When Hubert Joly took on the CEO role at Best Buy in 2012, it was being pummeled by Amazon. Naysayers had all but written off the company. Then, he ushered in one of the greatest revivals retail has seen over the past decade.
By the time Joly announced he was stepping down as CEO in April, Best Buy had achieved same-store sales growth for the past eight quarters. By the latest fiscal year, it had already achieved the financial targets it set for fiscal 2021.
But back in 2012, people thought he was "crazy or suicidal," remarked Joly, speaking Wednesday to CNBC's Courtney Reagan at CNBC's Evolve Conference in New York.
"I felt there was enough assets to be able to effectuate a turnaround," he said, citing Best Buy's products, its stores and its associates as the assets he identified.
But first its workers needed to be empowered. Joly gave associates the ability to match prices in stores to those found online, helping to prevent shoppers from checking out its products in stores before buying it more cheaply on the web.
He partnered with technology companies to ensure Best Buy was offering some of the most innovative products.
Notably, these efforts were focused on driving sales, a task some turnarounds can neglect in favor of rashly slashing expenses to stabilize a business.
"My personal philosophy of turnaround is you first focus on increasing revenue," explained Joly.
That didn't mean he neglected costs. He said he cut costs by roughly $2 billion, but did so without the sacrifice of employee morale.
"Eighty percent of cost structure is not salary," said Joly, who said he focused first eliminating waste and inefficiencies.
Not firing anyone too quickly also helped to make sure the best leaders were in place. "The most important thing we do is not the ideas we had, it's who we put in position of leadership," he said.
Once the company had steadied itself, it had to identify its next steps, Joly said. "After the turnaround we paused [to ask ourselves] – what do we want to look like we when we grow up?"
Best Buy decided it not only wanted to sell technology, but it wanted to "enrich lives through technology," which "vastly expands the addressable market."
As example, Best Buy now offers a home advisor program where employees go to a customer's house and advise them on what products would make the most sense for their lifestyle. That service is particularly compelling for customers, like seniors, that may have a difficult time getting to stores.
Best Buy has also moved further into technology through dealmaking. It acquired GreatCall, a health-services platform that focuses on personal emergency response services for senior citizens for $800 million in August 2018. Earlier this month, it acquired senior remote monitoring company Critical Signal Technologies for an undisclosed amount.
Best Buy also plans to open a "dedicated fitness space" to sell exercise equipment such as Flywheel spin bikes and connected treadmills.
Joly announced in April he was ceding the chief executive spot to Corie Barry, a move that went into effect earlier this month. Joly will serve as the company's executive chairman.
"I felt I had achieved quite a bit since I had taken over," explained Joly, also noting the company's investors should have a CEO with a few more years in him.