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.]