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:
- Chico's has a new man.
- Borders had a management shakeup as well.
- bebe lost a CEO, too.
