Home Depot’s CEO Believes In Top Down Leadership

Mar 16, 2004
George Anderson

By George Anderson

Bob Nardelli’s tenure as the chief executive of Home Depot is the subject of the latest In The Lead column by Carol Hymovitz in the Wall Street Journal.

Mr Nardelli described (almost with a sense of horror, it seemed to this reader) entering an entrepreneurial atmosphere where headquarters was called “the store support center.”

“The company’s co-founders used to tell store managers to ignore messages from headquarters and do what they each thought best,” he said.

Determined to rid the company of what he viewed as its “cowboy culture”, Mr. Nardelli began instituting changes that ruffled more than a few feathers. He shifted control away
from the stores and back to headquarters with centralized purchasing, tighter inventory control and standardized displays. Formal report responsibilities went up significantly
for stores in the process.

One former human resources manager at Home Depot told the Journal that some left Home Depot, in part, because Mr. Nardelli’s “do it my way style undercut the sense of ownership
employees had.”

Mr. Nardelli hasn’t had to worry too much, however, about ruffling feathers of analysts and shareholders. A boom in the housing market has helped the retailer achieve record
sales and earnings. The company has used its resources to build new stores and for modernization projects.

“I can walk though a store and know within five minutes if it is operating successfully,” he told the Journal. “It’s all about whether store associates look you in the eye and
say hello, whether they have an energy in their step, whether the shelves are full, the lights are bright, the place is clean.”

Moderator’s Comment: What is your assessment of Bob Nardelli’s leadership at Home Depot?

Only 29 percent gave Mr. Nardelli a positive rating for his leadership of Home Depot in Forbes’
CEO Approval Ratings
in February.
Anderson – Moderator

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