Dov Seidman: Welcome Hubert Joly, to the How Institute for society’s latest, our conversation welcome, prepare,

Hubert Joly: and Dov I so much look forward to our conversation. This is a such a treat congratulations for everything you do Dov. You’re a an inspiration for me. So thank you that’s

Dov Seidman: That’s meaningful and kind of you to say and this conversation is really to illuminate and highlight and underscore your teachings and your journey and all the perspective and wisdom that has been so hard earned, and therefore so valuable, that you forged in a remarkable journey of leadership. And not only are you an inspirational and an inspired leader, you’re now also quite a teacher. So we’re going to, if I can ask you for this conversation to wear both hats, the leader hat and the teacher hat. Our how conversation audience should know that currently you are a senior lecturer of business administration at Harvard Business School, you are. And today I think, this important and must read book, the heart of business turns three, right? Three, so congrats on that. And it’s really about not just leadership, but the kind of principles that ought to animate leadership in the next era of capitalism, so we’re going to talk about where capitalism has been, and where is going or ought to go. You’ve devoted your whole journey of leadership to the heart of business, and putting humanity at the heart of business, human concerns, needs, aspirations, anxieties, pressures, fights, frustrations and dreams at the center and found a way to operate with rigor, competitively, in a winning way, by putting humanity at the center. And that should really be the theme of our conversation. And when we were catching up prior, you made a comment to me that I was just struck by you said, Dov. We’re all on the journey. So first, welcome, again, thank you for joining us. And you said, we’re all in the journey. What journey are you talking about? What is the journey that we’re all on? Yeah,

Hubert Joly: it’s the journey of life and the journey of leadership. Sometimes I tell our students or the participants in our executive education program that 100% of leaders were born. But none of us were born a leader. And I think that we’re all on a journey, to become the best version of ourselves we can be, and to serve a great, a great purpose in life, and hopefully, to leave a positive impact on people around us. But it’s a it’s a journey, because it’s a journey on which we stumble, and which we, you know, for many years to have, I thought it was on a quest for perfection. Big mistake. This is not about the quest for perfection. This is about the quest for authenticity as a common friend, Bill, George would say, it’s a quest for love. Right? You quoted the importance of the heart. I love Kahlil Gibran

when he wrote the Prophet, you know, when he said inroads work is love made visible. And so how can we bring love to life, that’s the only thing that exists, right is genuine, authentic, loving relationships.

Dov Seidman: If the four corners of business, we should call it the business, the business was once business and the Four Corners no longer the walls have come down because we can see into the heart of business with MRI vision. We can even see town halls that companies not from the outside employees are filming them. And they’re putting them on social media. So we are seeing the inner workings of institutions and organizations and the mindsets and attitudes of those who make them up and those in charge. So if the business of business was business, then what is the business of business today?

Hubert Joly: I think we have to say out loud, even though I’m the eternal optimist, that the world as we know, it is not working. Right. It may be working for a few people, but in general, it’s not working. We have multiple crises. We’ve had a health crisis we we have a big issue with climate change. We have geopolitical tensions, we have significant societal tensions and fractures with enormous inequity. And so clearly, it’s not working and what’s the definition of madness, it’s to do the same and hope for a different outcome. And so, during my journey as a leader I’ve had to reflect on so what where should we go? Right? That’s your question. The purpose of business is to contribute to the common good. It’s the idea that you place people at the center because People are not a resource. I hate the words, Human Resources is like the equivalent to raw materials. No, that’s crazy. People are the source, right? They’re the the inspiration and also the destination. And so they are the ones who are creating these interactions with all of the stakeholders, you clearly have to embrace all stakeholders in a declaration of interdependence. That’s what we’ve learned, you know, Best Buy is headquartered in Minneapolis. Following the murder of George Floyd, the city is on fire. If the city is on fire, or if the planet is on fire to, you know, quote, Rebecca Anderson, you cannot open the stores. And so you’re dependent on the well being of the city of the community and of the planet. And Jamie Dimon, in his last shareholder letter, beautifully talks about this is that, of course, it would be shameless, to want to take care of the well being of the community because without that business cannot thrive. And so we are mutually interdependent. And then the final idea is that you treat profit as an outcome, very important outcome, but not the goal. It’s like seeming as in our lives, you know, how we will measure our lives to quote Clay Christensen is not based on begging accounts, but much more profound thing. So we need to reorient these ideas. And then, you know, lead from that standpoint,

