Respect in Retail Roundup (Wal-Mart and Home Despot)


Forbes Article on Wal-Mart

Here is a decidedly pro-Wal-Mart article (“the fair and balanced Lean Blog”) in a follow up to this post about Wal-Mart's new employee scheduling practices.

Forbes points out that Lowes and Target also use this type of scheduling. Forbes highlights that the practices are pro-customer and that out-weighs any employee problems that might be caused:

Shorter lines at the register mean more happy customers who are more likely to return. That's more important to the business than a cashier, unhappy about spreading her work week over four days rather than three, quitting and not returning.

I gave Wal-Mart unsolicited advice, as did the guys from other blogs. At some point, I'll step back and realize Wal-Mart knows their business better than I do, obviously. I don't shop at Wal-Mart as it is (but do have a Sam's Club membership, go figure). The market will decide… will customers put up with grumbly employees or a bad experience with high-turnover employees if they get low prices and short lines? Probably, if it's at a cost/price focused store. Still, I wouldn't want to run a business like that. I'd hate to run a business where “low prices” is the only thing you offer.

A Lack of Respect Does in Bob Nardelli?

I'm itching to blog more about the demise of Home Depot's Bob Nardelli. Grumbly employees there led to poor customer service scores and declining market share. A lot of that was grumbling was blamed on Nardelli's shortcomings as a leader. No, I don't think the problems at Home Depot are a failure of Six Sigma, as the Wall St. Journal stated in an article today. Nardelli's story is one of greed (a huge pay package and even bigger severance package), a top-down autocratic management style, and an inability to connect with employees… oh, and he pissed off the shareholders, big time.

I have to say, I had it wrong on Nardelli. I had praised him before for his “Gemba walks” through the stores. Now you read stories about how he was so hated that he had to bring bodyguards with him to the stores.

There's so much to potentially write about with his story. Here's a link to a glowing Business Week cover story from January 2006. I've wanted to blog about that articlefor a while, how what might have read like a “Home Depot is doing great” puff piece contained a lot of details that might have hinted at the coming downfall.

The sub headline of the article read:

Skip the touchy-feely stuff. The big-box store is thriving under CEO Bob Nardelli's military-style rule

Wow. Read the article and I'm curious to hear what you think of what you read from the perspective of a lean thinker and a lean leader. I'll share my thoughts over the weekend.

Other tidbits on Bob and his style, all direct quotes from Business Week:

  • Observes Goldman, Sachs & Co. (GS ) analyst Matthew Fassler: “Bob believes in a command-and-control organization.”
  • Nardelli is trying to build a disciplined corps, one predisposed to following orders…
  • Some describe a demoralized staff and say a “culture of fear” is causing customer service to wane.
  • Now [managers] click nervously through BlackBerrys at the end of each week, hoping they “made plan,” a combination of sales and profit targets.
  • The once-heavy ranks of full-time Home Depot store staff have been replaced with part-timers to drive down labor costs.
  • “He's the hardest-working guy you'll ever see,” says his former boss, Jack Welch. “If I was working late at GE and wanted to feel good at 9 p.m., I would pick up the phone and call Bob. He would always be there.”

If you're reading those quotes above as a traditional style manager, you might think “what's wrong with that, Mark?” If you're reading it as a “lean guy” or a “Deming disciple”, you probably cringed.

You know, I don't need to say anymore. You read and you decide. Read the “eulogies” in the comments from Home Depot employees there on the Business Week site. “Boss haters” I guess Jack Welch would call them, eh? It's easy to not like a guy who walked away with $210 million for doing a lousy job at CEO.

Tip of the Hat to Seth Godin, also.

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Mark Graban is an internationally-recognized consultant, author, and professional speaker who has worked in healthcare, manufacturing, and startups. His latest book is Measures of Success: React Less, Lead Better, Improve More. He is author of the Shingo Award-winning books Lean Hospitals and Healthcare Kaizen, as well as The Executive Guide to Healthcare Kaizen. He also published the anthology Practicing Lean that benefits the Louise H. Batz Patient Safety Foundation, where Mark is a board member. Mark is also a Senior Advisor to the technology company KaiNexus.

  1. Anonymous says

    That’s probably one reason Jack Welch has had so many failed marriages, calling Bob Nardelli at 9 PM to “feel good” instead of being with family.

  2. Anonymous says

    It’s just a good thing that HD wasn’t “doing lean” or people would hold that up as a “lean failure” intead of a six sigma failure.

    I don’t get the management approach that worships the militaristic “top down” command and control leadership style where the big boss barks orders at everyone else to follow. Why do people think that is the right approach? Why do so many people gravitate to that style instead of the Toyota management approach? Why do we pay these “leaders” so much? How does a guy like that get to the top (almost) of GE?

    The more I read about or get exposed to folks from the famed GE leadership system, the more I’m disgusted with the GE “leadership” system.

  3. elizabeth says

    i just want to know how much cash he actually walked away from us with some have said it was mostly hd stock which seems fair since it has tanked for so long now i remember the daze of $60 a share glad he is gone hope frank blake shows us that he values his long term employees those of us that have been around for awhile

  4. […] Update Jan 4 2007 — I really had it wrong on Nardelli, see the latest news and post. […]

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