Human Connections Drive Engagement and Performance

Question 10 in Gallup’s engagement survey is “Do you have a best friend at work?” I first heard about that question when I was working at Carlson Wagonlit Travel, and I was skeptical. This sounded too fluffy and soft to be of much value. I had been schooled in Cartesian rigor, science, and math. Data. Throughout my years at McKinsey, EDS, Vivendi, and Carlson Wagonlit Travel, I believed that effective leadership was mostly about intellect, rationality, hard work—and yes, being nice as well. But what would having a best friend at work have to do with performance?

Yet it was at Carlson that, slowly, I began to see that best friends at work may be valuable after all.

When I moved from Carlson Wagonlit Travel, Carlson still owned hotel and restaurant franchise businesses. In a restaurant franchise like TGI Friday’s, every restaurant had the same strategic positioning, the same decor, and the same menu. But performance across outlets varied greatly.

What explained the difference in performance was the human factor. How the general manager related to staff informed how staff connected with customers. I saw that when managers created an environment where everyone felt they belonged and mattered, employees gave their best. By the time I joined Best Buy in 2012, I had transformed my position on Gallup question 10. Ultimately, people do not give their best because they are blown away by superior intellect. How much of themselves they invest in their work is directly related to how much they feel respected, valued, and cared for, which happens to be what friends do for each other.

We cannot exist without connecting with others. In fact, a study has identified that human connections are one of the reasons why people in Blue Zones—five areas around the world, including Okinawa, Japan, and Sardinia, Italy—live a longer and better life.¹ Human connections, in this context, include a sense of belonging, putting family first—parents, partners, and children—and supportive social circles. Okinawans, for example, have something known as moais, which are groups of close lifelong friends.

The basic need for human connection became strikingly apparent during the Covid-19 crisis. Besides the explosion of virtual connections through technology during self-isolation and lockdowns, people in places like China and Italy took to singing and playing music from their balconies to remind everyone around them that they were not alone and ease the sense of solitary confinement, which has a significant impact on mental health.

My new conviction in connections at work influenced how I approached my first Holiday Leadership Meeting at Best Buy. With margins and revenues eroding, and our turnaround plan still being formulated, analysts were writing our obituary. I do not remember exactly what I said on that day. If you asked anyone who was there, few would probably recall my words. But I suspect many could tell you what they felt as they listened: hope and confidence, combined with realism and urgency. They remember my tone and energy. I was upbeat and optimistic, and honest too. Everyone in that room felt invigorated but also understood that the analysts were right: if Best Buy did not change, the company would die.

As I stepped down as CEO, and later as executive chairman, it became even more evident to me that my colleagues will not remember how smart I may be or how we executed some plan. What people remember is how I made them feel. What comes through from the heartwarming messages I’ve received is a sense of hope and energy and inspiration.

Although it is now clear to me that human connections are essential to engagement, they’re still not something that business schools and boardrooms think about or talk about much. This must change, as human magic, in the context of an effective strategy, leads to exceptional performance.

I understood why human connections mattered when I started at Best Buy, but it was during my years as CEO that I learned about how to create them. My former colleague Shari Ballard often said that companies are not soulless entities; they are human organizations made of individuals working together toward a common purpose. To unleash human magic, everyone must feel at home, fully valued for who they are, with the space and freedom to be themselves. Only then can people bring their best selves at work. Such environments get created by enacting the following:

• Fostering respect by treating everyone as an individual
• Creating a safe and transparent environment to build trust
• Encouraging vulnerability
• Developing effective team dynamics
• Ensuring diversity and inclusion

This has become a pillar of Best Buy’s strategic transformation and its soul as a company.

Treating Everyone as an Individual

“Make people feel they are big,” said Shari Ballard—a notion I wholeheartedly embrace. And you do this in a large company the same way you would in a small business. Typically, in any company, a general manager has 5 to 10 direct reports and directly interacts with a few dozen people. This was true for me at EDS France, which had 3,000 employees, at CWT, which had 22,000 employees, and at Best Buy with its 125,000 employees. The overall size of the company did not make any difference in my approach. Management should not be viewed as leading masses.

