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February 27, 2006
Militarizing retail
"In the military, we win battles and conquer the enemy. At Home Depot, we do that with customers."
So says the new breed of Home Depot store manager, summarizing the cultural change being fomented at the big-box retailer by CEO Bob Nardelli. Fighting, conquering, winning... more militarization of business.
Says Businessweek: "Nardelli is trying to build a disciplined corps, one predisposed to following orders, operating in high-pressure environments, and executing with high standards. Although he has yet to win all the hearts and minds of his employees, and probably never will..."
Nardelli's strategy is to usurp Home Depot's entrepreneurial culture by installing mostly former military officers in the company's leadership program and creating a just-follow-orders culture. Nothing wrong with employing plenty of military men and women. They can be just as effective company leaders as MBAs. But Nardelli's big-picture idea is to extend and embrace the battlefield culture from which many of them have recently graduated.
As a result, Businessweek says store
managers "nervously click through Blackberrys each week to see if they 'made plan.' " Employees talk about Home Depot's new "culture of
fear." While General Bob takes home $28 million a year, he's converting
the full-time workforce into battalions of part-timers. That's sure to help the balance sheet and destroy the bedrock of the previous culture, as well decades of valuable tribal knowledge.
I cringe every time business is compared to warfare, when competitors must be destroyed and company troops are expected to fall in line. War-happy business leaders see the world through a prism of mistrust and subterfuge. Secrecy becomes paramount as war-mongers position fear and propoganda as performance motivators.
But fear is a terrible motivator in striving for excellence or evangelism. A fight or flight response created by a fiat of fear makes it fairly impossible to collaborate or innovate with employees or customers.
As "Catch-22" reminds us, a not-my-decision bureaucracy is best at doing a lot of nothing and making it seem like something. The Yossarians at Home Depot must feel like they've been time-warped into the past.
Technorati Tags: Home Depot, Military, Culture
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Thanks to Church of the Consumer for pointing to the BusinessWeek article on culture changes at Home Depot. It seems CEO Bob Nardelli has instituted a military-style of management since taking over the giant retailer at the end of 2000. And what would ... [Read More]
» Home Depot Militarizes from Business Ethics & Corporate Social Responsibility
Check out a recent post on the Church of the Customer Blog (Militarizing Retail) about Home Depot brining in former military officers to move the company forward. I find the move very disturbing, not because Im against bringing former officers... [Read More]
This reminds me of the marketing metaphor discussions of Doc Searls -- perhaps he first discussed them in Cluetrain Manefesto. He says the marketing metaphors related to war always end up with customers being "targets." Searls argues that "dance" is a better marketing metaphor. It takes two to tango, as they say.
Yup, a dance or a date or in the penultimate of those... a relationship. I don't recall having heard someone wishing to be conquered or vanquished.
As a bonus, I recommend scrolling through the story's reader comments on the Businessweek website. Some speculate as to the motivation for such a strategy.
More than 10 years ago, successful businessman and author Jim Autry wrote "The last chapter on management by fear is about to be written." I guess Nardeli never read the book.
The good thing for those who study brands is that this will be a good case study in a few years: Jim Collins' research suggests that Home Depot has probably reached its zenith and will never make it to "great" with this kind of ego at the top.
Just one more reason to go to Lowes.
There is more than one culture functioning in the military. There is the command-and-control bureaucratic culture of the upper ranks, and the entrepreneurial teamwork culture of the ground troops. An interesting take on this is Robert Coram's biography of Col. John Boyd called Boyd. He was a principled renegade in the Air Force's bureaucratic culture. His impact was to change not only the understanding of the theory and practice of air-to-air combat, but also the design of military aircraft that are still being used today. But he had to do it by defying a bureaucratic culture that had lost touch with its mission. So too will Home Depot. I've notice for some time that the staff of Home Depot were less knowledgable, less cooperative than Lowe's. Now I understand why.
Mark -- You could be right about this as a future case study. It seems like Nardelli's trying to turn a zebra into a mountain lion. BTW, do you buy in to Collins' contention that leaders have to be the humble, quiet types to be effective?
Ed -- Great point. There are examples to be found in the military that aren't all command-and-control doctrines. There's also Mike Abrashoff's book, "It's Your Ship."
To cut Nardelli some slack here, I'm no expert on running a big retail operation or being in charge of 50,000 people. In this particular case, I'm just an obnoxious bystander in the bleachers telling the ref how to do his job.
At best, my hope is to be a voice in the Greek Chorus, commenting on the themes of a drama that seem portentous from the view found here in the evangelism bleacher seats.
Thanks for raising this. The other regrettable trend is use of the word 'Killer' to describe something as great. With the middle east in flames and fear in every street, peace would seem to be the smartest business strategy!
Ed:
I try not to buy into absolutes, because as soon as you make an absolute statement, you'll get bitten in the backside.
With that caveat, however, I'd say that humility is an admirable characteristic as long as it doesn't come off as weak, indifferent or scared. Jim Autry seems to be a humble man, and he successfully lead Meredith Corporation. Jesus Christ certainly wasn't indifferent or weak or scared. Colin Powell had a very successful military career and his head still fit comfortably inside a helmet.
I've worked for egocentric losers and watched them succeed despite creating chaos around them: they because their employees are too scared to fail. I think these leaders can build good companies. I don't believe, however, that they can build great companies. They don't have the empathy for others needs. They don't have the patience it takes for some ideas to take hold. They don't have the common sense to listen to someone else's idea and work together to make it better.
On the other hand, I've worked with quiet, sensible, humble people and I've seen them fall short of greatness because they don't have the stones to make something happen. They often keep the wrong people on the bus - to use one of Collin's metaphors - because they don't want to hurt them. I've seen otherwise sensible people make dumb decisions because they give in to big ego on the team.
So, in answer to your question, I'd rather support a humble leader than an ego-filled leader because I think the odds for success are in our favor.
My bad, Ben. I looked at the wrong line. My comment is in response to your thoughtful question.
I don't buy in to Collins' argument because of people like Herb Kelleher and Steve Jobs. Both have built companies over the course of 20+ years that continue to thrive.
While Jobs has the reputation of a domineering personality, both seem quite likeable. Granted, I've not been a dinner guest of either.
Just as it's impossible to measure charisma, it seems like a dangerous absolute to assert that a company is best led by a certain personality type.
Like you, Mark, my preference would be to work for a humble leader, but one of the best bosses I've ever had was someone with a reputation for being difficult and egotistical. He was, to an extent, but he wasn't an ass. A smart ass, yes.
He was super-smart, and I learned a lot from him. And I loved working for him.
Ben:
I think you hit on the characteristic that is MORE important than humility: you loved working for him! THAT's something that can be measured.
Year after year the Home Depot sends out a press release on how they are going to spend millions of dollars on customer service. I have a news flash for the Home Depot "It is not working" When I signed my contract on 9-14-05 the Home Depot was full of promises and now they can not seem to keep them. Now almost 14 months later and problems still are not corrected you can see the Home Depot just does not care about its customers. They will lose one customer at a time and end up like the old HQ. You can visit my web site at http://www.freewebs.com/myroof to see the destruction.
I've seen some improvements in customer service at home depot recently and im sure things are getting better.
-Darren
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