How to Lead in the Stakeholder Era

The world is clearly facing multifaceted crises: a health crisis, an economic crisis, a societal crisis, a racial crisis, an environmental crisis, and rising geopolitical tensions. In the face of these challenges, there is a growing realization that business and society cannot thrive if employees, customers, and communities are not healthy; if our planet is on fire; and if our society is fractured. More and more leaders believe that creating a better and sustainable future requires corporations to serve all their stakeholders — not just their investors — in a harmonious fashion. To make this transition, leaders need to evolve how they think about their mission and how they lead. According to Hubert Joly, the former chairman and CEO of Best Buy, we need leaders who, in both good times and bad, are keen to pursue a noble purpose, are ready to put people at the center of it, and are dedicated to creating an environment where every employee can blossom. In short, we need leaders who will embrace a declaration of interdependence. This is how we can create a more sustainable future. This is how business can be a force for good and do well by doing good.

In June 2020, I traveled back to Minneapolis for my final board meeting as chairman of Best Buy. As I drove down Hennepin Avenue, storefronts were boarded up on each side of the street. The city was still scarred from the riots and protests that followed the killing of George Floyd that May. Around the same time, forest fires were raging across Australia and, once again, in California. A few months earlier, a new virus had been identified, unleashing a pandemic that was spreading across the world.

The past year has heightened a realization that had started to gain ground prior to the devastation of 2020: Business does not exist in a vacuum. Even before the onset of the Covid-19 pandemic, a growing number of business leaders were shifting away from Milton Friedman’s assertion that the sole purpose of business is to maximize shareholder returns and embracing the idea that business should serve all stakeholders: employees, customers, suppliers, and communities as well as shareholders. Although making money was of course an imperative, many leaders were focusing on why they were in business and who they were serving.


  • Hubert Joly is the former chairman and CEO of Best Buy, a senior lecturer at Harvard Business School, and the author, with Caroline Lambert, of The Heart of Business. He has been recognized as one of the top 100 CEOs in the world by Harvard Business Review, one of the top 30 CEOs in the world by Barron’s, and one of the top 10 CEOs in the U.S. by Glassdoor. Joly is now keen to add his voice and his energy to the necessary refoundation of business and capitalism around purpose and people.

Then a pandemic turned the world upside down. As so many corporations now struggle to emerge from the health crisis and its economic fallout, will businesses and their leaders abandon principles that serve more than just a share price?

I hope not. Now is not the time to retreat. Instead, it is the time to accelerate. The profound multifaceted crisis we are facing has made it even more obvious that business and society cannot thrive if employees, customers, and communities are not healthy; if our planet is on fire; and if our society is fractured. Doing the same things we have been doing for decades while expecting different results would be, in Einstein’s words, the very definition of insanity. What we need today is a refoundation of business and capitalism so that we can build a more sustainable future. It is time for business leaders to embrace a declaration of interdependence that prioritizes the common good and recognizes the humanity of all stakeholders.

I know, based on my own experience and reflections over the past 40 years or so, that shifting a business from maximizing profits to serving employees, customers, suppliers, communities, and shareholders is not easy. It requires leadership. In this article, I share the philosophy I have developed throughout my career and that was at the core of the resurgence of Best Buy. Ultimately, it is about much more than piecemeal CSR or ESG. It is about fundamentally redefining your company around purpose and learning how to unleash the best people have to offer. It’s about putting purpose and people at the heart of business.

The Purpose of Business Is to Contribute to the Common Good

For business to be part of the solution to our collective challenges, we leaders must see companies not as soulless moneymaking entities but as “human organizations” made of individuals working together in support of a shared goal. This goal must contribute to the common good by making a positive difference in people’s lives — what author and consultant Lisa Earle McLeod calls a “noble purpose.” In this approach, making money remains an imperative, but profits are not the ultimate objective; rather, they are the outcome of a successful strategy rooted in purpose. This is how Best Buy turned its fortunes around and rebounded to heights that, back in 2012, few would have imagined possible. Best Buy is not an exception. Like-minded companies described as “firms of endearment” have outperformed the S&P 500 14-fold over a period of 15 years. Multiple studies have confirmed that purpose indeed pays.

