The Heart of Business: Leadership Principles for the Next Era of Capitalism by Hubert Joly – Here are my Seven Lessons and Takeaways

Heart of Business copy• The architecture I am advocating has employees at the heart of business, creating and nurturing caring and authentic relationships both within the company and also with all of the company’s stakeholders—customers, vendors, local communities, and shareholders—in a way that not only contributes to the company’s purpose but also creates great outcomes for each of these stakeholders. 
• I learned that the old top-down approach to management—having a few smart executives first formulate a strategy and its implementation plan, then tell everybody else in the company what to do while crafting incentives to motivate them—rarely works. And I learned that the model of the leader as a smart, powerful superhero is outdated. Through all my experiences, culminating in the incredible years at Best Buy, I have come to believe—to know—that purpose and human connections constitute the very heart of business.  
• This book is the articulation of key leadership principles for the next era of capitalism, and how to put them into practice in both the best and hardest of times.
• What we did is turn a large number of disengaged people into engaged employees, inspired to care for their customers. How? This is what the rest of this book is about. And it all starts with how we each see work, as well as the human beings doing the work.  
• We can choose to treat work as what I feel it is: an essential element of our humanity, a key to our search for meaning as individuals, and a way to find fulfillment in our life.
• If you are looking for an alternative approach to help make business a genuine force for good, this book is for you. If you seek to lead—at any level—with a sense of purpose and humanity to generate extraordinary performance that benefits all stakeholders, this book is for you. And if you want to understand better how purpose and human connections lead to a long-term success that defies rational expectations, this book is for you.
• Fulfillment from work comes from doing good things for others—and in so doing, contributing to the common good.
• The refoundation of business starts with considering work as an answer to our quest for meaning and fulfillment.
Hubert Joly, The Heart of Business: Leadership Principles for the Next Era of Capitalism

—————– Best Buy Zombie

In 2012, Bloomberg Businessweek ran a cover story on the travails of Best Buy. On the cover was a Best Buy Blue Shirt, their on-the-sales-floor representative.  But this Blue Shirt looked different…he was a zombie. In other words, Best Buy was finished! Its’ days were past numbered. It truly was on its last legs.

But Best Buy brought in Hubert Joly as the new CEO.  From France, but with American connections and experiences, he had a history of successful turnarounds.  He figured out what to do to help Best Buy return, and then go even higher.

{So, personal note:  I am a loyal Best Buy customer.  We have a television, computers, appliances, devices, and accessories, all that came from Best Buy.  The only exception:  I buy my Apple products – and I am all-in on Apple  — from the Apple Store.  So the Best Buy computers we have in the house are PCs, which are used by my wife.}

This book is Hubert Joly’s account of his personal business philosophy, which includes his time at Best Buy.  Yes, he did turn it around.  Best Buy is now flourishing, and Mr. Joly has moved on to other challenges.

If you are a fan of servant leadership; if you have questions/reservations about the current state of capitalism; if you like good stories of exceptional customer service; then this book is for you.

I presented my synopsis of The Heart of Business: Leadership Principles for the Next Era of Capitalism by Hubert Joly (with Caroline Lambert. Boston: Harvard Business Review Press. 2021) at the June 4 First Friday Book Synopsis.

In my synopsis presentation, I asked, as I always do: What is the point? Here it is for this book:  As with many good books, it is always about getting the basics right, and in the right order, that leads to business success. Get these basics right: meaning; purpose, people; leadership.

And I ask Why is this book worth our time?  Here are my three reasons for this book:

#1 – This book is a turnaround tutorial, as told mainly thorough the steps taken and lessons learned from the Best Buy turnaround.
#2 – This book is a modern critique of the foundational philosophy of Milton Friedman.
#3 – This book is a lesson in overall leadership; in how to make a big company thrive.  (And, a small company thrive).

