Landmark Agreement between HEC Paris and Hubert Joly to Create Purposeful Leadership Chair

Best Buy Chairman and CEO Hubert Joly and his Alma Mater signed an agreement on July 4, creating HEC’s first-ever personally endowed Chair, devoted to purposeful leadership. The 1981 graduate, who was recently recognized by Barron’s as one of the top 30 CEOs in the world, is donating €3.7 million ($4.3 million) to finance the creation of the Joly Family Endowed Chair in Purposeful Leadership. Professor of Strategy and Business Policy Rodolphe Durand has been named as the inaugural Chair holder.

“In many ways, this Chair is the fruit of 25 years of reflection on why we work.” With simple and direct words, Hubert Joly galvanized a packed audience at the season’s final HEC Alumni Matin HEC Paris with his vision of purposeful leadership: “I believe that the search for meaning is an essential quest for each individual,”  he declared after signing the gift agreement with his former school. “I further believe that a company is a human organization where individuals collaborate on a project, and that linking the search for meaning of a company’s team members with the purpose of the company is a key priority for the said company and the individuals who work there. Finally, I am convinced that a company’s purpose must contribute to the common good. This philosophy has profound implications on how leaders should lead, their role as a leader, who they serve, etc. For all these reasons, through the creation of this Chair, I am very happy to support HEC’s professors and their teams as they work to advance research and teaching on the theme of Purposeful Leadership in business.”

This philosophy has guided Hubert Joly along the path of one of France’s most remarkable international business careers. His success in the past three decades has made his name synonymous with “turnaround specialist”, as exemplified by his success at the helm of Best Buy over the last six years. The results since Joly took over the North American retailer in 2012, have been nothing short of astounding. Six years ago, Best Buy, the world’s leading provider of consumer technology products and services, was reeling from the impact Amazon was having in the sector. Most specialists deemed the company would follow the sad destiny of the likes of Circuit City, Radio Shack, and CompUSA and disappear. Revenues were in decline, the operational margin had decreased to 3.4%, and Best Buy’s stock value had plummeted to less than $15. Compare those figures to 2017: revenue grew by 7%, the operating margin jumped to 4.4%, and the share price quintupled to $75. As the company moved from turnaround to growth, it has taken the time to clearly articulate its purpose. “We are driven by a higher purpose, i.e., to enrich lives through technology,”  Joly told Les Échos in Paris. “We are going from selling products through transactions to selling solutions and building relationships. This opens a whole new range of growth opportunities as we unlock latent demand by more deeply understanding the human needs of our customers and helping them uncover what is possible.”

Growing Momentum for Purposeful Leadership

In front of a full house of fellow businesspeople and researchers attending the conference at the prestigious Pavillon Gabriel, central Paris, the 59-year-old attributed much of the Best Buy turnaround to his company’s application of purposeful leadership. And he is convinced this leadership approach is spreading. “You only need look at the recent letter  penned by BlackRock CEO Larry Fink , the world’s largest money manager, or the joint statement authored by Warren Buffett and Jamie Dimon  to sense that a corner has been turned. By insisting on a company’s purpose or role in society, profit-making is no longer an end in-and-of-itself, it is ‘merely’ an imperative. When you ally this approach to one where you encourage employees to find meaning in their work, you get Purposeful Leadership. To top it all, this approach happens to deliver superior business and financial performance.”

It is these new core ideas that HEC Paris Dean Peter Todd has been prioritizing at the Jouy-en-Josas business school. “Since 2008, we have made this search for purpose in work an imperative,” he told reporters after the conference Matin HEC. “We are asking our students: ‘Why are you embarking on this career?’; ‘what principles and practices will guide your actions as tomorrow’s leaders?’ For the past decade, we have had over 40 permanent researchers at our Society & Organization Center (S&O), led by Rodolphe Durand working in this field. They are creating a true impetus in the academic world with their findings.”

Drive to Teach HEC Students New Values

Rodolphe Durand was appointed as the first holder of the Joly Family endowed Chair in Purposeful Leadership. “I am deeply honored to be named to this post,” the Academic Director of S&O told journalists at the press conference. “The Chair program is a fabulous opportunity for our school. It accelerates our work in uniting colleagues from different fields at HEC, going well beyond research into leadership. This cross-fertilization of disciplines is a catalyst to bring leadership theory forward – currently, it remains too dissociated from business reality. Research into purposeful leadership also allows us to see how it can bring competitive and environmental advantages to a firm which integrates it into its central strategy.”

The author of a number of publications in top academic reviews, Durand also emphasized the importance of inculcating new values into HEC students. “We will be working on creating content which will familiarize students with purposeful leadership at a very early stage of their studies. Until now, our student population has been too conformist, following the familiar beaten track once they graduate. We wish to change that by delving on their fundamental purposes in pursuing their careers as leaders.”

Short termism Cannot Excuse Poor Management

Such reflections were music to the ears of Hubert Joly who highlighted the inexhaustible nature of the work on purposeful leadership. “This touches so many aspects of the business world: how to choose leaders, how to turnaround a business, how to grow a company, how to go about defining a strategy, how to approach people development, the role of diversity, the place of corporate social responsibility. Every management field is touched by the question of purpose.”

When asked about the pressure shareholders put on companies to maximize profit, Joly was reflective: “Investors are quite sophisticated. They understand what it takes to make a company successful over the long run, how a motivated and engaged workforce will create positive business outcomes which in turn result in superior financial results. Also, it is our responsibility as leaders to serve all our stakeholders. Short termism cannot be an excuse for poor management.”