Best Buy’s Hubert Joly on Walking the Talk of Stakeholder Capitalism

HBR IdeaCast

Harvard Business Review

Teams, Business/management, Marketing, Strategy, Management, Innovation, Finance, Entrepreneurship, Economics, Hbr, Business/entrepreneurship, Harvard, Business, Leadership, Business/marketing, Communication

4.3 • 1.9K Ratings

🗓️ 6 July 2021

⏱️ 28 minutes

🔗️ Recording | iTunes | RSS

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Summary

Hubert Joly, former chairman and CEO of Best Buy, says that now is the time for companies to get serious about operating to benefit not just shareholders but also employees, customers and broader society. In the face of environmental crisis, racial turmoil, and rising economic inequality, he argues that leaders shouldn't debate whether or when to embrace this new version of capitalism. They should focus on how to do it. He says this starts with having a clear purpose and ensuring that everyone in the organization connects with it and one another. It also involves offering fair pay and opportunities for advancement and working with, not against, consumers, the community, the competition. He shares how these strategies helped turn Best Buy around despite the rise of Amazon. Joly is the author of the book “The Heart of Business: Leadership Principles for the Next Era of Capitalism” and the HBR article “How to Lead in the Stakeholder Era.”

Transcript

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0:00.0	So you got the job. Now what? Join me, Eleni Mata, on HBR's new original podcast, New
0:08.1	Here, the Young Professionals Guide to Work, and how to make it work for you. Listen for
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0:30.0	Welcome to the HBR Idea Cows from Harvard Business Review. I'm Allison Beard.
0:47.9	Several years ago, a distraught mom and boy came into a big box store with a serious
0:53.2	problem. The robot dinosaur they'd purchased, his favorite toy, wasn't working. The
0:58.7	store associates knew just what to do. They explained that they were actually surgeons who
1:03.1	could fix the dinosaur's injury. They pulled the toy behind the counter, performed their
1:07.2	operation, really swapping one dinosaur for another, and handed the new one over to the boy,
1:12.2	who was, of course, thrilled. The associates improvised, this was not the store's standard
1:16.6	operating procedure, I feel pardon the pun, but our guest today says that what those employees
1:20.8	did also wasn't an accident. Their actions stemmed from a culture that he and the rest of
1:25.5	his leadership team tried to create and spread through the one struggling retailer Best Buy.
1:31.0	It not only made the boys day, it turned the company around. Joining me today is Hubert
1:36.0	Jolie, the former chairman and CEO of Best Buy. But he's here to talk about more than
1:40.6	one company. He also wants to explain how other organizations can find purpose, honor all
1:45.7	stakeholders, and lead with humanity, just like those store associates did. He's the
1:50.6	author of the book, The Heart of Business, Leadership Principles for the Next Era of Capitalism,
1:55.7	and the HBR article, How to Lead in the Stakeholder Era. Hubert, thanks so much for being here.
2:01.0	Listen, thank you for having me now. So look forward to our conversation.
2:05.2	So at least at HBR, we have been talking about this transition from shareholder capitalism
2:16.6	to stakeholder capitalism for a long time. What is new or different about the approach
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