In my synopsis, I always include many Quotes and Excerpts from the book – the “best of” Randy’s highlighted Passages.  Here are the best of the best that I included in this synopsis:

(From the foreword by bill George):
• The key lesson is to have an open heart and a beginner’s mind as you journey inward to discover your authentic self.
• Hubert makes a compelling case that pursuing a company’s purpose is superior to Milton Friedman’s dictate that “the social responsibility of business is to increase its profits.” He believes, and I agree, that sustainable profits are the successful outcome of organizations that are mission driven and focus on all their stakeholders.
• In the future, every company will need to focus on its purpose, or raison d’être, in order to establish legitimacy in serving society by creating value for all stakeholders.
…thus becoming the force for good needed to transform society.

—–

• Two-thirds of all jobs in the US economy now require post-secondary education—up from just 28 percent in 1973—with leadership, communications, and analysis the most valued competencies.  
• One of the most powerful books I have ever read is Viktor Frankl’s Man’s Search for Meaning.
…Life, he concluded, is not a quest for pleasure or for power. It is instead a quest for meaning, which ultimately is the path to fulfillment and happiness. And according to him, one can find meaning in three possible places: work, love, and courage. In truth, they often converge; doing something significant through work often involves caring for others and overcoming adversity.
• A Stanford University study found that innovation at tech companies slows by 40 percent after initial public offerings (IPOs) because management becomes more cautious once they are subject to market pressures.   
• “The purpose of a corporation is not to make money!” Jean-Marie Descarpentries, the newly appointed CEO of Honeywell Bull, exclaimed. Jean-Marie explained that companies have in fact three imperatives: people, business, and finance. 
Excellence on the first imperative—the development and fulfillment of employees—leads to excellence on the second—loyal customers buying your company’s products and services again and again. This then leads to excellence on the third imperative, which is making money. 
• In my view, putting purpose and people at the heart of business, and the practical implications of that model outlined in the previous chapters, are not luxuries reserved for thriving businesses. In fact, this approach forms the very core of the “turnaround manual” I have developed over the years,
• The principles in this “manual” are the antithesis of the blood sport I described above. It is the opposite of “cut, cut, cut.”
• When a business is in critical condition, its people are the key to a successful turnaround.
I am not advocating for a soft, sitting-around-the-campfire roasting-s’mores focus on people. I mean a mobilizing, energizing, making-things-happen-fast focus on people.
• I had learned over the years that a plan needs a name to exist in the collective mind of the organization.
• Building trust requires four things. First, it takes time. Second, it requires that you do what you say you are going to do. Third, you must be approachable: you cannot trust whom you cannot see. And fourth, you must be transparent. 
• In the end, I was personally responsible for basically four decisions: the overall strategy of the company; major investment decisions, especially mergers and acquisitions; who was on the executive team; and setting the tone for the values of the company. …In many cases — like the in-home advisor rollout — I only needed to be informed.
• Identify the systemic changes you can influence—for example, racial inequality, environmental issues—and tackle them with your peers. This is part of your job.

In the last major section of my synopses, I include key points and insights from the book.  Here are a few from this book, including some information about Mr. Joly. (Note:  sections below in italics are also taken directly from the book).

• Note: Mr. Joly clearly acknowledges his personal failings, in life, and at work, throughout the book. In other words, this is a man striving to find the right level of humility. 

  • About Hubert Joly:
  • his first job (as a boy) was a boring, meaningless, repetitive stock-boy job, with no human interactions with anybody – sticking price tags on vegetable cans.”
  • Elite French education
  • McKinsey Consultant
  • CEO of EDS France
  • Head of Vivendi’s video game division
  • CEO of Carlson Wagonlit Travel
  • CEO of Best Buy (retired, 2020) – the leader that led the turnaround at Best Buy

