- I'm thrilled to introduce our next CES keynote presenter, Best Buy CEO Corie Barry. Corie took over as CEO in 2019 after 20 years at the company. Her commitment to the organization runs deep. She knows what it means to build and grow a great team. I am continually impressed by Best Buy's ingenuity. Recently, I wrote a book about how to succeed in our 21st century innovation economy. I talked about how technology is rapidly transforming the world around us and how we must embrace change and think like ninjas to succeed. Time and again, I looked at Best Buy as a shining example of what it means to be a ninja innovator. From folding in Geek Squad into its core business in 2002 to acquiring health company GreatCall in 2018 to offer senior-friendly tech products, Best Buy is synonymous with innovation. For more than 50 years, it has been the place for consumers to experience the latest from the CES show floor on retail shelves. And Corie is committed to delivering on Best Buy's promise to enrich our lives through technology. Corie will be joined by Alan Murray, President and CEO of Fortune, who shifted from the Wall Street Journal editorial board to head and grow the Fortune Media Empire. They'll talk about Corie's vision for the future of tech, leading through a pandemic and why diversity and inclusion are critical in today's innovation economy. Please, join me in welcoming Corie Barry and Alan Murray to CES.

- So Corie, it's such an honor to be with you today, and it's been an honor to get to know you over the past year, but I have to say you picked one hell of a time to become a CEO.

- You never know what you're walking into in these jobs, Alan. And likewise, it's been a pleasure to get to know you and thank you for taking the time today. But, I think every new CEO would say, the first year was unexpected. I will tell you the first year was incredibly unexpected.

- You have a story to top all of theirs, I'm sure. So look, I want to talk to you here about the products and how consumption habits changed because it's a great window on technology usage. I also want to talk to you about the business and how your delivery of those products change. And I want to talk to you about leadership, but let's start with the products. What did you see after the pandemic hit?

- Yeah, there were really three things that we saw almost immediately. So the first was our hypothesis around enriching lives through technology became instantly the reality for every single person, meaning all of a sudden we were all stuck at home on the backs of technology, for anyone with kids, your kids literally overnight, were learning from, for anyone with large corporate offices, all of your employees were likely working from home. We were entertaining from home, we were cooking, everything overnight became available on the back of technology, even connecting, just having conversations like this. And so that was the immediate need that we saw, hence, the reason we felt it was so important to continue to provide those products to our customers. Now, the second thing we saw though, is the way in which we were going to provide those products to our customers was instantly different. People took immediately to more digital means, they were researching digitally and they were immediately using all the digital tools at their disposal. And we went to curbside within the first three weeks of March, but we also saw the customer going immediately to those digital means. And the third thing that we saw literally overnight is that our employees needed to work differently. So whereas we went into the pandemic with very structured jobs and responsibilities; you cover home theater, you cover computing in the store. Again, overnight because we switched to a curbside model, everybody was pitching in to just get the gear to the customer that they wanted. So that meant we had an incredibly more flexible workforce but we did it without really thinking about it, we did it overnight. And each of those things has remained true since literally those early hours that we switched our operating model, they've in fact, has grown in terms of their importance.

- I want to talk about each of those in a little more detail, but let's start with just needing the gear to operate from home. We all know the stories about toilet paper shortages, did you have shortages? Were there products that you simply didn't have the inventory to meet the demand?

- Yeah, we definitely talked about that, so in our first quarter, like I said, we moved to curbside and we scaled back on some of our inventory responsibly because all of us weren't sure exactly what the world would look like on the other side. As we headed into June, we opened our stores back up to traffic and immediately we saw that business ramp and ramp at levels we had never seen before. And of course, when you have that demand-supply imbalance, you just can't keep up with it. And I think most of the people watching would realize you literally couldn't even manufacture fast enough to keep up with it. And so unfortunately in some of the key areas around especially that working, learning from home, but also importantly, some of that cooking and entertaining from home, you just could not keep the gear. I mean, nobody knew there'd be a run on webcams, that was quite at the pace that we saw, and yet, suddenly it became the hottest item that we had. And so it definitely was a challenge to make sure we had all the Europe people wanted.

