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Dick Schulze On Anderson’s Career, Legacy

If you want to find out why Brad Anderson has had success in the consumer electronics industry, the first person you should probably talk to is Dick Schulze, founder and chairman of Best Buy.

After all, Schulze — a member of the Consumer Electronics Hall of Fame who founded Sound of Music in 1966, the precursor of Best Buy — was the guy who promoted Anderson to store manager back in 1973.

Back then, Schulze would visit his Sound of Music stores on a regular basis to see how things were going … or not going. In 1973, he called a young floor salesman by the name of Brad Anderson out of the parking lot. At first, the young salesman thought he was going to be fired, since Brad supposedly wasn’t the best performer in the store, or so the story goes.

Heck, why don’t we just let Schulze tell the story as well as volunteer a few observations and remembrances about his long-time colleague and friend, Brad Anderson:  

Tell us the now now-famous story about picking Brad, a floor salesman, to be manager of one of your Sound Of Music stores?

Brad is very people-oriented and was successful as a salesperson because he differentiated himself from many of the prototypical commissioned salespeople of that era. He was not pushy — he didn’t attempt to close or sell without explaining the products, the benefits and the differences between the products. He tried to match that with the consumer’s needs. He didn’t try to up-sell product … he was more an advocate for consumers. He may not have had as high a rate of success than others, who were more aggressive, but he was sensitive to the needs of his customers.

Brad played a role in how we repositioned our company, the Sound of Music, entering the CE business in audio with custom packages to hit value-driven price points. Our presentation and our ability to demonstrate [systems] on the floor separated us from our main competitors at the time, such as Audio King Team Electronics and Schaak Electronics.

I was looking for a manager back then. He was honest with me about what was going on in the store and on the

sales floor. Most people would patronize me and tell me what I would want to hear. Brad was open and honest about bad sales behavior on the floor just to close a sale, paperwork that wasn’t finished properly and other areas that was costing us money and not serving customers properly.

I said to Brad that it was time for us to develop a higher level of discipline on the floor, to reposition our [company] culture. I asked him, “Do you have any ideas for someone to become manager of this store?” He raised his hand and said he could. And he did. 

Fast-forwarding to the present, when did Brad tell you that he was thinking of retirement? Were you surprised that he would walk away at an age when many CEOs would stay around a few more years?

He told me about a year ago that was considering retirement by the time he was 60. Brad felt that the pace with which he was working and the travel with international expansion, that he did not have the balance he believed he needed at this stage of his career. And Brad felt, like I did, that the mark that he has left on the company is anchored in consumer centricity, [enabling us to] draw closer to our customers.

[When named CEO] Brad felt his contribution would be along the lines of embedding the values that we had through the highest levels of the company … along with digging more deeply into who our customers are and open up new channels of new services, new ways to demonstrate and display products. He did that and consumer centricity is his hallmark. 

Brad has made some unconventional decisions, such as the consumer-centricity strategy, having employees to set their own work hours with their managers. What does this say about his thinking and management style?

For me it mirrors the way he feels about empowering not only customers but the employees. Trust is the substantial element. When Brad opens the door to have employees bring work home because technology enables that to happen, if it is in the best interest of the employee and the company, it is a classic example. Only if an employee can’t perform would you give it a second look.

We are all about employees who are talented, who love to work hard and work as a team. You have to be a good listener … what are our people saying, what are our customers saying. That has guided much of my thinking. Brad has deepened that commitment with more trust. 

Brad has admitted he never aspired to be a corporate executive, much less the CEO and vice-chairman of major international retailer. What was it like seeing this guy move from being a floor salesperson eventually to CEO?

It is the greatest sense of satisfaction a man could ever see to have to see a person from inside an organization who ascribes to its values grow and prosper. When I did a lot of field visits and I have seen, for instance, a five-year part-time employee work with us to get through college. He graduated, couldn’t find a job in his field, but stays with us until he finds a “real job.” Eventually becomes a supervisor, handles operations, and then gets a six-figure salary managing a store with 120 employees and $40 million to $50 million in revenue with all that spirit and excitement — you can’t buy the gratification born from that.

Brad advanced from the field to the level of consummate decision making. Brad responded to that. He never backed away from it, and doesn’t understand the word “no” unless it goes against our core values.

That is Brad’s personality. He gives [employees and managers] a lot of space and he encourages feedback. There are sometimes mistakes, but if you don’t make mistakes you don’t have success. Change is inevitable in life as we build on our own experiences. Change is the way he does things … and people see that and realize that he walks the talk. He doesn’t have one set of rules for himself and one set for everyone else. People understand, respect and have bought into that.

We don’t have a corporate jet. But there have been times that Brad could have taken chartered flights that could have helped him interact discussing business issues. He has always flown commercially in a cost-effective way. The same can be said about his decision to decline stock options and give to employees. 

What do you see as his major accomplishments with Best Buy and what have been his major contributions to the CE and retailing industries?

Brad been a member of [Retail Industry Leaders Association] for many years and chaired it too. He shared lessons we have learned in our business with members of other industries, specialty stores and discounters. He discussed the pitfalls, the benefits and the investments we’ve made. He is willing to share and is more open [than many CEOs] and has gotten similar responses from others.

If Brad says something is possible that we can perform, it is an element of trust that gets mirrored outside the company. Partnerships are important. We realize we can’t do the best in everything. Maybe people feel Wal-Mart can be the best in everything, but we think that we should partner and share [expertise]. It is part of our playbook. Brian [Dunn] believes in that too. When you partner you have to have two winners [on projects]. Both sides must win. That’s how our management team is and how we behave. 

Brad is known for being a friendly, humble guy who is always looking for a new way to stay ahead of the industry and the competition. But what don’t we know about Brad that would surprise us?

He has tenacity about what he strongly believes in. He is a student of human behavior. Brad is a devout student of history — American, Asian, European history — and he draws his own sense of what the lessons of history are. He is tenacious about making sure his point of view is understood. Externally he is one of the most humble people I have every met … it is big part of what of who he is. And that’s why people follow him because he is so real. 

What is his greatest contribution at Best Buy?

His greatest contribution has been marked when he became CEO in 2002. Take a look at the connection we have with consumers. It has never been stronger, never at a higher quality level than it is today. He was the driver of the consumer-centricity concept. His mark there is profound. He was my COO, sales trainer, store retail leader in his growth years, and the most dedicated, hardest-working CEO anyone could possibly have. He’s honest. He walked the talk and has been honest in his views, and … you couldn’t find a stronger executive to work with.

Going forward … Brad feels good about continuing on as a director. He has agreed to serve on our board fulfilling his term. How many companies do you know of that has two long-standing CEOs serving on its board? I think that says volumes about our culture.