Robert Nardelli -- a Controversial Leader Leadership

Robert Nardelli -- a Controversial Leader

Leadership landscape has evolved greatly over the last few decades. Where there has been an extensive research performed in this area, major emphasis has been levied on distinguishing managers from leaders. And, in today's robust and diversified workplace, leaders with exceptional motivating power and business management ability is what every organization needs. This is the reason why obsolete leadership styles when exercised, tend to bring out disastrous results. This is precisely what happened when Robert Nardelli of General Electrics was made CEO of Home Depot, a leading store with a glorious history of excellent customer service and major customer satisfaction. Although Nardelli brought a rich experience to Home Depot but the ideology he was following had major clashes with the original vision of Home Depot which later on made him declared as one of the worst CEOs in the history of United States.

Before analyzing the leadership style of Nardelli, it is important to understand the culture that in which he was operating and grew throughout his career. It is acclaimed fact that the culture of General Electric is driven by numbers reflected in the balance sheet. Without criticizing this culture, one may agree that this work model works for GE due to its enormous size and highly extensive operations. Secondly, this culture is rooted in the foundation of GE. Whereas, if the case study of Home Depot is considered, the founders Bernie Marcus and Arthur Blank, had introduced a culture of entrepreneurship in this organization. For decades, employees were made responsible for their respective work domains with complete independence in terms of decision making and creativity. Hence, the motivation level of the employees was different prior to Nardelli. It was the difference between two sets of ideologies which made Nardelli a failed CEO.

After joining Home Depot, Nardelli introduced various measures which redefined not only the culture but also the business model of Home Depot. Some of these measures were replacement of a major number of skilled permanent workforce with contractual labor with relatively less experience (Colvin, 2001). Where such policy allowed a major reduction in fixed overheads, the decline in the customer service and efficiency and effectiveness of labor's performance was visibly observed. Nardelli further introduced extreme centralization of the work processes. New technological interventions with major investment were introduced with the decision making authority only resting with the Head office in Atlanta, the whole new process introduced uniformity in the business processes at all the outlets but too away independence at departmental level which made the employees highly demotivated.

Coming over to customer side, he also introduced a Do-it-Yourself shopping model which was contrary to the earlier vision of the store (Deutsch, 2001). Furthermore, change in the return policy also caused major customer loss as the customers failed to accept the new outlook of Home Depot. Resultant was major decline in customer service and customer base with loss in market share and reduction in listed prices of the store. If analyzed carefully, we would come across the fact that it was the desire of Nordelli, to control everything and become the ultimate decision making authority in the organization which made him fail as a CEO. He was highly task-oriented and visibly a believer of autocratic leadership.

Analyzing the personality of Nardelli as per trait theory, he was supposed to be agreeable, conscious, extrovert, open to experiment and emotionally stable (which are the evident traits of an effective leader). On the contrary, he was conscious but only towards the growth of the company and his objectives as the CEO instead of employees' motivation and customer's satisfaction. His failure to experiment and adopt the contemporary leadership practices with inability to form alliance with the stakeholders (employees, customers etc.) In the business raised question marks on his leadership later (Colvin, 2007).

Secondly, if the behavioral aspects of contemporary leadership models is considered, various factors can be identified which would lead to identification of reasons which caused failure of Nardelli as a leader (DePree, 2004). For example, consideration is the basic aspect of the leadership which allows one to develop and maintain a healthy relationship with the employees by providing them a comfortable and trust-based work environment but Nardelli insisted on taking things under his control instead of delegating it to his employees and empowering them (The Ohio Study). Nardelli was further found to be a job-centered leader instead of employee -centered one which made him focus only on the work processed and effectiveness along with efficiency supported by better numbers in the balance sheet (Michigan Study).

Further evaluating Nardelli leadership style on the basis of leadership grid model presented by Blake and Mouton, we can see that he was highly process oriented which makes him a production oriented leader (9,1) instead of an effective leader. Further reasons for Nardelli's failure can be identified in the light of theoretical implications presented by Fiedler. Fred E. Fiedler's (1967) contingency model suggested that leadership success depends on a match between the leadership style and the demands of the situation. Rather than train leaders to adapt a new style, Fiedler believed that leaders should match their styles with situations that are the best fit. Where Nardelli was a successful leader in GE which was run by an autocratic business model suiting its requirements, exercising same leadership style in the retail organization which was previously operating under entrepreneurial culture, lead to major clashes between the two. Resultant was visible to everyone in the later phase (Bass & Riggio, 2006).