During one employee focus group, a young Blue Shirt pointed out what a difference being seen as an individual made to him. He had been hired at 18 years old, shy and unsure of himself. When asked about meaningful experiences at Best Buy, he immediately remembered his district manager’s visit to his store. The district manager, who had met him when he was hired, recognized him and knew his name. This one small connection left a lasting impression. He wasn’t just a Blue Shirt. He was an individual who was known and who mattered. Two years in, the once shy, unsure kid was blossoming and confident.

When I think back over my dreaded summer job in a grocery store as a teenager (chapter 1), I realize now that no one there knew who I was. I felt like I did not matter, and neither did my actions. As CEO of Best Buy, I did my best to make all employees feel that both they and their job were important.

In Hidden Value, Stanford professors Charles O’Reilly and Jeffrey Pfeffer look at companies that are extraordinarily successful not because they have better or smarter people, but because they’ve figured out how to get the best out of their people and help all stakeholders thrive.² So-called “firms of endearment” recognize the value that each person can contribute, regardless of rank.³ They treat employees the way customers should be treated—with respect and a deep understanding of their needs.

Respect starts with acknowledgment and recognition. French philosopher René Descartes famously said Cogito ergo sum—“I think, therefore I am.” When it comes to creating a truly human organization, I believe there is a more powerful declaration: Ego videor ergo sum—“I am seen, therefore I am.” In Ralph Ellison’s classic 1952 novel, Invisible Man, the main character, an African American man, recounts the many ways in which he experiences social invisibility. I was struck by how poignantly relevant it still is today. In 2016, Best Buy organized focus groups of minority employees and managers. Although most Hispanic and Asian employees were generally doing fine, our Black and African American colleagues did not feel valued or even seen (more on this later in this chapter).

Respect means embracing people for who they are and as they are. After a transgender employee came to the HR team to explain that Best Buy did not cover her fully through her transition journey, the company looked at existing benefits and decided to cover aesthetic procedures such as pectoral implants and facial feminization. Kamy Scarlett, the head of HR, summed up perfectly why we’d made the change when only one employee came forward: “Because she is enough.”

Creating a Safe and Transparent Environment to Foster Trust

On Black Friday 2014, my phone buzzed at 4 a.m. It was Mary Lou Kelley, Best Buy’s head of e-commerce, calling to say that our website was down because of the traffic surge. On the busiest, most important day of the year, this was potentially devastating. There was only one thing to do: pull together and fix it. We did. That holiday season, comparable sales rose for the first time in four years.

When I think about trust, I often think about that phone call. Bad news has to travel at least as fast as good news, and that requires trusting that whatever problem arises, everyone will focus on fixing it, not doling out blame. Trust grows out of supporting each other, particularly during difficult times. Had Mary Lou feared that she might get fired for admitting what was happening, I might not have received that call.

Genuine human connections only flourish when people trust one another. In Conscious Capitalism, John Mackey, the co-CEO of Whole Foods, and Raj Sisodia define trust and caring as two key elements of what they label “conscious culture.”⁴ Without trust there is fear. And fear kills engagement and creativity. Building trust requires four things. First, it takes time. Second, it requires that you do what you say you are going to do. Third, you must be approachable: you cannot trust whom you cannot see. And fourth, you must be transparent.

Kamy and so many other Best Buy employees feel safe sharing their stories, and their openness encourages others to be vulnerable as well.⁵ Safety is a basic human need. Safety was the foundation of former Ford CEO Alan Mulally’s green-amber-red system, which encouraged executives to flag problems and their colleagues to help solve them. When making mistakes or not knowing or just being imperfectly human are seen as weaknesses, no one feels safe.

