![ed store manager home depot ed store manager home depot](https://pbs.twimg.com/media/CIxTTWaUYAEnaWJ.jpg)
Companywide performance metrics-including employee turnover and stores’ gross margins-forced Home Depot managers to see the broader financial impact of their decisions. Data presented in companywide formats encouraged Home Depot’s managers to look beyond sales as the only business goal and to understand relationships between revenue, margins, inventory turns, and other metrics. Detailed data quantifying customers’ perceptions of the Home Depot shopping experience suggested the need for better store lighting.
Ed store manager home depot how to#
How to activate Nardelli’s culture-renovation mechanisms in your company? Consider these guidelines: Metrics And more employees began recommending Home Depot to friends as a place to work-revealed by surveys of more than 80% of the company’s 300,000-strong workforce. Nardelli’s reward? Revenues and earnings per share virtually doubled from 2000 to 2005. Nardelli’s solution? Renovate Home Depot’s freewheeling culture through four mechanisms: metrics encouraging desired new behaviors, programs strengthening managers’ support of the new strategy, processes cementing the new culture (including a new companywide performance management approach), and structures eliminating inefficiencies (such as centralized purchasing). And executing these changes demanded a centralized, disciplined culture-alarming to managers used to behaving like autonomous entrepreneurs. The strategy required major changes-such as buttressing cross-functional collaboration and rethinking Home Depot’s traditional “warehouse” store environment.
![ed store manager home depot ed store manager home depot](https://resumesearchstorage.blob.core.windows.net/images/142/027/521/98003165_142027521.jpg)
To combat these problems, Nardelli defined a new strategy that included offering new services (such as tool rental) and serving new customer segments (including big construction contractors). But low margins, poor inventory turns, meager leadership bench strength, and looming rival Lowe’s threatened to derail its 20-year track record of spectacular growth. He knew that what had propelled the company from zero to $50 billion in sales wouldn’t get them to the next $50 billion. What to do when your company outgrows its business model? In 2000, Bob Nardelli faced this challenge as Home Depot’s new CEO. Many an up-and-coming company would do well to look to this model to gain similar advantage when the time comes to exchange the thrill of entrepreneurial spirit for the strength of established power. In this article, Charan lays out the panoply of tools that, wielded in a coordinated and systematic fashion, enabled Home Depot to get a grip on its freewheeling culture so that the company could reap-and sustain-the advantages inherent in its size. “But Home Depot shows-in perhaps the best example I have seen in my 30-year career-that a cultural transition can be achieved systematically.” Typically, culture change is unsystematic and, when it works, is based on the charisma of the person leading the change, Charan says. But vision, strategy, and leadership alone-while necessary-are not enough. The story of the vision, strategy, and leadership skills Nardelli used to move Home Depot to the next level has been told. What so effectively got Home Depot from zero to $50 billion in sales wasn’t going to get it to the next $50 billion. Each store’s vaunted independence was making the company as a whole highly inflexible, unable to take advantage of economies of scale. Rapid expansion had stretched cash flow, inventory turns, profits, and store manager ranks thin. And, as Nardelli himself acknowledges, the last thing anyone wanted was an outsider who would “GE-ize their company and culture.”īut despite its glossy high-growth exterior, Home Depot was standing on shaky financial footings. Talk about a shock: No one expected Marcus and Blank, both in their fifties, to leave. What could be harder than turning around a seemingly wildly successful company by imposing a centralized framework on a heretofore radically decentralized, anti-establishment, free-spirited organization? That was the challenge GE alumnus Robert Nardelli faced when he abruptly succeeded Home Depot’s popular founders, Bernie Marcus and Arthur Blank, as the top executive in December 2000.