I’m a huge fan of Brad Anderson, the soon to retire CEO of Best Buy, the consumer electronics giant based out of Minnesota. Under Anderson’s vision and leadership, he positioned Best Buy from being a commodity player to being a customer centric business. For example, in my book Without Warning, I praise Julie Gilbert and her leadership efforts in the formation of WOLF (Women’s Leadership Forum). Under Anderson, he encouraged his organization to take risks and supported them in their effort. WOLF for instance on every dimension was brilliant and risky. I state:
The idea for WOLF struck Anderson as being “highly eccentric, very unusual and brilliant. Anderson further realized that WOLF would be incredibly contentious, because anything that matters is.
Well earlier this year, Best Buy cut 750 jobs at corporate headquarters through layoffs and voluntary programs offering generous severance packages. Julie Gilbert, along with many other talented leaders took the buyout. Yesterday, news reports surfaced that Best Buy notified workers of a new staffing model. Brokerage firm Sanford Bernstein informed clients in a note that 8,000 senior sales associates will be demoted to regular sales positions which would pay about half of the hourly rate. They also estimate that approximately 1,000 assistant store manager positions would be eliminated.
What does this mean if anything?
First, the comparisons to Circuit City’s similar program which failed miserably obviously pops up. Time will tell. Two, it’s apparent that Best Buy sees new competition coming from the likes of WalMart and Target. Third, the potential for failure is high, since it places Best Buy’s premium service position at risk.
Will new cost cutting measures impact service and customer satisfaction?
Personally, Best Buy is pursuing the path of many failed enterprises. Short term gains will likely turn into long term losses. Beware…
