Senior consultant
Introduction
chapter
ONE
The Power of Reframing
B
ob Nardelli expected to win the three-way competition to succeed management legend Jack Welch as CEO of General
Electric. He was stunned when Welch told him late in 2000 that he’d never run GE. The next day, though, he found out that he’d won the consolation prize. A director of Home Depot called to tell him, “You probably could not feel worse right now, but you’ve just been hit in the ass with a golden horseshoe” (Sellers, 2002, p. 1).
Within a week, Nardelli hired on as Home Depot’s new CEO. He was a big change from the free-spirited founders, who had built the wildly successful retailer on the foundation of an uninhibited, entrepreneurial “orange” culture.
Managers ran their stores using “tribal knowledge,” and customers counted on friendly, knowledgeable staff for helpful advice. Nardelli revamped Home
Depot with a heavy dose of command-and-control management, discipline, and metrics. Almost all the top executives and many of the frontline managers were replaced, often by ex-military hires. At first, it seemed to work—profits improved, and management experts hailed the “remarkable set of tools” Nardelli used to produce “deep, lasting culture change” (Charan, 2006, p. 1). But the lasting change included a steady decline in employee morale and customer service.
Where the founders had successfully promoted “make love to the customers,”
Nardelli’s toe-the-line stance pummeled Home Depot to last place in its industry for customer satisfaction.
3
c01.indd 3
6/30/08 12:55:52 PM
A growing chorus of critics harped about everything from the declining stock price to Nardelli’s extraordinary $245 million in compensation. At Home
Depot’s 2006 shareholders’ meeting, Nardelli hoped to keep naysayers at bay by giving them little time to say anything and refusing to respond to anything they did say: “It was, as even Home Depot executives will concede, a 37-minute fiasco.
In a
chapter
ONE
The Power of Reframing
B
ob Nardelli expected to win the three-way competition to succeed management legend Jack Welch as CEO of General
Electric. He was stunned when Welch told him late in 2000 that he’d never run GE. The next day, though, he found out that he’d won the consolation prize. A director of Home Depot called to tell him, “You probably could not feel worse right now, but you’ve just been hit in the ass with a golden horseshoe” (Sellers, 2002, p. 1).
Within a week, Nardelli hired on as Home Depot’s new CEO. He was a big change from the free-spirited founders, who had built the wildly successful retailer on the foundation of an uninhibited, entrepreneurial “orange” culture.
Managers ran their stores using “tribal knowledge,” and customers counted on friendly, knowledgeable staff for helpful advice. Nardelli revamped Home
Depot with a heavy dose of command-and-control management, discipline, and metrics. Almost all the top executives and many of the frontline managers were replaced, often by ex-military hires. At first, it seemed to work—profits improved, and management experts hailed the “remarkable set of tools” Nardelli used to produce “deep, lasting culture change” (Charan, 2006, p. 1). But the lasting change included a steady decline in employee morale and customer service.
Where the founders had successfully promoted “make love to the customers,”
Nardelli’s toe-the-line stance pummeled Home Depot to last place in its industry for customer satisfaction.
3
c01.indd 3
6/30/08 12:55:52 PM
A growing chorus of critics harped about everything from the declining stock price to Nardelli’s extraordinary $245 million in compensation. At Home
Depot’s 2006 shareholders’ meeting, Nardelli hoped to keep naysayers at bay by giving them little time to say anything and refusing to respond to anything they did say: “It was, as even Home Depot executives will concede, a 37-minute fiasco.
In a