For the past few weeks I have been targeting The Home Depot (NYSE: HD) with a broad critique that has been echoed by the voices of frustrated readers, investors, customers and former customers. When it comes to analyzing the company's problems, Home Depot customers and employees have plenty to say! They are screaming in anger, offering opinions of the company that are very very low. Lowe's, on the other hand, has received more favorable treatment but has not gone totally unscathed either
Bob Nardelli, the ultra-arrogant ex-CEO has been criticized for a lot of what ails the company. Employees have occasionally felt that some customers are impatient, irrational, and in a few cases dishonest. We heard that stores are dirty, poorly stocked, and not organized as well as Lowe's Cos Inc (NYSE: LOW), which has much newer stores. Complaints also emphasized Home Depot's failure to make delivery commitments on contracts in a timely fashion or not at all. Customers complained often of poor service from undertrained, inexperienced, uncaring employees.
This got me thinking about how employees were trained and I found the following site: Home Depot - careers. The following is the intro to the site. The site has some strange things going on. The header has a picture of three people -- Asian, white and black -- followed by the text promoting diversity. But then the body of the text takes a dramatic turn focusing primarily on Hispanic groups. I felt like I was on a non-diversity page, or some sub-section.
- At the Home Depot, we believe in the abilities and talents of all people. It is talent above all else that is cultivated, nourished and is considered to be the foundation of our culture. The greater the diversity of our people, the greater our ability to serve our customers.
- As part of our National Hiring Partnership, The Home Depot is proud and honored to have alliances with some on the most prominent and respected Hispanic organizations in the country. Together we are united to bring positive change to communities across the U.S. from economic development, education and health, to specialized job training.
What I did not see was how the training was done, how employees were rewarded, or what would entice anyone to make Home Depot a "career" choice. I got the feeling that it was more like a commercial with a lot of fluff and little substance. Given the reality on the ground -- or in the stores -- there is a disconnect between the company line and the truth. This is not good.
A new approach: I think Home Depot should start its own school or work in concert with community colleges and trade unions to establish very specific training programs in sales, building renovation, management, customer relations, safety and more. The program could offer certificates of achievement and count towards an AA degree for those who continue in the program after they start on the job. Home Depot could sponsor continuing education as well and this might set them apart from competitors.
Home Depot can only sell its goods at prices set by the market. It can only construct buildings for the going rate, whatever it is. The improvements have to come by way of employee training, recognition and reward of success, management awareness and follow through, and better understanding of retail sales and customer relations. My concern and the concern of others is that this is not the background and corporate culture that current management has nourished and they may not be the group to lead this company out of it's current doldrums.
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.
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.
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Reader Comments (Page 2 of 2)
7-01-2007 @ 1:41AM
Bill Morrill said...
I also am a former employee who left during Nardelli years.I saw the training (read a book answer ??s)some of which was inaccurate or did not apply to our region,now its done on computer.I learned alot from people who did their time in the field as I had.Bottom line folks like me who were hired with a trade background cost too much.They replaced us with recent graduates or retail employees from other backgrounds.I saw many who were capped,as well I saw a change in attitude after they were capped.Giving 250 a year does not make up the accumulation of a yearly raise,nor does it make hard workers strive for excellence.Home Depot doesn't care.I have complained about service and stocking issues locally and online.No Reply.It seems that they did away with the 1-800# for complaints because they dont want to be accountable.Recently I started a building project,I went to HD because I still hold shares there and some of my family works there.I arrived 6:30 am with list in hand and with my 7ton trailer in tow.I had the materials quoted the day before.I left at noon fully loaded most of which was done by my hands as well as pulling the order myself.11,000lbs of lumber and sheet goods.with service like this how do they expect to keep customers.my local lumber yard would have delivered in my yard for free and cost would have been 10% higher.HD is understaffed and many are unskilled & untrained.The motto should be America's unimprovement store. after I sell my stock I will never shop there again.Bill
7-02-2007 @ 3:53PM
Damien said...
I am a full time Home Depot associate in Garden and I agree that Home Depot does not give customers quality service. There are many times that I would like to give a customer quality service to find what they need but I cannot because there is not enough staff on the sales floor. I really wish Home Depot would hire more associates to help customers. It would make my job a little easier and it would offer a much higher level of customer assistance. I work very hard to give the customers the service they deserve and I am never rewarded for it. I love working at Home Depot but it gets very stressful at times any many times I go home exhausted cause I was the only one in my department all day.
Home Depot does give training on installation and the products we sell but many times I am not confident enough to sell a install or a product because I do not know much about it or am not experienced in certain types of installs.
I think Home Depot would be a much better company to work for if the hired more associates and offered more training.
7-07-2007 @ 11:15AM
Carl G said...
As a former employee of THD, for more than ten years, I can personally say that when Arthur and Bernie left the THD it was not the same. As for the commenter telling of all the incentives, they were taken away by BN and staff. The merit badges that the employees could earn by customer service was taken away and was not paid for the ones the employees had earned at the time. Bernie and Arthur would walk through the store and talk with the employees about how each was doing and were they being given everything they needed to do their job. But if BN ever came to our store he would have a group around him and would never speak to anyone unless it was a staged event. He did more damage to the stores than any one person in such a short time. His management style was bottom line. Get rid of older higher paid employees and use fewer employees and less experience. I know for a fact when I was hired customer service was the number one goal of all employees and management. The slogan used "you can do it we can help" is almost non existence now with the experience level what it is in some stores today. Had the environment been the same today as it was when I was hired I would probably still be working. I still own stock and will keep it for a while longer. If management would only review what made THD the store it was in the past and return to those practices it could be a good place to shop again.
7-09-2007 @ 9:09PM
Tinman said...
To imagine that ALL of these challenges are not faced by Lowes, as well, would be a 'nardelli'.
I have 5 years at Lowes (Departmet Mgr). The customer and the employee complaints sited in these posts can be attributed to us as well. Even with extensive training the level of pressure to do more and more with limited resources drives employees out the door as fast as the customers.
We ALL have work to do. The theory that the CUSTOMER IS KING is not followed up on. We can best honor the stock holders by doing what we promise for the customer.
I remember a line from IN SEARCE OF EXCELLENCE: "Good Service shuld not be a surprise."
7-09-2007 @ 9:38PM
Angel said...
as an Ass. of Home Depot for a very short time, i've had problems getting the help needed to do my job when needed. I work at the Service Desk, and i'm sometimes there a lone.There are a lot of different things involve in Special Sevices. Sometimes it can be hard to please every customer. Don't get me wrong, some customer want something for nothing some times, if that makes any sence. They also cut back hrs. because sales went down.