How Home Depot Links HR To Culture & Community
When Bernie Marcus and Arthur Blank opened the first two Home Depot stores in Atlanta, Georgia in 1979, they had two goals: 1) To offer consumers an immense variety of home improvement merchandise at attractive prices. 2) To earn customers’ respect through superlative service.
The first was straightforward. But the second came down to a strategy to employ highly trained floor staff who could actually teach customers how to use the tools or materials they were buying. "Show and tell" rather than hard sell became the founding principle of the organizational structure. As The Home Depot grew, a "whatever it takes” philosophy emerged, as it gradually became the biggest home improvement retailer in the United States. Today, the retailer has over 2,200 stores and store support centers spanning three countries.
A Commitment to Culture
But it hasn't all been smooth sailing. As recently as 2016, the Atlanta-based giant was (according to company spokespersons) having to cope with "poor inventory turns, low margins, and weak cash flow". This was partly as a result of its high number of inexperienced store and district managers, and partly due to competitors’ successes in attracting customers from outside the traditional scope of the home improvement market.
Changes instigated under the Kotter and Cohen 8 Step Model to The Home Depot's organizational culture gained only a sluggish rate of adoption. And so the solution came in the form of new blood and a fresh approach in order to reinvigorate the fortunes and enthusiasm of the company's global staff of 400,000 associates.
Setting the context for personal and group behaviors within the company, The Home Depot's organizational culture is now re-emerging as a major factor in supporting the firm's market differentiation and competitive advantage. As co-founder Bernie Marcus puts it: “At the end of the day, we’re in the people business.”
New Chairman, CEO and President of Home Depot, Craig Menear agrees: “No matter what the situation is, no matter what the environment is, if we protect the core culture of our business, we’ll be just fine.” And that culture derives from the integration of several features.
The Inverted Pyramid
Known by some as "the inverted pyramid", The Home Depot's corporate structure places top priority on its customers. Employees come next, with front-line associates having priority over field support, which in turn has priority over corporate support. The company's executives and CEO come last.
Care is taken to imbue all Home Depot workers with the organization's corporate values, while in practice the emphasis is on the associates' contributions in terms of actions and ideas. It's a stark contrast to traditional models of top-down hierarchy, and an approach that especially highlights the value of the contributions made by front-line associates, and promotes a culture where the man or woman on the shop floor has as much right to be heard as those in the boardroom.
Watchword: Excellence
From its inception, The Home Depot has committed itself to providing excellent service in the home improvement sector. This is reflected in the company's policy of hiring experts in the field, such as pipe-fitters and carpenters. These specialists serve both as front-line associates offering guidance to prospective buyers, and as peer-trainers in the various aspects of home improvement.
Putting People First
While the customer remains the prime focus of The Home Depot's efforts, the company's own associates are also given priority as people, rather than employees. To this end, associates are actively encouraged to form enjoyable and profitable relationships with both their colleagues and customers. These relationships should extend beyond the store to the social scene, and the wider community.
Rather than simply relying on the separate contributions of individual associates, The Home Depot looks to the collaborative efforts of its Human Resources to move the company forward. Teamwork and group projects are actively endorsed, and the organization encourages associates to look on each other as members of a community.
Indeed, part of The Home Depot's community-based approach involves outreach in the areas where the company has a presence or interest. With backing from The Home Depot Foundation, groups of Team Depot volunteers are engaged in a continuous program of activities assisting armed services veterans and communities in the neighborhoods and cities that form a catchment area for the stores.
Upholding Core Values
Home Depot CEO Craig Menear acknowledges the need for his organization to embrace the global trend towards customer experience, as distinct to customer service. To this end, The Home Depot lays out a set of core values, to which all of its associates adhere:
- Excellent Customer Service: Including exceptional value for money, along with expert advice and assistance on using merchandise and materials purchased in the store.
- Taking Care of Our People: Creating an inclusive environment for Home Depot associates, in which diversity is encouraged, ideas and contributions are valued, and there are equal opportunities for development and growth.
- Building Strong Relationships: Achieved through listening and responding to the needs and opinions of customers, vendors, associates, and communities.
- Respect for All People: Reinforcing The Home Depot's commitment to diversity, inclusion, and an attitude of mutual respect.
- Entrepreneurial Spirit: Associates are encouraged to assimilate good ideas from others, and to develop innovative and creative ways of their own, for improving the business and serving their customers better.
- Doing the Right Thing: Placing ethics squarely on the agenda for The Home Depot and its associates, in all their dealings with customers, partners, vendors, and each other.
- Giving Back: Providing willing hands for community service through Team Depot, The Home Depot’s associate-led volunteer task-force.
- Creating Shareholder Value: Operating a profitable enterprise – which in itself is a consequence of sticking to The Home Depot's core values.
Greater global reach and advances in mobile technology will continue to increase the number of contact points and demographics for The Home Depot’s customer base. Supporting this, the retailer’s people-centric organizational culture forms the strong foundations on which the company can carry its world-leading market position into the future.