Home Depot Blueprint for Cultural Change Case Analysis

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decision he made was the layoffs of thousands who lost their jobs during the peak of the recessions (Stafford, 2014).

Situation Analysis

Using the situation analysis module, I found Nardelli’s internal assessment of Home Depot’s capability and capacity to meet his demands. The fit that Nardelli was able to find in the internal side of the company for the capacity of managers to unite for bulk discounts and grow to use financial statements was a fair plan to say the least. The true challenge of the transformation was to break the mustangs that “Bernie” had raised.

The managers that were the mavericks were still at the helm in the initial stages of the transformation. Although they had the ability to create value, and the resources and capabilities, they lacked the operational effectiveness. Although a manager should know where all products in the store are and the ability to guide and find the correct merchandise for the customer, they should have higher echelon jobs to do. The transformation required the mid and high level managers to do exactly that. The transformation to a corporate environment required immense amounts of training for the managers that wished to stick with the company. Once the staff absorbed and adhered the internal transformation could take hold.

While examining the external factors of the period that Nardelli had constructed this strategy equally as a response to external factors as well as seeing a gap in the market that if the company could grasp it would double in size internally. The competition heating up with other similar stores put an acceleration on their attempt to seize larger contracts while reducing costs through bulk purchasing. The plan to thwart the competition and external factors was only a success due to the success of the internal strategy and vice-versa.

Resources and Capabilities

Generally, Nardelli changed the Home Depot and reorganized the company way to be more centralized. For instance, according to the case, Nardelli located merchandising function to work with store operations in order to centralize and distribute buying power. According to Saia, director of global supplier performance management of Home Depot, in order to consolidate and control Home Depot’s supplier network, Nardelli launched Supply Center web site to enhance communication between suppliers and Home Depot (As cited in Bowman, 2006). However, a story instance is that some Home Depot managers found difficult to provide merchandise for special markets with this centralized merchandising system (as cited in Busch, 2008).

In contrast, according to Jacobs (2007) Blake granted store managers more authority to selected products needed for special markets leading to happier Home Depot’s associates. On the other hand, Nardelli also focused on the working culture, in which is believed a key factor building a sustain business for Home Depot. However, Nardelli failed to engage his employees into the transition of the company by switching full-time staff to part-time staff. According to the case, Nardelli changed the staff mix from 30% part-time to 50% part-time in sales department although part-time employees had less commitment than full-time staff. This change affected negatively in customer experience and loyalty. The case reported that customer complaint about the bad service. To turn this situation, when Blake took over Home Depot, he apologized customers and took action to improve the customer service. For example, the company implemented “Bay Sequencing” system used by associates at stores to assist their customers locating products in stores.

Business Rhythm

The CEO of Home Depot, Robert Nardelli, worked on changing the culture of the organization. He focused on improving the culture by increasing creativity, idea innovation, and critical decision-making process by creating a proper map of the communication throughout the organization. However, he lacked experience in such a business before, because he had worked for the General Electric’s (GE’s) power division. He was able to use his experience at GE to focus on building a strategy of achieving organizational goals, including forecasts, and implementing cultural changes as well.

Through his well-shaped, coherent strategy, he was able to include not only the vertical implementation but also horizontal implementation of enhancing the company’s culture. The entrepreneurial environment helped him successfully implement his plan, which was comprised of dose of discipline and accountability to enhance the company’s culture. This in turn created more value for the organization and for the customer as well. Nardelli’s approach toward the change was more systematic and formal. Similarly, he relied more on the facts and figures rather than being intuitive or following gut feelings. Thus, he set up the data templates to gather the data from all stores to analyze them based on the data provided. Similarly, many other steps were taken formally rather than informally. Therefore, it provided a learning program forum for the managers, as well as leadership-development programs, enabling the leaders from different organizational divisions to effectively communicate. One of Nardelli’s major successes was improving the organizational culture that not only helped to create a communication system within the organization but also helping to move toward the target achievement.

Alignment and Performance

We think that the alignment for each CEO, Blake and Nardelli, were completely different and came from different origins. The alignment for Blake was that of a group of rouge leaders each running their own ship on their own terms. The result was massive expansion in various parts of the country, with winning and expanding even more in the heart of every manager and employee. The alignment for Nardelli, was taking over the post of an undefeated champion and trying to convince the committed that they were doing it wrong, and that the success of their plan would not bring the same success in the coming years. The founders had cracked the code on how to get people to work on their houses and inspired a do-it-yourself revolution. Very few members of the company questioned the founders and were able to execute their goals with little to no push back from internal factors, and an unsuspecting market that made external factors welcoming. Nardelli was most likely fighting factions of workers that wanted his job and thought they could do as good of a job as the founders did.

The operational results that came from Blake, was that of rapid expansion and

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