Best Buy Gets It

by Dan Markovitz

Best Buy is generally not talked about as an exemplar of lean. (It’s best known for its Results Only Work Environment; read about ROWE here and here.) But yesterday’s WSJ article on Best Buy shows that the company certainly understands some of the key principles.

Respect for people? Check.

Brian Dunn, the current COO and CEO-designate, who has spent 24 years climbing the company’s ranks, believes that the best retail innovations come from front-line workers. Brad Anderson, the current CEO, says that

Brian’s particular gift is that he is genuinely interested in the blue-shirts as people, and they can tell. What that gives you that a lot of leaders miss, is that you understand what is happening in an organization on a more granular level.

Dunn understands that Best Buy’s competitive strength lies with its workers:

“Wal-Mart is trying to copy us,” Mr. Dunn, who had visited some of Wal-Mart’s new prototype stores in Arkansas days earlier, told the store managers’ conference. “But there is one thing nobody can copy, and it’s this,” he said, grabbing a Best Buy employee who was wearing one of the company’s blue polo shirts.

Genchi genbutsu?” Check.

Before he succeeds Mr. Anderson, he has embarked on a tour of stores in search of inspiration for his remodeling plans, which he sees as a way to differentiate Best Buy from competitors such as Wal-Mart and Amazon.com.

Dunn says that to compete with those behemoths, “you have to go where the rubber meets the road.” And that’s the gemba.

When stories about AIG executives feeding at the bonus trough batter you like a polo mallet to the head, it’s reassuring to know that there are still some executives who get it. And it doesn’t require Gary Hamel’s “management moonshot” to realize that front-line employees really do have some valuable business ideas.

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Dan Markovitz

Dan Markovitz is president of Markovitz Consulting, a firm that radically improves operational speed and efficiency by applying lean concepts to knowledge work. He is a faculty member at the Lean Enterprise Institute and teaches at the Stanford University Continuing Studies Program. He also lectures on A3 thinking at the Ohio State University’s Fisher School of Business. Dan is a frequent speaker and presenter at conferences, and has consulted to organizations as diverse as Camelbak, Clif Bar, Abbott Vascular, WL Gore & Associates, Intel, the City of Menlo Park, and Memorial Sloan-Kettering Cancer Center. His book, A Factory of One, was honored with a Shingo Research Award in 2013. Dan has also published articles in the Harvard Business Review blog, Quality Progress, Industry Week magazine, Reliable Plant magazine, and Management Services Journal, among other magazines. All of these articles are available for download on the Resources page. Earlier in his career, he held management positions in product marketing at Sierra Designs, Adidas, CNET and Asics Tiger, where he worked in sales, product marketing, and product development. He also has experience as an entrepreneur, having founded his own skateboarding footwear company. Dan lived in Japan for four years and is fluent in Japanese. He holds a BA from Wesleyan University and an MBA from the Stanford University Graduate School of Business.

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6 Comments on "Best Buy Gets It"

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  1. Brandon says:

    I have been working on a school project at Best Buy, and the respect for people element definitely seems to be there. They are looking at ways to improve employee and customer satisfaction continually. From what they say, this store has very low turnover, and is one of the top performers in the company. It doesn’t surprise me, because you really can see that employees enjoy it there.

  2. faceman888 says:

    I am not an expert on ROWE. I have read a couple of articles on it and I was concerned about the no hours and no meetings required thing — how do they avoid becoming to fixated on results (it iseems to be – from a far – that as long as you produce results you are OK) and losinfg a focus on process?

  3. Anonymous says:

    why would you focus on process…process is irrelevant since it just a means to an end. Results are all that matter.

  4. Mark Graban says:

    If you think “results are all that matter” how do you think you get good results?

    Either

    1) Luck
    2) Good processes

    Why would you rely on luck?

  5. Bruce says:

    I think process is very important for a number of reasons. Results can be a function of luck like Mark pointed out. You can’t teach / develop results — all you can do is hold people accountable to them. If you are engaged at the process level you can’t teach and coach. If you don’t teach and coach people (and learn from them at the same time) then how are you contributing. How can you assure long term improvement if you don’t teach process? If somebody produces poor results you need to understand why and you can’t do that without tending to process — all you can say if you only watch results is, “Hey you got bad results” and they probably already know that and they would look too you for help and you can’t give any. I think it is better for an organization to embrace good philosophies and teach good methodologies and improve the effectiveness and efficiency in applying them. If they look outside to learn then that is good too. I am not criticizing best buy. They might be able to manage process from a distance — there are a lot of web 2.0 things that can help with that. I worked with some peers in China (from Ohio) on things like value stream mapping, 5 why problem solving, kanbans, etc, from a desk in my basement in the evenings over the course of a year or so. So it is possible to be engaged from a distance – it doesn’t replace ‘going to see the actual thung in the actual place’ though. The big three all produced results over the long term. They weren’t using good process though and results were a lagging indicator of their decline.

  6. Bruce says:

    Try the Deming white ball / red ball and the Demin funnel experiments to understand process and results.
    http://www.redbead.com/
    http://www.business.ualberta.ca/yreshef/orga432/funnel.html
    Rule 3 in the funnel is a results orientation — reacting to results in the absence of process understanding.

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