After all the posts about The Home Depot (NYSE: HD) and seeing so many comments about the condition of the stores, customer dissatisfaction and low employee morale, I started thinking about what management needs to do to turn things around. What would I do in this state of affairs? Only one thing came to mind. Leave the ivory towers and spend time in the stores. Not visiting, not inspecting, not for pep talks -- actually go to the stores and stock some shelves! Spend some time helping customers find what they need. Work at the customer returns counter. Work at the checkout counters. Help customers to their cars. Brown bag lunch with employees.
The Home Depot directors, officers, and senior managers need to actually return to the days of the owner getting his hands dirty. It's time to role up the sleeves and lead by example. No more reading reports to find out how things are going or visiting three stores in a day that have been prepped for your arrival. At this point, management needs to actually jump into the trenches with the troops and see the world from their perspective.
This is how Costco Wholesale (NASDAQ: COST) Starbucks (NASDAQ: SBUX) and Southwest Airlines (NYSE: LUV) grew strong, just to name a few. The leaders know from first hand experience what needs to be done because they have been there alongside employees and customers making sure they understood what it takes to build a successful enterprise and keep it that way. You cannot manage what you do not understand. When ex-CEO Nardelli left The Home Depot in January, he could have won a trophy for being the CEO most out of touch with customers, employees and shareholders on planet Earth. They could have used his likeness to craft the trophy itself.
I write this to remind management that there is no time like the present -- the time is NOW. Get to work -- real work! Then you will be able to turn the ship around. If not, you'll just leave a bigger mess for somebody else to clean up. Did I hear someone shout "spill on Aisle 3?!"
Those of you who are new to BloggingStocks can check out my other stories and read Chasing Value or Serious Money to find more potential opportunities and verify my track record as well. Disclosure: I own shares in SBUX, as of this writing.
Sheldon Liber is the CEO of a small private investment company and the vice president for design and research at an architecture & planning firm.Check out his other posts for BloggingStocks here.











Reader Comments (Page 1 of 2)
6-13-2007 @ 5:01PM
Jason said...
I agree 100%. As CEO of a corporation myself, I am always telling mgmt to get out there and jump into the trenches. The troops will appreciate the move and a greater amount of understanding will be gained.
HD are you listening? My local HD is also a big mess !
6-13-2007 @ 5:07PM
Charles K said...
As a long time (now frustrated) customer I am lookinf into shopping elsewhere for my goods. Home Depot, if you are monitoing these blogs, should know by now that customers are not happy. What small chains are doing and seems to be working, is sell a small percentage of each store to a general manager,who will work his or her ass off to make the store a winner, because if it's a winner they are huge winners. They will work harder and longer if it's part their store and they can see some green at the end of each year. These CEO's who give direct orders from their ivory towers don't have a clue as to what goes on in each store. The shelves are bare, dusty, and confusing. Heaven help us if you can find a clerk who can speak English or even knows what they are talking about. Simple rule if the customer is happy, they keep comming back. More volume, more profit, higher wages, happier employee who is qualified to do the job and will stay longer and even develop a relationship with the customer. What a concept!! sounds a little like all the little hardware stores you guys put out of business. Home depot and its stockholders deserve what they get. Warren Buffett where are you?
6-13-2007 @ 5:50PM
Butch Fedco said...
Management is a function of the business...their job is to manage the business not to be a clerk or a shelf replenisher. What the Depot needs is a trouble shoot task team that visit stores regularly. A trained team that can walk into a particular store and immediately see where problems are evident. The task team then reports to a task manager whom takes the woes to the proper channels for the fix. The problem with most retail establishments the size of the Depot is because of inter management politics...no one stands accountable. Buddy managers protect other buddy managers for many reasons...job security being the primary reason.
Another Depot problem is entrenchment. They at Depot believe they have a niche. True, they did have a niche at one time. That niche no longer applies. Depot was founded on imagination, something different. They at Depot have lost their imagination for different. They now run a very structured business...."no change necessary..we are the best at what we do." Depot needs imagination to make it better...new ideas, new business rather than always trying to fix the old business. The consumer is not so difficult to please...they expect a good value. they "need" service and maybe most importantly, the consumer is shopping because it is a form of entertainment.
