Can Frank Blake Revive Home Depot?

Home Depot’s stock closed yesterday at $27.18; 29% lower than a year ago. That’s certainly troubling, but what’s even more concerning for the retailer is the poor feedback from its customers:

  • According to the American Customer Satisfaction Index, Home Depot’s satisfaction dropped 4.3% in 2007 — the largest drop of any specialty retailer that it tracks. By comparison, Lowe’s customer satisfaction increased by 1.4% over the same time-frame.
  • In Forrester’s Customer Experience Index, Home Depot received a score of 72%; 25th out of 27 retailers. Lowe’s, on the other hand, ended up with a 79%; 15th out of the retailers.

This is a terrible story. So is Home Depot doomed to failure? Not necessarily. While the firm has a lot of problems to fix, it’s got one key part of the solution in place: Frank Blake as CEO. I just read a Q&A with Blake in the Wall Street Journal which really impressed me. Blake seems to be doing a lot of the right things to make the company more customer-focused, in particular:

  • He went to the founders for advice. During store visits with Bernie Marcus, Blake learned the importance of the connection between associates and customers. As I’ve said many times in this blog, companies often lose site of what’s important; letting the hunt for profits obscure the company’s purpose. Founders can often help restore the original sense of purpose.
  • He thanks employees– personally. When it comes to great customer experience, it’s critical for executives to get actively involved. I’ve often discussed the thank you notes (called “Blue Notes”) that David Neeleman (JetBlue ex-CEO) sent out to employees who did something good for customers. It turns out that Blake asks for examples of associates doing extra-ordinary things and he sends out 40-50 handwritten thank you notes per week.
  • He understands the levers of leadership. To quote Napoleon: “The role of the leader is to define reality and give hope.” Blake understands that he needs to lead the entire organization through major change so he sticks to simple messages that everyone can understand and pushes his executive team to make decisions.

If Blake is looking for what to do next, he should take a look at following eight questions that gauge the customer-centricity of management teams:

  1. Do senior executive staff meetings have a recurring agenda item on customer experience? (this does not include dealing with customer emergencies)
  2. Do internal communications from the CEO/President regularly include discussions of customer experience?
  3. Do external communications from the CEO/President regularly include discussions of customer experience?
  4. Is customer experience explicitly discussed (in some form) within the company’s strategic plan(s)?
  5. Does the executive team have a clear set of customer experience objectives?
  6. Do most of the executive team members have goals based on customer experience objectives?
  7. Is the compensation of executive team members tied to customer experience objectives?
  8. Does the organization believe that the CEO/President would trade-off some short-term financial results for longer-term customer experience gains?

The bottom line: Home Depot appears to be in good hands.

Written by 

I'm an experience (XM) management catalyst; helping organizations improve results by engaging the hearts and minds of their employees, customers, and partners. I enjoy researching and speaking about leading-edge XM topics. I lead the Qualtrics XM Institute, which is the world's best job. We're igniting a global community of XM Professionals who are inspired and empowered to radically improve the human experience. To achieve this goal, my team focuses on thought leadership, training, and community building. My work is driven by a set of fundamental beliefs: 1) Everything starts and ends with human beings, so you need to understand how people think, feel, and behave; 2) XM is a discipline that needs to be woven throughout an organization's entire operating fabric; and 3) Building the XM discipline requires a combination of culture, competency, and technology.

6 thoughts on “Can Frank Blake Revive Home Depot?”

  1. Home Depot does NOT STAFF IT”S STORES well enough to provide ANY CUSOMTER SERVICE. You can NEVER FIND help at any of the stores I shop. Home depot was once THE BEST store for customer service and now it is THE WORST> THE ABSOLUTE WORST! NOBODY in teh aisles to hlep you find what you need and on accassion, if you look up into those overhead bins you can see waht you want, but there is nobody to get it down for you. Home Depot should be ashamed. Don’t know if this is Franks Blake’s fault or not, but certainly he can do something about that… Why doesn’t he???

  2. My father worked at the Home expo contracting division for 6 months, went through the entire training program and after being awarded multiple awards for bringing in several large contracts he was let go by a corp office that simply said fire the last 20 people we hired. Here you have a guy with 40 years exp. in his field, was 150% above his quota and is let go. Rather then the corp office talking with the local managers to see who’s producing and who’s not they shoot themselves in the foot and cut off someone who earnng them money.

  3. We all know Bob Nardelli was the worst thing that could have ever happened to Home Depot. I’ve been an Employee for 8years and yes the Nardelli era was hard, not only for the customers but also the employees who’s heart pumps orange blood. I stuck it out with the company because I know the creation of this company wasnt built on the values Bob Nardelli tried to push on all of us. The Nardelli era is known by many Home Depot employees as the “it is what it is” part of home depot history. Now that we have Frank, I can feel the flame spark again… it may never be a strong flame like it once was but I still have faith that it will one day light again. For all of you frustrated customers I would like to tell you that I am personally sorry, even I lost the customer service focus that bernie and arthur built this company around… but I can honestly say I got it back, and I want to rub it off on every employee I come in contact with…. Frank understands that in order to do this we have to teach train and develop eachother so that we can better serve you… so thats where we are… it will take some time to build that back, but I can see the light at the end of the tunnel.

  4. The definition of insanity is: Repeating the same process and expecting a different outcome.
    I’m happy to report that I’m not crazy. After two very dismal interactions with two different HD outlets in Sacramento that I will no longer use Home Depot for any product line or services. One issue was a supplier issue intially. But when I had a problem with merchandise and found that HD supplied a replacement item, they refused to order the replacement. I ended up getting a refund for the original item and purchased replacement at another local hardware store. Later, I purchased a patio door and the installer failed to show. Now they are dragging their heels about refund. I’m done working with them.


  6. frank you need more people like my self to come & give live work shops on home improvement & cover all the trades to some degree I have been a carpenter for thirty seven years & a general contractor for twenty two years I have been walking in and out of home depots from calif, to long island NY & I have never seen a demo on how to hang a door trim the door or how to hang crown moulding the proper way the way the the old timers did it the way i was taught sounds to me like you and I should swap ph numbers !

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