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On January 03, 2007, Bob Nardelli (Nardelli) quit as CEO after a six year stint at The Home Depot, Inc. (Home Depot), a US-based retail chain for home improvement products. Home Depot said that Nardelli would be replaced by Frank Blake, the company's vice chairman.
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With US$ 81.5 billion in annual revenues (for fiscal 2005), Home Depot was the second largest retailer in the US, behind Wal-Mart Stores, Inc. (Wal-Mart), and third largest retailer in the world, behind Wal-Mart and Carrefour SA. Nardelli had joined Home Depot as CEO in the year 2000. He had earlier worked in the General Electric Company (GE) as head of GE Power Systems, one of the most profitable businesses within GE.1 Nardelli, along with Jeffrey Immelt (Immelt) and Jim McNerney was a strong contender for the top post at GE.
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However, when Immelt got selected, Home Depot snapped up Nardelli for a high pay package.Nardelli was successful in changing Home Depot from a faltering retail chain in late 1990s into a high performance company. There was an increase in profits and revenue at Home Depot during his six-year tenure. For example, sales increased from US$ 46 billion in 2000 to US$ 81.5 billion in 2005.2 Nardelli brought about this change by centralizing all the functions in Home Depot, and emphasizing on strict financial discipline and accountability.
It was reported that Nardelli's command and control style of functioning resulted in discontentment among many at Home Depot. His focus on new technology, such as self-checkout aisles and inventory management systems, also did not go well with the rank and file of Home Depot as it led to down sizing the work force. He was considered as a highly autocratic CEO who focused excessively on numbers. Kenneth Langone, a co-founder of Home Depot and member of its board of directors had said, "This guy is maniacal about goals, objectivity, accomplishments within the boundaries of the values of the company."3
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1] Patti Bond and Maria Saporta, "How fired Home Depot CEO Bob Nardelli walked away with a $210 million payout," www.wilmingtonstar.com, 2007.
2] Harry R Weber , "Home Depot needs renovation, analysts say," www.sltrib.com, January 07, 2007
3] "Out at Home Depot," http://www.msnbc.msn.com, January 09, 2007.
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