Hubert Joly; Corie Barry – Photo: Best Buy
Hubert Joly: New Best Buy CEO has the right stuff to lead chain to new heights
Hubert Joly, the architect of Best Buy’s turnaround, is stepping down as CEO and moving to the role of executive chairman of the board on June 11. Corie Barry, Best Buy’s current CFO and strategic transformation officer, will take over as CEO while also joining the company’s board.
Ms. Barry, who joined Best Buy in 1999 and has held a variety of financial and operational roles within the organization, became CFO in 2016 after serving as the retailer’s chief strategic growth officer. She will become the first female CEO in the company’s 53-year history.
“I am deeply honored to have been selected as Best Buy’s next CEO and look forward to working closely with Hubert, our Board, and the exceptional Best Buy family to continue the momentum we have been able to achieve,” said Ms. Barry in a statement. “Today’s technology and consumer landscape creates tremendous opportunities for Best Buy to further expand and deepen relationships with our customers and employees, while continuing to deliver shareholder value.”
When Best Buy named Mr. Joly as its new CEO in August 2012, there were more than a few raised eyebrows in the retailing and vendor communities as well as on Wall Street. Mr. Joly, who was the former head of the hospitality company, Carlson, had never worked in retail before, and Best Buy was going through a rough patch even before its former CEO, Brian Dunn, abruptly left the company in April of that year.
While some saw a deck stacked against him, Mr. Joly came to retailer with a reputation for revitalizing companies. Hatim Tyabji, Best Buy’s chairman at the time, said Mr. Joly’s “range and depth of experience in transforming companies is exactly what the company needs at the moment, as is his energetic, imaginative and experienced leadership in executing strategies.”
Fast forward to present day and Mr. Joly and his team have pulled off one of the great turnarounds in retail history. Once depicted by some as a retail lamb being led to the slaughter, Best Buy has become a success story and a guide for how to combine physical and digital assets to compete successful with Amazon.com and others.
During his tenure and the launch of the Renew Blue and Building the New Blue strategic growth plans, Best Buy has raised customer satisfaction levels while improving comp sales and gaining market share. The chain has also grown margins and cut $1.4 billion in costs that helped when reinvesting in areas of need for the business.
“Now is the right time to begin a leadership transition,” Mr. Joly said. “We have a tremendously talented, deep and dedicated leadership team at Best Buy, driven by our strategy and purpose to enrich lives with technology, build lasting relationships with customers and make positive impacts on society.”
He said of Ms. Barry, “Corie has played a critical role in developing and executing the proven growth strategy in place today, and I am confident she has the vision, skills, experience and leadership capabilities necessary to be our CEO.”
Discussion Questions
DISCUSSION QUESTIONS: Do you expect Corie Barry to make any significant changes at Best Buy as the retailer’s new CEO? Will having Hubert Joly as executive chairman of the board be a positive or negative for Ms. Barry in her new leadership role?
Poll
BrainTrust
Carol Spieckerman
President, Spieckerman Retail
Paula Rosenblum
Co-founder, RSR Research
Hubert Joly’s tenure at Best Buy has been nothing short of impressive. Best Buy’s executive transition proves that Best Buy has a multi-stage plan across its entire enterprise. Mr. Joly will still be on board to ensure continuity while Ms. Barry is allowed to make her mark. Exciting times ahead for Best Buy.
This is a transition, an internal passing of the baton. It’s a healthy business in a highly competitive market. If significant changes are made, it will be because that change has been worked on and studied for an appropriate amount of time and has the blessing of the management team and board. There shouldn’t be any reasons for surprise changes.
Corie Barry inherits a sound and stable company. However, she will also face a number of challenges. The slowdown in innovation in consumer electronics is a constant worry as it dampens spending growth – as we saw towards the back end of last year. This means Best Buy will likely need to find new avenues for growth, probably building on its services play. Stores, while still extremely relevant to Best Buy, need investment and must be continually evolved to remain relevant to consumers. This means capital expenditure and a review of the store portfolio will likely be necessary on her watch. There is also the looming prospect of navigating a slowdown in the consumer economy, which will need to be managed without damage to the brand or the customer service credentials it has built up.
