Another G.E. Guy Gone
 
As many of you know Bob Nardelli, now former CEO of Home Depot (and former CEO of GE Power Systems - and runner up for Jack Welch’s seat) is gone. You can read about it in all of the business magazines/newspapers so I will spare you the details. In my opinion I can sum it up as GOOD!!! On Motto Magazine’s Blog, I commented on the post entitled: The Hardest Job -- Made Harder Kevin Salwen the article focused on his $210 million severance package Click here ------------------------------------------------------------------------------- Kevin you hit it right on the nose. “I believe in big pay, but it has to come after big performance.” I think it is obvious now that Nardelli was not the right guy. You want to know what the real problem was...besides his pay? It was his much ballyhooed “Command and Control” style. Businessweek even featured him in a story sub-titled “Skip the touchy-feely stuff. The big-box store is thriving under CEO Bob Nardelli's military-style rule”. NOT! The company needs many of the tough policies he implemented but what it was needing was inspirational leadership that first and foremost built trust and realized that it’s # 1 asset was not its inventory but its people. This is not touchy-feely stuff. It is common sense. ------------------------------------------------------------------------------- I do want to make a clarification. Bob Nardelli did deliver BIG PERFORMANCE! He not only doubled the revenue of Home Depot but also it’s profits. The company had too much of a loosey goose style that needed to get rained in. So do not get me wrong but Bob did do a good job from that standpoint. Although the reality is the stock was flat throughout his 6 year tenure. Why you say? It is not fair you say? What’s the matter with the market you say? All good questions but let me tell you something about the market you may already know. It is a casino. Most people do not bet on the solid numbers coming out of the annual reports (even if they were accurate) but on the story. That’s right the story. Why do you think some stocks climb way high when they have zero revenues? It’s the Story STUPID! Bob did not get this. Yes I know the numbers are important but proper attention has to be paid to the story that is being told...and how it is being told. An excellent example is Apple. Compare the two (yes you can compare Apple and Orange). Both are facing great growth and profits but one has had a flat stock in the last 6 years and the other has increased by 28 fold. Why? Just walk into any Apple store and experience the magic. You just want to touch everything. You stare with a wide grin at not only the products and how they are displayed but also the business process. How you are greeted. How there is always a knowledgeable person there ready to help you. How you have the genius bar ready to fix your computer/software problems... I could go on and on. Now I do not know about you but I am scared to go into any Home Depot here in NYC. Most of the employees are surly (if you can find any) and many are not knowledgeable. It was not always this way. Home Depot use to have plumbers, electricians and carpenters working for them but they decided in the last few years to get rid of them and hire more college kids. Not a problem, if you properly trained them. Now I was not an employee so I do not know the level of training that was given but one thing is for sure. If there was training it was aimed more at management and not the retail floor where it counts the most. Whose to blame? Lazy employees? I don’t think so. It is management's fault for once again thinking that it’s # 1 asset is it’s data systems and inventory and not its people. “Command and Control” is one lousy story. http://www.whatsyourmotto.com/Blogs/2007/01/03/the_hardest_job/http://www.businessweek.com/magazine/content/06_10/b3974001.htmshapeimage_1_link_0shapeimage_1_link_1
Monday, January 8, 2007
Image from BusinessWeek.com
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