Anna Erickson

1
Linking 360 Feedback to Business Outcome
Measures
Anna Erickson Tony Allen
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Nations 1 Specialty Retailer of Technology and
Entertainment Products and Services
3
Our Vision

• Making Life Fun and Easy

4
Brand Portfolio
Best Buy Canada
Shared Competencies
5
Map
Best Buy 528 Stores 48 States
Best Buy Enterprise
Musicland 1,303 Stores 49 States
Media Play 76 Suncoast 397 Sam
Goody Small Mkt 233 Sam Goody 597
Magnolia Hi-Fi 16 Stores, 3 States
Future Shop 101 Stores
Best Buy Canada 7 Stores

Source Best Buy Co., Inc. 2nd Qtr. FY 2003
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Best Buy Performance
( in billions)
30
25
19.6
20
15.3
15
12.5
10.1
10
8.3
7.8
7.2
5.1
5
0
'95
'96
'97
'98
'99
'00
'01
'02
FY
Revenue
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Best Buy Retail

• Structure
• 584 Stores
• 56 Districts
• 3 Regions
• Leaders Score Carded on Key Financial and
  Operational Measures Including
• Revenue Gross Margin
• Sales of Key Products
• Customer Loyalty
• Employee Engagement/Satisfaction

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Our Research

• 360 Feedback Results (June 2002)
• 38 District Managers (DMs)
• 573 Store/General Managers (GMs)
• 4 Key Financial Measures (July 2002)
• Revenue
• Gross Margin
• Accessory Sales
• Sales of Product Service Plans

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Best Buy 360 Highlights

• Administered Annually
• Retail and Corporate Leadership
• Corporate Director level and above
• Retail Store Manager (GM) and above
• Purely Developmental
• Competency Based
• Raters Self, Superior, Subordinates and Peers

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Best Buy Corporate Competencies
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District Manager Correlations
Gross Accessory Service Revenue
Margin Sales Plan Sales Drive for
Results -.100 -.066 .486 .547 Managing
Vision Purpose -.213 -.155 .455 .484 Orga
nizational Agility -.234 -.180 .445 .464 St
rategic Agility -.118 -.074 .365 .396 Custome
r Focus -.252 -.235 .431 .415 Integrity,
Trust, Ethics -.145 -.133 .349 .274 Self-Kno
wledge -.288 -.240 .518 .423 Building
Effective Teams -.099 -.057 .508 .591 Devel
oping Direct Reports -.145 -.063 .396 .406 Li
stening -.308 -.271 .431 .251 Managing
Diversity -.391 -.370 .615 .487 Motivatin
g Others -.276 -.182 .470 .389
Correlation is significant at the 0.01 level
(2-tailed). Correlation is significant at the
0.05 level (2-tailed).
(n 38)
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District Manager Results

• Correlations with Gross Margin and Revenue NOT
  statistically significant for most competencies
• Managing Diversity negatively correlated with
  Margin Revenue
• Gross Margin r -.39 (plt.05)
• Revenue r -.37 (plt.05)

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District Manager Results

• Service Plan and Accessory Sales strongly related
  to 360 Results for DMs
• Strongest Relationships with Accessory Sales were
• Managing Diversity r.61
• Self Knowledge r.52
• Bldg Effective Teams r.51
• Strongest Relationships with Service plan Sales
  were
• Drive for Results r.55
• Bldg Effective Teams r.59
• Managing Diversity r.49

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Managing Diversity Items

• Attracts and retains employees that represent
  diverse perspectives, styles and backgrounds
• Through his/her own actions, fosters an
  environment that encourages diverse ways of
  thinking, and discourages intolerant behavior by
  others
• Demonstrates an ability to manage people with
  diverse perspectives, styles and backgrounds

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Self Knowledge Items

• Accurately communicates personal strengths and
  weaknesses
• Actively seeks feedback regarding his/her
  performance, and responds by adjusting his/her
  approach
• Positions him/herself to leverage own strength
  and mitigate weaknesses

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Building Effective Teams Items

• Assembles teams with the skills and style
  necessary for success
• Defines teams purpose and clarifies roles within
  the team
• After assembling a team, provides members with
  directions to help them perform effectively

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Relation of scores to outcomes
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Store Manager Correlations
(n 573)
Gross Acsry Srvc Plan Revenue
Margin Sales Sales Drive for Results .192 .21
8 .258 .356 Managing Vision
Purpose .116 .133 .220 .167 Organizationa
l Agility .079 .086 .251 .225 Strategic
Agility .151 .170 .251 .336 Customer
Focus .176 .194 .237 .319 Integrity,
Trust Ethics .177 .193 .245 .325 Self
Knowledge .188 .201 .290 .355 Building
Effective Teams .174 .191 .264 .330 Devel
oping Direct Reports .154 .171 .278 .340
Listening .196 .214 .280 .385 Managing
Diversity .177 .184 .288 .343 Motivating
Others .109 .102 .170 .137
Correlation is significant at the 0.01 level
(2-tailed). Correlation is significant at the
0.05 level (2-tailed).  
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Store Manager Results

• All correlations positive and most statistically
  significant
• Again, accessory and service plan correlations
  stronger than those with Revenue Gross Margin
• Overall, correlation coefficients much smaller
  than for DMs

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Why are correlations for Dist. Mgrs larger than
for Store Managers?

• Frequent movement of Store Mgrs
• Sophistication of Raters
• Quality of items included in the survey

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Sample Items Drive for Results

• District Mgr. Items
• Focuses attention and energy on factors critical
  to success
• Sets high standards and expectations for
  him/herself
• Consistently meets aggressive timelines as
  established by self or others
• Mobilizes others as a way to accomplish difficult
  tasks
• Consistently follows through on his/her
  commitments

• Store Mgr. Items
• Creates and executes plans to improve store
  performance
• Has a sense of urgency, passion, and energy
• Accepts nothing less than our best effort every
  day strives for excellence

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Summary/Learnings

• 360 does relate to important Company outcomes
  especially those more directly impacted by
  manager behavior
• Rigor in item development pays off later
• Dont assume the process is purely developmental
  identify outcomes most likely to be impacted
  and build a measurement plan early
• Shape best practices to work with culture