Dov Seidman: There are people who say, I agree with you, it’s all about purpose. Our purpose is to be number one, to be the leading company, but you say no, you have to have a noble purpose. What makes a purpose noble, and there’s quite a spectrum of purpose out there. What makes a purpose noble, and in what way, for example, was Best Buy’s purpose a noble one, one that we should work be one that is worthy of people being devoted.

Hubert Joly: My view is that the purpose of a company its reason for being, it’s the needs that it serves in the world, it’s the good that it’s trying to create for the stakeholders, it is impacting. And you find it at the intersection of four circles. One is the needs in the world that you’re trying to address the important needs. Two is the unique capabilities you have as an organization. Three is what you’re passionate about, that’s the heart. And four is how you can make money with that without that last part, this is philanthropy, nothing wrong with that. But these are the four elements that you that you pursue. If we had said a purpose at BestBuy is to be the best consumer electronics retailer that we can be. But it’s not a bad thing. But it limits what we can do, especially if you think about it as a brick and mortar, consumer electronics retailer, or if you think about Microsoft, and you want them to be the best provider of Office software, it limits what you can do. So

Dov Seidman: In many ways, the purpose has to be about some goodness that you do in the world. And there’s many things can count as good. I’m hearing that it can’t be self regarding let’s do this and we’ll win or be number one that you have to be other regarding you’re doing it for somebody else, your success and profits could be a byproduct of that. So as a leader at Best Buy 1000s of employees all around the world, how did you make purpose not just the purpose? How did you make it truly the the pump the heart so that people live the purpose to live the purpose not to live the purpose in order to, to win and etc.

Hubert Joly: So first, I would say, of this view that there is a magic triangle or golden triangle in business, there is purpose, strategy and culture. And so once you’ve defined your purpose, you need to make it the keystone of the strategy. And then you need to design your culture so as to enable the purpose to come to life. So a piece of advice I give to companies and leaders is you have to go slow to go fast, who you may have crafted your purpose but don’t rush, a communication campaign, do the work on the strategy and the culture to allow the purpose to come to life. So that’s the first thought the second third to go very specific on your question, how did we embed this purpose at Best Buy all the way to the frontline? So our purpose, as I mentioned, was to is to enrich life. enrich lives through technology by addressing key human needs. Now let’s imagine for a second that you and I walk into a Best Buy store. And we tell the story to manager and the employees we have some great news we have a new purpose it’s to enrich lives through technology. They’re gonna say the very bare you look like fine gentleman, but we have no idea what you’re talking and we have no idea what that means for us. So I’ll give a lot of credit to our team at BestBuy. They distill debts in ways that were understandable by all of us from the boards to the front liners. And that’s a, that’s a lot of work to keep to make it simple. So they said our true positioning as a company, is to be an inspiring friend to each other into customers. One day in June. During my time there we, on a Saturday morning, we closed all of the stores for a couple of hours. Now, that was early in the morning, because frankly, in retail, we love Saturday revenue. So let’s be clear, right? But we closed the stores for a couple of hours. And as I said, no video, no PowerPoints. And we were put in small groups of three or four. And we were asked to do a couple of things, one, share with each other your life story, and to share with each other the story of an inspiring friend in your life. And so I will remember this forever, I was in one of our stores, and I was paired with a young woman, she had been in an abusive relationship with an ex boyfriend. She had been homeless. And for her best buy was Her home was our family. So of course, all of a sudden, I see her not as an employee, but as a complicated, messy, quirky, beautiful human being what we’re trying to do, which by the way, we already do when we are at our best, when we are it’s beautiful, when we are at our best is to treat each other and our customers, as human beings and to treat each other and the customers not as walking wallets. But as if we were an inspiring friend to them. Everybody gets it. So this is a human conversation. And so I don’t need a manual, I don’t need instructions. And that’s how we unleash human magic at scale is by making everybody feel in their heart and in their soul. What was our intense

Dov Seidman: talk about the kinds of leaders and the kind of leadership that fosters an environment where people who have the gift to be inspirational turnout to inspire?