- Any other big surprises other than webcams things that, you know, suddenly everybody wanted that you weren't expecting?

- I think it wasn't so much the things, especially as the pandemic has worn on, it was creating the more fulsome solutions. So it started with computers, and everybody wanted the computer. And Alan, you know, as we were all stuck home staring at the dot in our computer, we realized, oh no, I do need a webcam, so I may be perhaps look just a little bit clearer on the other side. And then I wanted speakers or a microphone so that I was clear both in what I was hearing and what I was saying. And then I wanted a nice ring light, so that at least I looked maybe like I was stepping out of my office occasionally. And it was more this idea that as you had more time to think about what the best experience might be at home, then you started bolting on the ancillary products. And I think that part was really interesting. I think the other thing that was interesting is how much people needed to entertain at home, and what a demand there was on whether it was home theater so that you can stream everything you wanted or gaming, which, you know, everyone had kind of been waiting for new gaming console launches. And yet even in that interim while people were waiting, they were looking for anything they could do with their, in my case, 14-year-old boy to help them entertain themselves at home and not drive you crazy.

- So, you know, one of the things that people have said about 2020 is that everything accelerated , sort of every trend that was in place suddenly became twice as fast or three times as fast. And of course, one of those trends was the move away from in-store commerce to online commerce, but hybrid became really important, I mean, can you talk about that? How did you compete with purely online channels that were selling the same products?

- What are the most interesting things that we saw even as our online sales ramped and, you know, as of Q3, they were 175 percentish, 40% of those sales were still being picked up either in our stores or curbside. So there was this real demand to be able to come to the store to get this item when I wanted it, where I wanted it as fast as I wanted it. And so for us, what became really interesting, we had a hypothesis, we had an investor day just over a year ago, and one of the things we said is, we assumed this digital penetration was going to increase, and therefore, we needed to double down on our fulfillment mechanisms. And importantly, we needed to put the customer in control. And to your point, what we thought might take three to five years to penetrate this highly happened overnight. And so one of the greatest things was all of the supply chain investments we've been putting in for literally four years, we flexed all of those up to meet that large-scale demand. But what we also did is we put the customer in control and whether the customer wanted it on their couch, whether they wanted it at curbside, whether they wanted it at the counter, that needs to not matter to us, we need to agnostically meet that customer wherever they are. And I think that's going to be the future for sure of retailing.

- Was it hard to get the stores on board for that?

- You know, what was amazing is there's something very unifying about a pandemic. And what I mean is when you're so worried about your employees safety, your customer safety and making sure people get what, you know they fundamentally need to live, that's a very unifying factor. And all of a sudden you worry a lot less about which channel is it happening in, which store is it happening in, and some of the real magic is watching the unification of our efforts against very common and honestly, very basic problems.

- Yeah, so many great stories about that over the year. It's kind of like the pandemic caused risk aversion to evaporate, because risk then became out there, we knew what risk was. It was the coronavirus and everything else was unified in trying to figure out the solutions. I can't tell you the number of CEOs I've talked to over the course of the last year who have said a version of what you said, which is we did things in, we did things overnight or in weeks that we thought would have taken us months or years, amazingly innovative period it was an amazingly tough period.

- You're absolutely right. And it wasn't just that it was innovative, it's that companies also learn how to iterate. And especially as a large footprint retailer, I mean, there are many companies that are represented at CES who are very used to iterating and using more agile models. But as a large scale retailer with almost 1000 physical touch points, we don't iterate incredibly well. And yet to your point, overnight, not only did we launch new ways of working, we had an incredible feedback loop with our stores or an incredible feedback loop with our customers. And as we heard how they wanted to interact with us, then we would change and move again. And that part I give our teams more credit for than anything. This idea that it wasn't just, you launch something, you actually kept working at it until you felt like the solution was right.

- Having learned what you learned in your incredible first year as CEO and knowing that much of that is going to stay learned, we're not going to revert to 2019. When you look toward the future, what is the role of the physical store in serving people's technology needs?

