Who Knew?

I recently finished reading a few of almost 600 pages of postings on MSN’s message board concerning an article by Scott Burns, entitled Is Home Depot Shafting Shoppers?

In a very short period, this article received confirmation that indeed Home Depot was shafting its customers, at least that’s what over 5,000 authors believed when I last looked. MSN Money reports an additional 10,000 emails.

What a corporate nightmare! First, the company suffers from the obvious public relations blowout by having the negatives of the store being flaunted so publicly.

Second, Home Depot employees used this public forum to outline how company policies have not only burned their customers, but also their employees.

Third, the current and relatively new CEO, Frank Blake, publicly apologized to customers and employees, pleading for “a chance” and says “the company is taking steps.” They’re going to be hiring 15,000 new employees to address these problems.

Hmmm. I’d say it’s a pretty bad day in Atlanta.

Out of curiosity, I made a trip to the Home Depot website. I wanted to see what image the site conveyed about the company, how the career page was crafted, and how all of that squared with the lousy experiences reported on the MSN message board.

The headline on the career page reads: A Team. A Future. A Career. What Will You Build? According to the employees responding to Scott Burns’ article, Home Depot workers don’t have a chance to build a lot.

The real surprise was to see the company values page. Taking Care of Our People, Excellent Customer Service, Respect for All People, Building Strong Relationships, Doing the Right Thing, Giving Back to the Community, Entrepreneurial Spirit, Create Shareholder Value.

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Of the eight listed values, one would have to conclude that the real emphasis has been on Create Shareholder Value while ignoring the other seven. But that isn’t anything new, is it? We’ve all read corporate values for other companies. Unfortunately, such proclamations are supposed to act as guideposts for all employees, from the tip-top all the way down. Few do. Home Depot’s obviously does not.

The next surprise was to check out Home Depot’s jobs, that is, if you can. It is the most convoluted job site I’ve ever seen. First, one has to pick the city and state and then pick preferred stores by address. A long laundry list of jobs roll down, jobs that may or may not have an opening at the store you have selected.

The obvious question is why limit possible applicants to just one store in a given market? In my market, Portland, Oregon, there are 10 Home Depots listed. I am within 20 minutes of at least three Home Depots. Why not give me the capability of searching as many stores as possible?

I think it will take Home Depot a long time to find 15,000 additional workers who will slog through its job site to find possible openings.

Four Lessons to Learn

What can every business, large and small, learn from this ugly episode at the expense of Home Depot?

  1. You reap what you sow. When a company, no matter how large or small, forgets the importance of the customer, everyone pays. Employees are the face of the organization to the customer. If the employees are unhappy, frustrated, tired, and overworked, where does all that ugliness land? It lands at the feet of the customers. That is, until the customers decide to take their feet to the competitor. Employees leave as well. The loyal, hard-working; reliable ones are out the door. In their wake are those who hate their jobs, don’t care, or are just inept, but continue to sour the environment.
  2. Listen to the criticism. Frank Blake certainly was listening to the criticism appearing on MSN and took a huge step forward by responding on the message board. I have a hard time imagining some of today’s CEOs earning $20 million or more a year breaking a sweat over some customer backlash on MSN; perhaps in the WSJ, but not on the Internet. Upper management needs to be less insulated by its VPs and middle managers and all the folks who are paid to keep the bad news away from the Big Guy. Upper management needs to get their feet out onto the floor and experience what customers do. They need to answer the customer service phone calls once in a while to better understand customers’ wants and needs. They used to refer to this as Management by Wandering Around. Getting out from behind the desk would probably be a most enlightening experience for most of today’s CEOs and presidents. What about HR’s role? My ideal is that HR should be more like a conduit or the bridge between management and its employees. Yes, HR needs to have a seat at the strategic table. But they also need to truthfully represent the company’s human capital in a way that makes upper management stop and think before they deploy disastrous policies on its employees.
  3. Walk your talk. Now that Frank Blake has asked his customers and employees to “give us a chance”, he better figure out how to make a significant difference and make it fast! He has to put some fire under all of his management team to get tangible changes down to the store level. For an organization the size of Home Depot, that’s a bit like turning the Queen Mary. But then, this is probably why he earns the big bucks that so many CEOs earn these days. If he doesn’t make significant changes, he can be assured that he’ll lose more good customers, more good employees, more off his bottom line, and maybe his job. The big issue is going to be matching up all the great things on the Home Depot website’s job pages and make certain they really mirror employees’ experiences. If the company’s website is out of sync with reality, it will not bode well for Home Depot’s aggressive recruiting efforts.
  4. Respect, with all your heart, your most precious asset?your people. Once negative publicity about a company gets rolling, particularly across the Internet, a company has a steep mountain to climb. A climb that wouldn’t be necessary if upper management paid attention to its employees. It is high time for today’s CEOs to wake up to the fact that an organization that cares about its employees? genuinely cares? will always be able to muster sufficient profits for Wall Street in the best and worst of times. This is because happy, well-treated employees will always want to deliver more in return. Bad employees? Well, they’re just bad hires who could be avoided if organizations like Home Depot employed aggressive screening and effective profiling techniques. Do you think they do? I don’t. No, bottom-line profitability probably won’t allow for up-front investments in making certain that Home Depot hires the right people for the right jobs. Why waste the money? It’s so much wiser to burn it with high turnover!

