The Heart of Business: Leadership Principles for the Next Era of Capitalism by Hubert Joly

Author:Hubert Joly [Joly, Hubert]
Language: eng
Format: epub, pdf
ISBN: 9781647820381
Google: d0WszQEACAAJ
Publisher: Harvard Business Review Press
Published: 2021-11-15T23:35:13.935443+00:00

“Are you sure you really want to do this?” asked David Thorpe, who ran EDS’s business in Europe, the Middle East, and Africa. He was concerned that bonuses may be paid out even when financial performance was poor. I told him I was not worried. If we did well on people and business, then the financial results would follow. Introducing new metrics into the system would ensure that the “people” and “business” elements received more attention. The new incentive system served as an effective loudspeaker.

When I joined Best Buy in 2012, the top echelons of the company were heavily siloed. We urgently needed to have everyone focused on the whole rather than their parts, so we changed the bonus system to send a clear signal. Everyone on the management team would receive the same bonus based on how Best Buy performed as a whole. How the incentive was calculated also clearly reminded everyone of our priorities during our Renew Blue turnaround plan (chapter 7): growing the top line, boosting e-commerce, improving customer satisfaction, and reducing costs accounted for a sizable part of the measurement.

Not for a second did we believe that anyone would jump out of bed in the morning because of those bonuses, devising while driving to work how to best maximize the payout. So yes, Best Buy had—and still has—an incentive system. But it is not meant to motivate. It is meant to communicate and to share the benefits of the outcome.

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