Being a successful leader calls for empathy and a noble purpose.
That's according to Hubert Joly, the former CEO and chairman of Best Buy. He's credited with turning around the consumer electronics retailer, in the face of significant competition from e-commerce giant Amazon. By the time Joly stepped down as CEO in 2019, the Minneapolis-based company held steady with increases across revenue, market share, and margins.
While today the executive spends his time lecturing at Harvard Business School, he's more than a little circumspect about his time leading Best Buy. He even wrote a book, released in May of this year, touching on his experience. It's entitledThe Heart of Business: Leadership Principles for the Next Era of Capitalism.
The biggest takeaway? Leaders who are charged with making difficult decisions must never make them in a vacuum. A company is ultimately a human organization that is driven by collective energy, he explained during "The New World of Work," a recent event hosted by Harvard Business Review. He believes that co-creating plans with staff can create productive, healthy workplaces and help keep employees from quitting in the Great Resignation.
Here, Joly explains four principles that every leader should abide when attempting to tap into the human magic of employees.
1. Hire the person, not the position.
The most important decisions CEOs can make are choosing whom they put in positions of leadership, Joly said. He shared that he used to mistakenly put too much emphasis on experience and expertise--hiring those who seemed like the best person for the position on paper. Instead, he suggests, focus more on who the person is and what kind of leader they are. For example, while interviewing to replace the CEO at Carlson Companies in 2004, the then-CEO asked Joly to describe his soul as a leader.
"It's a great question because it asks what drives the individual and what kind of impact do they want to have," Joly said. "It even suggests, how do they want to be remembered?"
2. Employees should be your North Star.
Many public companies have pursued a shareholder-first approach, putting that constituency above others, such as customers, community, suppliers--and employees. That era is over. In the next 50 years, Joly said, businesses will need to put employees at the center of the company's vision, no matter the industry.
Leaders can often get bogged down on the end goal, but how it's achieved is just as important, Joly explained. By advocating to put people at the forefront of your work, your purpose to do good can create an environment that encourages employees to successfully accomplish company goals.
"At one point, everyone thought Best Buy was going to die," he said of when he first took the helm. With the company's stock price plummeting, company board members suggested cutting jobs or closing the retailer's doors altogether. Instead, Joly listened to his employees through what he called a "listening tour" during his first week on the job to figure out the next move.
Joly says he learned that customers needed a place where they could touch and feel products or ask questions if needed. He also learned that some of Best Buy's problems were self-inflicted. He explains that prices were too high and the online shopping experience was broken.
3. Connect people with what drives them.
While the Great Resignation sweeps across industries, Joly says leaders should be asking themselves how they can create an environment where people naturally want to do their job. One of the main things that the past year has shown him is that a top-down management style doesn't always work and incentives can only stretch so far.
Instead, he suggested a different approach: Tap into human magic. "Human magic is when, at scale, you have employees who do things for each other and for customers that nobody has told them to do," he said.
To find this, he said encourage leaders to inspire connection and remind your employees that they are seen. Know what drives your employees, including their struggles and their dreams.
4. Admit you don't have all the answers.
"I think that's the great leadership trend today, to be able to say, 'I don't know. I'm going to need help, but we're going to figure this out and we're going to experiment," Joly said.
The idea of the leader banging a fist on the table and dictating policy is outdated. Instead, the responsibility of modern leaders is to create an environment where all employees can be themselves, provide feedback, and have an impact on key decisions.