The Heart of Business – Leadership Principles for the Next Era of Capitalism

By Hubert Joly

I just finished reading a great book by an inspiring leader, also an alumni of the business school I graduated from – Hubert Joly: The Heart of Business: Leadership Principles for the Next Era of Capitalism 

After joining Best Buy as CEO in 2012, Hubert Joly drove Best Buy’s spectacular turnaround transformation, and built a reputation as one of the world’s leading advocates of defining a business’s reason of being with social purpose and people as a guiding star- to unleash “human magic” and achieve sustainable results. 

I highly recommend this insightful read – it is a brilliant playbook for how leaders and companies can better serve all stakeholders in a new age of inclusive capitalism.

This is not a summary (for more, here is an interview of Hubert with McKinsey) but I wanted to share a few of the quotes that stood out to me.

gold-we live one life

There is no genuine human connection without vulnerability, and no vulnerability without imperfections.

Corporations are not soulless entities, but human organizations with people at their center, working together in support of that purpose. When companies do this, it unleashes human magic, by creating an environment where all employees can blossom and reach their full potential.

Most people around the world feel indifferent, at best when it comes to the work they do or the company they work for. (…) This is a tragedy of unfulfilled personal potential, for we spend a significant part of our lives at work. (…) This is also a tragedy of unfulfilled economic potential, for study after study confirm how engagement positively influences productivity, reduces employee turnover, increases customer satisfaction and profitability and even reduces workplace injuries.

We long to find the one – the dream job that will answer our search for purpose and offer a promise of happily ever after. More often than not, no such Prince or Princess Charming will just show up. I was well into my forties and years into exploring my purpose when I landed on a robust formulation.

I learned to look at feedback as “forward” and to choose areas I wanted to work on: this is a subtle but important distinction: I was not focused on fixing a problem but rather devising what I wanted to get better at.

Profit is not a good measure of economic performance. It does not take into account the impact of a business on the rest of society (…). Profit – like the temperature of a patient – is a symptom of other underlying conditions, not the condition itself. And focusing on the symptom alone can be dangerous. Think of a doctor who is rewarded merely for keeping patients’ temperature within a healthy range.

Doing great work for customers happens when employees relate to these customers as human beings, not walking wallets.

At the very top is a noble purpose. Purpose is the reason the company exists. (…) The purpose of a company is to contribute to the common good and serve all its stakeholders. (…) The architecture I am advocating has employees at the heart of business, creating and nurturing authentic relationships both within the company and also with all of the company’s stakeholders – customers, vendors, local communities, and shareholders. (…) Profit is an outcome of a successful strategy and the quality of the human relationships that drive it.  (…) In summary, this approach is a “declaration of interdependence”. 

The gap between today’s reality and my vision is not between words and intention. It is between intention and practice. (…) Good intentions alone or shortcuts will not result in the required change. (…) It requires a fundamental rethinking of management and leadership.

We also changed management practices by changing metrics. Key performance indicators ought to go beyond financials or rankings. (…) The measures are not perfect. But no measure is, so imperfection is no excuse for inaction.

Framing a meaningful and authentic purpose is not limited to companies engaged in the business of saving lives. “Meaningful” is about making a difference in people’s lives in a way that matters to employees. “Authentic” is about credibility – something aligned with what the company does, that it is able to deliver, and that is at the core of its DNA.

Unleashing human magic by celebrating employees and individuals is at its very core about diversity and inclusion. (…) 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.

I eventually concluded that leaders are neither born nor super humans. I realized I was free to decide what kind of leader I would be. (…) Clayton Christensen gave this advice to graduating Harvard Business School students in 2010: “Think about the metric by which your life will be judged and make a resolution to live every day so that in the end, your life will be judged a success.” This is a good framing to me. To make a choice about the kind of leader you want to be, think about three things: what drives you, the legacy you want to leave, and how to stay the course.

To advance toward becoming a purposeful leader, we must start with ourselves. We cannot be authentic and truly connect with others without deeply connecting with ourselves. And to help people succeed and become the best version of themselves, we have to strive to be the best version of ourselves as well, day after day. So start with yourself. Be the leader you are meant to be. Be the change you want to see.

Any farmer will tell you that seeds planted on poor soil do not grow. You first have to ensure that the soil is good. The same holds true for companies. The first step for companies on their journey to pursue a noble purpose is not always to define the company’s purpose. It may be more appropriate to first focus on creating a fertile environment, making sure that people feel that they exist, that they are seen, that they belong, that they matter. Only then can a noble purpose take root and flourish.

gold-we live one life