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Big Change at Best Buy

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Big Change at Best Buy

Working Through Hypergrowth to Sustained Excellence

Nicholas Brealey Publishing,

15 min read
10 take-aways
Audio & text

What's inside?

How to turn around an about-to-fail company when everyone resists change.

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Editorial Rating

8

Qualities

  • Applicable

Recommendation

Elizabeth Gibson and Andy Billings warn readers that this corporate biography is “a book within a book” that tells two stories at once. In the first story, they explain how big-box retailer Best Buy shifted from slow growth and corporate stumbling to great success. For the second narrative, they offer a manual about the change management principles involved in guiding an organization through a substantive transformation. The authors do both well, but ultimately prove better at covering Best Buy in particular than handling change overall. While talking policy, they may generalize, drift into platitudes and exclude the details that brighten their lively examination of Best Buy’s revival. That aside, this solid piece of reporting features numerous, illustrative accounts of corporate change successes and failures. The details of Best Buy’s change process will inspire businesses of any size to attack stagnation. getAbstract recommends this detailed, entertaining dual package to business students, investors, entrepreneurs, Best Buy stakeholders and customers, and any businessperson interested in retail, growth, change and corporate culture.

Summary

How to Initiate Change

By 1996, Best Buy was a large, successful company with more than 270 stores in the United States. The big chain moved fast, tackling new projects with confidence and aggressively pursuing its goal of becoming America’s biggest “consumer electronics retailer.” Then the company stumbled badly. At times, its leaders feared they would fail. Instead, Best Buy found its way to new functionality and profits. Examining its path from the heights to the depths and back teaches valuable lessons about the nature of change.

Between 1991 and 1995, “Best Buy opened 212 stores,” averaging more than 40 a year. But problems lurked. In 1996, Best Buy’s revenues were “$7.2 billion” – but its profits ran only .7%. Stores often started strong and then lost money. The chain’s management practices spurred explosive growth, but failed to produce “sustained profitability.” Given Best Buy’s highly competitive market, challenged by competitors like Circuit City, something had to change. Best Buy’s problems included a lack of standardized practices. Managers ran their stores their own way, with no oversight and no motive to implement corporationwide changes. Many change...

About the Authors

Elizabeth Gibson is principal at Elizabeth Gibson Consulting Group. She co-wrote A Practical Guide to Knowledge Acquisition. Andy Billings is VP of Profitable Creativity at Electronic Arts.

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