Hubert Joly is the former chairman and CEO of Best Buy Co. He took on the role when the company was considered in danger of failing and turned it around with a dramatic transformation through his ‘People First’ approach. Prior to his Best Buy Co job, Joly had worked at McKinseys and then increasingly senior roles at Vivendi and Wagons Lits. He is now a senior faculty at Harvard Business School.
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Roddy Millar 0:12
Hello, and welcome to this podcast from Ideas for Leaders. I am Roddy Millar and I’m very excited to have with us today Hubert Joly. Hubert is a promoter of the Purposeful Human Organisation which fits very closely with our red thread here at Ideas for Leaders of ‘making organisations more human’.
But that’s not the only reason I’m delighted to be speaking with Hubert today, for he not only is a great thought-leader, but has also put the thinking into practice with stunning effect. After a long and successful career, which he admits he started with a much more traditional view of leadership that took him through McKinsey as a consultant and increasingly senior roles, at Vivendi and leadership ones at Carlson Wagonlit, he took on the CEO of Best Buy, the large US electronics chain store in 2012. For most people, this was a poisoned chalice, a chalice with failing performance and huge competitive pressures, but Hubert through applying his ‘People First’ principles successfully turned it around and with great effect. He retired as Executive Chairman last year, and now is part of faculty at Harvard. His book, the Heart of Business, which is part case-study, and part leadership manual is published in May this year, and it seems like a great place for us to start our conversation. So Hubert, welcome to the show.
Hubert Joly 1:46
Roddy, thank you for having me, I look forward to our conversation.
Roddy Millar 1:51
So I’ve been reading avidly, the book, and it’s packed full of both anecdote, and, and sort of great thinking as well. And it’s a great story and a great read. But I think what comes through very clearly from it is is this passion, you have to promote and speak about the the way of leading, and how your thinking around that has changed since you started out your career. I mean, do you want to just sort of talk us very quickly through that journey from the sort of McKinsey technical consultant through to the broader style of leadership you’ve adopted and champion today?
Hubert Joly 2:39
Yeah, Roddy, it’s been a journey for me. And I studied, like many believing that being smart was the most important thing. So I have classical training, went to business school. McKinsey is a great, you know, problem solving school. And I now know that my role as a leader is not to be the smartest person in the room, is not to tell everybody how smart I am. But it’s much more to create an environment in which others can, can blossom. And for me, there’s been several milestones in that journey. Maybe, if I go because this has been going way back, so to maybe the early 90s, when one of my clients at McKinsey, Jean-Marie de Carpentrier, who was in the French office at the time, told me that the purpose of a company is not to make money. The company has three imperatives. Of course, there’s a financial impact, you need to make money, otherwise you die. But it really starts with excellence on the people imperative, having great teams well equipped, well motivated, that leads to excellence on the business imperative in customers, happy customers who want more. And excellence on people in business is what leads to excellence on financial imperative, but you shouldn’t be confused between the goal and imperative. The other milestone pretty much at the same time, Roddy, was a conversation with two of my friends, who are monks and asked me to write with them articles about the philosophy and theology of work.
Why do we work? Does work occur because some dude sinned in paradise? Is it something we do so that we can do something else that’s more fun? Or is work really part of our, you know, search for meaning as human beings? is it part of our calling to do something good in the world? And of course, I know, I know what it is. So this point about your individual search for meaning and how it can connect with the purpose of a company, I think, is something that, you know, became magical at BestBuy and was part of my transformation in the, you know, mid 2000s. I was working with other CEOs How can we apply this humanistic principles to the way we lead? I also did … because it has to do with spirituality as well. I did the exercises, the spiritual exercises of Ignatius of Loyola.
But all of this remains either in my head or in my soul that there’s a big difference between thinking about this and doing it, right? And part of the challenge for all of us, is inside ourselves right during this lockdown, if you cannot go outside, go inside. And for me, I got some wonderful help from a coach, I highly recommend to any…, it’s interesting Roddy, 100 percent of the top 100 tennis players in the world have a coach, 100 of percent of the UK soccer teams have a coach? What about us as executives, it helped me tremendously to evolve. And I started to work with Marshall Goldsmith, in 2009, who’s written this great book, ‘What got you Here, Won’t get you There’, and in the 20 quirks of successful people that Marshall lists in his book, I had 13 of them, I really had to work on myself. And it’s really during my time at BestBuy that I fundamentally understood the power of ‘human magic’, and ‘letting go’ and really focusing on creating this, this environment where others can be successful. I know we’ll get into the details. But that was my transformation.
