Wednesday, April 11, 2012

Opportunity for Agility- Best Buy

Donald Sull’s article, “Competing through organizational agility” brought to mind Best Buy’s, worrisome state of affairs. Over the last few years, a series of problems including the economic downturn, customer complaints, internal investigations, plus CEO Brian Dunn’s resignation yesterday have all raised questions about the sustainability of this big box retailer. Encouraging decision makers to embrace and prepare for such turbulent times, Sull argues that companies must reexamine their “organizational agility” in order to thrive. After researching organizations in fragile markets and unpredictable regions, he found that those that were most successful built strategic, portfolio and organizational agility. Although some of Best Buy’s problems did not occur overnight, they can still find opportunities to change the way they conduct business (through game-changing opportunities, shifting resources, and restructuring their organization/culture to implement these moves). Since they are not yet facing financial ruin, will Best Buy have what it takes to make tough decisions across their organization?

Ulrich and Smallwood (2004) would argue for a reevaluation of Best Buy’s organizational competencies and capabilities before making any major changes. Considering the recent organizational leadership changes, I doubt that the company will have the ability to focus and conduct a thorough audit of their capabilities. With billions of dollars in profits at stake I wouldn’t be surprised if this organization has already conducted multiple assessments and surveys to help inform their strategy. I also wouldn’t be surprised if these assessments indicated major gaps in agility and organizational requirements. Some of the problems that plague Best Buy could have been resolved such as chronic complaints from customers, back ordered sales, and poor customer service, yet the public perception is that they haven’t taken much action. What does it take for leadership to reevaluate their strategy? Will the future CEO be the beacon of hope for Best Buy or will they follow Circuit City’s footsteps? We shall see.

[1] Sull, Donalad. “Competing through organizational agility” (McKinsey Quarterly, December 2009)

[2] http://www.forbes.com/sites/tomvanriper/2012/04/11/what-best-buy-needs-exclusives/

[3] http://www.huffingtonpost.com/2012/04/10/best-buy-ceo-quit-over-pe_n_1416195.html?ref=business


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