Gene One Benchmarking
In 2004, Best Buy was named by Forbes magazine as “Company of the Year” (Stopper,
p.2). The company was recognized as a turnaround situation, from posting losses in 1995 on
revenue of $3 billion to “net earnings of $705 million on revenue of $24.5 billion” (Stopper, p.2)
Best Buy believed, to continue growth its philosophy would need to focus on
innovation and meeting customer needs. In 2006, Best Buy reported “net earnings of $1,140
million on revenue of $30.9 billion” (Stopper, p.2).
Walden, EVP of Customer Business Group, attributed these gains to a change in
company vision and philosophy. In order to meet customer needs, changing market conditions,
and unique requirements of local markets, Best Buy changed from a centralized and institutional
model of retailing to a decentralized model. Over a two-year time frame, the company evolved
its culture to empower store managers with decision-making authority on how to best meet
customer needs in local markets. In addition, Best Buy’s philosophy embraced employee and
customer input to closely evaluate customer preferences. Best Buy initiated the culture change
with five pilot stores, which remain in existence. New concepts demonstrating positive results
are quickly communicated throughout the company. Walden contends that implementation of
employee ideas motivates employees to give further input. In addition, observing financial
success assists the company to embrace the culture change (Stopper, p.3).
Walden, (as cited by
Stopper, 2006) states, “We really believe that employees and customers deserve to know that
their ideas are considered and where possible, acted on first, at the local level and then perhaps
throughout Best Buy” (p. 5).