Some retailers entertain very well, others have no clue.....Depot has lost it's imagination.
As a former mass merchandise retail professional, I can walk int any Depot store and within one hour provide a list of store problems and identify the source of the fault.
6-13-2007 @ 5:54PM
Sheldon L said...
Butch, thanks for your great comments.
I do not necessarily disagree with your assessment, but, I think they are not getting the straight scoop indirectly and need to take a more direct action. Management needs to remove whatever has set them apart from their customers, staff, and shareholders.
6-13-2007 @ 5:56PM
Dan said...
I seems so strange to me that top management spends so much time and effort to address problems...but they never go to the stores and hit the sales floor.
If they would go to the store on a normal weekend they would see first hand how badly they service their customers. Lowes is no better, both chains and many companies would be wise to have their managemnt get on the sales floor and service their customers...or shop the stores - without giving notice - and see how they service their customers.
6-13-2007 @ 6:02PM
homer poe said...
HD associate says: AT Least in my DIstrict our district manager and other district level people do go out and work the stores. They will show up to help and visit during slow times as well as really busy times i.e. all memorial day weekend. These folks helped pull down/packout productas well as helping customers throughout our store.Kudos to our folks. Not trying to make up for stores or associates that really do have poor customer service, but at my place we try to greet everyone and help as much as possible. We are a very High volume store and as such things are always missed. We run usally 3000 - +4000 checked out customers per day on a weekend. Most of those show up between 11:00 a.m. and 7:00 p.m. An 8 hour span. say about 250 checked out customers per hour for that period. There are 9 basic departments which would mean about 28 checked out customers per hour per department. And now suppose if we allow just 5minutes per customer for service We need 3 associates to take care of the checked out customers per dept. Now all this works if customers would just come to us one at a time and be completely taken care of in that amount of time. However not everyone can be pushed away that quickly and then this scenario was just "checked out customers" it doesn't include all the ones that need help just to talk or ask questions or looking around but waqnt info on every kind of lawnmower or lighr or air compressor we carry. Also don't forget the people thar really don't need anything they just want to come in and argue about what the sales person does or doesn.t know. SO If there is any way to fix all this let us know.
6-13-2007 @ 9:55PM
Me said...
They should be required to spend at least 2 days per month in a store "working" like the rest of us. No "announced" visits allowed. Just show up at a store and clock in/out--on time and follow the same rules that we are expected to follow. Grab a apron and DO NOT let the customers know you who you really are--just "be" one of us for the day and listen to what is really being said about the stores, the service, etc. I dare you to! You want to know the truth about what is going on in the stores, this is the ONLY way you will really know for sure!
6-14-2007 @ 9:20AM
Chris said...
I am relieved to see that I am not alone in this sentiment. My wife and I stopped shopping at HD about 2 years ago after repeated instances of being treated like a couple of pesky customers by unempowered employees. I can't imagine management was aware of the minimalistic (and sometimes, simply rude)service provision of their employees. I won't even browse through their flier in the Sunday paper anymore. I am in the process of moving and consequently buying new appliances, and I would not even consider shelling out the required thousands on major kitchen appliances at HD. Open your pockets Lowe's!
6-14-2007 @ 10:06AM
Me said...
Is Home Depot "listening" to any of this? I can "guarantee" you not a one of them gives a S***!
6-14-2007 @ 2:00PM
John Katica said...
This suggestion is right on the money....literally. Anytime any business puts customer service below #1 on their formula for success plan, they're destined for problems. Management should definitely teach by "on the floor" example. Put on an orange smock over a tee shirt and levis and show your staff you care. Perspiration will improve the bottom line more than another report.
6-14-2007 @ 1:16PM
Former HD employee said...
As a former Employee of HD, I can tell you that customer service GOES BOTH WAYS!!! We as associates need to be polite and knowledgable, but you customers need to be polite and patient as well. I can only speak for myself, but I always did my best to help everyone to the fullest of my capabilities.Most of the problems came when a customer either did not know what they wanted, and I had to spend 20 mins quizzing them to find out what they really needed, or they were trying to jerryrig something together and when a knowledgeable associate told them it would not work, they got pissed and blamed it on us. Majority of problems are just customers unrealistic expectations.
