Home Depot

The book, The Founders Mentality by Chris Zook and James Allen, talks in chapter two about three predictable crisis of growth. A key one that affected Home Depot, and I believe affects many large organizations, is Stall-Out: The Crisis of Low or Slowing Growth. Home Depot, or more specifically the previous CEO Frank Blake, is featured in the book for how he tapped into the power of the founder’s mentality to launch a series of initiatives that focused on renewing bonds with front-line employees and the customer. I would like to share some insights I gleaned from this book and other sources, and share how we can leverage this learning and wisdom to help our organizations grow and prosper.

I loved chapter four, where it shares the story of Frank Blake being elevated to CEO and how he brought back the founders mentality. Reading this reminded me of an earlier podcast where Frank goes into detail about these first days at Home Depot and how he leveraged the founder’s book, Built from Scratch, to bring back the original core values and the idea of the inverted pyramid. I will share some of my notes on this podcast and chapter four below, but recommend that you revisit the first few pages in chapter four of the Founders Mentality, and simply listen to this podcast to learn more.

You can find the podcast at the links here for part 1 and part 2 or listen on iTunes by searching for The Andy Stanley Leadership Podcast and scrolling down to the Sept 3, 2015 episode Vision: A Conversation with Frank Blake, Part 1 and the Oct 1, 2015 episode Part 2. However you find it, I am certain you will find this worth the hour and 12 minutes it takes to listen to it…

Before I begin I just want to share a personal connection to this content and a interesting note. I am amazed at how reading this book, the Founders Mentality, reminded me of a talk I listened to about 3 years ago. I am then further amazed that this podcast talks almost exclusively about a presentation that Andy Stanley gave at the 2003 Leadership Summit, and how it inspired Frank Blake and helped him in his first days as CEO at Home Depot. Why this is personal, I attended this summit as a young man and it was the very first time I heard Andy speak. I was so moved that I bought the DVD, and started to read and listen to most things that Andy Stanley has published since. So now that I have this setup out of the way, lets dig into the content that Andy and Frank share…

From Part 1:

around the 6 minute mark Frank shares the story of flying back on the company plane after the board meeting where he learned he would be the CEO. In his words, “I put the DVD in and watched it on the flight, and thought, that is the most intelligent, straight-forward, comprehensible, inspiring description of what leadership is about. And, it shares in detail, how you cast a vision for an organization, and then live that vision, and finally how to celebrate that vision.” That just encapsulated leadership! And it was truly a personal fork in the word in terms of thinking about what I would be doing at Home Depot.

8:50 Frank discusses his thoughts about the inverted Pyramid: The CEO is at the bottom and the customers are at the top of the pyramid… Really for me, my eight years as CEO was about linking Andy’s concepts on leadership with how you think about running an organization where you truly put the customers on the top and the CEO at the bottom.

“Colin Powell once said, ‘Optimism is a force multiplier’. Our job as leaders is to be a force multiplier within our organization. Our job is to listen and learn…” – Frank Blake

11:06 “Home Depot is a great organization with a great foundation. Bernie Marcus, Arthur Blank and Ken Longone founded a great company but we needed to go back to [our original] bolder culture and reinvigorate it.” – Frank Blake

13:04  Everything changes when you begin to picture the organization upside down. It is not as simple as servant leadership, now the burden is on those at the bottom (the CEO, the president, and the Board of Directors) to then take mission and vision and push it up through the organization. 

13:50 This forces you to think about who you are serving (the customers on the top). It forces you to think about how you communicate (because you have a lot of people between you, leadership team, and your customers). In Home Depot’s instance you have 350,000 people between the CEO and the customers.