After 30 years working with companies of every size and dimension, I am continually frustrated by the dumb, bone-head moves that most of management make in the name of ROI. With thousands of new business books, new theories, globalization, and technological advances, it seems a bloody shame that business can’t figure out one of the most basic tenants to success? treat your people well and they will deliver.

This is a universal law of business. Frankly, it is a universal law of life. It always has been and it always will be.

Sheila Hibbard is President of Personnel iQ (www.personneliq.com), which provides companies with hiring and management intelligence through online pre-qualifying, screening, job profiling and company-wide evaluation tools. She has over 30 years of research experience working with clients to help solve business problems.

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7 Comments on “Who Knew?

  1. Since Home Depot is a customer driven enterprise and the experience is all employee driven (how many times have I gone to Home Depot and had to interact with an employee for something vs self service …. probably 70/30) then keeping those EXPERIENCED employees happy should be prime.

    In my area (Cincinnati)there is a Lowes, a Home Depot and a Home Emporium within 300 feet of one another… and if it seems that the employee has even less of a clue than me when we are talking about ‘how do I fix my ball valve in my WC’, then its an immediate turn off and a quick trip over to the next store. Customer experience is PRIME in this market and retaining those knowledgeable and customer driven employees should be prime.

    As a whole I believe that while many companies are focused on talent acquisition, they only focus on talent retention when the bad times roll (remember the year 2000)which is a huge mistake.

    Thanks for the article.

    Eamonn

  2. Why rip on HD? Of course, the company has to be profitable. Earnings and share holder value is a priority over employees and customers. Home Depot used to be a great company. I think it will return to those days again and it sounds like the CEO has his ear to the ground

    If you want to see customers getting the shaft and horrible work environment, then look no further than AT&T. They are a monopoly. Just wait when NET Neutrality vanishes. You can thank all the lobbyist for that.

  3. As you rail over the ‘bloody shame’ that businesses fail to treat their people well, and that Home Depot has become the latest subject of job bashing, I notice that their stock is trading at just 10% below their 52-week high. Pretty impressive for a company that has just sustained over 600 pages of criticism, and whose CEO has issued a semi-public apology.

    My simple point is that HD long ago recognized a different ‘universal law of (HD) business’. That is, ‘If you build it, they will come’, and come they have. Customers by the millions have responded well to Home Depot’s business plan. HD is about price, quality, and selection first, and service falls somewhere down the line. Customer’s have complained for years that HD service is not good, yet profits pile up at warp speed. The fact is this: Most customers want service, but will take price, quality, and selection over service any day. Wal-Mart and Costco make no apologies for lack of service. One is the largest business entity in the world, and the other is the undisputed leader of it’s niche. HD would be better off to not promise something it cannot deliver (customer service), and instead continue to focus on price, quality, and selection, while providing customer service to a limited degree.