———-

  • He spent his first few days at Best Buy on the sales floor with a name tag that said: “CEO in Training.”
  • He (finally) grasped that he needed a coach (he hired Marshall Goldsmith). — In my defense, executive coaching at the time was perceived as remedial. So why should I get a coach?
  • He really does believe that Milton Friedman got it wrong…
  • There is just one constituency to please – shareholders — and one performance metric that matters—profits.
  • I learned that the purpose of a company is not to make money, contrary to what Milton Friedman wanted us to believe.
  • I am not for a second suggesting that we should ignore profits. Of course, companies must make money — or they do not survive. – BUT — Excellence on the first imperative — the development and fulfillment of employees — leads to excellence on the second — loyal customers buying your company’s products and services again and again. This then leads to excellence on the third imperative, which is making money.
  • I deeply disagree with Milton Friedman’s view that business has no business dealing with societal issues. …There can be no thriving business without healthy, thriving communities, and there can be no thriving business if our planet is on fire.
  • In August 2019, the Business Roundtable, whose members are the CEOs of the United States’ leading companies,10 issued a new statement on the purpose of corporations. “Each of our stakeholders is essential,” it read. “We commit to deliver value to all of them, for the future success of our companies, our communities and our country.” 
  • Best Buy: At Best Buy, our purpose is to enrich lives through technology. 
  • Twenty years from now, enriching the lives of customers through technology will still be relevant—even if TVs and personal computers no longer are.
  • The two big initiatives at Best Buy
  • Renew Blue (2012: for the turnaround years) – this was wording that was “clear”
  • Building the New Blue (after the turnaround was successful) – This wording was “not as clear”
  • The big ideas:
  • Part One THE MEANING OF WORK
  • Part Two THE PURPOSEFUL HUMAN ORGANIZATION
  • Part Three UNLEASHING HUMAN MAGIC
  • Part Four THE CASE FOR PURPOSEFUL LEADERSHIP

And, at the end of my synopses , I always include my own lessons and takeways.  Here are my seven lessons and takeaways from this book:

#1 – Personal growth starts with self-reflection; leading to self-knowledge…
#2 – Who you are matters every bit as much as what you know and what you can do.  Actually, more so.
#3 – You’ve got to decentralize. Seriously. Let everyone have some freedom.
#4 – Look for the good ideas. Lots of good ideas.
#5 – Nurture — and train, and develop, and help – the people.  Really, all of the people.
#6 – Embrace this:  business success is much more than short-term profits. Much more!
#7 – And remember the basics; take care of your people. Treat each person as a person, with their unique qualities; bring in more diverse groups of people, throughout the organization.

I have presented many, many books on leadership.  And plenty of books on strategy and execution, and plenty of others that critique modern-day capitalism.  This book is a whole package, and it is going to go into my most-recommended books list.  Give it a read.  You will learn some things… 

——————–

  • Note: you will find ideas in this book from: 
  • Viktor Frankl (Man’s Search for Meaning); Daniel Pink (Drive), Carol Dweck (Mindset), Amy Edmondson (psychological safety; The Fearless Organization), General Stanley McChrystal (Team of Teams), Brené Brown (her TED Talk, and her books), Bill George (Discover Your True North); Marshall Goldsmith (Joly’s personal coach, and What Got You Here Won’t Get You There); among others. He always gives credit for the source of the ideas he writes about.
  • And, he gives credit to many of his employees, and colleagues, by name, from Best Buy, and other places he has worked, for their good ideas.
  • And, he gives credit/blame, not by name, for some pretty bad ideas from all his years at work.

——————–

I have presented synopses of business books monthly for over 23 years.  Our synopses are available for purchase.  Each synopsis comes with my multi-page, comprehensive synopsis handout, plus the audio recording of the synopsis presentation (recorded at our First Friday Book Synopsis events).

You can order them for our web site.  Click on the “Buy Synopses” tab above to search by book title.  And click here for our newest additions.  My synopsis of this book, The Heart of Business, will be available soon.

And, one other note: all but one of the books listed just above – Viktor Frankl (Man’s Search for Meaning); Daniel Pink (Drive), Carol Dweck (Mindset), Amy Edmondson (psychological safety; The Fearless Organization), General Stanley McChrystal (Team of Teams), Brené Brown (her TED Talk, and her books), Marshall Goldsmith (Joly’s personal coach, and What Got You Here Won’t Get You There) – are books we have presented at our event, and you can purchase our synopses for each.

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