Alan Mulally is a master at fostering trust and safety by establishing and enforcing a clear behavior code. At Ford, everybody was expected never to use humor at the expense of someone else or criticize someone not in the room. Everyone was expected to fully support the team. The members of Alan’s team needed to feel that they could trust each other to be supportive. Alan had zero tolerance for behaviors that deviated from these rules. He was famous for interrupting his weekly Business Plan Review meetings if he caught people checking their phones or engaging in any side discussion. He would stare down the culprits. “Let us all help you,” he would say, “since you are doing something that is obviously more important than saving the Ford Motor company.” It was a matter of respect, which built trust, and of keeping everyone focused. “That’s okay,” he would eventually say with a smile to anyone who did not live up to the expected behaviors. “You do not need to work here. It’s up to you.”

Encouraging Vulnerability

“Vulnerability is the glue that binds relationships together,” says Brené Brown, who has written several books on the topic.⁶ By being vulnerable and showing up as who we truly are, she explains, we’re able to find compassion, genuine belonging, and authentic connection. And that authenticity, she concludes, is the birthplace of creativity, joy, and love.⁷ The way to create more love and care at work, besides hiring and promoting people who are loving and caring, is to allow love and care to be more openly expressed.⁸

Having company leaders such as Kamy share her struggle with depression signals that we all share a human journey, and people should not hide who they are or be shy to ask for help. CEOs must participate too. When I arrived at Best Buy, I shared with my team that this turnaround was going to be hard and required that each of us be the best leader we could be, starting with me. I told my team that my executive coach, Marshall Goldsmith, was going to gather some feedback from each of them on how I was doing. After receiving feedback, I thanked my team and shared with them what three things I had picked to try to get better at. I think it helped set the tone for the turnaround.

Yet allowing myself to be vulnerable has not come easily to me. Although I am now able to embrace imperfection and feedback, I was brought up believing that professional and personal lives are kept separate and that emotions have little place at work. I am also rather private by nature. When I joined Best Buy, I threw myself into the turnaround and parked the pain of my recent divorce, which had left me saddled with a sense of failure. It took me several years to open up about it to friends, which helped me not only process these feelings and heal, but also show up at work as my whole self. This in turn enabled me to lead with my heart and my gut, and not just my head.

Being vulnerable isn’t the same as sharing everything about one’s personal life, however: the point is to share something authentic, relevant, and helpful to others.⁹ So when, at the Holiday Leadership Meeting in 2019, one employee shared how she grew up with alcoholic parents, did not study past high school, and had been in a same-sex relationship, it wasn’t just a “get-to-know-me” story. The visibly moved employee said these were all things that she had been ashamed of and never thought she would share. But she was sharing her story because it was relevant in the context of the meeting: she had found a home and a safe place at work, which gave her the courage and the space to be herself, trust again, and find forgiveness. She was being vulnerable to encourage and inspire others to be themselves as well and to find their own voice.

Vulnerability like that takes courage. But like this leader and Kamy’s story have demonstrated, when you are being vulnerable in environments where trust has been established and respect is a given, people want to help you. And you are also giving them license to ask for help. This is what builds places in which people support each other and why such companies are often described, like Best Buy often is, as a family.

Leadership requires combining vulnerability with making sometimes tough decisions and giving hope. Marriott CEO Arne Sorenson’s video message to employees on March 19, 2020, in the midst of the Covid-19 pandemic, is a master class in emotional intelligence and vulnerability. He appeared, shockingly to many, without his full head of hair, because of treatment for pancreatic cancer. He first talked about employees directly affected by the virus, offering support. He then explained that the impact of the pandemic and the restrictions taken to contain the outbreak were battering Marriott’s hospitality business.

There was no sugarcoating, but no panic either as he went on to explain what the company was doing to mitigate the crisis. New hires were paused, and costs such as marketing and advertising cut. He would not take any salary for the rest of the year, and his executive team would take a 50 percent pay cut. Work weeks were being shortened around the world, and temporary leave was implemented.

He then focused on signs of recovery in China, which offered hope to the rest of the world. “I can tell you that I’ve never had a more difficult moment than this one,” he said, reflecting on his eight years as CEO of Marriott. “There is simply nothing worse than telling highly valued associates, people who are the very heart of this company, that their roles are being impacted by events completely outside of their control,” he added, his voice breaking. “I’ve never been more determined to see us through than I am at this moment.”