    Had HD not recently chosen to talk up their customer service, there would be no basis for the argument that they are Shafting Shoppers. And, there would be no follow-on pile-on about how badly the employees are treated (which is factually no worse than Wal-Mart, Lowe’s, K-Mart, and many others…Costco being a shining exception within the big-box discount group).

    Having escaped after 25 years in various retail environments, I am no defender of retailers. The reality is that all elements of retail that customers may wish to see will never be offered under the same roof. No one business can be the price leader, selection leader, quality leader, shopping environment leader, customer service leader, employee treatment leader, and shareholder value leader.

    HD is following their plan, and customers certainly seem to appreciate it.

  4. Great points but time and time again, I’ve seen this type of goal set by corporate management, but time and time again, it never gets pushed down directly to first line management. It’s easy to discuss these goals of treating employees with repect, etc., but then a first line manager get’s disciplined when he lets an employee leave 20 minutes early because he has to pick his kid up at day care.

    It’s about time that management (both upper and first line) gets evaluated by their employee and that data gets figured into THEIR compensation. Bet things will change quickly!

  5. Well said, Jim.
    The evolving world business order is super sized companies with unimaginable clout. Their treatment of employees is only about competitiveness. With declining real wages (in the US at least), and a world clamoring for cheap goods, the ‘price first’ value equation is King. The internet is fast on the heels of retailing for the same reason.

    Sadly, it means more and more Americans stepping down to $9/hr. wages at companies like WalMart. I was very surprised to discover that this has already happened in the airline industry, where marginal profitability and price competition has created a new $9/hr. standard for many operations employees. There’s something ironic about handing out those peanuts…

  6. I would have to agree with Eamonn Coleman’s article – particularly the final paragraph. I have been in recruiting for 10 years and employee retention has always been an issue I’ve discussed with my clientele. It’s one thing to identify superb talent but if you (the employer) cannot meet or chooses not to meet the expectations of the talent, it all becomes a waste of time, resources and money. I’ve seen it happen time and again where an employee is over worked and under appreciated until, as Eamonn mentions, the ‘bad times roll.’ Citing 2000 is a perfect example. As soon as the recession started, employees were holding on to their jobs with all of their strength for fear of being unemployed. Employers knew this and in several instances took advantage of their top notch employees. When the recession finally started to ease, those same employees who were grasping on to their jobs could not wait to run out the door. A great time for recruiters but an awful time for employers trying to avoid turnover and a poor reputation for treating their employees badly. I see the effects of this even now. What can we do as recruiters to educate our clients on the importance of employee retention?

  7. Who Knew? The answer is the customers, the associates and the CEO.

    ?I’m Frank Blake, the new CEO for The Home Depot. I’ve read a number of the postings on the MSN message board (unfortunately, there were a lot of them), and we’ve dispatched a dedicated task force — working directly with me — that is ready and willing to address each and every issue raised on this board. Please give us the chance.? – Excerpt from Mr. Frank Blake?s online response to MSN article.

    I don?t know of many CEO?s, let alone the CEO of one of the largest corporations in the world, willing to answer an article online. Frank Blake has taken the tough issues straight on and proven that he is a leader of people and listens to the customer and associates. The Home Depot is a great company filled with over 300,000 motivated associates all working together to take an industry leading company to the next level. Every great organization stumbles at some point along the way, its part of growth. Businesses mature and have to reinvent themselves along the way. Home Depot has worked hard to build the infrastructure to support the future. The foundation of the company has always been service and value to the customer.

    I take issue with the off-handed, misdirected comment that the company has left its values behind. It is not true. It is an insult to the dedicated associates of Home Depot. Home Depot associates, including management, still bleed orange and support the values that have built the company. Transformation and growth are difficult but the core values are still strong at The Home Depot and Frank Blake?s apology is a sign of strength and commitment to values.

    Home Depot is earning its chance every day. Frank Blake supported by a dedicated team of manager and associates is building on a great brand and have a great future.

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