Why you can’t blame ROWE for Best Buy’s trouble

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Larry Downes (@larrydownes) recently wrote an article for Forbes describing a myriad of poor management practices that are causing Best Buy, currently responsible for about 1/3 of all consumer electronics purchases in the US, to slowly lose market share to more innovative, nimble and progressive on-line e-tailers like Amazon.

The article, entitled “Why Best Buy is Going to Go out of business…gradually” caught the attention of a few folks who have opined that, with business performance slumping as a result of some obvious managerial gaffs,  ROWE might not have been such a good idea at Best  Buy, afterall.

Let me cut right to the chase and state that these folks ought to slow their roll.

First off, the thought process is just plain wrong.  It’s nothing more than finding the most obvious thing that stands out about something and blaming that for anything that you don’t like.  The assertion that ROWE is, somehow, responsible for Best Buy’s faltering or, at the very least, could have prevented it reflects a lot of ignorance about business operations and the nature of understanding inputs & outcomes in general.

Let’s consider Toyota – home of Lean – one of the greatest managerial innovations ever known and a system of manufacturing that has yielded an entire paradigm shift in the way the production of goods and, in many cases, services ought to be conducted.  Yet Toyota has experienced a rash of product recalls and safety concerns over the past few years.  Does this mean that Lean wasn’t innovative, revolutionary and a game-changer?  Of course not.  It simply means that neither a humanistic focus on engaging employees nor manufacturing process excellence can contend with poor decisions at the enterprise level.

So it is with Best Buy’s business performance and ROWE.  I think I’m on record quite clearly with my appreciation and earnest support of ROWE.  I’ve talked with one of the creators of ROWE personally, been in touch with a few folks at CultureRx, the company spawned off of Best Buy by ROWE’s creators, and blogged about it here and elsewhere.  I think that it is one of the greatest managerial innovations we’ll ever see.  Nonetheless, much like Lean, choosing to adopt a particular culutral mindset within an organization is not a guarantee of business performance.

Yes, I know, the culture advocates out there in the management consulting realm would scoff at such a suggestion.  Nonetheless, it is true.  Even in the most progressive of environments where process excellence is pursued and employee engagement is highest, those at the top of the organization entrusted with strategic, decision-making authority are still capable of making bad decisions.

But…wait….aren’t practices such as these supposed to prevent poor business performance by creating highly engaged, innovative, progressive and customer-oriented organizations?  Yes, that is the intent.  Nonetheless, even the most well-intentioned leader can be wrong and simply because an organization has people who love to work there doesn’t mean that every business decision will be the correct one.  Culture-transforming practices don’t necessarily make business successful.  It’s still a matter of sound decision making at the top that makes a company profitable, or not.  The benefits of progressive, empowering, engaging cultures is that they are more able to take advantage of good decisions or favorable changes in the environment and, generally, lessen the impact when things take a turn for the worse.

Toyota has recently suffered through concerns over product quality and safety, including several recalls.  Some have indicated are the result of the company’s drive to be the biggest automaker which may have resulted in sacrificing some of its position as the best automaker.  Even if this is taken to be true, does that mean that the manufacturing innovations that were created in the company are now rendered worthless?  Of course not.  Toyota’s problems are rooted in something other than its manufacturing practice and there will still be hundreds of companies looking to mimic its success in manufacturing operations.  In fact, it is those same manufacturing quality practices that continue to give the brand value, even as the strategic decisions and, perhaps, engineering choices have stumbled a bit.

At Best Buy,  ROWE was created within the company’s Human Resources department as a way to generate greater engagement and retention.  Along with these practical concerns, however, the concept is still rooted in a profound insight into human behavior.  That insight is still remarkably visionary and valuable, even if the problems at Best Buy are more than ROWE could have prevented or corrected.  As such ROWE, like Lean, will continue to be viewed by many organizations as a practice that can save the company, rather than as one that will kill it.