He concluded on a hopeful note, projecting to the day when the global community would come through to the other side of the pandemic, and people would start traveling again. “When that great day comes, we will be there to welcome them, with the warmth and care we are known for the world over.” His message was honest, heartfelt, and moving, while at the same time uplifting and inspiring.¹⁰

Developing Effective Team Dynamics

To create high-performing teams, the best version of every individual must translate into the best version of the collective. And this requires leveraging human connections.

In 2016, Best Buy was transitioning from its Renew Blue turnaround to its growth strategy, and it was time to shift gears from making sure we had the right individuals in the right jobs to getting our teams to perform better. We called in executive coach Eric Pliner to work with senior executives, including myself (chapter 3). Initially, the goal was to improve the performance of each of us, but it shifted quickly because, as Eric says, “the best teams are A teams, not collections of A players.”

We had A players, but we did not yet have an A team.

Eric diagnosed two reasons why. First, the executives tended to have hero mentalities: they were high performers who sought to fix problems, as individuals. Second, caretaking was valued over caring. This is a subtle but crucial distinction. People were kind to a fault, so they avoided delivering hard messages rather than risk hurting a colleague’s feelings.

So first, Eric established where each of us stood on a number of dimensions, such as the need for interaction or control or reflection, or likelihood of becoming emotional, to help us understand how we differed from each other. Then he gave us feedback individually and mapped each of us on a chart. Finally, to make it really stick, he got us to stand in different places around the room so that we could experience physically where we were positioned relative to each other on each of these dimensions. Not only was it fun to see where everyone was “plotted,” but it also gave a visual, and then physical, sense of how similar and different we were.

Understanding each other’s different needs and wiring when interacting with others equipped us to better relate to one another. This did not mean any of us needed to change, but it became much easier to see how we each could irritate someone else and understand the consequences of our own behavior. Live in that room, we moved from “I find it irritating when you do this” to “If I present this differently, we can both get what we need.”

Another telling moment was when Eric asked these senior executives who their primary team was. They all said their primary team was their functional team—whether merchandising, marketing, supply chain, retail, finance, or HR. No one said the executive team—the team doing the exercise—was his or her team. We were still a collection of players. This started changing when Mike Mohan, who was then the chief merchant, affirmed that he needed to make the executive team his primary team.

To strengthen our connections, we also learned to move from caretaking to caring. “I do not want to hurt your feelings” would give way to candid feedback. We practiced with a “continue-start-stop” exercise, telling each other what we should continue doing, start doing, and stop doing when relating to one another. We moved from being “Minnesota nice” to far more open and honest.

Over several years, we invested one day every quarter—about a work week per year—working with Eric on becoming a more effective executive team. If you had told me 20 or even 10 years ago that I would be investing that kind of time in something like building better relationships at work, I would have shaken my head in disbelief. Really? We are going to spend a day or a day and a half talking about ourselves, our feelings, and how we relate to each other? The previous version of me didn’t yet understand how much more valuable it was to invest a week in becoming a more effective team than to spend that time poring over spreadsheets or sales figures.

Promoting Diversity and Inclusion

Unleashing human magic by celebrating employees as individuals is, at its very core, about diversity and inclusion. As I write this in 2020, it has become even more obvious that diversity and inclusion are existential issues that must be addressed. Fostering environments that promote diversity greatly improves employee engagement and company performance.¹¹ Seen in this light, diversity and inclusion are not a sideshow. They are key business imperatives.

When I talk about diversity and inclusion in the context of creating human magic, I mean creating space for every individual to contribute and be valued for who they are, as they are, with their unique perspective and experience. This of course covers gender, race, ethnicity, and sexual orientation. I also include considerations such as cognitive, age, social, and cultural diversity.

Although many companies are committed to becoming more diverse, change has been too slow. We are wired to favor people who look like us and think like us, which perpetuates systemic exclusion, particularly when it comes to gender and race. It takes more than good intentions or a diversity, equity, and inclusion program to tackle existing imbalances. It takes bold and sustained actions. It takes leadership. And it was during my years at Best Buy that I learned the most about diversity and inclusion.