As a kitchen designer, I can't tell you how many times a customer came in with screaming kids in tow and 15 mins to spare and expected me to design a $10,000 kitchen in that time period. Get real!
On the other side of the coin, the mgmnt practices at HD are bad. The pay is low and getting lower, thanks to bean counters like Nardelli. I would be in the plumbing aisle trying my best to help people with the small amt of training I recd. and they would all ask me "where is the plumber?" I would reply, he/she is out making $75/hr- they don't work here. Can customers really expect HD to employ seasoned professionals at the wage HD is paying? again- Get Real!!!
Another HUGE problem is the scheduling. No one in their right mind would work those hours. That is why HD and WalMart have gone to the computerized template scheduling. That is why associates have to be part time and not full time. At HD being full time meant that I was on call and could be scheduled ANYTIME BETWEEN 4AM AND MIDNIGHT, and I had no say in my schedule. And in the spring peak season- it was 24 hrs a day. Monstrous!!! Again it goes back to customer expectations- we have been so spoiled by 24 hr restaurants and stores, that we deem it our right as consumers to shop anytime. What happened to the good old days when stores closed at a decent hour and closed on Sundays? People had more family time and went to church on Sunday, thats what. Get organized and get your shopping done at a decent time.
6-14-2007 @ 10:52PM
Joshua said...
If the H.D. really wanted to turn things around, to go back to the "old" days, then they should bring back Bernie and Arthur. The two men who made the Home Depot what it used to be. They understood what customer service meant. After all, they came up through the ranks of retail sales. The millions that they have today, they earned. The millions that Nardelli has, he stole. They also understood about taking care of the employees. Under their leadership, the H.D. stock split on average, every 18 months. When Nardelli took over, it hasn't split once in seven years. I think that Warren Buffet would be a very good thing for the H.D.
6-15-2007 @ 6:18AM
WalterP said...
I spent most of my working life in the "service" industry and was constantly on the "floor" talking to the "customers" and when I retired I joined HD because I missed the action so I take exception to the comment that HD associates don't give a S*(T. I won't argue that there are associates with that attitude but it is just a reflection of society as a whole. I bleed orange....if customers took the time to let management know when HD doesn't meet their expectations they would help weed out those associates that don't bleed orange.
6-15-2007 @ 8:44AM
buckmaster2253 said...
I shopped at The Home Depot many times only to become more frustrated each time. The lack of knowlegeable employees is incredible. I specifically remember asking some questions about an electrical project I was undertaking, when I was told that the employee really worked in home decor, but had to cover in the electrical department because they didn't have anyone to cover that dept. The employee with that knowledge was out moonlighting, making a good wage, and using HD only for the insurance benefits. Perhaps if HD paid better salaries to those knowledable tradesmen they could keep a knowledgeable staff on the sales floor. That dosen't even address the problem of checking out of the store. Why in the world would anybody would want to shop at HD knowing that it could take 30 minutes just to get out of the store. Thank God HD didn't put my local hardware store out of business, because I won't go back to the BIG BOX store again.
6-15-2007 @ 1:01PM
Skidoo said...
Some points from a current member of the "Big Orange Box"
-both customers and employees making comments here have valid points.
-Frank Blake has been in position for less than a year, give him a break people, you aren't going to see changes overnight.
-During his time in the company though, there have been more changes for the good in that one year than I have seen in my 3.5 years with the company.
-Yes, he is consulting the founders Arthur & Bernie. Arthur & Bernie's take on the Nardelli regime: "What the hell did you do to my stores?"
-Let's not forget this is a company that took back & gave money to a customer who returned a set of car tires, just to satisfy the customer who we all know is in the wrong, but it was the right thing to do. On that note, I would like to add that your tools & power equipment are warranted through the MANUFACTURER, not HD. I love those moments when customers bring in a 2 year old power tool trying to return it because it doesn't work. Lifetime warranty? GREAT! But that's through the manufacturer, here's their number.
