Perhaps one of the biggest news that opens 2007 is Robert Nardelli’s, Home Depot’s CEO, departure from Home Depot. Viewed as among the highest paid CEOs in the world—and at the helm of the world’s largest home improvement retailer no less—his leaving may have come as a surprise.
When Nardelli came to Home Depot, he brought with him the exacting management and leadership style he learned from GE and Case Corp. He was already a Six Sigma guy. However, it took him three years after joining Home Depot to unfold the Six Sigma carpet so to speak. His reason was that (to use his exact words) he wouldn’t want to push the concept down everyone’s throats.
Eventually, Nardelli made Six Sigma became the formula for Home Depot’s success. Everyone was involved in ensuring efficiency of strategic processes: making the supply chain as lean as it can be, using scale to unseat competitors, leveraging IT to reduce costs, and finding the right marketing formulas. Its focus was on quality of human interactions. The 325,000 shop assistants interact with customers about 3 billion times per year, and often at a very personal level, helping them select items like kitchen sinks and toilets. Every month, the volume of activity rises. The retailer opens a new store every 48 hours, and receives more than 10 million job applications every year.
What went wrong, then?
A banner story on Wall Street Journal, Nardelli’s leaving Home Depot was also seen as a case of Six Sigma failing to put the company move forward and maintain the lead.
We may have to wait a few days to know the full story.
Sources:
Strategy+Business: Winning Hearts and Minds at Home Depot
Wall Street Journal Online: The ‘Six Sigma’ Factor for the Home Depot
[…] In my previous post, I mentioned that what’s happening at Home Depot these days may be attributed to Six Sigma not delivering on its promise to improve processes and increase bottomline. […]