RIP ROWE: Best Buy Changes Course on Results

The end of ROWE?

Yesterday Best Buy, Inc. announced they were discontinuing their ROWE (results only work environment) program. I left Best Buy in 2009 during their “voluntary separation” program.  I took a package, along with many others,  before they may need to  enforce involuntary separation.  At the time, I was an online channel manager.   Taking the package was a great opportunity for me and allowed my family a smooth transition to Iowa City – as smooth as it can be when both spouses are taking new jobs, selling a house in a depressed market, buying a house in a new city, and have two kids under 3 in the process.  I will always think highly of the way Best Buy treated all of the employees during that transition. 

A few current and former colleagues have asked me how I felt or what I thought about it.  Here are some quick thoughts:

1.  ROWE was about results first.  That’s a good thing.  It was a framework that drove, or should drive work, and respects the individual employee.  With the focus on results, all meetings were optional.  Imagine how much better you have to run a meeting so that you have a reputation for good meetings and good projects.
2.  I believe a lack of leadership and discipline had more to do with Best Buy’s downward trend then ROWE. Less than two years after the voluntary separation program, Best Buy had more staff on payroll.  What the what?!?!  You were trimming staff to save money.  Instead, they lost a lot of talent with the separation program, as many left with their package to start other careers.  To the directors and VPs who had 2-4 years’ worth of severance, they basically said “I believe in me more than I believe in Best Buy” and took their talents to their own startups or other organizations.  Best Buy  did the right thing by their employees, but I think they weren’t sure how to deal with the unintended consequences of talent (that had deep organizational knowledge, and current skills) leaving.
3. There were too many uncoordinated initiatives competing for resources.  Leadership needed to focus on channels and desired outcomes.  It seemed easy to label a priority.  It’s a lot harder to prioritize.  Also, during the turmoil and shifts of the marketplace over the past five years, BBY had three CEOs.  One retired, one fired for cause, and their current CEO.  
4. The home office/store (or blue shirt) relationship was strained.  Blue Shirts could never do ROWE.  “Hey, what can you tell me about this Sony Bravia?” I’d  like to sell you on it, but I’m going to a movie for a while.  I’ll be back whenever. Blue Shirts also had crappy access to corporate systems and technology.
5. Best Buy hit the wrong enemy target.  They did a great job targeting and beating Circuit City. But that may have been the wrong target.  Best Buy was late to the game when it came to e-commerce.  It should have been targeting Amazon.  Instead of a good bricks & clicks world, Best Buy became a shopping destination, but not a purchase destination.   The high margin items that helped Best Buy quickly became commodities – GPS Devices, HD TVs, etc.  You can buy a great, reliable flat screen TV at Target,  Wal*Mart, or Costco – why do you need Best Buy.  GPS is a standard party of your smartphone. Don’t have time to get to the store right now – Amazon is always open…and have it shipped to your door…through Prime, which includes free second day shipping and lots of content.
6. Related to the miss on e-commerce.  Many leaders at Best Buy would dismiss projects saying for that $$$ we could open X number of new stores.  Those stores are now an albatross around their neck which exacerbates their lack of nimbleness. It’s the employee costs at the store, the real estate at the store, the physical costs of that footprint, etc.  It’s hard to change when you always see yourself as a big box – a symbolic law of the hammer.  As a big box, they will always try to solve problems in big box ways.  Big box get bigger. BIG BOX SMASH!
7. In the wake of Yahoo & Best Buy’s changing of EE benefits, I think we have two struggling brands that have had leadership issues for the past few years.  The consumer doesn't really know what those brands stand for today or what value those brands generate. 
8. ROWE had results first.  That’s still a pretty good place to start.

Personally, I think BBY was right with ROWE.  Their leadership has failed to produce results for the past few years and are now paying for it…and will pay for it for some time.   

What are your thoughts?