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