My first reaction to the news that Bob Nardelli was out as the CEO of Home Depot was “thank god, I really hate that place”. Like most home owners I have made my fair share of visits to that god awful place and while I appreciate the fact that there is one close to me I always dread going there.
It was interesting to read the linked article about how the job of (public company) CEOs has changed and how Nardelli’s peers have responded while Nardelli mouthed the words but really resisted changing. This much is clear, it takes someone who is much more than an operations expert to run a large public company, and it requires someone who’s belief system is rooted in something more than shareholder return, such as customer experience.
Nardelli did a lot of things that were right in terms of cutting the cost structure at Home Depot, but in the process he made it a miserable place to shop, and as a second order effect, a miserable place to work. I can recall just a few months ago while standing in the checkout line (there’s always a line when you have 2 registers open and a quad of “self service” stations that don’t work for crap) and listening to the employees talking to each other about how a Lowe’s was opening in Foster City and they were all going over to put in their applications. This is not the kind of environment you want to foster as a CEO.
For all the criticisms that Bezos gets for the investments he makes at Amazon, the one thing that is beyond criticism is that the result is a strong customer experience and that makes you a loyal customer not out of necessity but out of choice.
In the end it may be that Nardelli’s $200+ million pay package doomed him but it’s a crappy customer experience and disgruntled employees that are dooming Home Depot.
Robert Nardelli’s demise as chief executive of Home Depot resulted, in part, from his failure to understand how profoundly the job of CEO has changed in recent years.
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