There is a common saying in business that You get what you measure”. I would amend it by saying, “You also get what you celebrate”. – Frank Blake

14:10 Someone early on told Frank, “You have a very prominent job, but you do not have a significant job. The only significant jobs in your organization are the jobs that interact with your customers”

26:11 You set the vision, then you have to live to the vision, and then you have to celebrate the vision. Those three things are mutually self-reinforcing. As you live the vision you are more comfortable talking about it. As you celebrate the vision you understand it better. We spent a large portion of time celebrating people who did great things on customer service.  Every weekend I would spend an afternoon just writing handwritten notes to our associates for great things that they had done. We did videos every week that would take the best example of customer service and broadcast that video to all of our associates. We had special customer service awards.  There is a common saying in business that You get what you measure”. I would amend it by saying, “You also get what you celebrate”. Frank adds that this does not come naturally for him, but is the most important thing to do…  How do you get people who are working in your organization to understand what you want? The most powerful way to do that is to celebrate them when you catch them doing it… That is so powerful because people ‘feel’ how to do it…

30:44 It takes time to get this culture rooted, but once it is rooted it is self-sustaining.

31:00 To accomplish this Frank had to take time away from other things. He realized this was critically important. He made this a high priority and wrote about 100 handwritten notes. (each note was specific and addressed the person and the action / win, not cookie cutter copies of the same note).

32:26 This had a Flywheel effect. Started to see division presidents, regional vice presidents, district managers, and store managers use this power of recognition and invest time to write notes and celebrate the wins they see.

35:08 I started to see the notes framed by their desks. I did the same thing. When I got handwritten notes from Jack Welch I would frame them… We respond to recognition. We understand recognition.

Franks first question to a leader, “What do you celebrate?” What is it that you are out celebrating and what is your organization celebrating?

From Part 2:

5:04 “Leadership is not about getting things done right, Leadership is about getting things done through other people” – Andy Stanley  simple concept but it takes a lot of self-discipline to realize the power of that concept.

8:07  Equation Q x A = E  Quality x Acceptance = Effectiveness.  The point of that is to make us all stop as leaders and realize the other part of the equation is acceptance. Without acceptance, even great ideas will not be effective. You have to work through the organization, spend time with others, thinking about how you communicate it and share it through the organization.

“Leadership is not about getting things done right, Leadership is about getting things done through other people” – Andy Stanley

10:16 Assign responsibilities and not tasks…

12:07 So simple that associates could both use it and potentially abuse it. Versus opposite of complex directives that nobody reads or follows.

12:54 People want responsibility. The leaders job is to effectively assign responsibilities. To assign as many responsibilities and as few tasks as they can.

16:05 How to Listen…  How does headquarters develop listening skills… Advantage of inverted pyramid and seeking counsel from wise leaders.  For more information on this I would recommend chapter six of the Founders Mentality.

16:57 People don’t want to give you bad news. This is a human instinct. You have to create a culture where you can hear and attract all news… You have to be aggressive about listening. “If you’re not listening to the people around you, don’t be surprised if they stop having anything to say.”

22:36 One of the tools Frank uses is the skip-level lunch. Important to Frank and he would do at least one of these a week and his administrative assistant would pick the associate to ensure a full mix of people, not just the top performers.

24:28 If you listen genuinely, it is amazing what people are willing to say and share. The people in your organization actually want your organization to succeed. They’ve got enormous frustrations with how things are done; some of them you can fix and others you cannot. It ties into how do you engage everyone. Really believing that the organization is committed to the vision, by repeatedly asking how are we doing.

27:19 Colin Powell “Optimism is a force multiplier”. Our job as leaders is to be a force multiplier within our organization. Our job is to listen and learn… – Frank Blake

29:19 Home Depot is not perfect, but Frank believes this to be directionally correct. As you show your team that you are willing to aggressively listen, not just expecting positive feedback all the time. And then as you reflect back and address things that you heard it makes people more willing to speak. As they are more willing to speak you get better informed decisions, which makes it easier to assign responsibilities more effectively and you learn where you need to empower people. And, this helps you learn if your communication is getting through. This is a cycle that reinforces each other – back to the first part: these things are mutually self reinforcing. As you live the vision you are more comfortable talking about it. As you celebrate the vision you understand it better.

Frank closes stating “The power of the leadership principles that Andy shares is that they are simple but profound”. I agree fully with this statement and hope that we can leverage this wisdom and combine it with our great founding vision and mission to see our company grow and prosper.

Wish you the best,

Douglas Diemel

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