Home Depot Executive Summary

Since the organization was taken over by Nardelli, the store managers facing the change he put in place were resistant to them. While it is important for the organization to change the model of store management currently in place, benefits could be found in other avenues of change as well. Therefore, one recommendation for management intervention is to dissect the problems using OODA, or observe, orient, decide, and act. The OODA Loop is:

As originally described by Boyd, the first activity is Observe which means detecting the enemy aircraft. The second activity, Orient, refers to pointing or orienting the aircraft toward the enemy to be in a good position to enter the third stage, Decide. After deciding what the next step is, the fourth

A stock price this low had some investors concerned that a hostile takeover of the retailer might become a possibility. The new CEO, Frank Blake, recognizing that the corporate culture would not sustain a profitable company, started to make changes within the organization after his hire in January of 2007. Nardelli had taken The Home Depot from 1,134 stores in 2000 to 2,000 stores in 2005, with a plan on opening another 400-500 additional stores from 2005 to 2010 (The Home Depot, 2005). Frank Blake recognized The Home Depot had become too stretched and needed to focus on rebuilding the customer service that once had made The Home Depot a strong contender among retail stores and the number one home improvement retailer. This caused Blake to stop the expansive store growth, close 15 underperforming stores, sell the newly acquired supply, and close the EXPO design centers. The Home Depot then started in-store initiatives that focused on customer service. It reinforced the need for customers to have positive interactions with staff and encouraged staff to seek the answer if they did not have the answer. Additionally, there was also a corporate initiative to have no tasking during peak customer service

This was shown by the downturn in The Home Depot during the Nardelli leadership. Customer service was not an emphasis for The Home Depot, and the workers felt their success was built on making sure their tasks were completed and metrics met. When Frank Blake became the CEO and placed the emphasis back onto customer service, a turnaround came for The Home Depot. Research has shown that 68 percent of customers who chose not to return to a retailer have made that choice because of how they have been treated by retail employees. In another study, it was shown that the quality of service and treatment the customer receives affects the customer’s satisfaction, the loyalty of the consumer, and the company’s profit and ability to cross-sell to the consumer (Nanda &Murty, 2013,