Organizational Analysis
Structural Frame
Bernie
and Arthur believed in decentralizing operations as much as possible. Once a
store was built most decisions were made by the store management team along with
the District Manager and supported by the regional office. It was rare for the Atlanta-based
headquarters staff to make specific decisions the affected individual store
operations. Newly minted managers as
young as 23 or 24 years old were responsible for making hiring decisions and
had an unlimited checkbook to purchase merchandise for their stores. Mottos heard frequently throughout the stores
were “stack it high and watch it fly,” and “sales cures all.”
Nardelli
seemed to follow Max Weber’s “monocratic bureaucracy” model and initiated
organization restructuring protocols that focused on the five norms of
rationality: A fixed division of labor; a hierarchy of offices; a set of rules
governing performance; a separation of personal from official property and
rights; and the use of technical
qualifications for selecting (store) personnel (Bolman & Deal, 2008). Nardelli
quickly began changing THD’s organic culture into what he thought was necessary
in order to get to the next level of corporate growth. He instituted control systems throughout the
organization, began centralizing operations, promulgated performance metrics
and changed the everyday mantra to “accountability and compliance.” Adherence
to policy gradually overtook the free-wheeling mentality and rules were
mandated that dictated in no-uncertain-terms where the responsibility lay for
every aspect of Home Depot life.
Human Resource Frame
With
the imposition of external controls over store operations, the Home Depot
concept of “family” began to erode. What
began as a four-legged stool analogy, values/customers/work/family, turned into
a three-legged stool during the Nardelli regime (work, customers, values). Store Manager discretionary funds, commonly
used for employee cookouts and impromptu celebrations for achieving sales
milestones, were outlawed. Store
personnel were prohibited from assisting other stores with special events such
as Grand Openings, inventory preparation, training, and sales promotions. The
locus of leadership began shifting from the store level to a hierarchical or
vertical model with the home office often trumping locally made decisions.
The application of external
controls also affected the one-on-one relationship customers had with “their”
stores and the sales associates who assisted them. Store managers could no
longer hire knowledgeable trades-people due to new salary-caps and long-term
employees were targeted for removal and replaced with inexperienced individuals
making half as much pay. As employee empowerment became a thing of the past,
with the corresponding loss of loyalty and team spirit, the unique blend of products
and expertise so attractive to THD’s customer base disappeared. Ultimately, so did the customers.
Political Frame
Store associates hired BN (before Nardelli) were
accustomed to having unlimited access to anyone in the company. If more of a popular “special buy” product
was needed to satisfy customer demand, just pick up the phone and call the
corporate buyer who was happy to accommodate the request. Have a HR question? Call the regional office and get your answer.
BN associates were empowered to be creative, develop relationships inside and
outside the organization and get stuff done.
THD’s advertising slogan, “You can do it, we can help,” applied equally to
customers seeking DIY information and store associates seeking answers to
customer service issues.
With power coalescing around
Nardelli and his inner circle, and Home Depot employees rapidly leaving the
company by choice or fiat, it did not take long for organizational politics,
with its resultant emphasis on conflict and positional power, to become the
dominant form for workplace relationships.
Now, if a store required more merchandise
to satisfy customer demand, store managers needed a well-developed power base
of influential people to get the request approved. Without this requisite self-advocacy and
political savvy on the part of the store manager, the customer would be forced
to go elsewhere to make the purchase.
The new emphasis on political power
trumped the old focus on growing sales and acquiring product knowledge.
Political power trumped getting stuff done. Political power trumped the Home
Depot values of respect for all people, providing excellent customer service
and giving back to the community.
Political power trumped Bernie and Arthur.
Symbolic Frame
Desolate, bereft, discouraged,
soul-less. Although these are the words
that described the survivors of the Nardelli organizational reframing, there
was inspiration in the concluding moments of his reign. During the annual shareholders meeting in
2006, Nardelli refused to answer any questions from individual or corporate
stockholders. He was unconcerned that he
had embarrassed the board, upset the shareholders, turned off customers and was
acting in his usual arrogant manner (Bolman & Deal, 2008). Nardelli did not survive a vote of confidence
and was forced to resign.
The new CEO, Frank Blake, took
immediate steps to rectify the destructive legacy caused by Nardelli’s missteps
and brought back Bernie and Arthur.
Blake recognized the power of symbolism and knew he needed to do
something dramatic to recreate hope and faith.
In an elaborately staged ceremony and after four years in exile, Bernie
and Arthur were back on Home Depot’s closed circuit television dressed in their
customary orange aprons.
Bleeding
Orange Blood trumped Bob Nardelli!
