$210,000,000 Is Enough to Soothe Any Ego
January 4th, 2007 by HalWunderkind Bob Nardelli got fired today. Actually, the news reports say he resigned. While I haven't seen his contract, normally people don't get severance pay when they resign. In his case $210 million.
Bob has been running The Home Depot…into the ground. He's the same guy that thought he should replace Jack Welch as CEO of GE. Looks like Jack made a better decision selecting Jeff Immelt. The board at The Home Depot didn't.
Even bad leadership matters.
Leadership comes in many forms. I've found stories about Nardelli to show him as indifferent and elitist. Maybe he was or maybe not. It doesn't matter. His leadership, or anti-leadership, has produced really poor performance at the company that created the big box home improvement format. The Home Depot's board decision indicates they hold Nardelli accountable for those results. And that is the lesson for all of us.
Leadership matters. Good leadership matters. Even bad leadership matters. In either case, it matters. Those of us who toil on our projects somewhat removed from company leadership are still influenced by that leadership. Our partners and our clients are also influenced. For projects to be successful, one after the other, we need an environment that is conducive for achievement, for learning, for innovation, and for taking care of each other while we take care of our customers. That doesn't come easy. That's why firms are willing in the first place to pay the big bucks to leaders. In return for those big bucks, leaders must perform. Nardelli didn't. He's gone. It's just too bad that he got to take the big bucks with him.
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January 5th, 2007 at 9:23 am
Actually, if the press reports are correct, it is the shareholders who have held the board accountable. the board acted out of fear of being held liable for the bad performance of the company under Nardelli. The big question is when will the make up of the board change?
I find it interesting that there are so many people that believe that if a manager at GE achieves a high level of senior management within GE that it is a ceritication of high level business leadership that can be transferred to any business. GE is not retail. They are terrible at even producing retail products: look at the frequency of repair records for GE applicances. GE is a very particular type of business. They train their people in-house to run their business: some of those skills trasfer to other areanas. Thier biggest asset is that they are percieved as the “best” so they attract the “best” as prospective employees. They retain the “best” through training and competion. As the up or out process continues, the top level that get passed over move to other companies where they have had a mixed record.
Nardelli made a good deal for himself when he came in. Langone made another bad deal: he should stop hiring talent. His talent is not in picking leaders.
January 8th, 2007 at 6:15 am
Interesting how times change–read all the praise for Mr. Nardelli’s leadership in Business Week’s March 6 2006 edition:
http://www.businessweek.com/magazine/content/06_10/b3974001.htm
(If the link doesn’t work, go to Business Week online and search for “Renovating Home Depot”).