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dispatches from the new world of work

Best Buy & Bye Bob

"We were a boys' toy store designed for boys by boys."—Julie Gilbert, VP, Best Buy

"It's no longer the days of eight-track tapes and big speakers with the big foam that smells. The products we sell and the services we sell are about trends and fashion."—Julie Gilbert

"Women couldn't get anyone to help them. They weren't treated with respect."—Julie Gilbert

"We're working with the Girl Scouts, with private female colleges and others to recruit amazing women so we can delight our women customers."—Julie Gilbert

"Instead of hitting high-tech hysteria at Best Buy this holiday season, shoppers may notice a softer, more personal atmosphere. Music is quieter. Lights are lower. Salespeople talk to customers about their lifestyles, what they want the technology to do for them ... and how they want it to fit into their homes, offices, cars. ... If you need more help, one of thousands of its 'Geek Squad' techies will come to your home to hook stuff up."—USA Today, 12.20.06.

Welcome aboard the ultimate megatrend, Best Buy! It turns out that about 90 percent of consumer electronics decisions are made by or significantly influenced by ... women. So, too, DIY. Lowe's figured that out years ago—and it's a leading reason Lowe's has given Home Depot fits. (I remember a biz article that featured pics of the two contending CEOs. Home Depot's top gun was pictured among stacks of plywood. Mr Lowe's was shown among plants in the inside nursery. One photo doth not a strategy make, but still ...)

Not catering to women was hardly the whole reason Bob Nardelli took an invited hike yesterday—and will have to be content with his $200 million+ severance pay for a while. But it's not unrelated. I railed at Home Depot about the women's thing for years—my present to Bob, who is a pal. Some moves were made, but hardly up to the strategic re-orientation of Lowe's or, apparently, Best Buy.

Nardelli took an ailing giant—and put needed infrastructure in place to run a $100 billion company. Profits leaped but the stock stayed in the basement. And then there was the 2006 annual meeting fiasco—I predicted that was the end, but I was off by a few months. The meeting farce was tied to the nutty pay package. Nardelli was worth a ton ... but so many tons?

(Last Sunday the New York Times reported on the $200 million+ that the former Pfizer CEO walked away with—after losing more than $100 BILLION in market cap. Ye gads!)

(Exec pay is a thorny topic. On the one hand I think the market should rule. But there's also something to say for common sense and killing the goose who laid the billions of golden eggs. "If it walks like a duck and quacks like a duck ..." Well, the pay issue to me is to a large extent about ducks—it "feels" all wrong, and business' reputation may sink below the "Enron days" if folks don't wise up.)

Then there was the "Home Despot" tag. Home Depot needed tough medicine—but a reign of terror? What I saw up close did not "make me shudder"—but it set alarm bells ringing.

(Nardelli was enraptured with the military approach—very common among those who did not serve, I've observed. Those of us who did serve know that the public "military model of leadership" has little to do with the real thing. As far as I know, incidentally, Nardelli's former boss, Jack Welch, was never active military either.)

Nardelli did a lot of good stuff. Nardelli did a lot of bad stuff. I applaud discipline and accountability—but do not believe that despot-like behavior is needed to achieve those goals.

I fear that Mr N got his just desserts.

Meanwhile, again, hats off to Best Buy:

(1) Cater to women! (Hey, they buy everything.)
(2) Put women leaders in charge—Best Buy's female "wolf pack" aims to get a woman in the CEO's seat at Best Buy! (The leadership profile ought to mostly mirror the buyers' profile.)
(3) And: Watch the money flow in!

(NB: Marti Barletta's wonderful PrimeTime Women: How to Win the Hearts, Minds, and Business of Boomer Big Spenders ... is on the shelves! So, too, Margaret Heffernan's terrific How She Does It: How Women Entrepreneurs Are Changing the Rules of Business Success.)

