Best Buy shows the importance of culture in the modern corporation

Last week I had the good fortune of meeting Peter Hirshberg and today I checked out his blog and a write up of an interview Peter did with Brad Anderson, CEO of Best Buy, at the Google Zeitgeist conference in September.

It turns out that Best Buy has embraced the use of social media to empower it’s employees and reaped massive productivity gains as a result.  From Hirshberg:

Traditionally, we associate companies like this [Best Buy] with classic top-down management approaches. Brad points out that as their business challenge shifted from simply distributing product to ensuring customer delight under countless usage scenarios, only a method that tapped the wisdom of everybody made sense.

and:

Brad told me that it “absolutely flips the role leadership” since great ideas often come from the edge, not the brass. And, all this “ can be murder on middle management”

Three of the social media tools they use are:

  • The ‘Loop Marketplace’ which replaces the suggestion box with a market where employees can submit and share ideas, and often get them funded
  • A prediction market which was apparently dead on in predicting Christmas sales
  • An internal social network called Blue Shirt Nation which they use to solve corporate problems from how to increase use of the company’s pension scheme to changing IT systems.

The results – 40% more employees enrolled in the 401k pension scheme, millions of dollars saved on a new in-store IT system and employee turnover reduced by over 50%.

Underpinning the success of these tools is a strong corporate culture and very visible support from the CEO. 

A strong culture is born from strong values that everyone can see embodied in the every day words and actions of senior management.  Best Buy’s values are:

  • Have fun while being the best.
  • Learn
    from challenge and change.
  • Show respect, humility and integrity.
  • Unleash the power of our people.

Strong values are essential to guide employees for corporations who are serious about empowering the edge.

This is also true in small companies, where having a strong positive culture is a big driver of success.  There are some differences at small companies; it is not usually necessary to have a written set of values and the culture will change more quickly as the business grows, but the same basic logic applies.