Roddy Millar 6:20
But it is this awareness or your sort of digging into this concept of ‘human magic’, which is the energy and the passion that drives everybody, and the ability, the ability for humans to do such extraordinary things. Why do you think that was not clear to you at the outset of your career, but also not clear to so many people? Why do we ignore it?
Hubert Joly 6:56
I think we have to rewind and go back to last century. Because I think that if you step back today, it’s very clear that the world as we know it is not working right? We have this multifaceted crisis, health crisis, economic crisis, societal, geopolitical, you know, systemic racism, certainly in the US and many places around the world. So what we have today is not working. I believe it goes back to two seminal ideas. In two thinkers in the 20th century, Milton Friedman who told us that the only thing we have to worry about as business leaders was profits. And Bob McNamara, who came up with this idea that the way… that he exemplifies and he was not the only one. But the way to get things don in companies is take a bunch of smart people, create a smart plan, an implementation plan, communicate it, track implementation, put incentives in place, and hope that something good happens.
And none of this is working but we’re still influenced by this. So we really have all of us to rewire ourselves. And what’s interesting, Roddy, is that today, I would say, I don’t know what you’re hearing and feeling, but most of the business leaders I know, today, and I know quite a few believe that leading from a place of purpose, and with humanity is the right way to go. But there’s a big difference between knowing that’s the right way, and in being able to do it. And the reason why I wrote this book, the ‘Heart of Business, leadership principles for the next era of capitalism’ is as a guide for leaders who are eager to abandon the old ways and move in that direction. And part of the way we learn is because it is by doing right. And during the time at Best Buy, you know, it was not a linear journey, we had some challenges, and we had to overcome them and be happy to talk about it. But to me, root cause is these two guys.
Roddy Millar 8:59
But I mean, so I mean, leadership, I always define as ‘being able to create the conditions for other people to do their best work’. And, and so you need that set of leading principles at the top of the organisation. But the change seems to me to always be the bottleneck, or the bottleneck for the change is in the middle. It’s the poor people, the middle managers, who are given instructions from on top but then have to apply them with sort of some resistance to the practicalities of that happening below.
Hubert Joly 9:40
Well, I’m happy to talk about this. I guess the maybe can I walk you through our journey at Best Buy? In the difficulties because I think it’s good to talk about what’s difficult. And I’ll skip the first phase, which was the turnarounds we can come back to this but you know, we save the company. And we set ourselves up to ask the question of where do we go from there? How do we accelerate our growth? What kind of company do we want to become when we grow up. And we did some work o the purpose of the company, we decided that we were not a consumer electronics retailer, we were a company that was there to enrich lives, through technology by addressing key human needs. And that followed a tonne of market research. So we were clear about what segments, you know, market segments we wanted to serve, what our positioning was going to be to help, you know, customers. But then when we asked the question of ‘why?’, this question of purpose, it was a first game changer.
And a critical moment around that was when during one of our executive team off site, when we gather the executive team, and we work on our strategy, our planning, and so forth, over dinner, I’d ask everybody to come with a picture of themselves when they’re when they were little, maybe three or four years old. And we wanted to share our life journey during that dinner. In our purpose in life as individuals. And Roddy, this was a game changer, because it got to help us to know each other at a much more at a much deeper level. And realise that what we were there to do was to create good in the world and so that it became a matter of how do we use our platform at BestBuy to do good in the world.
Now, many companies articulate a noble purpose, and that’s a good thing. But if you stay there, nothing happens. So the next step was make the purpose the cornerstone of the strategy, you have to come up with very specific, very concrete translation of their purpose into a strategy.
So at Best Buy for us, for example, it was getting into the health space, helping ageing seniors, you know, stay in their home longer independently by placing, you know, sensors under their bed, under the sofa, in the bathroom, the kitchen for detection with remote monitoring, you can detect, you know, a problem and then do an intervention, you would not go into that space if you are a retailer, because that’s actually sold to insurance companies. But that’s an illustration of the power of purpose. Now, a challeng in getting there was, I was expecting, naively, that the people running the company on a day-to-day basis and Best Buy, you know, it’s close to a $50 billion business, more than 100,000 people, it’s a big, you know, it’s an all-consuming job to run the company, I was expecting them to run it, and at the same time, reinvent a company that doesn’t work.