- I think it's going to be more broad than it's ever been, meaning the store is going to have as we just talked about, a massive role in fulfillment, and you're going to need to enable the store to quickly and easily get that customer whatever they need in whatever timeframe they want it. Do they want it same day? Do they want it within an hour? Do they want to come in the store? Do they want to get at curbside? Are they okay waiting for us to ship it? So this idea of stores as fulfillment epicenters is really important, but they also have a real experiential need to fill in our case, we definitely noticed as soon as we opened our stores back up, the places where our customers gravitated were those more complex sales, they wanted to have that interaction. So when they came to the store, they had high expectations for what that interaction and consultation would look like. And then finally, in our case, the store plays a very important role in support and help. And when I need that support, when I need someone to make sure that this thing keeps working and is up and running for the longterm, our stores play a really vital role in that. And that is a very hands-on experience, help me understand what's not working for you and will help make it better. And so I think there's going to have to be equal parts.

- We talk about all this incredible year we've just lived through as an accelerant of so many trends, including particularly the digital trends. But how do you predict what happens now? Are we going to slow down again? Does the acceleration continue? Have we picked up the pace of technology adoption? How are you foreseeing the future?

- Yeah, I think there isn't a world where people revert back to their, as you said, 2019 behaviors. And part of that is just a comfort level. Like I always joke, I knew the world had changed when my dad started getting his groceries ordered online and picked up at curbside, right? He was never going to adopt that readily or at least it was going to take a lot longer, but he was forced to. And now that he's comfortable with that curbside experience, he's more comfortable with curbside experiences in general. Telehealth has been another great example. We've gone through years of trying to push the consumer to adopt telehealth methodologies. And again, overnight, because it was required you have a much deeper penetration of people who understand how to use telehealth tools. And I think it's this comfort level more than anything else that we'll continue to push the envelope. Now what's interesting is once you have a great experience with one retailer or even one provider of any kind, you expect that experience from everyone else that you deal with. So if I have a great curbside experience at Best Buy, I'm going to expect everyone else can deliver that kind of curbside experience. And so I think customer expectations will also be raised in terms of what they can get done digitally but importantly, in whatever way they want.

- We're already seeing that across the board, aren't we? A gap between the people who do it well and the people who don't do it quite so well, I mean, you must feel that in your business pretty clearly.

- Yeah, and I think it's also a bit of a gap in what the investment profiles looked like over the last, you know, five, 10 years, because if you hadn't been investing heavily into those digital experiences but also into that fulfillment infrastructure, it's very hard to make the kind of movement that you need fast enough. I want to talk to you about leadership because Best Buy has always had a very well-deserved reputation for purpose-driven leadership, but that has to really come under the test when you have a year as challenging as 2020 was. So can you talk about how your purpose guided you through this year? What impact it had on you as a leader and also what impact it had on the company?

- I actually think those that went into the pandemic with a very strong sense of purpose were able to double down on it in a time of crisis, because I think clarity of purpose provides clarity of direction in a time of crisis. And so for Best Buy, our purpose is to enrich lives through technology. And we believe that's not just a tagline, we believe that's fundamentally what we're here to do. And so that's our company purpose, but we have also talked a great deal about our social purpose, what are we here in a balanced way across our constituencies to do in the way that gives back to our communities, it gives back to our country. But there's also our personal purpose. At the Best Buy, we've talked about how do I tie my purpose into that of the company? And when you find an intersection between the company, the social and the personal purpose, there's great power in that. And in a time of crisis, the clearer you are about the intersection of those things, the more quickly you can make decisions and pivot. So an example being, we strongly believe we're here to enrich lives through technology. So that meant as the pandemic hit, and we knew our customers needed the things that we had, then how do I find the safest way to do that so I can fulfill my social purpose, keeping people safe, which was our first priority, and that's what drove us to a curbside model.

- Yeah, that's so interesting. And frankly to me, a little bit counter intuitive, I mean, if you would ask me in March, I would have said that what I was going to expect to happen is that everybody was going to be focused on the bottom line, because the bottom line was deteriorating fast. I mean, your stores were suddenly all closed, they weren't selling anything. You look at the bottom line and you say, "Holy crap, I've got a problem here. "I'm going to put purpose off to the side, "I'm going to put all the stakeholder capitalism stuff "on a back burner and deal with my short-term problem." Why didn't that happen?