How do leaders make this vision a reality? First, they help articulate a noble purpose. It can be found at the intersection of what the world needs, what you and your team are passionate about, what the company is good at, and how it can earn a good return on its investments. What did that look like for Best Buy? After much soul-searching and analysis, we eventually decided that the company’s purpose was to enrich our customers’ lives through technology by addressing key human needs in areas such as entertainment, productivity, communication, food, security, and health and wellness. That had a deep meaning for us as human beings, and it made business sense. It was also a much bigger, more inspiring idea than simply being a consumer electronics retailer.

Sometimes a company’s stated purpose can feel divorced from its operations — just a fancy way to tell the world who you aspire to be. It needs to be more than that. Take Best Buy’s investment in products and services to help aging seniors stay in their homes independently. In working toward its goal to serve 5 million seniors in five years, the company has the potential to significantly accelerate growth. How likely is it that we would have tapped this growing market had our purpose been simply to sell electronics to consumers? Not very. But when your purpose is to enrich lives through technology, that market not only seems possible, it makes total sense.

Leaders must ensure that their company’s purpose goes beyond words and becomes the cornerstone of strategy and operations. Once articulated, Best Buy’s purpose fundamentally transformed our strategy and how we did business, shifting our playing field from the market of consumer electronics to a much broader environment rich in opportunities, which helped to fuel the company’s growth and success.

Unleash Human Magic

A noble purpose must be something every employee can relate to in their day-to-day job. For far too many people, work is viewed as a chore, a curse, a punishment, or a means to an end — something you do to pay the bills, go on vacation, and retire. And too often, this is the reality at organizations that put profit ahead of everything else. Sadly, the result is an uninspired workforce; we see that in study after study, including 2020 research by ADP Research Institute in which only 16% of people globally reported being “fully engaged” at work. This is a tragedy of unfulfilled personal and economic potential. But what if we choose to view work in a radically different light? What if leadership becomes about creating an environment where every employee can blossom and become the best, biggest, most beautiful version of themselves?

Consider this interaction: Jordan was a three-year-old whose favorite T. rex toy broke. His mom brought him to the local Best Buy where Santa Claus had “sourced” the T. rex and explained the situation to two sales associates. These associates could have directed Jordan’s mom to the toy shelves and let her find a replacement. Instead, they went above and beyond to “save” the T. rex. Playing doctor, they took the broken dinosaur in for “surgery” behind the counter, discreetly exchanging it for a new one while narrating the lifesaving procedure being performed. After a few minutes, they handed over the “cured” dinosaur to a beaming, excited Jordan.

Brian Stauffer

There aren’t standard operating procedures at Best Buy — or a memo from me as leader — detailing how to deal with sick dinosaurs. Instead, this moment was the result of creating an environment that recognizes and values such human creativity. Work for the two employees was not just about collecting a paycheck or selling a new toy. It was about putting a grin back on a little boy’s face. Work was for them, in the words of poet Khalil Gibran, love made visible.

How can we as leaders transform companies into places where all employees are willing and able to give their very best, not only to customers but to each other, to suppliers, to their communities, and to shareholders?

The foundation or spark of this magic is to treat work as an essential element of people’s humanity and as a way of finding meaning and fulfillment in life. Start by asking yourself and people across your organization, “What drives you?” — a question that I find rarely gets asked in corporate environments. The answer helps people discover a sense of personal purpose, which in turn determines how they relate to their work. When I was at Best Buy, I always found the simplicity and humanity of people’s answers striking. Often, managers talk about friends, family, and colleagues — real people who matter to them and motivate them.

One of the most crucial roles for any leader is helping people at all levels of the organization make the connection between what drives them and the company’s noble purpose. This may seem like a woolly step. But being able to infuse what we do every day with a bigger sense of why we do it helps foster energy, drive, and direction in everyone — from front liners to the CEO. I saw the power of this at one of our stores in Boston, where the store manager asked all employees — every single one — about their dreams in life and then regularly collaborated with them one-on-one toward their goals. Not coincidentally, this store was a top performer. Similarly, during one of our executive team retreats, each of us shared over dinner our life story, what drove us, and how it related to Best Buy’s purpose. I remember that this conversation had a profound impact on how we decided to shape the company’s purpose and make the company a force for good in the world.

These are not soft practices. The link between personal and collective purpose and how much people are willing and able to invest themselves at work is well-documented. This is the dimension that powers corporations as purposeful human organizations and, when coupled with a sound strategy anchored in a noble purpose, results in extraordinary performance. This is human magic.