So we make some progress when we set up on the side, the Strategic Growth office that enabled us to develop the kind of initiative I talked about. But then once we had done that, we were still not done. Because this idea of purpose really works when everybody at the company can write themselves into that story. And imagine, Roddy, for a second I walk you and I walk into a BestBuy store. And we tell the associates we have big news ‘the purpose now is to enrich lives with technology by addressing key human needs’, you know, people are going to say ‘you’re saying what? what do you want me to do by 10 o’clock when I take my shift?’. So the the, you’re talking about a challenge of middle management and it’s… the way I phrase it is that you need to, as leaders, you need to get to the point where you can make things palatable for the frontline. So the way we did it was instead of you know doing PowerPoints and videos and so forth, we closed the stores one day and we did a training and the training was about, in small groups, and of course I was in one of these trainings, share with each other your life story. So we spend with a young woman, she had been in an abusive relationship with an ex-boyfriend, she had been homeless, and Best Buy for her was her home. All of a sudden, Roddy, I see her as a human being not as an employee.
And the second exercise was share with each other the story of a an inspiring friend in your life. Hopefully everybody has one, for me it’s my older brother, Phillip is a wonderful guy, and to describe what he does, what she does, for you, okay, very simple. What we’re trying to do with each other and our customers, is to treat each other as human beings and see each other as human beings and be an inspiring friend for each other. So that changes everything and the result of that is a story.
So when I took over BestBuy you know the the quality of service had gone down and we were supposed to die. Things were not good good. Walking into a Best Buy store was not a great experience at the time. Not terrible, but not great. Now fast forward to 2018 or 2019, there’s a woman walks into one of our stores with her young child, maybe three or four years old. And for the holidays, he had had a dinosaur toy as a gift, the dinosaur toy, unfortunately, you know, the head got dismantled, you know, the dinosaur was ‘sick’, they go to the store. Now in any normal store, they would have, you know, pointed to the toy aisle and with some luck, maybe there was still a dinosaur toy that they could buy.
This is not what happened in that store on that day. Two associates saw what was going on. They took the ‘sick dinosaur’, they went behind the counter, and began performing ‘a surgical procedure’ on the dinosaur, walking the child through the steps, they were taking, of course, substituted, they got a new dinosaur, but gave the child a cured dinosaur. Now imagine the joy of the boy and his mother.
And now here’s the question, do you think, Roddy, that there was a standard operating procedure at BestBuy, how to deal with these situations, or maybe a memo from me? Of course, not these two associates found it in their heart, because they saw the human being and they felt they had the freedom to do this ‘magic’ for the for the customers. And so everything we had to do was, in your words, was to create this environment, where at scale, you know, the associates would feel that this was what they were here to do, …
Roddy Millar 16:47
You were giving them permission to behave like this, basically,
Hubert Joly 16:51
We were permission. And we were creating an environment where they could connect their individual purpose with the purpose of the company. We created an environment where they felt that they could be human beings in that they have the autonomy to do this, and that is magical – I tell you.
Roddy Millar 17:13
I mean, that story is magical in itself, and it was presumably magical for the child too that there’s the dinosaur came back to life and in one happy, healthy part. But I mean, what are the biggest barriers that you encountered in trying to enable that process to happen?.
Hubert Joly 17:34
The first barrier was the one of capacity. So that’s why we created the Strategic Growth office. Sometimes there can be leadership barriers. So the most important decision we make as leaders is who we put in position of power. That is the single most important decision and they also have learned and change. In the old days we put a lot of emphasis on expertise and experience. So the top of the house, I would look for the best ecommerce, or supply chain, or marketing person, and expertise and experience is good and helpful. But over time, when I was recruiting or promoting, spending much more time on the person in the leader, so here’s another story. When… that really struck me… when I was being recruited to become the CEO of Carlson Companies, the parent company of Carlson Wagonlit Travel and Radisson, and TGI Fridays, Marilyn Carlson Nelson, the daughter of the founder, during the interview asked me a question. She said, “Hubert, tell me about your soul?” Who asks this question? Because aren’t leaders supposed to be merely a brain? No, today we need to lead with all of our body parts, our head, our heart, our soul, our guts are ears and eyes and so forth. And this question of who are we as a leader? how do we want to be remembered? What drives you?
