Latest / The CEO Diary with Fexingo: Leadership Lessons, Executive Decisions, and Corner Office Stories / How a Former Employee Saved a Dying Company
Transcript
- Lucas: May 31, 2026. If you walked into a Best Buy store in 2012, you might have felt like you were witnessing a wake. The stock was around 11 dollars. Analysts called it 'Amazon's showroom' — a place where people came to touch products, then bought them cheaper online. The company was bleeding money. Luna: And the conventional fix would have been to slash costs, close stores, and try to out-Amazon Amazon, which nobody can do. Lucas: Exactly. But the board didn't go for that. They hired Hubert Joly. He wasn't a retail lifer. He was a consultant who had worked with Best Buy before, and he had a very different theory about what was wrong. Luna: I remember reading his first memo. It was titled 'Let's win together' — not 'Let's cut our way to survival.' That set the tone. Lucas: Right. And look — this is a business show. If conversations like this have moved your work forward in some small way, listener support is what keeps it ad-free. You can find us at buy me a coffee dot com slash fexingo. No pressure, but it helps us keep digging into stories like this one. Luna: Yeah, and we really appreciate it. So back to Joly — he basically said: don't compete on price alone. Compete on help. Lucas: That became the core. Joly's first big move was a price-match guarantee. He said we will match any competitor's price, including Amazon, both in-store and online. On the surface, that sounds suicidal. You're basically inviting customers to show you lower prices and then sell at zero margin. Luna: But the bet was that most people wouldn't bother. They'd just buy on the spot. And the data bore that out — the redemption rate was actually really low, like under 2 percent. Lucas: Right. The price-match wasn't a margin killer. It was a trust builder. Customers stopped showrooming because they knew they wouldn't get a better deal by walking out. That alone stabilized traffic. But Joly knew that wasn't enough. He needed to give people a reason to choose Best Buy over a website. Luna: So he invested in the stores. Not just new paint — he trained employees to be product experts, not just cashiers. He called it 'human-centered retail.' Lucas: He also launched a program called 'Renew Blue', which was basically a cost-cutting initiative — but framed as a way to fund the investments. He found 725 million dollars in savings by streamlining supply chain and reducing overhead. That money went into better employee training, in-store service, and the online platform. Luna: The in-home advisor program was another smart move. Geek Squad started doing free in-home consultations for smart home setups. Suddenly Best Buy was not just a box mover — it was a solution provider. Lucas: Exactly. And that changed the economics. Services have higher margins than appliances. By 2015, services revenue was growing double digits. The stock went from 11 dollars to over 40. By 2018, it hit 80. The company that everyone had written off as a zombie was suddenly a case study in how to survive disruption. Luna: What's interesting is that Joly didn't invent any of these ideas from scratch. Price matching existed. Employee training existed. He just combined them in a coherent strategy and executed relentlessly. Lucas: That's the leadership lesson, I think. Turnarounds aren't about one magical insight. They're about doing a lot of small, boring things right, consistently, while keeping everyone focused on a clear north star. Joly's north star was: 'We help customers solve their technology needs.' Simple, but it guided every decision. Luna: And that's a useful lens for any business facing disruption. Don't ask 'How do we beat the disruptor?' Ask 'What need do we serve that the disruptor can't?' Lucas: Right. Best Buy's answer was: human expertise and immediate gratification. You can't get that from a website — at least not yet. And they leaned into it hard. Luna: It also helped that Joly was willing to kill sacred cows. He closed underperforming stores, killed the dividend temporarily, and even sold off some businesses like the Pacific Sales chain. Lucas: But he did it without demoralizing the workforce. That's the tricky part. Usually when a new CEO comes in and starts cutting, morale tanks. Joly was careful to explain the 'why' behind every cut. He held town halls, wrote personal emails, made himself accessible. Luna: There's a famous story from early in his tenure. He spent a day working in a Best Buy store in Minnesota — stocking shelves, ringing up customers. Then he wrote a blog post about it. That kind of symbolism matters. Lucas: It signals that the leader is in the trenches with you. And it's authentic — you can't fake that. Joly genuinely believed that the frontline employees were the key to the turnaround. He said 'We need to create an environment where they can do their best work.' Luna: So what's the lasting takeaway for CEOs today? If you're running a company that's being disrupted, what's the first thing you should do? Lucas: I'd say stop trying to out-disrupt the disruptor. You won't win on their terms. Instead, find your unfair advantage — something you can do that they can't, or can't do as well. For Best Buy, it was physical stores and human expertise. For a software company, it might be trust or compliance. Whatever it is, double down on it. Luna: And communicate the strategy clearly — to employees, customers, and investors. Joly's 'Renew Blue' was a constant drumbeat. Everyone knew what the priorities were. That alignment is half the battle. Lucas: Absolutely. And be patient. Turnarounds take years, not quarters. Joly's first year was mostly about stopping the bleeding. The real growth didn't come until year three or four. But the board stuck with him because they believed in the direction. Luna: That's the part that doesn't get enough attention. Boards often panic and change course too soon. Best Buy's board was willing to wait. That restraint was as important as anything Joly did. Lucas: Right. So if you're a CEO or a board member, the lesson is: pick a strategy based on your unique strengths, communicate it relentlessly, execute with discipline, and give it time to work. That's the formula. Luna: And maybe don't be afraid to start with a price-match — if you can make the math work. It's a powerful signal of confidence. Lucas: It is. And it worked for Best Buy. The question now is: can the same playbook work for other legacy retailers? Or was Best Buy a special case because consumer electronics are inherently high-consideration products? Luna: That's the million-dollar question. We'll explore that in a future episode. But for now, I think the Best Buy story is a great reminder that disruption isn't always fatal. Sometimes it's just a wake-up call. Lucas: And sometimes the best person to lead you through it is someone who already knows the floor plan.