[Note from Cathy: We did a thorough search of every source we had access to, and we found no evidence of Mr Nardelli's being active in the service, let alone a war zone. But if you know something we don't, we're sure you'll fill us in.]

Tom Peters posted this on 01/04/07.

Comments

Re: Nardelli's military service: According to answers.com, Nardelli was a ROTC cadet at Western Illinois Univ. Nothing mentioned regarding further service.

Posted by Dave O. at January 4, 2007 4:11 PM

Good points made by Gilbert - it speaks to bringing in a larger market share and profits which is [correctly] the only goal of business!

Can having a woman in charge naturally fix everything? I'm sticking with the best person does the best job regardless of race, color, creed and GENDER.

Executive pay? How is it really hurting me? I don't shop at Home Depot and do the Lowe's route when I have to (prefer locals). I think many complaints about exec pay sound awfully green.
I know what line I would like to be in when severance packages are handed out!

Posted by Jack at January 4, 2007 4:19 PM

Tom,

You are right on with "Nardelli was enraptured with the military approach..." as I observed while doing a short stint at a local Home Depot. Not employed in my regular field at the time, I was working part-time for HD. I was asked by the store management if I would consider going to Home Depot's management training school. With some additional questioning I found out that HD was primarily recruiting future store managers from the ranks of retiring military personnel. This was not for me.

I noted in my own fledgling blog yesterday, http://fwiw-forwhatitsworth.blogspot.com/index.html
that how Bob dressed spoke volumes about how he would run a "hardware" company.

I'm glad he's out, but he's laughing all the way to the bank on this one.

Andy

Posted by Andy H. at January 4, 2007 6:57 PM

I'll believe Best Buy has gotten a clue when I walk into one of their stores and trip over one. ;o)

Seriously, Best Buy's issues don't start with not catering to women. I, a female, have always done all of my family's technology and appliance shopping, and Best Buy's staff is almost always clueless. Worse, if something is bad out of box or isn't as described, they're a nightmare to deal with.

Over the past three years they literally became the store of last resort for me for those reasons, and they will not win me back with frills and lace. It will take competency, common sense, and customer service to woo this female.

BTW, I like the functionality of boy's toy stores; I prefer dealing with male sales staff (less likely to throw attitude and more likely to tell me about the product's features instead of how their sister got one and it was so much fun...yadda yadda); I prefer lighting that gives good visibility; I want linear and logical layouts that make things easy to find. There are a lot of stores that cater to women that eschew these attributes, and I simply won't go into them.

Oh...and why I like Lowe's better than Home Depot: you can navigate Lowe's, find stuff, and get out and back to what you were doing. Home Depot always has tons of junk in the middle of the aisle -- always fun when pushing a cart full of lumber/cinderblock/conduit. They also rearrange the store so often that you can't learn where things are and reliably be able to run in and get another of the same thing you bought a week earlier without having to run through the whole store looking for it. No, this strategy does NOT make me more likely to impulse buy, it makes me more likely to curse loudly and shop elsewhere whenever possible.

Nardelli tried to fix Home Depot's customer service issues by providing online ratings and reviews, unfortunately, they didn't utilize that feedback to improve their customer service or processes. The online reviews were a litany of the same basic set of complaints followed by "nobody listens." Because they didn't. Seems Nardelli started implementing a number of good ideas but didn't follow through and finish them. That's not a gender thing, that's an ADD thing. :o(

Posted by KT Hernandez Woods at January 5, 2007 2:49 AM

1. Totally loyal to LOWES thank you - AND now shall totally boycott all things Home Depot given the $210 Million HD Board decision - AND have e-mailed HD corporate PLUS called the local HD store manager to convey & vent = 5 minutes of sheer fun

2. COSTCO for me vs. Best Buy - however the Geeks may be worth a check - seems to me the main deal is to find near minimum wage types who are Authentic & in to it = enjoy pleasing customers

3. "Sexism - so be it" @ TP Inc - diminishes TP brand - so be it

Posted by sean_lowes at January 5, 2007 9:20 AM

I fail to see how good customer service, friendly store layouts and pleasant atmosphere are attributes meant to be enjoyed exclusively by females. By this logic, I suppose men just enjoy walking into a store, grunting at other males as they pass, and scavenging aisles piled high with junk until they locate what they want and let out a tarzan-like shout.