And I told the officers at BestBuy, look, if you’re here to serve yourself, or your boss, or me, as the CEO of the company, I said, It’s okay. It’s okay. I don’t have a problem with that. Except you cannot work here. You can be promoted to being a BestBuy customer, which is a very, we’ll take care of you, you know, but you just can’t work here. And so looking for… and it starts starts with us, right? change starts with us. What drives me? why am I here? What good do I want to make in the world? and making sure that you populate, and oftentimes you do have to do it top down, right? With the right type of leaders, and then you, you translate it. So, you know, every year we get store-managers together ahead of holiday, most important season for us, half of the annual profit are there. So you would think that we spend all of our time on the plan. To execute the plan, and of course, we do have a great plan. But for a number of years, we started the meeting with human stories. We ask every one of the leaders to describe and share what drives them. Right? And so put the humanity of the place and tell them, don’t worry about the size of the organisation, make it your own. And so, as a translation of this, there was a store manager in Boston, he would ask every one of the associates in his store, 100 of them, “what is your dream? Tell me about your dream at Best Buy or outside of Best Buy, okay, write it down in the break room. Now, your job, excuse me, my job is to help you achieve your dream”. So you build that kind of commitment. And so it’s that leadership transformation that’s the biggest leverage point, I choose to talk about it in terms of opportunity, rather than obstacle. But if you don’t deal with it, then it’s a big challenge, because nothing happens. You can talk talk talk, but nothing happens.
Roddy Millar 21:06
But there must have been resistance. And I mean, that was not what BestBuy was like before you took over. And, and people are used to new managers coming in with their new ideas. And yeah, it’s all just something going on up there. And yeah, what did they not go? Yeah. This too, will pass. Until they bought it. I mean, how long did it take for that to happen?
Hubert Joly 21:34
It was a journey. And so if we go back to the turnaround to the time when we were going to die, you know, with hindsight, the team told me ‘Oh, Hubert you were so clear about the fact that we needed to change because you told us if we don’t change, we die. So we said, okay, we’re going to change’. Now, how did the change happen at the beginning? Start with people.
So, first thing I did, when it my first week on the job, it was to spend working in a store. So that Icould listen to the front liners. See what was going on. In so make notes of everything they were telling me, what I was seeing, and then we acted on it. So first thing was, we’re going to listen to the front liners, who know what’s going on. Second thing starting with people is you have to change to start at the top right because of a bit of a Maoist – fish rots from the head. So in a turnaround, my approach to change management is to change management. And so pretty quickly, we changed some of the key senior leaders at the company, then you need to have a clear philosophy.
So in a turnaround, everybody would say ‘Cut, cut, cut’. Right? Close doors, cut head counts as if people were the problem. No, people are the solution. They’re the source. So we said in our turnaround, our first priority is going to be to grow the top line. To the extent that we need to cut costs, which we needed to, we’re going to focus on non-salary expenses, which is all of the elements of the cost structures that have nothing to do with people, optimise benefits – in the US companies pay for health care, so if your employee population is healthy, guess what? You know, health care costs go down.
And you go after a headcount only as a last resort, and even there, you’re gonna try to redeploy the people that was position eliminated. And then, to your point, I love what you said, like, it’s all about creating energy. How do you create energy? co-create the plan, it’s not about coming up with the best plan is coming up with a plan that, you know, people will rally around. And then it’s agreed the energy because you’re going to get the bicycle going, you know, you cannot direct a bicycle at standstill, it falls, so you need to get moving.
Then you celebrate the victories, you talk about the problems, and you work together to solve them. And so this big idea that you have, I think you and I are brothers, maybe from a different mother, but the same idea. Energy is not a finite quantity, you can create energy, right. And so my approach to change-management is to change management. And the other thing, the way you change behaviours, is by changing behaviour. So, you know, if as executive you spend your time on your frontline, you, you know, you’re putting people in position of leadership, who have a heart and a head, and ensure thay have all of the right body parts. You spend time on the customers, you spend time, you know, helping people solve problems, you empower people, you know, people, you know, the power you have, by through your behaviours is really critical. Now, of course, with fees, the whole system is results, you know, you need to produce results along the way because talk is cheap, right. So one of the key areas of focus was, say/do ratio, the ratio between what we said we were going to do and what we actually did that builds credibility. Not only with the employees, with also the shareholders, the board, you know, all of our of our stakeholders. So that’s some elements of our journey, you know, many more details in the book, you get a flavour of what it was like. That is my philosophy.
