Chain of Thought

Best Buy CEO Missed Chance to Leverage Social Media

There's heavy irony in the following quote:

“I'm a heavy user of Twitter and Facebook, and I learn a lot from the time I spend on those platforms. I interact directly with customers and employees. … If a company, or even its chief executive, doesn't have a presence on social networks today, that company risks not being in the conversation at all. Over time, I believe, that can be fatal to a business.”

Brian Dunn wrote those words in an article he authored for the December 2010 edition of Harvard Business Review's “The Magazine.” More recently his name has appeared in all the business journals under headlines similar to “Best Buy CEO Resigns.” To add more irony to this already heavy news, the title of the article Dunn wrote for “The Magazine” was “How I Did It: Best Buy's CEO on Learning to Love Social Media.”

Judging by his resignation, his love for Facebook and Twitter wasn't enough. Never mind the character issues that have been raised about Dunn, business analysts say he just wasn't taking Best Buy in the right direction. Online e-tailers like Amazon have been putting the competitive pressure on brick & mortar retailers by drawing consumers to the convenience of shopping from home. Best Buy did its best to be a leaner, meaner competitor by announcing an $800 million restructuring plan to take effect over the next five years, including the closing of 50 of its U.S. big-box stores, cutting 400 corporate-level jobs and opening 100 smaller stores focused on selling mobile phones. According to Time magazine, in the year that ended March 3, Best Buy lost $1.2 billion, compared to a profit of $1.3 billion the previous year.

I hadn't been paying much attention to the Dunn news, mainly because the peccadilloes of political and business leaders don't surprise me much anymore. But his name came up during a phone conversation I had with Peter Schnorbach a few weeks ago. Schnorbach is senior director of product management and strategy at Manhattan Associates, the supply chain software provider. We were talking about SCOPE Social, his company's new “Supply Chain Optimization Planning through Execution” tool as leveraged through social media. SCOPE Social is designed to combine a business's key volume indicator data with a social networking tool to enable employees within an operation to look at the data and collaborate on what the data mean. Schnorbach believes this medium will eventually eliminate the need for e-mail.

“Instead of sending emails and having one-on-one conversations with supervisors, if they can share this information in a collaborative environment, everybody gets the benefit of what's talked about to the extent you want them to, and that can improve the overall operation,” he told me.

Schnorbach used Dunn as an example of CEOs who are starting to recognize the business value in social networks. Of course, this was before the news about Dunn's problems and eventual resignation broke. Nevertheless, the business case for using the power of social networks makes sense—and might have even helped Dunn if he hadn't besmirched his character while trying to save his company. In fact it's those pesky human frailties that cause the biggest concern about combining business and social. Bullying and downright anarchy have been spread via these social networks.

Schnorbach acknowledges this.

“The same principles that apply to how you act with people in life apply in this forum as well,” he said. “There has to be governance, and one of the things we focus on is providing very specific prescriptive uses for this. If I'm a supervisor and want to praise my employees, we say take this social network capability and link it to the operational dashboard that's part of our applications. We're trying to focus the discussion on the operational data we care about.”

The way this would work in a plant or distribution center is users would pull performance metrics from their WMS and post results on their in-house social network's dashboard. Employees can then pull that information up on their mobile phones and send out suggestions for how to improve performance in that area.

Schnorbach says Manhattan is just rolling this out with a couple customers now, but he believes they're providing a framework for a social/business hybrid that's focused and operationally driven.

If the people using that hybrid can commit to sharing the same focus, maybe we'll see fewer unfortunate headlines.

Related Editorial:

Squeezing New Productivity Out of Mature Technology

Keeping Up with the E-Giants

2012 Top 10 Predictions for the Supply Chain in 2012

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