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Case Study

Renovating Home Depot: 2000-2006

By Jean-François Manzoni and Jean-Louis Barsoux

28 pages

December 2010

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Reference: IMD-3-1907

This is the case of a leader who came into a hugely successful company only to find out that it lacked basic systems and was running out of growth opportunities in its existing markets. Though a non-retailer, he had a lot of experience in different businesses and learned quickly. Having diagnosed the situation, he made overdue investments in systems and brought in new blood from outside, instilling new discipline, capabilities and operational efficiencies. Over five years, he managed to transform this seat-of-the-pants operation into a much more robust company, while at the same time continuing to deliver solid financial results. He also repositioned the company for growth in markets where there was little serious competition. These were considerable accomplishments for which he gained belated recognition. Yet, there were nagging concerns throughout his tenure: doubts from analysts about where he was taking the company; criticism from former executives that he was killing the entrepreneurial culture; question marks over the morale of store employees; complaints about customer service; and public disapproval for his expanding remuneration package. These issues came to a head in his sixth year in the job and specifically at a badly misjudged annual meeting with shareholders. Ultimately, he stopped listening to dissenting voices, and made a dreadful blunder – from which his reputation never quite recovered.

Learning Objective

The case covers four key leadership issues: 1) The complexity of leading a large company – and the 3 critical roles required of leaders – as strategists, architects and mobilizers. 2) The difficulty of transforming a successful organization – and how to make the case for change in such a company. 3) The need to manage one’s own competencies – and the dangers of carrying certain strengths too far: e.g. when does demanding become intimidating and when does self-confidence become stubbornness? 4) The need to manage oneself over time – particularly in terms of maintaining one’s ability to listen, as well as coping with disappointment and coping with criticism.

Keywords

Leadership, Change, Strategy, Culture, Customer Service, Growth, Resistance, Communication, Alignment, Shareholder

Settings

Northern America, United States of America
Home Depot, Consumer Services, Retail
2000-2006

Type

Published Sources

Available Languages

English

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