I think Tom Peters recognizes an imbalance in society and so has chosen to go to the opposite extreme in order to balance it. So be it. But anyone who truly wants "excellence" in their life had better realize that it doesn't come by declaring one race, creed, religion, or GENDER superior to another. Women, like men, face their own host of leadership issues and shortcomings. Diversity at the top, in proportion to the people an organization represents, is what is needed. Empirical studies that show women make buying decisions may fail to expose the dynamics of said decisions--is it because men don't care as much about what a woman brings home? Could it reflect an even deeper sexist notion that it is the woman's role to shop (or maintain the house in the case of HD) while the man sits home and watches football? I agree with above post: sexism diminishes ANY brand. Besides, my last ten trips to Best Buy would lead me to conclude that the buying decisions were made by children under the age of 18. Perhaps BBY should exclusively hire THEM at the top.

On to Nardelli (having fun now!): his departure is due to ONE thing--share price. If HD stock had doubled by now, no one would be talking about military-like leadership, poor service, etc. I'd bet instead that the 'gurus' would've already written a book finding ways to praise and glorify the very things we are complaining about. Since admitting this would mean admitting to canning a CEO for something he doesn't completely control, we look for other reasons instead. NO, I am not a blind Nardelli supporter, though I did buy the stock (and was rewarded more by his departure than anything else) b/c I believed in his ability to execute (and he did not let me down). I was disappointed at hearing at various times in his tenure how little he listened to employees. But I don't see this as a misapplication of the military leadership style. The military (in which I proudly served) has good and bad leaders just like everywhere else. Bottom line: when you post quotes like "Ready. Fire. Aim." or "We have a strategy: its called doing things." (Kelleher) or admire Grant's tenacity in making contact with the enemy, I don't think you can hammer a guy like Nardelli, who personifies much of this attitude. Maybe HD SHOULD have held onto their visionaries instead of getting a guy who only executes.

Again, not a blind defense of Nardelli. I just want to present a different viewpoint to prevent lemming-ism. Could not be more disappointed with Nardelli's severance pay, as I am a shareholder.

Posted by Paul at January 5, 2007 9:58 AM

In "Why We Lie", which I'm reading currently, the author explains the evolutionary reasons for deception. I believe Julie Gilbert here is engaged in self-deception.

I was at two Best Buy stores during the holidays: the music was loud, the staff uninterested in helping me, and when finally gotten to, completely clueless as to store inventory and stock.

I'm with KT Hernandez Woods on this one. Those statements are not consistent with my experience.

As for Home Depot -- I stopped going to that store ages ago after having a heated discussion with a store manager on them selling a composed particleboard door for solid wood. Just because I'm a woman, it doesn't mean I can't tell the difference!

Posted by Valeria Maltoni at January 5, 2007 11:31 AM

Tom

I do not know Mr. Nardelli but the course of events at Home Depot under his "regime" was predictable. Especially, the fact that he walks away with a substantial severance payout at $US 200 million. Incidentally, I believe Mr Nardelli is entitled to whatever contracted payout he had at the time of his engagement.

Nardelli learnt his craft under the Jack Welch regime. The house that Jack built was all about the numbers. The culture at GE under Jack was get your numbers right first and foremost and the rest will fall into place. Nardelli learnt his lessons well. He sold that story to the powers that were presiding over an "under performing" Home Depot. The people who hired Nardelli got exactly what they wanted and what they paid the big money for. They have now fired him because they did not like what they got. So who is to blame? I reckon it is not Mr Nardelli! Blame,envy,anger, outrage, etc is what is now being levelled at Nardelli - how can any of this help anyone?

