In this penultimate newsletter of 2021, I wanted to cover a few different topics I've been reflecting on. By sheer coincidence, my good friend Ian Haycroft shared with me a Harvard Business Review interview featuring Hubert Joly – former CEO of Best Buy, an American consumer electronics retailer – talking about how he turned the organisation around by empowering workers to 'create human magic'. I was immediately engaged as this interview covered several of the very topics I wanted to go deep on, so what I thought I'd do in this newsletter is a deep dive on the interview, reflecting on the points that interest me, along with my 'yes, ands'.
When Hubert Joly first started at Best Buy, the organisation was in pretty dire financial straits. Whilst he was presented with the typical advice of closing stores and firing people, he started by spending his first week in an actual store, in uniform. He wore a badge called 'CEO in Training' and spent his time just listening to front liners and customers in order to truly understand pain points, exclaiming: "They had all of the answers and our job was easy."
What resonated with me was Hubert specifically mentioning that the activity was about 'empathetic listening', which to me speaks to the idea of listening deeper behind what is being said, to understand the emotional motivations and drivers. In a data-driven era where behaviours are increasingly broken down into stats and percentages, I believe that empathetic listening can be quite difficult to put into practice. It requires us to listen past the words and the data to understand the 'why'.
One of the most important lessons I learned when growing ColourSpace was when my Advisory Board pushed me to go out there, hustle, and get as many "No's" as I possibly could. What I learned was that it wasn't about getting over rejection, trying to establish conversion rates, or determining costs of acquisition (though those were important too); what was more important was trying to understand the reasons why not. Conversely, I also had to interview all my existing clients so I could ask them: "Sooo why do you actually work with ColourSpace?"
In both scenarios, the big challenge was in learning how to listen in-between what was being said. Prospects and customers alike did indeed have the answers I was looking for but it needed a great deal of reflection to interpret what they actually meant. I learned that more often than not, people don't always know how to articulate what it is they want. People might say they want to have art on the walls, but what they actually want is a simple way to create an engaging place where people are happy to work. Those are two vastly different interpretations of the same thing.
Over time, I've come to the realisation that this approach isn't limited to just sales and marketing but applies to many other areas of our professional and personal lives. That it's far more important to listen deeply and understand 'why' someone does something, and not get caught up on 'what' they do or say.
The other reflection that popped into mind is a much more business-centric one, and that is the fact that Hubert Joly put himself in close proximity to the point of value exchange. He didn't simply analyse the performance of Best Buy via written reports or summaries from others; he directly went to where the action happens in order to ethnographically observe for himself what was happening. I'll have a think about this for a future Ko Lab; maybe there's a model for 'Proximity to Value Exchange' or something.
Trigger warning for my fellow 'purpose-centric' peers as I'm gonna get a little controversial here: I've been entertaining the notion that sometimes we over-value the importance of 'why' and 'purpose', and under-value the importance of 'how' and 'what'.
Firstly, I'm not saying purpose isn't important. Hubert does reflect on the importance a new purpose played in helping Best Buy grow, and I quote:
"If I had joined the company and said: “The key thing we’re going to do in the next few years is double the share price or the earning per shares,” who would’ve cared at the company? This is not motivating. And so what we did a few years into the journey was to redefine who we were. And we said, “We are not actually a consumer electronics retailer. We’re a company that’s in the business of enriching lives through technology by addressing key human needs.” And the beauty of that is, number one, it’s inspiring, but also it vastly expands the addressable markets."
However the operative phrase I'm focusing on is this bit: "And so what we did a few years into the journey...". Hubert didn't start with purpose. Later in the interview, Hubert expands on this:
"With the IBM turnaround that Lou Gerstner did in the early nineties, he said, “The last thing that IBM needs at this point is a vision. We need execution.” In our case, we found that the world needed Best Buy. Customers ... need a place to touch, feel the products and ask questions. And importantly the vendors also needed us. Our problem was that all of our problems were self-inflicted, execution was terrible, prices were too high, [bad] online shopping experience.
So sometimes, logically we say, “We need strategy first and then execution.” In this case, you flip it. It’s operational progress before strategy. Because if your prices are not competitive or your website is not working, there’s no point in doing strategy. So we started with a very incremental “let’s fix everything that’s broken.” And then over time we elevated our game to define that new purpose and a whole new set of very, very exciting strategies, but it took time."
This is a sentiment I've come to resonate with because it's something I've experienced across my career in a multitude of ways. In organisations, it can manifest as amazing-sounding purposes that don't also translate into practice, with people not actually empowered or possessing the right tools and resources. In the startup world, it can manifest as incredible, world-breaking ideas but lift up the covers and we find a trail of broken systems and toxic cultures (I'm looking at you Theranos).
In fact, I would go so far as to argue that in some cases – especially for established organisations – good operational hygiene is a precursor to good strategy and purpose. Here's my reasoning: Let's say we're working in an established organisation and we're charged with developing a new purpose and strategy, but the processes and systems are all over the place; think disconnected technology, poor financial management, no resource management, etc. Irrespective of when we develop the new purpose and strategy, we still need to fix up the operating environment. Thus, is it better to create a new purpose first, only to find that once we've 'Marie Kondo-ed' the place we find that it may not be capable of delivering on purpose, or is it better to have a (relatively) clean operating environment first that helps us understand what we're truly capable of?
I've been quite vocal in my time at Leadership Victoria about the idea of making myself redundant. I've said it to my team, to my CEO, the Board, and just about everyone else who cares to listen. Naturally, my point isn't that I'm trying to simply 'lose a job' but instead that I'm trying to create a self-sustaining environment where people are so clear in what they need to do and feel empowered to do so, that they don't need me to make any decisions.
So my interest was heavily piqued by this passage from Hubert: "...that one of the things I’ve learned during that journey is that as the CEO, I make very, very few decisions. And the key for me is to push them down as far as possible."
He elaborates that there are several ingredients needed to make this happen but to summarise his interview, I believe it comes down to the following:
By mixing these ingredients together, it creates what Hubert describes as 'human magic', when: "...at scale you have employees that do things for each other and for customers that nobody has told them to do." Hubert goes on to share an incredible story in which a young child visited a Best Buy store with a broken robot dinosaur that the child said was sick. Instead of simply directing the child down an aisle, the staff pretended to be doctors to 'operate' on the dinosaur whilst doing the switcheroo beneath the counter.
Thus the quest to make myself redundant is not a small undertaking. It's being able to create a well-oiled work environment, where people feel empowered to do what they want, whilst all pulling in the same direction. To finish on one last quote from Hubert that summarises what I hope to achieve in my quest: "There's a point where I said, “I’ve actually lost control of this operation. I mean, it’s completely out of my hands now.” And that’s when the performance started to skyrocket."
In any case, that's it from me for this fortnight. I encourage you to check out the interview as there are even more gems that I simply don't have time to cover in this newsletter. Whatever piques your interest, let me know! There will be one last newsletter from me this year, but it'll be a short one that I'll direct to a Year In Review article I plan to post on LinkedIn, so keep an eye out for that. In the meantime, I hope all of you have a wonderful holiday and a well-deserved break. Take care and stay safe!
If you enjoyed this Ko Lab, I'd really appreciate it if you shared it with a friend or two you think would get a kick out of this. You can send them here to sign up. Time permitting, I'll try and make it the most engaging and thought-provoking newsletter you get!
And if you come across anything you'd like to 'Ko Lab' on, send it my way! I'm equally keen to learn about and share new perspectives and thoughts.
Have a great week!