Back in 2012, Best Buy was fairly diverse and representative when it came to its Blue Shirts. But from the store manager level up, everyone became progressively whiter and more male. Women made up fewer than one in five store managers, for instance, and all territory managers were men. The field had traditionally been an old boys’ network, which felt uncomfortable for many women. Few managerial positions were held by people of color, particularly African Americans. The racial imbalance partly reflected local demographics: historically, Minnesota had been on the paler side of the racial spectrum, populated by immigrants from Germany, Scandinavia, Finland, and Ireland. Yet more recently, the state has become more diverse, now home to a growing community of Latino, Somali, and Asian immigrants. That diversity was not reflected at Best Buy beyond the store floors.

We had work to do.

We started at the top. If employees cannot see someone who looks like them among their managers and in the boardroom, they don’t feel they have a shot. And if they feel they have few prospects, they cannot be fully engaged and give their best. I was fortunate to be able to quickly redress imbalances in the executive team. There is ample research confirming that companies with more women in their top management perform better.¹² My long experience working with women had confirmed as much: Marilyn Carlson Nelson had been my boss throughout my years first at Carlson Wagonlit Travel and then at Carlson; when I was in charge of Vivendi Games, I also reported to a woman, Agnès Touraine.

Formidable women soon held key positions on Best Buy’s executive team, from CFO Sharon McCollam and head of stores Shari Ballard to Mary Lou Kelley, in charge of e-commerce, which led Fortune magazine to run an article headlined “Meet the Women Who Saved Best Buy” in 2015.¹³ From experience and study, I had gained insight that helped ensure that women would get noticed and promoted as they deserved. Women’s leadership expert Sally Helgesen and my former coach, Marshall Goldsmith, for example, highlighted in their book 12 habits that often stand in the way of successful women becoming more successful—quirks that are different from those that men tend to exhibit.¹⁴ Women, for example, typically find it more difficult than men to claim achievements or put themselves forward for a job unless they meet every single requirement or more. I distributed Sally and Marshall’s book to all leaders at Best Buy. I wanted everyone to understand we had to put our thumb on the scale to account for differences in behavior. Otherwise, nothing ever changes. In the first half of its fiscal year 2019, 58 percent of Best Buy’s external hires at the corporate level were women. And in 2019, Best Buy named its first woman CEO, Corie Barry.

Revisiting Best Buy’s board of directors was also part of diversity efforts. We needed more diverse skills, perspectives, and experience than we had on our board, to support a major turnaround and then a major growth campaign. Starting in 2013, we recruited individuals who had experience in successfully transforming large enterprises; directors who had a strong focus on innovation, technology, data, and e-commerce; and more recently leaders with experience in the health sector. As I write these lines in 2020, Best Buy’s directors now represent a diverse mix of skills, gender, and ethnicities—all of whom have made invaluable contributions. Out of 13 board members, three directors are African American and seven are women. Effective diversity at the board level is about finding the right skills and building critical mass—not tokenism—so different perspectives and views achieve better outcomes.¹⁵

Racial imbalances among employees turned out to be more challenging to redress. In 2016, focus groups I ran with minority employees and managers made one thing painfully clear to me: our African American colleagues often felt stuck at entry-level positions, with few prospects for advancement. At headquarters, they felt trapped in the call center, hardly ever considered for promotions. Best Buy’s General Counsel Keith Nelsen, as executive sponsor of the Black Employee Resource Group, was batting hard on behalf of Black candidates, but they never got the jobs. Many employees of color were from other parts of the country and felt displaced in Minnesota. They found little awareness or understanding among their local colleagues that their life experiences were different from your average Minnesotan’s.

I was blown away, and frankly hurt, by what I heard in these focus groups. As a white Frenchman living in Minnesota, I had had very limited exposure to the challenges that people of color face. I was also aware that my experience in driving real change when it came to diversity of all kinds was limited. I needed to do more, starting with better understanding the depth of systemic obstacles facing minorities, especially our African American colleagues.

