerstner called “commodity hell” was pretty much every business’s nightmare.

• Ranjay Gulati is the Paul R. Lawrence MBA Class of 1942 Professor of Business Administration at Harvard Business School. He is the author of Deep Purpose: The Heart and Soul of High-Performance Companies (Harper Business, 2022).

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