The bottom line is that although Best Buy is a strong business, it operates in a very challenging part of retail that is characterized by wafer thin margins, a lot of shopping around, and where loyalty is often give to electronics brands over which retailers they are purchased from.
I think this is nothing but good news. It always scares me when a financial “only” person takes the reins of a retail company. But Corie Barry is not only a perfect choice, but an ingrained executive with nearly 20 years with Best Buy. She and Mr. Joly have been the architects of this incredible turnaround. Will she make changes? Of course, but they will be extremely thought out, based on history and opportunity with no great surprises to anyone at Best Buy.
I never would have guessed Mr. Joly would execute the kind of turnaround he’s pulled off. I can only assume he knows what the next woman up can do.
And yay for a woman CEO, by the way.
Time will tell, but I would expect there to be very little change at first at Best Buy because they have developed a winning formula. However, the consumer electronics/appliances industry tends to change quickly as technology offers new concepts and features. How the public responds and what desire they have will force Best Buy to stay one step ahead, along with the never-ending competition that will continue to increase market share. So how Best Buy remains successful will eventually be determined by the strategy and concepts implemented by Corrie Barry. Chairman Hugh Joly can offer suggestions and ideas but if the company wants a CEO who is a leader, ultimately it will be Barry who will be the driving force getting the credit when things are right and taking the hit when they’re not. Only time will tell how things work out.
Hubert Joly’s new position is not likely to be disruptive to his successor, since she has worked for most of her career at Best Buy and he presumably mentored her along the way. If the company had hired an outsider CEO, there would be a bigger sense of Mr. Joly looming over his/her shoulder. This offers the chance at an orderly transition, and at some point Mr. Joly will be ready to step down.
He deserves a lot of praise for reinventing a big-box retailer like Best Buy when so many others are struggling or closing entirely. But Ms. Barry will not simply want to walk in Joly’s footsteps (even though she was a key member of the “transformation” team). Retail is simply moving too fast (and so is the kind of product that Best Buy sells) for anyone to become complacent.
I often include Best Buy in my keynotes as an example of a company that proves legacy brands can go from boring to remarkable. In particular Joly’s decision to see Best Buy’s stores as assets rather than liabilities and to work hard to harmonize the shopping experience across channels will be his legacy.
As I alluded to here, I don’t expect a lot of change, but given the intense competitiveness of many of the categories Best Buy is in I don’t expect the next chapter of their story to get any easier. As more and more business moves online there is also the challenge of optimizing their store footprints, in terms of number of units, size of each unit, and potential new formats.
Corie Barry’s reputation inside Best Buy is stellar. She has an obvious solid grasp on the business and the transformation strategy beyond the finance lens. She did a great job as interim president of the Geek Squad and is considered a strong people leader. When you consider that Best Buy has more women in senior leadership than most large companies and double the share of women on their board of directors, one finds that this decision by Hubert Joly is not surprising at all.
It’s full speed ahead with the right skipper in charge maintaining a steady course, yet fully tested to weather any future storms.
Best Buy’s “new” competitive edge seems to be the customer experience. Best buy retails products found at thousands of other retailers. Likely Mr. Joly’s ability to execute the Best Buy turnaround was guided by foundational expertise in the hospitality industry. As a Best Buy consumer, the “pretend not to see the customer” experience is still alive and well at Best Buy. Getting it right for Ms. Barry will require qualitative versus quantitative measurement of the customer experience at Best Buy.
Of course Best Buy will have to pivot to address changes in the economy, technology and customers. The company has a history of big reinventions.
Ms. Barry has the responsibility to keep the momentum going in the right direction. She has been on the inside and knows exactly what made this turnaround work. Mr. Joly being on the board helps give some confidence to the transition. This will be business as usual.
My advice to Best Buy is to master digital from a commitment and technology POV but MOST IMPORTANTLY, as a brand-led play. Every possible way that they can make it wrong for a consumer to go to Amazon or Walmart for home electronics, technology, appliances, they have to go for that. why does Amazon have 10 times the share of Walmart online? Pricing? Breadth of offers? I doubt it … it’s brand and the search pattern habits that consumers adopt. So Best Buy — brand, brand, BRAND!