Hubert Joly: Yeah, into the maybe the most important decision we make in life is who we who we put in positions of power, right? Because as leaders, there’s very little we can do on our own right. It’s all it’s all done through others. For many years, I was putting a lot of emphasis on experience and expertise as a key criteria to evaluate recruit, promote leaders, and what they do best, you know, digital marketing person, best e commerce, you name it. And that’s interesting, but not fascinating, in particular, in this highly uncertain environment where every new crisis, you know, is different. So the manual is not that helpful. So it’s the question of, yes, what leadership attributes do we want. And so at Best Buy, we articulated what we ended up calling the five B’s of purposeful leadership. The first B is about being clear about your own purpose. Being curious about the purpose of people around you, and how it all connects with the world. That’s the first thing. The second thing is be clear about your role as a leader is it to be the smartest person in the room or to create the right environment for others to flourish. The third B is be clear about who you serve, and it’s all of the officers at BestBuy. If you’re here to serve yourself, or your boss, or me as the CEO, I told them, like melotti would have done, it’s okay, I don’t have a problem with that, oh, except you can’t work here. We’re going to promote you to customer and we’re going to love you up. Okay. But on the other end, if you’re here to serve the organization in the frontliners. Alright, in a moral fashion, then we’re good. The fourth B is be values driven, right? Integrity is foundational without it, everything falls apart. And the fifth B is more about character. So it’s it’s about your authentic the words we use authenticity, empathy, vulnerability, humility and humanity. And so you have to be really clear about this. And, and if the leaders have these five attributes, then you know, beautiful, beautiful things. It’s just extraordinary. And I think

Dov Seidman: the most important thing is to be sure that this is true of everybody in charge. And we sometimes forget how much charge there is a store manager, Product Manager division. There are lots of people in charge of teams and you know at the end Our institute, the number one management leadership challenge that we are tackling is how do we not only nurture and develop leaders who lead with moral authority, moral leaders, but how do we ensure that these are the people in charge that these are the baristas in a Starbucks because the the legacy of the pandemic is we’ve not only saw how consequential leadership is, but we saw how consequential leadership is at every level dimension and sector of society. And what I love about your framework is that you wanted to ensure that if you’re in charge of just one other person, you should be this kind of leader, and then you embed it throughout talk about some of the principles that guide all of this, not just the strategy, you talk about the principles, these are the five attributes of leadership, are there some operational principles that help this not just happen, but stay on track, happen on a sustainable basis? What are the operating principles that allow you to do this every day, not just once in a while?

Hubert Joly: What is central underlying idea is that the basis for all of this is the individual, it’s the person and it’s the personal leadership is the clarity. And when we teach cases at the school, you know, we put a lot of emphasis on the protagonist, Bill George’s are come in front of you, and I, you know, I am not my position I wrote an article years ago, in distressed repute in Minneapolis that I was not the CEO of Best Buy, I had that job, but that was not who I was, and clarity around our purpose in life. I think that’s truly foundational. And if we’re not able to, if we’re trapped, if we’re stuck, or if we’re schizophrenic, bad things are gonna happen in this alignment. So one of the things I think we’ve learned during COVID is that we need to lead with all of our body parts, not just the brain, right, so it’s the brain, the heart, the soul, the guts, the ears, the eyes, I remember on the soul when I was being interviewed for the CEO job at Kelson company, so before BestBuy was being interviewed by Marilyn Kelson Nelson, the daughter of the founder, and a long interview with her because we were flying back together from Paris, to Minneapolis on a plane. And one of our interview questions was, you bear? Tell me about your soul? Who asked this question, right? And yet, it’s so for. So for me, the first principle is that it starts with self self awareness, self acceptance, self compassion, clarity of who you are. And then you have to connect that with the purpose of the company. And then apply not be self conscious about applying what are your true values to how you’re going to lead?

