Tuesday, April 1, 2014

Geek Squad founder has harsh words for Best Buy

Posted: 04/02/2014 12:01:00 AM CDT

Updated: 04/02/2014 12:08:48 AM CDT

Geek Squad founder Robert Stephens has been mostly silent about his 10-year tenure at Best Buy, the final two years as chief technology officer.

And even after he left in 2012, he couldn't say much because of lingering contractual ties with the Richfield-based big-box technology retailer.

Those ties lapsed this week. Now, Stephens has released a candid memo ( https://dl.dropboxusercontent.com/u/9008/pioneerpress/stephensmemo.pdf) he sent to Best Buy management not long before heading out the door.

The retailer was, and still is, struggling to survive in an age of booming Internet commerce. Stephens intended his memo to serve as a call to arms and a blueprint for Best Buy's future.

"I don't have an adversarial relationship with them," Stephens, who now lives in San Francisco, said in an interview. "But everyone I know in Silicon Valley can't believe there is not more excitement going on there."

Best Buy's thriving online nemesis, Coupon Code.com">Amazon.com, "is not going to kill physical retail," Stephens added. "It's going to kill mediocre retail."

Stephens left a company in disarray. "Showrooming," a concept where shoppers browse physical stores and then find lower prices online, was a major challenge.

But for the past 20 months, Best Buy has been under new management. CEO Hubert Joly's team has pushed more employee training, stronger online capabilities, stronger customer service (through Geek Squad) and even embraced the vision of Best Buy as a "showroom."

Through price matching, Best Buy has turned "showrooming" into instant gratification for shoppers who don't want to wait for Amazon's shipment to arrive.

In February, Joly called the Geek Squad "one of Best Buy's biggest competitive advantages, and yet, at the same time, it is an underutilized asset."

The two brands, now inseparable, were married in a 2002 business deal that brought Stephens on board. Stephens founded the mobile tech-help company in Minneapolis in 1994.

The 2012 memo did not mince words about Best Buy's predicament and the need for drastic action.

"Nothing short of radical will accomplish much now," Stephens wrote.

In the memo, Stephens called for:

Better workers, better training. "We will employ the best people in retail at all cost to us," he said. "Hire for curiosity above all else. Curiosity for the customer, curiosity for the tech, passion and persistence."

A generous employee discount on Best Buy products is one essential variable "because it is the greatest training program ever devised."

Humility. "The public is rooting for us," he wrote. "How many turnaround stories have we seen? The public is used to them and even expects them. The only thing people love more than seeing a giant fall, is seeing it humble itself, and resurrect itself."

He added: "Admit our mistakes. Immediately. They will forgive us. We then must work tirelessly to avoid repeating mistakes. If we're going to make a mistake, it should always come from trying to create some amazing new customer benefit. Customers will always cheer those 'failures.' "

Simplicity. At a time when "anything can be Googled," it is essential for Best Buy shopping to be friction-free, Stephens wrote.

He proposed one cardinal rule for workers: "Don't ever say, 'I don't know.' Say, 'I'll find out.' At the end of the day, customers don't expect rocket science from any retail employee, but they expect us to try. The majority of complaints stem not from lack of knowledge, but lack of trying."

Free tech support. "Anything you purchase from us should come with some level of support for free beyond anything the manufacturer provides."

Digital and mobile first. Best Buy's stores should answer to those in charge of the retailers' website, not the other way around, he said.

"Make the stores part of the dot-com universe, (and) every system being changed or built will be built for the mobile interface first, then for tablet, finally for desktop. ... Stop buying PCs inside the company," and let employees bring their "own device, or provide tablet, or mobile at minimum."

Embrace being Amazon's showroom. "Go further: Become the Internet's showroom."

Kill the social media team: "Everyone is on the social-media team. No more press releases or corporate-speak."

Stephens also made some more-predictable recommendations in the memo, such as closing stores that did poorly, slashing spending, cutting the staff and otherwise streamlining and automating. That has been happening at Best Buy.

The memo in early 2012, just before the Consumer Electronics Show in Las Vegas, was prompted in part by a just-published, scathing Forbes magazine article: "Why Best Buy is going out of business ... gradually," at bitly.com/bestbuygoingout.

In his memo, Stephens wrote, "We owe (article author) Larry Downes a huge favor. We should call a spade a spade, and give him credit."

Stephens, in an interview last week, said then-CEO Brian Dunn did not take him and his ideas seriously enough, he now believes.

Around the time Stephens was considering a departure, Dunn was involved in a relationship with a female co-worker that later would become public and be deemed "improper." This led to Dunn's departure from the company and a year-long leadership vacuum.

Stephens said his vision for the company while CTO included:

-- Using his bully pulpit to help reform obvious failings in the tech industry, such as getting Sony to make its technology more open and prodding Microsoft to make its more mobile.

-- Going Google big-time by embracing the technology titan's Android operating system and "putting it in every picture frame, washing machine and television."

-- Using Best Buy as a showcase for emerging tech trends like home automation, robotics and wearable tech. The stores would have been terrific places to feature experimental but brimming-with-potential products from Kickstarter and Quirky.com, he said.

-- Making the Geek Squad, which remains the retailer's customer tech-help arm, "the tech department for every company in America with under 100 employees."

Stephens, who is now heading up as-yet-undisclosed startup projects in the San Francisco Bay Area, said he made Best Buy an offer as he prepared to quit. He proposed using Silicon Valley as the springboard for a new kind of Best Buy: a "retail lab" to experiment with fresh, promising tech-retail approaches.

The company, he said, did not take him up on that.

Tom Webb contributed to this report.

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