Client Story: Best Buy 2018-11-08T16:12:16-04:00
Becoming Customer-Centric
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Summary

Best Buy’s transformation centered on a sweeping effort to create a customer-centric organization. To help bring about and manage that change, and its impacts on the supply chain in particular, the consumer electronics leader leveraged Applied Learning’s Knowledge Maps. Below, Best Buy Director of Operational Transformation Melvin Mitchell explains how his company is using supply chain Knowledge Maps to help individual employees understand why the change is necessary, how it is reshaping the supply chain and what their roles will be in the new supply chain.

How Best Buy Visualizes Customer Centricity

Best Buy wrote the book on organizational change.

 

In the prior decade, Best Buy initiated a change effort that ultimately elevated the consumer-electronics company from a $5 billion retailer with moderate profits to a highly profitable $27 billion powerhouse routinely recognized as a top performer among the world’s best companies. The success of that change effort is described in “Big Change at Best Buy: Working Through Hypergrowth to Sustained Excellence” (Davies-Black Publishing).

 

The book’s co-authors report that Best Buy’s senior management team understood a crucial component of bringing about change: “Before people can shift their motivations, they typically ask three very important questions: Why is this important? What’s in it for me? Can I be successful? To be ready for change, people must develop a compelling conviction that there are positive answers to these questions.”

 

The company continues to apply that understanding to change management efforts. Its current “Customer Centricity” effort leverages Applied Learning’s Knowledge Maps.

 

The goal of the new strategy is to enable the company to continue to compete very favorably on price while differentiating itself based on its rich collection of customer information. The company carefully scrutinized that deep reservoir of knowledge to reinvent how it segments customers and to develop highly attractive value propositions for each of its customer segments.

 

“A central component of Customer Centricity is anticipating and satisfying our customers’ unique needs with the right solutions,” explains Best Buy Director of Operational Transformation Melvin Mitchell. “A customer may shop for a digital camera, but that purchase typically stems from a desire to capture and share memories with family and friends. So, the solution they need extends beyond the actual camera. How can they store and share those memories on their computers, in scrap books and through other means?”

 

The Customer Centricity strategy seeks to remove complexity from the consumer-electronics purchasing experience. The strategy can be distilled to a simple commitment: delivering the right solution, at the right time, at the right price.

 

There are many different changes that support Customer Centricity at Best Buy. For example, individual stores will be designed and stocked in ways that appeal to the customer segments that they serve; and employees will be recruited, developed and rewarded to strengthen the company’s ability to meet customer needs.

Q & A with Melvin Mitchell

Best Buy Director of Operational Transformation

Best Buy was drawn to customized Knowledge Maps, in large part, because they can show employees why the change is important, what’s in it for them and how they can be successful.

How is Best Buy’s supply chain affected by the Customer Centricity transformation?

 

Melvin Mitchell: Customer Centricity requires several changes within our systems and processes. In the past, you could walk into almost any Best Buy store in the country and see the same products, product groupings and design scheme. We now know that not all customers want the same products or the same bundles of products; nor do they want the same shopping experience. Our Customer Centricity effort recognizes that we need to differentiate our products, assortments and service offerings according to the needs of different customers who shop at specific stores. We need to deliver the right solutions, at the right time, at the right price for each of our customer segments. For that to occur, we need a much more nimble supply chain.

 

How did Knowledge Maps become part of Best Buy’s change effort?

 

Mitchell: I first saw an example of this visual approach to change management several years ago while working in executive development for Norwest Corporation. I knew I would revisit the approach in the future. When we started the transformation around Customer Centricity, I mentioned the Knowledge Maps approach to a couple of colleagues here. Then, a few weeks later, I overheard our executive vice president of operations, Bob Willett, talking to people in our communications department about the difficulty of conveying to the organization how our supply chain needed to change. I very clearly heard Bob say, “Well, we need to show them a picture, don’t we?” My ears perked up. After I explained the concept of Knowledge Maps, Bob said that it sounded like exactly what we needed.

 

What do you hope to accomplish through your use of Knowledge Maps?

 

Mitchell: We believe that there is a crucial education, training and communications piece necessary to bring about our transformation to Customer Centricity. The Knowledge Maps are a part of that. We want people in our organization to know exactly what the future supply chain will look like: Why is the change necessary? What are the components of the new supply chain? How will it operate and how will we measure its success? Most important, we want people to understand where they fit into the new supply chain and how each of them, as individuals, directly or indirectly affects the supply chain.

 

What attracted Best Buy to the Knowledge Map methodology?

 

Mitchell: Many, many people are visual learners, and the Maps appeal to the visual sense. More broadly, the Knowledge Maps appeal to people at many different informational levels. It’s an educational tool, a communications tool and a tool that helps enable cultural change. The process delivers a visual picture of the necessary change and a guided, but very natural, discussion about change. Most important, our employees bring to the discussion their knowledge and expertise from various parts of the organization. That helps cultivate a better understanding of the change among all of the employees involved in the activity. The exercises and the script are very well thought-out and very well orchestrated to train and educate people. You can deliver a very concise set of messages without engaging people in a one-way conversation or boring them. You can also use this process with individuals from any level in the company.

 

How have the Knowledge Maps helped employees understand how the supply chain is changing and their role in the new supply chain?

 

One of the exercises relates to what we at Best Buy call “the space in which we play.” The phrase refers to the part of the organization in which each of the individual employees operates. In each session, our people are asked to find that space within the supply chain Knowledge Map. That has helped our people understand and describe their contribution to the supply chain and how their roles affect other segments of the supply chain. After conducting that exercise, we engage participants in a Knowledge Map process called “From-To.” Each group participating in the session – that includes the retail group, merchandising, inventory and logistics – is asked to describe their supply chain contributions within their area; that represents where they’re coming from. They are then asked to describe where their group is moving to in terms of its supply chain contributions.

 

For example, our supply chain in the retail area is moving the company from a standard assortment of products and services to a customer-segment-driven assortment of products and bundled solutions. The “From-To” cards really illustrate the implications of the supply chain transformation to our individual supply chain professionals: they learn what it means for them, and then they discuss those changes with each other.

 

Have employees experienced any “ah-ha” moments while using the Knowledge Maps?

 

A couple of things come to mind. When we first laid out the steps of the supply chain on the Map, we actually placed the store at the center of the illustration. We quickly saw that this was an outdated way of thinking: our stores represent just one of several ways we reach our customers. So, we placed the customer segments in the center of our Knowledge Maps. We also realized early in the process that it is extremely helpful to present the Knowledge Maps and the related conversations to a heterogeneous group. The learning is more robust when you have people from several different departments in the same session. That way, when you conduct the “From-To” exercise, someone from each part of the supply chain is on hand to explain how the processes work in their area of the organization. As a result, we’ve heard a lot of employees say, “Ah, so that’s how it works in that area of the company — I didn’t realize that.”

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