Home Depot's systematic approach to culture change and leadership under Robert Nardelli

Culture Change & Leadership

Home Depot culture change under Robert Nardelli

Robert Nardelli joined home depot in 2000 and found an organization that was largely successful indeed it had a 20 years growth record and was beating other competitors like Wal-Mart in the market. However, there was underlying approaching financial and operational problems that would in the near future drag it downwards. Robert Nardelli had the challenge of changing the culture of the organization so as to evade these two major challenges in the future, this was worsened by the backdrop of the closely knit and freewheeling existing culture that had been installed by his predecessors.

Robert approached the culture change challenge in two major ways; personal leadership and encouraging employees as he put ultimatums. He needed to change the organizational culture and immediately brought in a former colleague at General Electricals Dennis Donovan to be his head of Human Resources. This in a way helped him make a statement that there was going to be major changes in the organization in order to achieve the continued growth of the organization.

According to Edgar Schein, any meaningful and planned learning, development and change cannot be well understood without understanding culture to be the root cause of the resistance to change hence culture understanding is essential to all managers (Value-Based management, 2011). Home Depot by then had a widely regarded culture of focusing fully on the customer needs on the sales floor until even the managers often forgot about their paper work which finally ended up not attended to completely. There was also a decentralized system where the managers of each store made decisions independently hence ending up in differing agreements with suppliers. As the chain store grew bigger, there began to be a lack of strong career development programs thus making the store run short of talented managers to run the organization.

To tackle the issue of poor inventory, weak cash flow and low margins, he initiated a centralized purchasing, an idea that would give the chain store a higher buying power leverage than its competitors like Lowe's, as well as curbing the differences that emerged in the stocks from one store to another and brewing a potential conflict. To aid this process, Robert ensured that the performance data was presented before the relevant parties and decisions as to what and where to purchase from was made in a collective manner.

There was need to re-evaluate the significance of the layout that was adopted over the years in the stores. With time, the haphazard layout and the lack of signage was no longer relevant particularly with clients who had little time to walk around.