Bob Nardelli is now the former chairman, president and chief executive officer of Home Depot. Mr. Nardelli and the company's board of directors mutually agreed he should resign with a parting gift of a $210 million severance package.
Mr. Nardelli has been the source of controversy on a number of issues during his tenure with the home improvement retailer. Among the many complaints against Mr. Nardelli from inside and out of Home Depot were his lack of retailing business acumen, an autocratic management style, excessive compensation, slowing sales, a dismissive approach to investors, and an underperforming stock when compared to rival Lowe's.
When Mr. Nardelli first arrived at Home Depot, he was determined to change the "cowboy culture" of the company, according to a Wall Street Journal report. Prior to his arrival, store management had a great deal of autonomy. Company founders Bernard Marcus and Arthur Blank would visit stores and personally instruct associates on customer service. As the WSJ piece points out, Mr. Nardelli was ill at ease in interacting with front line employees.
To establish discipline, Mr. Nardelli actively recruited former military and/or GE people to join the company's management ranks. The result is that many who had grown up with Home Depot in its rapid rise began leaving the company.
A source close to the company, told RetailWire, "Most feel that the biggest travesty is all of the 20+ year 'stars' that left because of conflict with Nardelli. He replaced these people with folks that appear to be very operations focused and not exactly seasoned vets in their field of responsibility."
In an apparent cost-cutting move, Mr. Nardelli cut back on full-time employees with experience in the construction trade and moved to more part-time workers with little or no history in do-it-yourself projects. During his tenure, Home Depot was frequently taken to task for poor customer service.
To replace Mr. Nardelli, Home Depot has stayed in-house, picking Frank Blake, himself a former executive with GE, as its new CEO.
In a press release, Mr. Blake said, "The Board and I are committed to continuing on our current strategic path and remain focused on enhancing performance and delivering value for customers, shareholders and associates."
Discussion Question: Is retail experience necessary to lead a large chain business?
- Behind Nardelli's Abrupt Exit - The Wall Street Journal (sub. Required)
- Robert Nardelli Resigns as Chairman and Chief Executive Officer of The Home Depot and Is Succeeded by Frank Blake - Home Depot/PRNewswire-FirstCall via COMTEX News Network