POST OF THE DAY
Home Depot
Store Manager Comments

Format for Printing

Format for printing

Request Reprints

Reuse/Reprint

By TurnerRock
July 3, 2001

Posts selected for this feature rarely stand alone. They are usually a part of an ongoing thread, and are out of context when presented here. The material should be read in that light. How are these posts selected? Click here to find out and nominate a post yourself!

Over the last several months I have had my early morning coffee while reading what people have been saying about MY company. I must say, between the ignorant people who don't understand what it means to leverage expenses to associates who can't see what the big picture is all about and that, yes, in order to have a Home Depot in the future the blanket raises of 12-15% annually had to stop, I'm humored and saddened at the same time.

Firstly, and listen very closely: IF WE DON'T CHANGE AS A COMPANY, WE FAIL! This is a point that every successful business understands and it took some bumps in our road to force us to figure this out. And what are my thoughts? GREAT! Sure we could sit back, continue to grow at 25-27%, continue to only grow EPS and Net Income by opening new stores, but if we do that, we will eventually reach a point of diminishing returns.

I hear all of the people talk of the 'good old days'. It's funny, I recently attended a kick off meeting for SPI (Service Performance Improvement), in which Larry Mercer (assistant manager of store #1, now Executive Vice President-Operations) said "You know, you hear people talk about the good old days, and folks I'm telling you, they weren't that good, and if we continue to run the next 20 years without learning lessons and adapting our business from the lessons learned in the last 20 years, we will fail." FROM THE HORSES MOUTH! The most respected man in this company, and really the only person left in the upper echelons of Atlanta management from the 'old days' -- HE GETS IT!

For those so quick to bash Nardelli, here are some very simple bullet points with rough figures from memory. These are things that have occurred in the last several months:

  • No longer does HD overnight mail EVERYTHING, we now 2nd day air.... Sounds insignificant right? $2,000,000 per year, right to the bottom line in savings.
  • No longer does interoffice mail get sent out twice per week, it is now once. $500,000 per year in savings.
  • No longer are the stores' receiving departments required to mail (2nd day, of course) many documents to the Atlanta store Support Center due to systems enhancements that have happened in the last 60 days. Total savings? $1,500,000 this year alone.
  • For many years, there was NO -- ZERO, ZILCH -- accountability for payroll. Managers GAVE out money like it grew on trees, with total disregard to budgets, guidelines, or even pay equity. This too has been fixed with extraordinarily stringent guidelines. Let me state, however, that we have done this without losing any of our 'pay-on-performance' values. It simply means that if an associate earns a 10% increase, then this will need to be offset by an associate earning a 1-2% increase. The cost savings here is well into the tens of millions of dollars. Also, on a personal note to the naysayers.... this philosophy affects EVERY level from associate to store managers, to D.M.s. I'm fine with it because I want there to be a Home Depot in 20 years!
  • Store managers now have e-mail in the stores. Again sounds simple, right? But this one step alone will save us over $3,000,000 in expenses this year alone.

I could go on and on about Nardelli and what he has brought. But stated simply, he has brought a new perspective that has brought a future. None of these (oh so simple) expense controls were put into place before Nardelli, and why not?

Understand, Marcus and Blank are phenomenal businessmen. They built and grew one of the greatest names in retail, but the HD of 1978 and even 1998 is not the HD of 2001 and we needed to change, to adapt.

I feel we have started down a road that should have been started down long ago, and the only thing at the end now is a pot of gold.

Yet on another personal note, I read some of the horrible things that associates are saying concerning their store or their store's management team. If you want to fix the issues, you can. Make the phone calls to your HR, to the Impact Line, to Atlanta; don't quit and please don't vent here, it devalues our company way too much in the eyes of the most important people in the world, our customers. In a company of 270,000 employees and over 1,200 store managers, there are going to be some bad apples, but if you make the right phone calls, and never give in in the face of adversity, you will succeed.

The future is extremely bright for us. SPI is going to change our world for the better; we finally are beginning to understand as a company what leveraging expenses actually means. And pretty soon, our GMROI and Inventory Turnover numbers will be going through the roof due to the pressure that Nardelli is putting on the merchants to ensure that items being bought do, in fact, sell! What a concept! Best of luck.... first, last, and only post.

Sincerely,
Store Manager - Midwest Division