Many leaders are experiencing this season as the most volatile they’ve ever seen. In the first half of 2020 alone, we’ve seen over 500,000 global COVID-19 deaths, the worst stock market crash since 1987’s Black Monday, the loss of over 400 million full-time jobs globally, and an estimated global GDP contraction of nearly 5%.
And that’s just what we can measure, not to mention the social unrest, political divides, and global tensions threatening trade and commerce.
Right now, we need leaders who can inspire their people during times of great volatility. To do that, it’s helpful to look at examples of powerful leadership in volatile circumstances. These leaders often create stability by aligning the purpose of their people to the purpose (and performance) of their organization.
One such leader is Hubert Joly, as told in a recent interview with McKinsey & Co.
Focus on Performance
Hubert Joly became CEO of Best Buy in 2012 as the company was struggling to compete against online retailers. Critics were predicting the fall of Best Buy as Amazon was taking over. He knew he had to turn the company around by “addressing key operational-performance drivers.” So, he and his team spent three years “on making sure that the soil of the company was fertile.”
In times like these, many leaders focus first on purpose, but he says that’s the wrong way around:
When you start working on defining purpose, the danger is to make it too abstract, too glossy.
No. It needs to be grounded in true customer needs, and true demonstrated abilities to achieve competitive advantage … but also the ability to make money: something that’s very real, tangible, and tightly connected to the growth and profit engine of the company.
The danger of the fact that purpose is very much en vogue, paradoxically, is to put too much emphasis, too early, on it — as opposed to really finding the right time and the right approach to go after it.
The strategy worked. In December 2012, Best Buy’s stock fell to a low of $11.20. By December 2019, the stock hit a high of $89.50, nearly an eightfold increase.
First, performance. Then, purpose.
Focus on Purpose
But how did he focus on the purpose of the organization? There were several components of his strategy — including having a personal purpose, putting people first, and viewing shareholders as customers — but one component resonated with us: purposeful leadership.
“The first thing,” he said, “is to be aware of what drives you as a leader. Be clear about your purpose as a leader, the purpose of the people around you, and how all of this connects with the purpose of the company.”
He then recommends leaders use all their body parts: “their brain, their heart, their soul, and their gut. Especially in a crisis like we have today with COVID-19, using your instincts and your intuition is also important.”
We might call this integrated leadership, when a person or organization uses all the resources at their disposal in a holistic way to achieve performance.
In some ways, that’s why we built Inspire Software the way we did: to finally achieve integrated leadership development to inspire leaders at every level.
How do you know if you’re doing a great job at integrated leadership?
Measuring Purpose and Performance
Joly spent some time discussing how to measure purpose and leadership. There’s a great debate among leaders, especially financial leaders, on what metrics to use in measuring success.
Most people measure profit, but there are problems with that. “I think the key in leading companies,” Joly said, “is to have a balanced scorecard, to have KPIs that are focused on customers, like a customer-satisfaction score or revenue per customer; on employee engagement and turnover; on vendors and how the relationship with them is going; your impact on and reputation in the community; and on financial performance.”
We couldn’t agree more. That’s why the Inspire platform embraces transparent and holistic metrics for everything from eNPS scores to performance management and feedback. Broader views of success and performance help shape a company’s purpose and its future going forward.
Hubert Joly has since stepped down in his role as CEO and stepped into a new role as executive chairman, with the company’s former chief financial and strategic transformation officer Corie Barry leading as CEO.
Best Buy’s announcement of Joly’s retirement summed up his performance this way: “As a result, Best Buy investors have seen significant value during Hubert’s tenure as CEO. We improved our profitability and returned capital to shareholders through dividend payments and share buybacks. Since the end of fiscal 2013, our total shareholder return is 335%, compared to 104% for the S&P 500.”
Now, we know not everything that comprises a great leader can be measured, but for what can be measured, Joly serves as an example to follow in tumultuous circumstances. He helped leave a lasting legacy for his people and was named one of the top 100 CEOs in the world by Glassdoor.
Aligning Purpose and Performance Amid Volatility
At Inspire, we believe every company — and every leader — can achieve great success, even when everything around you seems volatile.
By using technology to help cultivate conversations between managers, coaches, and mentors about goals and KPIs, leaders can stay focused on how the performance of the organization — and its individual people — aligns with a bigger purpose.
We built Inspire to integrate goals, performance, feedback, and recognition as critical parts of creating empowered leaders at all levels of an organization.
We can help you in this season of uncertainty.