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A leading innovation and marketing blog from Braden Kelley of Business Strategy Innovation

Thursday, March 11, 2010

Listening to Employees is a Best Buy

by Robert B. Tucker

Listening to Employees is a Best BuySeveral years ago, the Wall Street Journal reported on an unusual cost-cutting move by electronics retailer Circuit City. The chain abruptly fired their top-producing veteran salespeople and replaced them with lower-wage new hires.

When Circuit City went bankrupt last year, you had to wonder if decisions like that were at least partly to blame.

Meanwhile in Minnesota, retailer Best Buy took a different approach. They began to focus on creating a deeper dialogue with the firm's 160,000 employees spread out amongst 1,150 stores across the United States and China, Mexico, England and a growing number of countries.

Best Buy began experimenting with social networking technologies centered upon the company's intranet site. They started conducting weekly online polls of employees. They set up wikis for people with common interests to brainstorm together. They invited senior managers to participate in agenda-free town hall meetings. And they established a "listening chair" where employees could survey other employees on such questions as "Do you think the Geek Squad uniform needs updating?"

When they started listening in earnest, employee turnover stood at 81 percent a year. Three years on, it had dropped to 60 percent. Last year, it was down to 49 percent.

All of this hyper-listening didn't just happen. And it wasn't something decreed by senior management.

Jennifer Rock was a mid-level marketing manager when she became aware of what lack of communication was costing her company. Highly analytical and a self-described 'Type A' person, she noticed that stores with higher than average employee engagement levels and lower than average turnover rates tended to be stores that outperformed the others in sales growth and sales per employee. But merely noticing an opportunity doesn't do any good.

To her credit, Jennifer took action. She created a new position for herself, Director of Intranet and Dialogue.

Next she and her team developed a clear mission: to use every low or no cost means possible to help Best Buy become extraordinary at communicating with employees (not just at them), and to connect employees with information and with each other as well. The goal of all this was to add to business success by helping the individual employee succeed.

If you've attended one of my keynotes lately or participated in my new "Innovation is Everybody's Business" in-house workshop, you have heard me rave about what Jennifer Rock and her team have accomplished. You have heard me extol this group of quiet revolutionaries for their innovativeness in seeing a problem, and stepping up to the challenge of solving it using every trick in the innovator's toolkit. And you no doubt heard me point out that developing one's innovation skills may be the smartest career move you'll ever make - especially if you want to become indispensible.

And you may have heard me say that Jennifer Rock represents the future of the innovation movement.

When I visited with Jennifer recently in Minneapolis, I asked her why would any company, especially a quarterly-results obsessed American company, give a hoot about listening to its employees, especially now? Why would they add headcount (Jen's team has climbed to eight people) when competitors were busy chopping heads?

Jen's unflinching response: Because she and her Intranet and Dialogue Team sold senior management on the bottom-line benefits of listening to employees. "Our success boils down to the interaction between one customer and one employee," Jennifer said. "Is that employee happy and productive and informed and excited? We need to know that employee's state of mind better than anyone else in the company."

Though we are loathe to admit it, the global economic crisis disrupted the Innovation Movement as more and more firms went into survival mode. A new survey conducted by Chuck Frey of InnovationTools.com suggests that most initiatives are in a holding pattern at best, and there is little enthusiasm for broad-based, enterprise-wide initiatives. CEOs and senior executives admit they are just too distracted with more immediate issues. But meanwhile, they are suddenly, desperately in need of more people like Jennifer Rock. As John Draper, senior VP marketing for Mead Consumer Products told me:

"I need people to be less risk averse, I need them to rattle the cage, challenge what we do and look for new ways to do things."

Jennifer and her team realized the impact of what their team was doing when company leaders decided to reduce the employee discount. "The move set off a firestorm with employees," Jennifer recalled. "On the Watercooler [an online forum] hundreds and hundreds of employees talked about what this discount meant to them, and what it meant to customers, since employees could try out products and recommend them to customers. People wrote in to suggest other ways the company could save money without touching the employee discount."

And company leaders changed their mind and rescended their decision.

"They said to us, 'The next time you see a groundswell like this and we are unaware of what's happening, you have our permission to kick down our door. Don't even knock. We need to know.' And that's when we thought, 'Wow, we are adding value, we are making a difference.'"

Jen said she will remember that day for as long as she lives.

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Robert B. TuckerRobert B. Tucker is the President of The Innovation Resource Consulting Group. He is a speaker, seminar leader and an expert in the management of innovation and assisting companies in accelerating ideas to market.

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