Dov Seidman: I know, it’s trite. But if I said, What is the one piece of advice you’d give an emerging leader today of all the things if this person said just what’s the one thing what would you say I hate to be reductionist to one thing, but if you’ll indulge me,

Hubert Joly: the first thing that will highlight, especially in this chaotic environment, it’s really draining where mental health is a big bigger and bigger challenge is take care of yourself. You know, of course, physically, but also mentally and spiritually, because this is hard. And, you know, you can try to change the world. But first thing is you have to change yourself, and you have to be in a position to be able to do that. And so, spending the time to discover your TrueNorth, to quote bill, George, to again, take care of yourself, physically and mentally, but also spiritually, to one things I’ve learned is that as human beings, we’re not disciplines, right? We need structure. And so having a set of mechanisms, where you can check in regularly with yourself, maybe you have your personal board of director, your spiritual director, or coach or friend or spouse, and oh, my wife, my amazing wife, you know, helps me a great deal in checking out by doing on my journey, and made How am I doing time to be the best version of myself and asking for healthy if it’s not going well. So I think it really starts with with that, and it could sound selfish, but we know that when we fly, we’re told, put the oxygen mask on yourself first, so that you can help others.

Dov Seidman: You know, you’re earnest and saying this is hard. Not only is this hard on a good day, I’m fond of the adage that smooth seas don’t make great sailors. So however hard it is, it then gets harder. When a crisis happens, right or unfamiliar challenge, just talk about a crisis or either a personal one or a business one, where you strengthen this aspect of you, you have to be strong to navigate and confront the crisis. But had it What was it about how you dealt with the crisis that made you even stronger?

Hubert Joly: October or November 2014, a few weeks before Black Friday, were being informed by the authorities that they believe we’ve been hacked. And if you’re a retailer, especially Best Buy, you don’t want to be hacked, you don’t want to have a data breach, you know, three weeks before Black Friday. And but here we have, you know, the FBI, that’s what they tell us. So we gather our crisis management team. And, of course, I get to open the meeting, right, to set the tone. And I, that morning, I have to think about whatever goes said. And I could have said, who forgot to close the backdoor, right? Or, you know, who, you know, who did something wrong instead, because that was pointless. They said, look, let’s be clear, nobody will have we dream to have a data breach two or three weeks before Black Friday, but here, you know, we may have one. And so having said that, I couldn’t be more excited in the sense and more proud to have the opportunity to lead this team or be part of this team. Because I’m not going to lead. There’s some more people who are more competent on this one, and navigate this crisis the best we can because we’re going to have the fate of many individuals, businesses in our hands. And I know that this team is incredibly competent. So Todd, why don’t you tell us what we know. And then how we should move forward. And what I learned from that episode in good news is that it was a false alarm, but doesn’t matter now is that as a leader, we shouldn’t be a thermometer with our temperature varying based on the circumstances, but we should be a thermostat. And set at always upbeat and positive. In trying to create the environment for people to do their best work.

Dov Seidman: I feel like we’re just scratching the surface but I you you painted quite a portrait not only of of your journey, but and how it was informed. But how it shows up at scale is by Carlson how it shows up in a classroom, how it shows up in a store and how it shows up in the global company. And so much of it is in here. And I really would encourage people to read the heart of business. Only a human being has a heart with the with the with AI scaling and starting to invade and, and shape our lives in ways that are are pretty phenomenal and scary at the same time. But one thing in machine will never have is the heart. So keep in mind that the heart is human, and the heart of business has to be human. I think we not only might not lose our way but we can forge a better way that’s really generous of you to make the time and to be in a how conversation and just we at the Howe Institute, respect you deeply and admire you and I just want you to know publicly on the record that we are kindred, both in spirit and philosophically.

Hubert Joly: Thank you