January 21, 2015
Home Depot CEO offers three requirements for success
Through a special arrangement, what follows is a summary of an article from COLLOQUY, provider of loyalty-marketing publishing, education and research since 1990.
Profit margins and sales-per-customer have their place of importance, but when it comes to succeeding in retail, three more human strengths are required, said Frank Blake, chairman of the Home Depot.
"Energy, a habit of excellence and a great generosity of spirit," Blake told an audience at the National Retail Federation’s Big Show after receiving the organization’s annual Gold Member Award.
In a short presentation, Mr. Blake shared three tips for success:
Energy: "Retail excellence is about energy," he said, conveying how the best executive conversations are those that prevent him from sitting down, because he is so engaged and committed to the idea or topic.
Excellence: To succeed, merchants are required to build a habit of excellence. "It is day after day of making sure that the customer interaction exceeds that customer’s expectations every day," he said.
Generosity: This quality is applied first to employees and then to customers. The single most important mission to which retailers can commit is living up to their commitment to those who work for them. He illustrated with a story that took place recently in Columbus, Ohio, when he and other executives met with 20 associates. These meetings usually serve as feedback conversations, but on this day, the topic among the associates turned to one of thanks for the difference Home Depot has made in their lives.
"The single most important thing we do is that commitment to our associates," Mr. Blake said. "You cannot expect them to take care of customers if you do not take care of them."
Discussion Questions
What do you think of Frank Blank’s three tips for success at retail? Which is most important? What’s missing?
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A tad tired, but then things get to be cliches because they are generally true.
I was impressed that “Generosity” started with employees—logical but rarely articulated or acted on.
You can pick many things as “the criteria for success” but what I really like is the closing quote. Commitment to your employees will reflect in all areas of the business.
Retail remains a people business. That may well be the only true differentiator in an overcrowded marketplace. For customers, they want to be treated well—with energy, excellence and generosity. I couldn’t agree with Mr. Blank more on these immeasurable traits.
The addition I would make is “passion.” If customers sense sincerity and true passion about the help being offered and the commitment associates have to the retail operation, they will become more satisfied and more loyal.
Mr. Blake had me at “Energy.” It’s ALWAYS about the energy. Every circumstance we face is always about the energy.
Back in theology school I was taught that a good sermon had three points and a poem to finish it up. The poem is missing but this is a darn good sermon! The big test is what the parishioners do Monday morning.
These are three good tips. The most important of the three he chooses is generosity. More specifically, living up to their commitment to those who work for them. In retail you rely on the front-line associates to execute your strategy, communicate your message and provide real-time feedback on what’s working and what’s not. You need these associates to be engaged for success and the best way to do that is to live up to the commitments you make.
Consistency is one I would add. Specifically to online vs. the store experience. The customer experience should be the same and pricing should be transparent.
In light of Mr. Blake’s comments, it’s not surprising to observe Home Depot’s turn-around since the days of Mr. Nardelli. Many issues put forth in RetailWire are addressed if one can create a corporate culture where everyone strives to succeed with energy, excellence and generosity.
Nobody would challenge these ingredients to succeed, but the difficulty is to create an enterprise culture where these are woven into the fiber of the brand and not just words on a poster in the break room. Those of us who make the art and science of shopping our passion can see first hand the real manifestation of these requirements to succeed at Home Depot, when you walk into today’s Home Depot.
It would be hard to argue with such admirable goals. However, each one cited by Mr. Blank is highly subjective and unless there are specific steps, activities and tactics assigned to each one, these “tips” will likely live only on a plaque on the wall and not in the hearts and minds of Home Depot associates.
For example, while excellence in customer interaction is critical, it should also be noted that customer-driven ideas should somehow find a place in this discussion. That means empowering associates to both solicit and advocate ideas based upon their customer interactions in a measurable way.
The devil is always in the details, but certainly each of these three general categories of corporate behavior provide a healthy platform from which to grow the Home Depot business.
Mentioning employees in the list is very impressive. Often the employees are left out. They are the face of the company to the consumer, the embodiment of service and an important area to focus on training. Generosity toward employees is not often included as an important factor of success and I would emphasize that one.
I believe it was Bill Marriott that once said, “you cannot have customer relations without employee relations.” Generosity, or whatever you call true caring for employees, is key to success.
I am more interested in how these ingredients for retail success can be strengthened and if needed, increased in reserve for the thousands of store employees positioned as customer service associates and cashiers. There remains an abundance of retail executives needing a front-line sabbatical for a few weeks to exercise and refine the tools for success. This action in itself would certainly inspire the majority of employees to follow the leader(s). But that’s just what I think.
Frank’s comments are broad enough to cover the many areas that we have discussed in relation to associates. My fav HD store #420 in Scottsdale has seen real results in the executives’ efforts to improve customer service and associates’ attitudes. The story is more “cheerful” now and associates are always ready to help with more ideas and constructive criticism. Some of my home projects are more complex than my emails, so store #420 helps me to simplify the effort.
Good work Frank and team! GO HOME DEPOT!
Of the three mentioned, generosity was the surprising one, for it rarely bubbles to the top of lists—but definitely belongs on Mr. Blake’s list and maybe the most important as retail is truly a people business. Respect for the employees and building a culture that really listens and honors their voice is no easy task. The other two tips are broadly applicable to leadership and success across industries.
What’s missing? The leadership industry has thousands of articles and books on the subject (Amazon has nearly 170,000 titles on leadership), someone can surely find something. I would add personal perseverance and resiliency to drive through organizational hurdles and life’s challenges.
The one thing that I see missing is knowledge. Any employee/associate that does not know anything about the products they sell is useless. This includes the checkout. Just think how much more sales a retailer would have if their checkout person said have you tried the new flavor of this or that really goes great with X. Just look at how many web sites are putting knowledgeable person online to help customers shop.
Generosity—take care of your employees and they will spread the goodwill and take care of your customers. This, sadly does not always trickle down to every level of leadership or individuals who are responsible for others
Resourcefulness is another important trait. Recognize your own areas of weakness, know what you don’t know—this way you can always find an answer or solution for your customer from a variety of sources.