Brad Anderson

Chief Executive Officer of Best Buy

Born Bradbury H. Anderson, April 29, 1949, in Sheridan, WY; son of Marbury Anderson (a Lutheran minister); married Janet; children: two sons. Education: Attended Waldorf College; earned degree from the University of Denver, c. 1972; attended Northwestern Seminary, c. 1972–73.

Addresses: Office—Best Buy Co., Inc., 7601 Penn Ave. South, Richfield, MN 55423-3645.

Career

Began career as salesperson with Sound of Music retail electronics store (later known as Best Buy), 1973; became store manager; company vice president, 1981–86; executive vice president and board member, 1986–91; president, 1991–2001, chief operating officer, 1991–2002; vice chair, 2001; chief executive officer, 2002–.

Sidelights

Brad Anderson serves as chief executive officer of Best Buy Co., Inc., the largest consumer electronics retailer in the United States. His career with the company began when he dropped out of divinity school, and he progressed through management ranks until becoming the handpicked successor to Best Buy's founder. Since becoming president in 1991, Anderson has gained a reputation as somewhat of a maverick retail executive who encourages innovation, hands over his personal stock options to employees, and donates generously to charity. "I was with 20 investment firms this week, and none of them asked about our charitable outreach," he told a writer for the Minneapolis Star Tribune, Neal St. Anthony, in 2004. "I think acting in [shareholders'] interest includes charitable outreach. I believe the employees function better knowing they're part of something bigger … that also touches the community."

Anderson was born in 1949 in Sheridan, Wyoming, but spent his formative years in the Minneapolis/St. Paul "Twin Cities" area of Minnesota, where his father served as a pastor of a Lutheran church in a struggling urban neighborhood. An admittedly poor student in high school, Anderson recalled in an interview with New York Times writer Abby Ellin that his C-average grades prompted a high school guidance counselor to remind him, "'Some of us, son, are just not meant for college.'" Determined to pursue a higher education anyway, he enrolled in Waldorf College, a junior college in Iowa, where he majored in sociology with a minor in art history. It was there that a history professor finally sparked a deep interest in learning for Anderson, and he went on to graduate from the University of Denver.

Anderson considered following his father's career path, and spent a year at Northwestern Seminary in St. Paul, Minnesota. Around 1973, not long after he decided against a career as a minister and left the school, he took a job with a local stereo store that had sold him his own sound system. When he was looking for full-time work, he wanted "a job where I could listen to music and get paid at the same time," he told Ellin in the New York Times profile. The store was called Sound of Music, and was one of eight mall-based locations in the Twin Cities area of a chain that was the forerunner of Best Buy. But Anderson did poorly on the commission-only job during his first two weeks, and briefly considered quitting before realizing the secret to selling was "do anything for the customer," he explained to Ellin. "The first stereo I ever sold I delivered personally, 70 miles away, and installed it myself."

Anderson eventually became manager of that Sound of Music store, but when the chain began to suffer quarterly financial losses, the owner, Dick Schulze, asked Anderson if he knew anyone who could help reverse declining sales. "I said—way out of character—that he should hire me to repair the damage," Anderson recalled in the New York Times interview, and Schulze agreed. Over the next few years Anderson helped the chain grow in a new direction, moving into the wider consumer electronics market with new videocassette recorders and camcorders, CD players and accessories, and portable personal stereos. In 1983 Sound of Music changed its name to Best Buy Co., and began opening warehouse-sized stores in Minnesota and then across the rest of the Midwest.

Anderson was named Best Buy's president and chief operating officer in 1991, and helped oversee a period of explosive growth for the company. One of his most controversial executive decisions was the abolition of commissions for its sales staff, a change that had been met with no small degree of opposition within the company itself and by high-end electronics suppliers, too. But research had shown that high-pressure sales tactics and the push to sell extended warranties rankled customers, and Anderson held firm on his decision. "Consumers have been very clear that they don't want sales people hovering around them," Anderson explained to Pete Hisey of Discount Store News, "and when they make their own decision, there's a lot more positive feeling toward us."

During the 1990s, Best Buy continued to enjoy impressive growth: It emerged as the sales leader in the personal-computer market, then advanced past Circuit City, its nearest competitor, to become the number-one consumer electronics retailer in 1996, and moved its brand into cities on both coasts as well as several southern states. In June of 2002, Schulze handed over the chief executive officer title to Anderson, though the founder remained active in the company as board chair. In the years that followed, Anderson became known for his support for innovation within the company and his generosity to various philanthropic causes. In 2003, he donated his stock options—granted to him by the Best Buy board as part of his annual compensation package—to line employees. "If I'm talking about unleashing the power of the people, and I get all the rewards, what I say is rather meaningless," Anderson asserted to St. Anthony in the Star Tribune article about the gift, which was valued at $7.5 million. "Part of what I did with the stock options was symbolic. I'm going to continue to do that. I want to lead by example."

Anderson oversees a company that posted $30 billion in revenues for 2005, operates 930 stores in the United States and Canada, and enjoys a market share of an astonishing 17 percent of consumer electronics sales in the combined market for those two countries. One of the most revealing details about Anderson's iconoclastic management style and commitment to innovation is in Best Buy's "results-only work environment," or ROWE policy. The movement to implement it began at Best Buy's corporate headquarters, and operates by the tenet that being in the office is not a sign of productivity; instead ROWE allows employees to set their own hours. ROWE started as a secret experiment at Best Buy's corporate offices in Minneapolis, and Anderson did not learn about it until it had been spreading through various departments for two years. "ROWE was an idea born and nurtured by a handful of passionate employees," Anderson told Business Week's Michelle Conlin. "It wasn't created as the result of some edict."