Best Buy's New Top Guy

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It's getting a little bit difficult to keep track of all the retail CEO changes these days. The latest such news is that Best Buy (NYSE: BBY  ) CEO Brad Anderson will retire this summer. Is Best Buy's competitive advantage in danger, and so soon after the tough economy delivered a blue Christmas to the electronics giant?

One of Best Buy's major competitive strengths has been its approach to its business, attempting to serve a "customer-centric" strategy with innovative initiatives that most retailers would shun.

Over the years, Best Buy has tried many ideas most retailers would never imagine, including gearing stores toward specific types of demographics and trying out an interesting flex-time policy for employees called ROWE, or "results-only work environment." And of course, the retailer recently tried an internal predictions market called TagTrade, which lets employees make predictions on trends and services.

Best Buy under Anderson has been pretty innovative and gutsy. You don't hear about ideas like that from retailers like now-defunct Circuit City or RadioShack (NYSE: RSH  ) .

Anderson will be replaced as CEO by Brian Dunn, who is currently Best Buy's president and chief operating officer. So not only is he an internal replacement, it turns out that Dunn started out as a Best Buy sales clerk in 1985 and has worked his way up through the company.

That sounds like a great candidate, given the theory that he's viewed aspects of the company far beyond the executive suite. This kind of experience and perspective isn't the kind of thing you'd get from external candidates. In fact, the company's chairman described Dunn as a product of, and steward of, the company's unique culture.

For the most part, I haven't really thought recent CEO shakeups have held that much promise for major business improvements as musical chairs have commenced at retailers like Borders (NYSE: BGP  ) , Chico's (NYSE: CHS  ) , and bebe stores (Nasdaq: BEBE  ) . (Granted, unlike Best Buy, all three are in major need of turnaround strategies.)

However, for Best Buy, shareholders should take consolation in the fact that an insider is coming to the helm, and he's seen the company from many different perspectives. That kind of understanding of the business should be a good omen for the future -- and for Best Buy staying true to its culture.

Here's more on recent CEO musical chairs:

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Best Buy has been recommended by both Motley Fool Inside Value and Motley Fool Stock Advisor. The Fool owns shares of Best Buy. Try any of our Foolish newsletters today, free for 30 days.

Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.

Read/Post Comments (2) | Recommend This Article (10)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On January 26, 2009, at 6:05 PM, mimntx wrote:

    What am I missing? How do you think every CEO makes it to the top? Do you think they are born into the executive suite? Executives get to their spot by working their way from entry level positions, dedicating themselves in school and often putting in long hours and going the extra mile in networking and offering to take on more work. Working your way from sales rep to the top in one company shows hard work but does not make this man more qualified than an outside candidate. Without any outside perspective it could prove very challenging for him. Best Buy is extremely heavy in upper management. Compare the number of execs in total versus any other company their size. These are very difficult financial times. Lean is the name of the game.

  • Report this Comment On April 16, 2009, at 6:20 PM, Columbo1 wrote:

    A companies success comes from the people that are in the pits every day that see what is happening day to day. I still believe that promotion from within is the best way to go and I also that to many Chiefs and not enough Indians will lead to the tribes demise. Outside has put many companies into the here after.

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