Best Buy headquarters in Richfield.
Glen Stubbe, Star Tribune
Wieffering: Best Buy needs an outsider as its next CEO
- Article by: ERIC WIEFFERING
- Star Tribune
- April 10, 2012 - 9:53 PM
Brian Dunn is out as chief executive of Best Buy, but not for the reasons many thought would prove his ultimate undoing: Losing the loyalty of customers and the confidence of investors.
Too bad, because it means Best Buy remains -- at least for the time being -- wedded to a flawed strategy. And that will make it much tougher for the next CEO to revive the fortunes of the nation's biggest electronics retailer.
Best Buy has had only three CEOs in its 46 years, and all grew up within the company. Dunn, whose tenure was the briefest, began his career wearing a blue shirt on the sales floor.
What Best Buy most needs now, however, is someone who can look at the company with fresh eyes, someone not burdened by history. And that means hiring from the outside.
The interim appointment of board member G. "Mike" Mikan to the top job could be taken as an encouraging sign that directors recognize that the next CEO won't come from within the halls of Best Buy's Richfield headquarters. If that person existed, he or she would surely have been identified in the succession plans that companies have in place for days like Tuesday.
Though an accomplished executive, Mikan should not be seen as anything more than a placeholder. He has no retail experience, he's never run a Fortune 500 company and his tenure running UnitedHealth Group's Optum unit lasted just six months.
Any insider also would be dogged by questions relating to Dunn's departure and the findings of the continuing internal investigation, such as how long executives or directors knew about the allegations of personal misconduct, how were they made aware and how long they waited before deciding to investigate.
Best Buy can't afford that kind of distraction. Investors, meanwhile, aren't interested in a caretaker. The next CEO will be under intense pressure from Wall Street to evaluate and overhaul the company's business model. So the next CEO would ideally be less wedded to the current big-box format and more willing to upend the orthodoxy that Best Buy is a few tweaks, some modest store closings and a hot gadget away from regaining its momentum.
What's not clear is whether Best Buy would welcome a person whose first act might be to repudiate the restructuring plan Dunn unveiled two weeks ago, and that investors panned for being too little, too late.
Typically, a new CEO gets a fresh start; everything is on the table. Best Buy's next CEO might not have such free rein. As my colleague, Thomas Lee, reported on Sunday, the company's directors, including Best Buy's founder, chairman and largest shareholder, Richard Schulze, played a major role in hammering out the restructuring plan that opened to such bad reviews.
In fact, Best Buy went out of its way on Tuesday to insist Dunn did not leave because of differences over strategy or operations. Investors weren't exactly cheered by that prospect, sending Best Buy's shares down almost 6 percent on a day when the major indexes fell less than 2 percent.
As they consider CEO prospects in the coming days and weeks, Best Buy's directors will surely ask candidates if they agree with the company's strategy and tactics for regaining relevance with consumers.
Hint: Hire the one who says no.
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