Roddy Millar 25:18
I think one of the things that has struck me most is and we we mentioned, Bob Chapman, just before before we we started speaking. You know, he’s an owner of a business and has followed very similar principles with extraordinary effect too. And there’s Tony Hsi at Zappos and Chris Rufer at Morning Star, but they all are either founders or owners of businesses. And then we also look at the likes of Gary Hamel and his book, Humanocracy, he’s thought it through and seen it, and (Jeffrey) Pfeffer as well. All these. But you were an employee, so you have to, you don’t have those deep roots into into the business and you’ve come in from outside. It seems to me that it takes extraordinary courage and bravery to do what you did. How, how much self doubt did you have? Because I think also part of what you’re offering, and you’re sharing and your people see is that vulnerability that that human-ness. And so it’s not as if you were that sort of bold leader from the front area that this is the plan and everyone was followed. And yet, you had to be very strong to to push this through, I would suspect.
Hubert Joly 26:47
Yeah, I think that, you know, you’re touching on something that I feel is really, really important, which is, what’s the leadership model? Right. For this century? Clearly, whatever we’re doing last century is not really right. So the model of the of the leader as the superhero, was there to save the day, who was quite autocratic, who is driven by power, fame, glory or money. We don’t want that.
I think that the model today is that of, what I call, the Purposeful Leader. And it starts with being clear about why are you here? What is your purpose in life? And being curious about as we said, right, but the purpose of people around you in rallying around this idea of creating some, some good in the, in the world. It does continue with this idea of vulnerability, which is the opposite of what we were taught.
You know, I remember when I was growing up one day, one of my parents’ friends was visiting, and I was asked a question, and I said ‘I don’t know the answer to that question’. So Young man, you should never say this. It’s the truth I didn’t know. So like, you know, and being globally, that is one of my favourite phrases now is ‘My name is Hubert, and I need help’. And so when I started at BestBuy, I mean, I had credibility, not from my knowledge of retail because I had zero knowledge. But I had done quite a few turnarounds. But I didn’t know everything. So three months into, after I joined, I told my team Look, this turnaround is gonna be hard, right? Let’s agree. That means that all of us need to be the best leaders we can be. That starts with me. So I have a coach, he’s going to come in, and he’s gonna ask you for feedback about what I’m doing and how I’m doing things. And so I would appreciate it if you would be willing to spend time with him. You know, he gathered everything. I think that my team, I gathered them, thank you for all of the wonderful feedback you’ve offered. On the basis of that feedback. I’ve decided to work on three things, number one, number two, number three. And I’m going to follow up with each of you to ask for advice on how I can get better on these three things. And don’t get me wrong, I was not failing at the time, things were going great. But I wanted to make sure that I got feedback from them. And also at the same time signal that it was okay, for every one of us, you know, to want to get better in this idea of being okay with saying I need help. And really orchestrate is fundamental. And then it leads to this key notion that we’ve talked about my key role as a leader is not to be the smartest person, although it’s tempting, oh my god, you know, adding too much value, it’s really to create the environment where others can be successful.
Roddy Millar 29:48
I think that’s really critical, isn’t it? To understand that that exposure of vulnerability of human-ness doesn’t in fact weaken you. It In fact, makes you stronger. It, in fact, builds people’s faith in you. It allows people to give you information, rather than thinking ‘he doesn’t need any information because he knows all the answers’. And I think it also, I mean, just the way you were speaking about it, it creates that foundation of purpose that you that you have. Yeah. And you need that strong platform to work from. So So the question is, I suppose, how, how do you spread the word? How do we get other people to take this on? Because I still think the environment that, the standard environment people go into in in work situations is not like that. So how, how do we encourage people to change?
