Servant Leadership as Effective Management Style

Abstract

This research paper was written to display the rise and domination of The Home Depot (HD). Although Home Depot had much adversity to overcome within itself as a company, it also battled with outside influences. The Home Depot was able to evolve and persevere with excellent leadership and decision making skills that continuously had the public and the natural environment in its best interest. This paper will transition from the beginning of the first Home Depot doors opening to the current state of the company.

Introduction

It all started on June 22nd in Atlanta Georgia when visionaries Bernie Marcus and Arthur Blank opened the doors of the first two “The Home Depot” stores in 1979. From there the rest is history and the hardware and home improvement business was forever revolutionized. Marcus and Blank were established leaders basing their business from community morals and ethics. The orange framed doors, orange signs and orange aprons signified a customer service guarantee to the “do it yourselfer.” In the beginning, as with most thriving and booming industry, there were leadership challenges, growing pains and setback endeavors.

Observations

In 2002, John Costello joined the company and moved up to the Chief Marketing Officer in 2006. Costello overhauled the mission creating the catchy business logo “You can do it. We can help.” His visualization was customers should be able to distinguish differences in store products themselves. The Home Depot was also known for having a military style employee hierarchy leaving workers in fear of losing their jobs if they didn’t follow protocol exactly. In 1997 HD’s transactional leadership cost the company $87.5 million in a settlement concerning female pay equalities. Frank Blake was hired in 2007 as the CEO; his biggest tasking was to repair customer service relations damaged by his predecessor. Blake was a charismatic leader and began his work by owning the complaints of angry customers by apologizing and encouraging them to continue to provide feedback and suggestions for improvement. Blake’s commitment to customer service was so effective he converted protesters into promoters and enthusiasts.

Analysis

Quite possibly, Home Depot’s biggest challenge was proving to environmentalists their business promoted a healthy environment as well as left a negligible footprint. The big orange was ridiculed for purchasing lumber from “old growth forests.” Protesters picketed stores for two years to sway home improvement consumers from shopping at Home Depot.

Recommendation

From a business leadership aspect HD took the best approach in knowing its adversaries and short comings. HD exploited cultural intelligence and social intelligence in its development the vital importance of aligning its business leadership with those of the conservationists and the betterment of the earth. Home Depot realigned it business principles with eight core values; excellent customer service, taking care of our people, building strong relationships, respect for all people, entrepreneurial spirit, doing the right thing, giving back and creative shareholder value. The eight principles set guidelines to help the business giant be environmentally sound as well as conserve energy, water and train its employees and shoppers to be ecologically conscious. Their actions not only propelled their profits and expansion but also gained the respect of a larger customer base and opposing forces. On the 20th anniversary of Earth Day in 1990 Home Depot announced its corporate principals to conserve the environment. HD became trendsetters inspiring over 46,000 hardware stores represented by National Retail Hardware Association and Home Center Institute to follow their lead and adopt their company guidelines. On The Home Depot’s 20th year anniversary it was happy to announce it had ceased the sales and production from “old growth forests.”

Dominating the home improvement industry HD didn’t stop there it also used philanthropy and volunteerism to be socially accepted and respected. The Habitat for Humanity was initiated by the Home Depot Foundation investing $300 million in building and renovating affordable homes, parks, playgrounds and facilities nationwide. The company also had a social responsibility to disaster relief and it capitalized by donating building supplies and merchandise to tragedies such as 9/11, 2010 Haitian earthquake, Hurricane Sandy and 2013 Oklahoma tornados. Moreover, HD donates $500,000 annually to The American Red Cross and has also donated over $80 million to build homes for veterans and an additional $2.7 million for disabled veterans.

With such success HD had to keep up with customer services, needs and time sensitive building processes. The HD leadership recognized its biggest competitor was Lowes. Perceptive of Lowes’ female and less experienced customer base, the HD leadership continued to aim their sights to accommodate to professional builders and contractors they established the program named “Pros.” “Pros” was accounted for 30 percent of the annual revenue by allowing the professionals to order their products online and even have them delivered to the job site in just an hour when ordered in bulk. The principled approach helped professionals exercise expert power by spending their time on the job site and less time shopping and compiling their building essentials. The Home Depot’s critical thinking and interdependence realized it lacked technologically and took a proactive approach spending $1.3 billion in research and development and electronic system upgrades. This strategy paid dividends to both customers and employees enhancing process flow and diminishing time spent waiting in lines or time spent validating merchandise.

Conclusion

The Home Depot has developed transformational leadership since the beginning from trial and error to comprehending the need for a paradigm shift for better business perspectives. The comprehension of honesty, integrity and servant leadership has proven a lasting impression and solidified the color orange in home improvement retail. Today The Home Depot continues to dominate the home improvement industry and has 2,248 stores nationwide to include stores in Puerto Rico, Virgin Islands, Canada, China and Mexico. They also have implemented the “lowest price guarantee” and claim to beat any competitor’s prices. HD has been a front-runner for 37 years and continues to put its employees, customers and environment at the forefront of its primacies. The Home Depot as a business endures by delivering its business message and developing strategic alliances utilizing cultured business leadership to provide the ultimate shopping experience while creating value for all stakeholders.

References

1. Draft, R. L. (Ed.). (2008) The Leadership Experience . Mason, OH: South-Western Cengage Learning.
2. Ferrell, O.C., Fraedrich, J., & Ferrell, L. (2013). Part 5: Cases: Case 10. In Business ethics: Ethical decision making and cases : 2015 update (10th ed., pp. 498-507). Stamford, CT: Cengage Learning.

Websites:

1. The Home Depot- Home. (n.d.). Retrieved from https://corporate.homedepot.com/Pages/default.aspx
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4. ironment/Pages/Principals.aspx
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6. Panmore Institute. (n.d.). Retrieved from
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