Home Depot's Strategic Plan

Still trying to recover from self-imposed wounds from the annual meeting debacle, Home Depot senior management is schmoozing with Wall Street as well as investors. CFO Carol Tome presented a version of Home Depot's strategic plan at the recent Goldman Sachs Global Retailing Conference. CEO Bob Nardelli has recently made himself available for media interviews. Bad publicity had reached such high levels that Home Depot did the previously unthinkable. Nardelli called HD founder and huge shareholder (at one point as many as 59 million shares) Bernie Marcus so he could say something nice about Nardelli's job performance. What Marcus said is what everybody but Nardelli already seems to recognize. Customer service is inconsistent at Home Depot stores, often bordering on abysmal. Touting various customer service initiatives such as the $30 million "Orange Juiced" program, or bragging about 5.5 million employee hours in stores for the second half of 2006 are meaningless to customers who cannot get the information and/or products they need when they are standing in the store. Lack of money is not Home Depot's problem. Lack of a customer-centered corporate culture is.

Home Depot senior management is trying to make strategic decisions. Nardelli recently announced that 300 jobs at the Atlanta HQ will be cut. But since it is not clear what those job responsibilities entail, it is equally unclear how this move will help improve the shopping experience for consumers. Recognizing the need to revamp its own corporate culture, Home Depot recently decided not to expand in Europe by acquiring Kingfisher, a UK-based home improvment chain. CEO Nardelli has indicated repeatedly that the SEC investigation into how the company accounts for stock options will have no negative material impact on Home Depot's finances. Home Depot caught a break in Chicago. Mayor Richard Daley vetoed a city council living-wage resolution that would have forced Home Depot, Wal-Mart and Target to pay up to $13 per hour in pay and benefits.

During the month of September, Home Depot intends to provide a national home show in more than 1,000 stores. Celebrities from home improvement shows will lead a number of how-to clinics. Vendors will offer in-store demonstrations of innovative products designed to save money and be energy efficient. There will also be interactive online workshops, and a virtual home tour specifically designed to show case brand new products.