I can not judge Mr Nardelli nor the people who put him in charge and who negotiated his pay and conditions unless and until I have walked in their shoes. Thank goodness I will never do that. viagra in usa

Finally, it is common knowledge that Jeff Immelt and Bob Nardelli were rivals for the top job at GE when Jack stepped down. It is also common knowledge that Jeff got the job because he was not Bob. samples for viagra

Look at what Jeff has tried to do and has done at GE since he got the top job. He has been expansive, stimulated innovation, taken big risks in searching for new customers, he has stayed close to GE customers, etc. Look at what Bob has tried to do and has done at Home Depot since he got the top job. He has tried to centralise control of a business that runs on tight margins but seemingly has lacked the measurement, computer systems, management controls and disciplines, etc to hold costs down.

Bob Nardelli's big mistake, I believe (with an apology to Mr Nardelli for being so arrogant or forthright), was trying to do what he was hired to do in a healthy US economy wherein customers want to be "pampered" not "ignored". In this type of US economy one should expect that customers will seek a modicum of service above and beyond an extra 5-10% discount.

Cheers
Richard

Posted by Richard Lipscombe at January 5, 2007 6:43 PM

Tom, have you actually walked into a Best Buy over the Holiday Season? Or perhaps in the past 2 years? I was once a Best Buy bigot - a boy and a geek shopping at Best Buy for geek boy's toys two or three times a week.

A few years ago, I gave up the habit - partly because I grew up and don't feel the need to feed my toy habit anymore.

I've returned to a couple different Best Buy stores across the country in the past few years and have been COMPLETELY underwhelmed.

Visibly aging stores. Shelves are a complete mess. Music still loud and still sucks (and this comes from a weekend musician with paying gigs).

My last visit included asking no less than three couldn't-give-a-shit kids where a DVD might be found in a complete mess of a department. No reponse. A couple seemed to be deaf, mute, and physically incapable of walking a few aisles to help me out.

Maybe I should have text messaged the question to one of 'em instead.

And so went my final "Buh-bye" to Best Buy.

Posted by Drew at January 6, 2007 8:27 AM

If people are to get huge payouts it should be for huge performance - not for failure. The problem is defining performance - if you ask for something and pay to that don't be surprised if you get that (at the exclusion of everything else)

To a large extent I agree with Tom on market forces but huge companies cannot wash their hands of responsibility for their impact on society. Excessive gaps between rich and poor can be just as destabalising as a flat society.

I am not worried though - these fat cats will be the first with their backs against the wall when the revolution comes :-)

Posted by PaulH at January 6, 2007 10:15 AM

It's a pity that Bob Nardelli didn't get anymore than a surface view of military leadership. Anyone who's been a Marine leader at any level from fire team leader to Commandant (or now Chairman of the Joint Chiefs) hears over and over again that a leader has two jobs: accomplish the mission and care for the people. Nardelli got the first one, but never seemed to even understand the second. You need both to bring about major cultural change or build a great organization.

Posted by Wally Bock at January 7, 2007 6:04 PM

I've read enough about Best Buy's corporate culture to be impressed. I happen to like shopping at Best Buy and don't have the problems mentioned in the comments above. This leads me to think that, when there are complaints as above, that it's most likely the store management at fault. Of course, that's also a fault of corporate for not holding them accountable.

I was in my local Best Buy multiple times this holiday season. I was impressed by the blue shirts knowledge and by their rapid checkout.

Regards,

Glenn

Posted by Glenn (Customer Service Experience) Ross at January 7, 2007 8:09 PM

One day I was in my local Home Depot and couldn't find the item I wanted. I walked up to the nearest employee, who was wearing an orange apron conspicuously printed with "I Help in All Departments," and asked him where the item was. He snarled, "I don't know, it's not my department." Hello??

Posted by Paula at January 18, 2007 12:35 PM