At our November Leadership Conference, "Forward Together", I had the privilege of interviewing former Chairman and CEO of Best Buy and the author of "The Heart of Business – Leadership Principles for the Next Era of Capitalism."
What follows are a collection of ideas, experiences, and lessons learned from that day’s interview.
On Leading Turnarounds…
- When things are going well in a business, look at the front lines. When things are not going well, look within the Executive Suite.
- Operational progress creates strategic freedom - Before focusing on strategy, focus on fixing what’s broken for the customers and employees.
- Focus first on growing the revenue. It’s incredible what revenue growth can do. Then, focus on taking the costs out that have nothing to do with people. Things like breakage, waste, etc. As a last resort, reduce unnecessary headcount, such as extra layers of management.
- Leadership needs to create the energy. Co-create the strategic plan with your organization and then get going. No one likes it when the CEO tells everyone what to do. Work together to create a great plan.
On Moving Forward Quickly…
- Celebrate the early wins and be transparent when a plan isn’t working. There is no need to worry about being perfect. People know it when something isn't working. Just rework it.
On Defining Purpose and Helping it Come Alive…
- Beyond traditional strategic thinking – it is critical to define your organization’s real Purpose. If done well and with great thought, it is the Purpose that can be inspiring, motivational, and something your company’s stakeholders can ultimately get behind.
- Of course, defining Purpose has become quite fashionable. However, it can be challenging to do well. I believe you find Purpose at the intersection of four areas – what the world needs, what you are passionate about, what you are good at, and the economic value of what you create. Nail these, and you have it.
- How do you make a Purpose come to life? You start by translating it into very concrete initiatives. Then, help everyone in your organization write themselves into that story. We asked our team to share life stories and inspiring stories of others they knew. It helped us see and treat ourselves and our customers as human beings, aspiring friends, not as walking wallets. It is about being human - being generally interested in what each other are trying to accomplish.
- It is so essential for leadership to create an environment where people, day after day, can be their best and have genuine human connections.
- It's OK not to be a superhero. It is OK to be vulnerable. To share that you were struggling and viewed by others as being human.
- It's essential to create a space where autonomy can exist. The reality is people don't like to be told what to do. Empower your people as much as possible - especially in areas where they are more equipped than you are to make decisions. Doing this is how you create scale.
- What separates good leaders from great leaders? My thinking on this has changed. I used to overemphasize experience and expertise. While important, I now spend more energy learning what kind of person the leader is. I've learned it's about empathy, humility, and leading with our whole person. I now ask different questions of our leaders, such as, "how do you want to be remembered?" or "share with me your retirement speech." These questions tell me so much more about a person.
- Be wary of adding too much value as a leader. It is destructive to try and be the most intelligent person in the room. We see an idea and immediately share how it can be better. This approach can be very demoralizing to those you work alongside. Our role as a leader is not to solve problems for our teams. It is to create an environment where they can be their best.
- If you find yourself eager to add more value, count to seven, pause, and ask yourself – is it worth it to say what I am about to say?
And Other Lessons Learned Along the Way…
- The quest for perfection can be evil. It is easy to confuse being perfect with performance. Many of us were trained to be perfect and have all the answers. But be OK with learning how to say I don't know. Perfection only leads to being disappointed in oneself and others. By being vulnerable, open to not knowing, and letting go of the quest for perfection, we can build human connections and find better solutions to our challenges.
- On Decision Making. It's important to clarify who is responsible for what type of decisions and then how decisions will be made. Is it by a majority, unanimous, consultative, autocratic? Then, when we'd meet, we'd define the purpose of the meeting, if we were trying to decide, who oversaw the decision, and what that person would want out of the meeting. It decluttered our organization, and our speed went up exponentially.
- Financial incentives do not drive behavior. To be clear, I do believe it necessary to reward people for outstanding company performance and share in that success (i.e., a bonus). However, most people are motivated by something more significant than money and don't begin their day thinking about maximizing their pay.
- Payment uncertainty is a source of great stress. Too much emphasis on variable – or incentive – pay can drive people to do the wrong thing. A better way, we found, was to tie additional compensation to the company's overall performance. This approach created teamwork and a situation where everyone celebrates the company's success.
- On dealing with resistance to change. There are two types of resistance. You can disagree on the strategy. That's to be expected and acceptable among reasonable individuals. You have a debate, gather input, and then decision-makers decide. The other is opposition to leadership expectations – how we will agree to lead a change. All must agree to that. There is a choice to be made by an individual leader. Either on board or not. Not onboard is fine, but you can't work for us.
- Autonomy doesn't mean autocracy. If purpose, values, and clarity around decision-making are clear, you get to be the very most significant version of yourself. But also be very eager to surround yourself with people who can help you.
- How Leadership will evolve. It is significant. The mission has changed from shareholder value creation to business as a force for good. Good for people, communities, customers, really everyone. Two, it's no longer about simply optimizing the business. It's about optimizing your community and working to evolve those communities. Three, the leadership model has changed. The all-knowing superhero model is dead. Listening, empathy, reconnecting with employees and their dreams, and displaying vulnerability is the way of the future, and it's exciting.