- I think it's about as it always is finding balance amongst those constituencies. So when it's something as base as people's lives are at stake, that's going to drive you to strike a different balance between this very near term financial outcome than almost any other competing factor. And so for us, we set three principles right at the beginning of the pandemic. And it was to keep employees and customers safe, it was to protect the employee experience as much as we could for as long as possible. And it was to come out of this, not just a vital company, but at vibrant one. And in all decisions, we were trying to strike the balance between those things. So trust me, make no mistake. We were anchoring hard on the financial decisions we needed to make to keep this company, like I said, vital, but ultimately vibrant. But we also knew based on what we were hearing from customers, that if we took care of them today in the moment, that would be very important for our brand over the longer term. And my job is not just to maximize the cashflow, the profitability of a quarter. Our job as leaders is to make this a vital company over the longer term. And that's not just about that one moment of, you know, inch of more profit, that is about the credit you get with your customers over the longer term because you're prioritizing their safety.

- Corie, one of the things that happened during this tumultuous year when so much happened was the killing of George Floyd, which really shone a spotlight for all of us on problems of diversity and inclusion in the country as a whole but also got a lot of people thinking about diversity and inclusion in business. What effect did it have on you at Best Buy?

- One of the things that's always been core to our value system is the importance of inclusion and diversity. And frankly it's because it is an imperative we reflect our communities. We have almost 1,000 stores all over this country in a variety of communities. We need to reflect every customer that's coming into our stores. That being said, I think every one of us also know it's been proven time and again, diverse teams produce better outcomes. And we said boldly to our customers, all of them, we will do better. And we meant it both on a company level but also a community and a country level. And that means under-representation in our own business, but it also means overcoming technology inequality. It also means making sure that there are job opportunities for people who need it most. And so we took time with our employee base and really listened lots of open forums, many of the things I know many of the people that are listening are doing as well. And we just came out with and our team helped us create a series of bold commitments. And what we've said is one out of every three non hourly corporate positions will be filled by a BIPOC employee, a black, indigenous, person of color. One out of three non hourly field roles will be filled by a female employee, a woman in the field, and we're targeting those, those are I think our real targeted efforts to address the places where we see gaps in our own company. And then we're going to foster retention that reflects interestingly. And we want our senior leadership team to reflect our board composition. Our board is over 50% female right now, about a quarter people of color. And we believe all of our leadership teams should reflect that. But also outside of these walls, we're going to reach 30,000 teens through a network of 100 teen tech centers. We're going to provide $44 million to expand student college prep opportunities and adding 16 scholarships to HBCU colleges so that we have that pipeline of opportunity. Then here in the Twin Cities, back to our own community, we are going to provide opportunities for teens here to go through these teen tech centers, go through scholarships that we provide and come back into this company and guaranteed internships and jobs. And so I think if there's any, I could go on and on because there's organic efforts, and I think that the point here is we feel strongly that we need to continuously think about ways in which we can set the goals for real change, not just here but across our country. And I think the message that I have is one of resilience in this work. It is not just about this year or this moment in time. It is about how each of us continuously is iterating and thinking about how we drive change for the long term.

- Yeah, very interesting. So, Corie, I'm going to ask you to pull out your crystal ball for us. Let's just forget 2021. Take me to 2022, how does your world look different in 2022 than you thought it was going to look when you became CEO a year ago?

- I think we're much further down the pipe than I would have guessed on adoption of and frankly pull on starting with digital experiences. And that means, you know, for many retailers, we tend to start with humans. We're just so geared to start with humans. And instead, this digital first mentality is embedded in all the decisions we're making now. And by 2022, I believe it's exactly how every consumer will for sure start their journey on what they're trying to get done in their homes. I also think, and you hit on it this idea of the penetration of consumer electronics writ large in people's homes and in the way they live is wonderful for all of us. Because what's great about CE, it's innovative, it's disruptive in a very good way, and it's competitive. And that means that in the next, you know, small span of time more will be done to innovate, more will be done to disrupt in a good way, more will be done to compete. And that will only provide the consumer with more options in their homes. And I think for all of us that accelerated adoption in a way that's really powerful, and will continue to allow us the room to innovate and really help consumers understand what cool things they can be doing in their homes.

