In late May, I wrote an article called
. I argued that it "needs to think like a tech company" and lauded its March decision to name Stephen Gillett, formerly the chief information officer and head of digital ventures at
, as president of Best Buy Digital and Global Business Services.
Gillett, who also sits on the board at
, has since become president of practically everything at Best Buy. Just look at
Best Buy continues to pile duties on to Gillett's plate. Why then wouldn't the company elevate the man who essentially operates as COO to the CEO slot?
At first blush, particularly in the aftermath of
, it seemed like a no-brainer.
Like Mayer, Gillett is under 40. He's not a retail lifer from the Midwest. He cut his teeth in Silicon Valley and drove mobile strategy at Starbucks for the last four years, laying the groundwork for the company's recent
Pause there for a second because it's the pivotal point that makes it appear as if Best Buy erred by passing up Gillett and giving the job, seemingly out of nowhere, to Hubert Joly, who ran privately-held
Joly is 53 and, by all accounts, not tech- or mobile-savvy in the slightest. On the surface, he seems like the last person Best Buy should have turned to.
Every analyst in the world seems to think Best Buy should have named somebody with more retail experience as CEO. That's absurd. People with "more retail experience" deserve all of the blame for the mess Best Buy is in.
Retailers like Best Buy must stop identifying themselves as retail companies. When you run in spaces that
direct, you have to operate like a tech, Internet or new media startup. Assume the attitude and mindset Howard Schultz put in place long ago at Starbucks.
Chris Murphy is the only other member of the media I have come across who has connected the dots. After the Starbucks-Square deal, Murphy, editor of
As he outlined the ingredients that led to the forward-looking pact, Murphy highlighted "another, critical piece of innovation infrastructure: people." He noted that InformationWeek named Gillett CIO of the Year in 2011 for his role in building Starbucks' "innovative infrastructure" in mobile, thus enabling the Square agreement.
That brings us back to the burning question: Why make the anti-Yahoo! move and pass up young tech blood?
First, Best Buy's board likely viewed Joly as the safe choice. I'm not so sure they expected such a negative reaction from investors and the media, particularly after having positioned Joly as a successful turnaround architect.
Second, because Gillett is young, has never been a CEO and lacks Best Buy-like retail experience, the board likely viewed him as a risky choice. Ironically, the media probably would have reacted more positively to Gillett than it did Mayer, particularly since
. There's no question that the young new-media types would have praised the move as visionary.
Third, the Best Buy board might be smarter than we think. Even though it happened under the previous regime of former CEO Brian Dunn and Founder and former Chairman Richard Schulze, this board hired Gillett. And as I have reported, it continues to load him with key responsibilities. There is no doubt that an influential faction at Best Buy thinks the firm needs to roll more like a tech company.
The media has given Joly an incredibly unfair shake. I had never heard of the guy until Best Buy hired him. I would guess that his most vocal critics never had either or know very little about the man.
If he is indeed the turnaround artist Best Buy claims he is, maybe the company put him in place to sort out internal disarray. Maybe he's the perfect person to deal with corporate issues on the inside, while Gillett leads what is a related, but ultimately distinct process of positioning Best Buy as something other than a big-box retailer, something unrecognizable to itself.
Simply put, Joly focuses on cleaning up the internal mess. He allows Gillett's current plans and vision to proceed, while grooming him to become Best Buy's future CEO. It makes absolutely no sense to bring in a person who has no interest in working with a key recent hire with a more-than-compelling background. In fact, I think Best Buy brought Joly in to work with Gillett.
As an aside -- and maybe it's more than an aside, I simply do not know yet -- former Best Buy CEO Brad Anderson sits on the Carlson board. Anderson, of course, is a member of the old guard that Schulze would like to make part of the turnaround team if he is able to gain control of Best Buy.
Take this for what it's worth. But more importantly, as an investor, don't do what so much of the media does. Don't jump to the easy conclusion. At the same time, don't get long; keep tabs on a situation that's probably more complicated than the media reaction to the Joly hiring makes it out to be.
At the time of publication, the author held no positions in any of the stocks mentioned in the article
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Rocco Pendola is a private investor with nearly 20 years experience in various forms of media, ranging from radio to print. His work has appeared in academic journals as well as dozens of online and offline publications. He uses his broad experience to help inform his coverage of the stock market, primarily in the technology, Internet and new media spaces. He has taken a long-term approach to investing, focusing on dividend-paying stocks, since he opened his first account as a teenager. Pendola, 37, is based in Santa Monica, Calif., where he lives with his wife and child.