~Some things to think about: We are in war-time, gas prices through the roof, and the housing market is crazy-down. Joe Homeowner is going to be careful about spending thousands on his home improvement. This in turn is hurting our sales, with no money coming in, it's hard to hire the right mix of people. It's tough to make a 45 million dollar sales plan nickel & diming toilet repair kits.
~Blake has committed more than 300 million dollars for staffing, refreshing & remodeling stores, restructuring Joe Cashier's pay & incentives to boost his morale which will help boost customer service. He's even committed to hire professional plumbers & electricians in at $30+/hr to strictly help customers, but once again, what plumber is going to work for $30 an hour when they can make $75/hr doing their craft?
-In my short time with the company I am more positive about its growth now than I have ever been. Just wanted to vent.
6-15-2007 @ 2:16PM
haveittodayray said...
More time will not solve Home Depot's issues and problems. The current CEO, is a clone of GE and does not have the retail background to understand the stores issues and problems. Suggest, he actually work in a store for two weeks, and get some practical experience. Until all the "GE" people are gone from Home Depot, brought aboard by Nardelli, this company is heading South. Lowes is still the growth company for the future of Home Improvement, they will continue to take market share and a greater slice of the pie awasy from Home Depot.
6-15-2007 @ 4:23PM
Paul said...
HD is a ten minute drive from my house and Lowes is a 30 minute drive. So I go to Lowes as much as I can because my HD absolutely sucks at cleanliness, stocking, customer service, and check out lines. I hope that Lowes will buy the big, decaying shopping area across the street from the 7 corners Home Depot in Falls Church, VA (the "sniper" Home Depot) so we have a decent store to go spend our money. Meanwhile, I continue to drive to Lowes in Alexandria VA and when I HAVE to go to HD, I go straight home and sign on and rate them as low as possible on their customer survey form to vent my frustration of having to go to the 7 Corners Home Depot trashy, dirty, crappy store.
6-15-2007 @ 6:55PM
Butch Fedco said...
There are basically three management teams to every big box retail organization...merchandising, operations, and finance. Then there's executive management who oversee the three teams. Operations is usually the team the has the responsibility of store operations. One of the three teams always points a finger at another team for fault. There is a need for a fourth team....call them "Trouble Shooters," they would answer to the "TOP." If the "TOP" can't fix things then no one can. The buck stops at the "TOP."
Look folks...this is retail were talking about not brain surgery. Retail 101, it should be very easy, but "oh no" lets make it as difficult as we can. If every HD paid person took ownership of their job, the problems would go away. Ownership is accomplished through reward. No ownership, no reward. No ownership....unemployment. The reward can be many things...but money makes em walk the walk..
6-15-2007 @ 10:22PM
Elie M said...
I have spent much time reading all of these comments. I think the pionts are valid, and there is alot of things that we are working on to improve. As you may guess i am a current employee of THD. More than an employee i am a manager for the Totowa,NJ store. For those of you folks that believe that we do not take your comments or concerns seriously, your sadly mistaken. I challenge you folks to gear your comments to your local store managers; contrary to your beliefs, many of us are "down in the treches" to make sure service and safety are priorities. It's inevitable that with size and volume there will be mistakes, we are all still human, but we try our best every day, dispite the temperments that we're addressed with. Great "SERVICE" comes from comes from respect and understanding, and although we hire and develop lots of new talent we can't be there for everyone; however we will go above and beyond to make sure you are satisfied.
6-16-2007 @ 1:22AM
John said...
I think that a lot of the problems at HD are caused because of low salary and inexperience help...Just as others have stated you can't expect a pro to work for what the store is willing to pay....I work at a store where there are times you have one associate for three or four departments...It doesn't matter if you know anything about the departments that you cver, just get over there and do it..If you say that you are not comfotable in the department , because you are not skilled , you are told,LEARN IT... I have been with the company for a while now , and I remember how it was with Arthur and Bernie... Just think about it , if they hired knowledgeable employees, and enough staff to service the customers, as they should be, the store could be a great place to work , as it was in 1996.. Remember this if you pay peanyts you get MONKEYS