- Yeah, and how about you as CEO? How will you act differently in 2022 than you might have had you not lived through the last year?

- It's interesting, I think I have a personal hypothesis that my job as a leader is to create the conditions for other amazing leaders to be successful. And doubling down on that point of view in the last nine months or so, I think has been a huge component of our collective success. Meaning when you unleash other amazing people to do great work, they will organically do more than you ever thought possible. And I think it's been so rewarding to watch, but it also provides a bit more confidence that no that feels like the right way to go. And so I think for me as a leader, doubling down on what I feel is important, that authentic approach to leadership, which has really resonated, I think in a time where our teams for sure want to understand really how we as leaders are thinking, feeling and acting. I think that will inform perhaps what looks like a slightly different leadership team of the future versus where we have been in 2019.

- Yeah, I've also heard a number of people. I mean, it builds on what you're saying, a number of people say that the crisis has forced them to be empathetic in a way that they were not fully accustomed to the kind of conversations they have found themselves having with their own staffs are very different and they're much more involved in the health and well-being of their employees than they were before. Do you notice a difference there, or was that something that you've always been on top of.

- Let's just say heading into the pandemic, well, before it started, we had four leadership behaviors and we called them our inclusive leadership behaviors. As we strive to create an inclusive environment, where everyone genuinely feels like they belong. And the behaviors are vulnerability, empathy, courage and grace. And if there's ever been a period of time where we have doubled down on what we already felt, kind of in the soul of our best by being, it's been nine months. And so for me, it feels less like a change in how I or the rest of the leadership team are leading. It's more of an emphasis that what we thought to be true, it turns out really against you.

- Hey, Corie, every CEO I've ever interviewed has told me that there were things they learned in their first year on the job that were incredibly important and that they weren't prepared for, that the job is different than every job you hold up to that point, and there are some big, important breakthroughs that happen. Well, what would you say is the one thing you have learned in the last year that surprises you, that maybe you weren't fully prepared for it?

- No matter how much you think you know about how you will lead in this role, you genuinely have no idea until you see the challenges in front of you. There is no way I could have walked into this job thinking, here's exactly how I will lead through a pandemic. And the pure nature of there being millions of books on leadership means no one's done it right, no one's said it perfectly, no one's got the answer. And so for me, it was really embracing this idea that there is no playbook and you need to double down as a leader on what you hold dear on what's important to you. And that actually authentically is what will help you be successful.

- One last question for you, we all track to Las Vegas every January, partly to see the just acres and acres and acres of new products that have been put out, partly to see each other and to have the opportunity to be together and talk about trends and to be inspired. And we can't do it this year, what are you doing to replace that? What are the tools you can use to stay on top of the zeitgeists and what's going on in the industry?

- Yeah, one of the other big learnings I had over the last year, Alan, is this idea of looking outside. You can get very insular as a company and certainly as a leader, because there are so many polls on your time, but prioritizing the time to look outside. And so for me, that can come in a variety of ways. I am a voracious online researcher and reader. And so I follow every single publication that is geared toward what's the newest thing, what's the coolest thing, what's the thing you should take a look at. And so I use all those tools, but I also as best I can, I try to just get out there and look and see what else is out there. You know, I always find our stores to be hubs of inspiration. I never know exactly every single skew that's sitting in one of our stores. So taking the time to walk through, talk to our associates about what they love and what their customers are asking for, but really prioritizing time outside of kind of the insular walls of what we already believe to be true. And instead pushing myself to experience as much as I can, the way other people are working, the things other people are using, and then the newest and latest and greatest, that's why I'm so excited, we're still having this event. It doesn't have to look the same. It can still inspire.

- Corie Barry, thank you so much, fascinating conversation. Hope to see you in person maybe in Las Vegas a year from now.

- Thank you so much, Alan. It was an absolute treat, I really appreciate it.


 

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