Hubert Joly 30:47
Yeah, that’s, that’s the… now that I’ve passed the baton of CEO and the chairman at BestBuy, and I’ve started a new chapter, that’s, that’s really what I’m focused on. The premise is that, again, the world… we need to change, right? Because what’s the definition of madness? right, doing the same thing and hoping for a different outcome. The world we live in, is not working. So you have to start with this. You know, then it goes into so change to what?, I think that the reason why I’ve written this book is I wanted to lay out what I’ve learned over the last 30 years, and really provide a… what I believe it is a re-foundation of business and capitalism around purpose, and human connections, in which you provide an architecture for these principles, right, so that we can move forward, I’m not the only one to talk about it. But I…, because of the surprising success of BestBuy, the share price went from $11 to now I think, between $110 and $120, that gives me some credibility..,
Roddy Millar 31:47
Wow, it does, indeed
Hubert Joly 31:48
So the my way to contribute was to write this book, lay out the principles in really, write it as a guide, for people who are keen to move in that direction. The other ways that, you know, I’m active in that area, is I like to go into companies. And, you know, so one-on-one, you know, coaching and mentoring of CEOs and senior executives, we can do town halls, you know, a fireside chat with a CEO in the leadership team. I think that’s a, that’s a conversation. At Harvard where I’m now a member of the faculty, I’m working on developing a course, both for executive education and in the MBA programme. Because I believe that too much of business education is focused on learning techniques, and not on how to put everything together to lead in this 21st century. And so I’m going to spend a lot of time on that, as well. What I think is going to help as well. Roddy is it’s, I think employees are demanding it. Customers are demanding it. Shareholders, you know, whether it’s BlackRock or State Street, or, you know, Vanguards, I know a lot of these players, of course, through my time as a public company CEO, and many of them are friends. They know that if the planet is on fire, it’s a big business risk, they… in Best Buy, headquartered in Minneapolis, we know in Minneapolis, if the city’s on fire, you cannot open the stores. And so, you know, as leaders, we need to fix these things. And it’s part of our responsibility, the role of CEO, it’s very interesting how that the mission has changed. It’s not simply about creating shareholder value, the scope has changed. And you need to deal with all stakeholders in a harmonious fashion. And the leadership model has changed, right. And so I think there’s external pressure for all of us as leaders to change and then help, you know, can be provided through coaching, mentoring, executive education, in whatnot, and, and celebrating successes.
There is many more, I believe, there’s many more great leaders who are on this journey, and who are progressing. And I think we, it’s fascinating, as I think we’re at the beginning of a new era. And we get to create a world that does not exist yet. But with many great approaches, so I think we should celebrate all of the great leaders who are moving in that direction, learn from the challenges, you know, you’ve pushed on, what are the challenges, how do you overcome them, and then create this future that does not exist yet, but that can be more sustainable.
Roddy Millar 34:33
Do you think how or how much do you think that the finance world, the investment world, the investment community, have a role to play in enabling this? I mean that focus on quarterly reporting and quickfire returns?
Hubert Joly 34:49
Yeah, so any CEO who says that the reason they are not able to do these things is because of the pressure and quarterly earnings? Come on. Yeah, that’s a terrible excuse. Come on, do you love leaders because they have the best possible excuses? No. So I think we live in a world where, I do say that we treat profits as an outcome and not the goal. But by the way, shareholders are a very important group of stakeholders, because they take care of a retirement of our parents of ourselves, too. They play a very important role. So our role is to work with all the stakeholders simultaneously to create great outcomes for them.
Now, where shareholders are actually very helpful in many, many different ways. I’ve loved every interaction with our shareholders. One is when Larry Fink started to write to all of us public company CEOs, emphasising the importance of purpose, long term strategy, you know, social environmental matters. In the first time that Larry wrote to us, I was so happy with his letter that I had delivered my shareholder letter to him in his office in midtown Manhattan, Larry, thank you for this is my response. But thank you for writing, because you’re providing the air cover for boards in companies. And then of course, it was followed by the BRT [Business Roundtable] statement on corporate …. shareholders, you know.
In almost every one-on-one meetings, now, with shareholders, so called ESG matters, or, you know, environmental, social governance matters are on the agenda. So they’re really making a difference. That doesn’t mean that they don’t care about financial return. Of course they do. And of course, we should. Yeah, and one of the ways that have really enjoyed our interaction with shareholders, they always love their questions. And so you’re doing this, how’s that gonna work? So their challenge was very helpful. You have to see them as customers, I never saw them as the enemy. Sometimes people like zero sum games. So if we do the right thing, we’re not gonna be profitable. That’s crazy. You know, that doesn’t make sense, we have to embrace the power of ends as opposed to the tyranny….,
Roddy Millar 37:02
But you were on an upward trajectory…, so that….
