The Home Depot Tiffanie Harrison. Overview...

The Home Depot

Tiffanie Harrison

Overview

Background

Problem

Analysis

Recommendations

Contingencies

Identify

Analyze

Recommend

Background Identify AnalyzeRecommen

dContingenci

es

Timeline19

90’s

Posi

tive

Cul

ture

Rem

arka

ble

Gro

wth

Mar

cus

&

Bla

nk S

tep

Dow

n

2001

Nar

delli

as

CEO

Profi

tabi

lity

Impr

oves

Cus

tom

er

Serv

ice

Dro

ps


dContingenci

es

ACSI Index 2001-2005

2001 2002 2003 2004 200560

62

64

66

68

70

72

74

76

78

80

Home DepotLowes


dContingenci

es

Net Earnings 2001-2007

2001 2002 2003 2004 2005 2006 20070

1

2

3

4

5

6

Net Earnings (in Billions)

Net Earnings


dContingenci

es

From Nardelli Blake

2006

&

Bey

ond

$350

m

inve

sted

to

impr

ove

cust

. sa

tisf

actionB

lake

Rep

lace

s N

arde

lliIn

vest

men

t in

5 k

ey

area

sM

SN M

oney

com

plai

ns &

Bla

ke’s

re

spon

seASC

I

incr

ease

s by

11 p

oint

s by

20

11


dContingenci

es

Problems Assuming that employee engagement has a

direct correlation to customer satisfaction… Focusing on the bottom-line and not customer

satisfaction Employee recognition and incentives sending

mixed messages Store manager behavior goes unchecked


dContingenci

es

Orangeblooded Culture


dContingenci

es

Inverted Triangle of Home Depot

Customers

Front-Line Associates

Field SupportCorporat

e Support

CEO


dContingenci

es

I Put Customers FIRST Find a customer; find the product. Inquire. Ask open-ended probing questions.

Ask, “How can I help you?” Respect. Be polite, professional and positive. Solve their problems. Thank the customer. Say, “Thank you for

shopping with us. We appreciate your business.”

“I was greeted by 5 people when I walked in but could not find anyone when I actually needed help finding something.”-Customer


dContingenci

es

In Addition to Customer Service…1. Execute Power Hours 100%2. Order & Pack-Down for your area3. Follow-up on all out-of-stocks4. Don’t allow a customer to leave dissatisfied

due to an out-of-stock5. Keep aisles uncluttered and easy to navigate6. Execute MAP standards7. Ensure that the ad is 100% set in your area

each week


dContingenci

es

Employee Rewards Success Sharing

Incentive program for hourly store associates driven by individual store performance.

What effect would this have on morale? Why are you getting a bonus if I do all of the work?

Homer Awards Individual awards given to associates for

outstanding customer service. Stock Grants

Starting at the assistant store manager level


dContingenci

es

Inverted Triangle of Home Depot

Customers

Front-Line Associates

Store Management

Field SupportCorporat

e Support

CEO


dContingenci

es

Strengths• Blake as CEO• Brand recognition• Entrepreneurial spirit• Strong history in terms of

sales

Weaknesses• Employee dissatisfaction• Convoluted employee

incentives• Poor rapport with customers• Poor rapport with

employees

Opportunities• Employee incentives that

actually interest employees• Capitalization of employee

strengths• Placing employees

according to ability

Threats• Lowe’s & other competitors• Competitors that have the

ability to work with professionals on a contract basis


dContingenci

es

Recommendation OverviewFocus on Store

Management

Clarify Reward Criteria

Lighten the Load of Hourly

Employees


dContingenci

es

Focus on Store Management Include store-level management in the pyramid for

accountability Make criteria for incentives clear & standardize Dale Carnegie training @ $1,350 per manager for a

2-day session. If 2 managers were sent from every store that would be approximately $5.9 million

This cash might be better invested in developing and/or refreshing existing programming

$45K for 55 hours a week. Increase salaries as a possibility. Approximately $22 million cash outlay


dContingenci

es

Make Criteria Clear for Rewards Back off of the Success Sharing program over

time Reallocate the 50% of the annual $63 million

payout to individual incentives Can we expect hourly and part-time

employees to fully buy-in to sales goals? Success Sharing will grow with time as store

managers are held accountable and trained


dContingenci

es

Lighten the Load At one point in time, HD invested $2 billion

into new hires for ample support Customers still complained that even though

there were more employees, there was still not enough help to go around

Moving forward, hire for strengths Allow sales employees to have a singular

focus Place people strategically

“Own the Pro”, Merchandising Execution Teams, etc.

This should come at no cost to the company

Contingencies

The Home Depot Tiffanie Harrison. Overview...

Documents

Transcript of The Home Depot Tiffanie Harrison. Overview...