One of the initiatives introduced by Howard Rankin, who drove our diversity and inclusion efforts, was a “reverse” mentor program that paired Best Buy executives with employees who would mentor them to help broaden their understanding of differences. I was incredibly lucky to have Laura Gladney, an African American mother of two working in supply chain management at Best Buy, as my mentor. Our monthly discussions helped me see the world in general, and Best Buy in particular, through her eyes, which helped me measure the weight of history and what it means to be African American in the United States today. I learned how, for example, the once vibrant Rondo community in St. Paul, Minnesota, was eviscerated in the late 1950s and 1960s when the I-94 freeway was built right through its neighborhood, displacing families and killing local businesses. On a more personal level, Laura echoed the view expressed by many of her colleagues about the lack of career development opportunities, which had almost led her to leave the company. She also helped me gain a deeper understanding of Historically Black Colleges and Universities, which made me realize we were missing out on recruitment grounds rich in talent.

At the suggestion of colleagues, I also met Mellody Hobson, the president and co-CEO of Chicago financial management company Ariel Investments, and a director in a number of boards, including Starbucks’s and JP Morgan’s. “You need to put it in business terms,” she told me over coffee in New York. Companies must reflect the demographics of their customers to be able to understand and address their needs. She explained how, for example, many hands-free faucets and soap dispensers in public bathrooms were a source of frustration for African Americans because the infrared technology did not work well with dark skin. In companies full of white employees, no one had thought of testing the technology on darker skins. There is no shortage of similar examples, including Google Photos’ infamous tagging and widespread biases in facial recognition software because of insufficient diversity in the racial makeup of development teams and photo databases.¹⁶

Best Buy’s drive toward better diversity and inclusion has centered on workforce, workplace, suppliers, and community. We expanded our recruitment efforts by widening our slate of job candidates. This has included establishing a recruitment program and scholarships with Historically Black Colleges and Universities. In the first half of its fiscal year 2019, people of color made up 20 percent of Best Buy’s external hires at the corporate level and 50 percent of external recruits in stores.

Yet change is slow. Best Buy typically prefers internal hires, which, while offering many advantages, slows progress on diversity. In addition, turnover remains higher among employees of color, even though the gap has narrowed. There is more work to be done.

Besides pushing for more diverse recruitment, we worked hard to better support minority employees. A one-on-one diversity mentorship program was set up to help advance careers. Diversity and inclusion are now part of how all Best Buy’s officers are evaluated.

Best Buy, like other companies, is also leveraging its buying power to influence suppliers. For example, I encouraged our general counsel to explain to law firms that we expected the teams assigned to work with us to be diverse; otherwise, we would be happy to work with someone else.

Such a push toward diversity invariably leads to some discomfort. Making more space for underrepresented groups is often seen as squeezing other people out. When, in 2016, I mentioned during an address to Best Buy employees that the face of the company, like much of corporate America’s, was still largely “pale, male, and stale,” one employee felt insulted and complained to our human resources department. My words were meant to be self-deprecating—there is no denying that I am, after all, a white man myself—but I apologized.

The way I see it, this gives white males like myself an excellent opportunity to realize how privileged we have been and to feel what so many others have felt in the past. At the same time, the zero-sum-game perspective misses the point that, without diversity, everyone eventually suffers. Just take a look at Lehman Brothers. If it had been Lehman Brothers & Sisters, I am convinced the story would have been very different.

Best Buy has received multiple accolades for being a great place to work for all by the likes of Forbes and Glassdoor. When asked about what makes it so, most employees repeat similar themes: it’s like a family; it feels like home. This is part of why they want to go to work in the morning. That sense of connection stems from respect, trust, vulnerability, and effective team dynamics, as well as diversity and inclusion.

Such strong human connections within the company, added to a sense of purpose, contribute to creating the kind of human magic that creates irrational performance.

Next is the third of our five human-magic ingredients: autonomy.

Questions to Reflect On