Organizational Excellence
Since it’s founding in 1978, Home Depot has continuously strived for organizational excellence in a variety of ways, some extremely successful and others less successful. The initial idea for Home Depot was the brainchild of several home improvement employees intent on improving on flaws they saw in their previous home improvement company. Since the 1978 founding, Home Depot has gone through three distinct phases in driving organizational excellence. During the first phase from 1979-2000 the founders of the company constantly strived to improve on the standard home improvement business model leading to growth from $22 million in revenue to $45.7 billion in revenue. This established Home Depot as one of the top names in home improvement.
In 2000 Home Depot brought in Nardelli from GE, who attempted to drive excellence by implementing GE business processes. These included implementing centralized processes, improving core stores and diversification, as well as a move into international markets. The new processes Nardelli brought over proved to be incompatible with Home Depot’s business model, leading to stagnated (and at times falling) stock price despite a doubling of revenues. Nardelli’s tenure proved that attempts to drive organizational excellence do not always succeed, especially if they push a massive culture change too quickly. Following the departure of Nardelli, Home Depot’s new CEO Frank Blake, pushed organizational excellence emphasizing engagement, enabling, and environment with employees returning Home Depot to its former core values. This led to the revival of Home Depot’s brand.
In 2000 Home Depot brought in Nardelli from GE, who attempted to drive excellence by implementing GE business processes. These included implementing centralized processes, improving core stores and diversification, as well as a move into international markets. The new processes Nardelli brought over proved to be incompatible with Home Depot’s business model, leading to stagnated (and at times falling) stock price despite a doubling of revenues. Nardelli’s tenure proved that attempts to drive organizational excellence do not always succeed, especially if they push a massive culture change too quickly. Following the departure of Nardelli, Home Depot’s new CEO Frank Blake, pushed organizational excellence emphasizing engagement, enabling, and environment with employees returning Home Depot to its former core values. This led to the revival of Home Depot’s brand.