Home Depot’s Blueprint for Culture Change

Home Depot’s Blueprint for Culture Change Harvard Business Review By: Ram Charan

Robert Nardelli • CEO of Home Depot – December 2000 • Bernie Marcus and Arthur Blank Home Depot’s legendary cofounders • Goals: • Independence of stores • Take advantage of economies of scale • Inflexibility of company • Decentralized

Three part strategy • Enhance the core by improving the profitability of current and futures stores in existing markets • Extend the business by offering related services such as tool rental and home installation of Home Depot products • Expand the market, both geographically and by serving new kinds of customers

Tools for cultural change • To improve the collective ways in which people work together across the organization which supports the business model. • Metrics • Processes • Programs • Structures

Way’s to achieve strategy • Taking advantage of its growing scale • Centralize certain functions (purchasing) in order to leverage buying power • Functional, regional and store operations need to collaborate • Store environment needs re-evaluated

Metrics • Describes the values and makes clear what people will be accountable for. • Standardized the performance management process based upon quantitative criteria. • Three one-page documents

Processes

Programs • Set up five day forums which including district and store managers • Nearly 1,800 people • Small groups set up to invision where the company is going. • “This is what Bob and his team are trying to do” • Continued commitment has continued

Structure • Centralize Purchasing • “Super Saturday” • Get people affected by a change to help define the problem and design the solution. • Base your change on hard data

Home Depot Culture Today • Process • Hard Data • Accountability

Home Depot’s Blueprint for Culture Change