Competing on Culture

In his new book, The One Thing You Need to Know...About Great Managing, Great Leading, and Sustained Individual Success (Free Press, March 2005), Marcus Buckingham advises leaders to "find an edge -- one edge -- and talk about it all the time." Buckingham says Brad Anderson, CEO of Best Buy, has done exactly this by identifying the consumer electronics retailer's edge -- its people, especially the "blue shirts," or frontline employees, in its stores -- and then focusing on it relentlessly. As Best Buy implements its "customer-centricity" strategy, which calls for each store to focus on one or two customer segments (soccer moms, say, or small business customers) in order to serve them better, Anderson is promoting a people-centric culture, too. Rather than merely concentrating on the surface-level changes in the stores, Anderson is pushing on leadership development and employee engagement to enable the transformation. In two separate interviews, Anderson spoke with Fast Company about Best Buy's new strategy. Below are some of the highlights.

Fast Company: Why have you decided to focus so much on development at a time when the company is trying to make such a radical transformation?

Brad Anderson: I've found that times of great turmoil and change are actually the places where opportunity is created for people who might not otherwise be able to see it. I just have this overall theory that there's a lot of folks who have an enormous contribution to make who either don't know how or can't find a way to get into the right place to be able to make the contribution. Change helps from an organizational standpoint. It helps you reevaluate what you're doing so that normal organizational lethargy doesn't stop people from making that contribution. I'm a real zealot about that.

FC: Is there any downside to focusing so much on the development of Best Buy's people at the same time that you're trying to cause such massive change? Does it slow you down at all?

Anderson: My experience told me the opposite. I believe most of us behave much more on emotional needs. Especially in this country, we've got all the basic needs for food and housing, but [what's] often missing are the things that connect us to other people or that make us just feel satisfied as a human being. If companies can't figure out how to address that, they actually reduce their productivity rather than increase it. I believe it accelerates your capacity as opposed to diminishing it.

FC: So it sounds like part of your strategy is that in order to put your customer at the center of all of your operations, you have to put employees' needs at the center, too. How did this thinking begin?

Anderson: It started long before we ever got to customer centricity. A lot of it has to do with being a believer in some of the work that's been done on strength-based leadership. Marcus Buckingham is a good friend. If we could build an organization that instead of looking at every human being like they were the same, looked at them as though they were completely individual, we would be in harmony with reality as opposed to fighting reality. We could choose almost every endeavor and have a much higher likelihood of winning.

FC: This employee-centered approach has to be applied to corporate-level employees too, right? Not just Best Buy's "blue shirts"?

Anderson: This is the part of the issue that hasn't been solved yet. One of the parts of the problem [of developing leaders at the corporate level] is that once you begin to do this, you'll actually find a lot of business opportunities. Once you unlock the talent and begin to freshly engage with the customer, you'll find lots of good things you can do with your resources. That's really what freezes up large organizations. They've got all the money and talent in the world, but they can't figure out how to spend it. Once you begin to do that, the instinct is to do the same thing a large company would, which is to define it and boundary it, and that becomes so compelling that you actually forget about the thing that got you there. Right now that's the challenge we're facing as an organization.

For me, the heart and soul of it, the way I evaluate whether or not this thing actually works, is less in the outcome -- though that's critical because if it doesn't give us an outcome it isn't worth doing -- but more in seeing whether the core engine is healthy. Is the employee engaged with the customer? If that engine is healthy, then I'm not worried about this at all. But if that engine begins to atrophy then I get very worried.

FC: What has surprised you as you've rolled out this strategy?