So, ask yourself: How can you help connect your team members’ search for meaning with the company’s noble purpose? A simple way to start is by treating people as individuals who are valued for their unique talents — not as “human capital.” This sounds simple and basic, but it has an enormous impact when you actually practice it. I still remember a young employee who explained to me that he felt seen as an individual at Best Buy and what a difference that made to him. He had been hired at 18 years old, shy and unsure of himself. When asked about meaningful experiences at Best Buy, he immediately recounted a visit by his district manager to his store. The manager, who had met him back when he was hired, recognized him and knew his name. That one small moment of connection left a lasting impression. He wasn’t just a “Blue Shirt.” He was an individual who was known and who mattered. Two years in, the once shy, unsure kid was flourishing and confident.

This is what putting people at the center means. This is the job of the leader in a world driven by more than shareholders. It is the best foundation for learning how to serve all your stakeholders today and in the future.

Purpose and People When Things Get Tough

Putting purpose and people at the center is not a luxury reserved for good times. It is even more crucial for leaders to stay the course during challenging crises like the pandemic, which test the spirit and humanity of purposeful organizations. During my time as CEO of Best Buy, few moments tested us as meaningfully as when Hurricane Maria devastated Puerto Rico in September 2017. The storm knocked out the island’s electrical and communications infrastructure. Homes were blown apart or flooded beyond repair. Roads were impassible. Hospitals were inaccessible or evacuated. Best Buy had about 300 employees on the island in our stores and our distribution center. At first, we could not locate any of them.

Our team sprang into action. After we accounted for everyone, we learned that some employees had lost their homes and all their possessions, and many didn’t have enough food and clean water. Within a few days, the team organized a cargo plane and arrived in Puerto Rico with the first shipment of emergency supplies. We gave employees cash to buy necessary items and paid them for four weeks after the storm, even though the stores were closed. We also continued to pay any employee who volunteered in the community to help rebuild the island. All told, that cargo plane made 14 trips to Puerto Rico filled with supplies of diapers, water, and food, and made seven trips to bring employees to the mainland. Over time, we helped our people piece their lives back together.

Brian Stauffer

This was in mid-December 2017. If you work in the retail sector, you know what that means: Our stores were closed during key weeks of holiday shopping. But I couldn’t have cared less about that. Our employees felt cared for and we were open for business a mere three months after Maria — a case study in resilience and purpose. And much like we helped our employees, they in turn, helped Best Buy. Within a year, the stores and our distribution facility on the island were open again. Remarkably, our year-on-year sales in each of those locations soared 10% to 15%. But in my mind, our employees’ commitment to helping each other through the trauma of losing everything overnight was the real achievement.

Clearly, none of this is easy. Businesses will face obstacles and difficult choices. But, in good times as in challenging ones, it is one of our main responsibilities as leaders to create, nurture, and embody a collective spirit that puts people at the center of everything we do.

The End of Zero-Sum Leadership

Putting people at the center of business means fostering caring and authentic relationships. This should occur within a company but also with all the company’s stakeholders — customers, vendors, local communities, and shareholders — in a way that not only contributes to the company’s purpose but also creates great outcomes for each of them.

The corporations that will thrive coming out of the pandemic are those that will treat customers as human beings with needs, not walking wallets. They will connect and collaborate with vendors as partners, benefiting both sides and serving customers. They will contribute to their communities in a way that aligns with their noble purpose. They will reject the view of shareholders as soulless and obsessed with short-term profits at all costs. This shift in investor mindset, still in process and led by BlackRock CEO Larry Fink, prioritizes investing in companies that care about their impact on the environment and their communities, and it reinforces the belief that purpose and people (and planet) are at the heart of successful, sustainable business. The companies that will thrive will refuse to see the world as a zero-sum game. They will choose “and” instead of “or.” It won’t always be easy; there is the temptation to simply “greenwash” and say you’re sustainable but not behave as such. Leaders must resist this temptation and serve all stakeholders in word and deed.

It is past time that we as leaders acknowledge that our role has changed in three fundamental ways. One, it is no longer simply about maximizing shareholder value; it is about making a positive difference in the world. Two, the job of leaders is to maximize performance not by choosing among stakeholders but by embracing, mobilizing, and serving all of them in line with a noble purpose, and refusing zero-sum games along the way. Three, the purposeful human organization cannot flourish with the traditional top-down model of the powerful and infallible hero-leader driven by power, fame, glory, or money. What is required now is a leadership approach that puts purpose and people at the heart of business.

This is how, together, we can begin to reinvent capitalism so that it contributes to a more sustainable future.

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