Home Depot
Nardelli became CEO of Home Depot in December 2000, despite having no retail experience. Using the Six Sigma management strategy also used at GE, he dramatically overhauled the company and replaced its entrepreneurial culture. He changed the decentralized management structure, by eliminating and consolidating division executives. He also installed processes and streamlined operations, most notably implementing a computerized automated inventory system and centralizing supply orders at the Atlanta headquarters.
Nardelli was credited with doubling the sales of the chain and improving its competitive position. Revenue increased from $45.74 billion in 2000 to $81.51 billion in 2005, while net earnings after tax rose from $2.58 billion to $5.84 billion. During Nardelli's tenure, Home Depot stock was essentially steady while competitor Lowe's stock doubled, which along with his $240 million compensation eventually earned the ire of investors. His blunt, critical and autocratic management style turned off employees and the public. Nardelli was notably criticized for cutting back on knowledgeable full-time employees with experience in the trades and replacing them with part-time help with little relevant experience. This move reduced costs, but hurt customer service at a time when Lowe's was making inroads nationwide. While the board strongly stood by him for most of his tenure, questions about his leadership mounted in 2006, and in an ominous portent of the near future, he was the only director present at the annual meeting; he only allowed shareholders to speak for a minute each. When the board reportedly ousted him in January 2007, Nardelli's severance package was estimated at $210 million. He was succeeded by The Home Depot vice chairman and executive vice president, Frank Blake. Blake had served as Nardelli's deputy at both GE Power Systems and Home Depot.
During his tenure at Home Depot, Nardelli met President George W. Bush at the White House in 2002 and was appointed to Bush's Council on Service and Civic Participation (although he is no longer a member). Nardelli also hosted a garden reception/fundraiser for Bush at his Atlanta home on May 20, 2004.
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