Competing on Culture

Anderson: One of the things you [need to] know when you embark on this kind of work is that you don't know where the seed will blossom. When we initially started [changing over some of the stores to the customer segment format], the initial premise was that it doesn't matter where you do it, that all the stores are at about the same readiness to be able to implement the strategy. That turned out to be wildly false. Where we had [a region] already in tune with the point of view I described earlier -- in other words, a place that actually recognized the uniqueness of the human capital to begin with -- it was way ahead in terms of its capacity to be able to implement the strategy. If it wasn't there, it had no capacity whatsoever to be able to implement the strategy. The community that really did it first was our community in California, where we had a leader that had been trying to develop his very disparate group of people with this central approach of really cherishing the uniqueness of the human capital and the uniqueness of the way they operate the stores. They just absolutely went to the moon with these things. Now, they've come back and have been challenging the rest of us with what it actually takes to deliver.

FC: What specifically were they doing in that region?

Anderson: When you got to the core, their whole focus was on the employee's experience. One manager said I literally didn't come in and look at the numbers, I was looking at what is the health of the team. It's a much more organic look of what's underneath what you're trying to do as opposed to what are we trying to do tangibly. So if I've got a very enthused, energetic group of people who are passionate about the work that they're doing, the numbers are going to be fine. The kind of leadership that takes -- that my primary job as a leader is to provide the right sort of emotional support or relief -- is more of a different point of view than I think we recognized. They had an enormous amount of faith in what [the frontline employees] were doing, which is then really reciprocated by the staff.

FC: Do you spend more time in stores with this new strategy?

Anderson: Actually I've spent less time in stores than ever. This strategy [is] so challenging to the infrastructure of the company, so the first work is to get the infrastructure ready to embrace it. Key concepts like servant leadership [have to be enforced] that are very different from the examples we've set over a lot of years. That first has to get modeled at the hub of the enterprise.

One of the things I hate about all this terminology is that it has standard meaning which tends to denude the value of the principle. At the fundamental level, at the core, servant leadership is seeing -- whatever your job and whatever your title is -- that you're actually in service to the people you lead. That the real measurement of whether you're effective is if you helped increase the energy of the people who you're engaging with and leading. If you've done that -- if the energy level is higher than it was when you started -- than you're probably evidencing some servant leadership.

This could be coming in and recognizing an achievement somewhere else, or sometimes, it's coming in and holding someone accountable for not supporting the process that energizes those around them. So I don't see it as namby-pamby leadership; I think it's pretty tough leadership. It measures productivity and energy of the environment as a whole. I really care about measurements at Best Buy like our employee engagement score. If I had to pick a single measurement, that's the one I'd care most about: how engaged are employees? If they're really engaged, there should be other things that I should be able to see in the numbers, but that's really the centerpiece of the job. Part of the reason the California stores we talked about just excelled is that they've got some stunningly engaged employees.

FC: That culture that has been created in California, how do you transfer that culture to other areas? Is that one of the reasons you've been slow to expand the new store formats to other parts of the country, or announce when you'd do so?

Anderson: That's exactly why we don't talk about it. Usually in my history, I've been someone who's pushing for more, more, more. In this case, I'm much more inclined to be arguing for less, less, less, less. This is really about people's hearts and minds. You can't just dictate that by Jan. 13 you're going to be ready to engage your employees in a completely fresh way. That just doesn't happen. It has to be in that genuine, individual point of view about the world. That's really hard to fit.

FC: Where do you think your belief in these ideas comes from?