Hubert Joly 37:05
Oh no, no, Roddy. In 2012, there was zero, ‘buy’ recommendation on the stock,
Roddy Millar 37:15
Hubert Joly 37:16
And when we introduce our ‘Renew Blue’ plan in November 2012, we focused on the five stakeholder groups, and it was very clear with them. Now, admittedly, when they heard my presentation, it was a big yawn. Because shareholders You know, they’re very smart. So words are cheap, they want to see progress. And we kept them on the journey, we explained to them what we were doing, why we were doing it. So one of the chapters in the book is, is about how to turn around a business without everyone hating you. Because the principles you and I are talking about also apply, when the going is tough. When things are really difficult, this idea of, you know, purpose, and putting people first, we didn’t spend a lot of time talking about the abstract purpose we, but we started with people and doing the right thing for customers, fixing what was broken, and really treating profit as an outcome.
We always tried to refrain from making any decision for the sole purpose of hitting earnings that quarter, that would endanger the, you know, our strategic progress. You have to be disciplined around this. But if you… my experience, Roddy, if you build your credibility, and if you’re transparent with your shareholders, and say, ‘This is what we’re doing, this is why we’re doing this, we see the potential we see, and we’ll keep you on the journey’… . they’re looking for great investable, you know, stories, so it’s your duty to create that story and then deliver it but the the idea that shareholders are the problem, I think is is very far from…
Roddy Millar 38:48
So it comes to that, you know, that great leadership intangible of trust, doesn’t it? And we’re always told that leaders need to build trust, but trust is the outcome of lots of other actions. It’s not something you can go ahead and and do you can’t do trust.
Hubert Joly 39:13
Yeah, trust me. I’ll see you in five years. That doesn’t work.
Roddy Millar 39:18
That’s not going to get you very far. But by doing but it’s that say/do equation again, isn’t it? Yeah. Yeah. Fascinating. Fascinating. Well, it’s really exciting. I mean, I mean, I I take it from your demeanour, you’re you’re quite hopeful about, about how things will change?
Hubert Joly 39:38
Well, I think it’s it’s a matter of, yes, of course, staying with it. But I think there’s there’s a greater, greater and increasing realisation that we have a burning platform. I mean, you would need to be blind, to not see that there’s a burning platform. I think the level of conviction. So there’s understanding, there’s conviction. When I talk to my peers, you know, leading large companies they know, there’s a growing desire, and we have to stay with it too. You know, as an example, I think following the murder of George Floyd, the issue of, you know, systemic racism and how important it is for business to address it, has really risen to the top. And now, I am impressed by how many business leaders understand both in their head, but also in their heart, in their guts that we need to change, we need to work on endings.
And so people are setting goals, public goals, boards are holding management accountable. In the business world, do we know how to solve business problems? and for me, ending systemic racism is a business problem – of course we do. But then we have to stay with it, and keep working it. And I believe that if we stay with it, this generation has the ability to, if not solve systemic racism, make it really much smaller, so that it’s much less of an issue. But everything in life was to stay with it.
Roddy Millar 41:13
And it’s really interesting that that that ecosystem, that the way that everything is, is interconnected. And if you start making things better in one place that can, you know, the virtuous circle, can can work.
Hubert Joly 41:27
This is such an important point. So I’m speaking from New York City. So, a few years ago, there was a declaration of independence. I think today, what we need is a declaration of interdependence….
Roddy Millar 41:45
Hubert Joly 41:46
…truly believe that business can be a force for good, that you can do well by doing good, but it takes everyone working together. And the idea that you can win at the expense of others. I mean, it’s so terrible. And so I’m a big believer in Win, win win partnerships, let’s create this future together. That does not exist yet. But that is going to be more sustainable. And we’ll need a lot of human magic and human genius in ingenuity, ingenuity, to solve all our problems. But, you know, I think if we unleash that magic, great things can happen. Certainly beats the alternatives.
Roddy Millar 42:28
But we’ve, we’ve eaten up loads of time. Unfortunately, we’re out of time. But I think that’s a really, really positive, upbeat note to end on. So Hubert, thank you very much. I’ve thoroughly enjoyed speaking with you. And I think what you say has so much importance for how we go into the future. So you Hubert Joly, thank you very much, indeed.
Hubert Joly 42:52
Roddy. Thank you, everyone. Good luck on your journey. Thank you.
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