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Bleeding OrangeHome Depot’s Blueprint for a Customer-First Culture

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Home Depot Associates Bleed Orange

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FOUNDATION MISALIGNMENT REFOCUS

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Our associates have driven a historic run for the company

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Home Depot is built on the foundation of a customer-first culture

“We take care of the associates, associates take care of the customer, the rest takes care of itself.”– Bernie Marcus, Founder Home Depot

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These values are enshrined in our symbols and our language

CEO

Corporate Support

Field Support

Front-Line Associates

Customer

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Entrepreneurial spirit and innovation drove our growth and early success

1777 Atlanta

1913 Chicago

Outdoor Garden

Lighting

Lumber

Tools

Appliances & Kitchen

Outdoor Garden

Lumber

ToolsLighting

Appliances & Kitchen

“If you’ve seen one Home Depot, you’ve seen one Home Depot.– Every Associate

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Employee autonomy was baked into who we are by design

Home Depot was a haven for independent-minded employees just like ‘Arthur and Bernie…’

Because everyone believed that managers should spend their time on the sales floor with customers, company paperwork often ended up buried under piles on someone’s desk, tossed in a wastebasket—or even marked with a company-supplied “B.S.” stamp and sent back to the head office.

Store managers were actually encouraged to make decisions independently of headquarters. According to Home Depot old-timers, if employees received a memo from Atlanta, they would tear it up. Voice mails from head office executives were often immediately erased.

Sources: Strategy and Business, Winning Hearts and Minds at Home Depot, March 2005; HBR April 2006

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In 2001, we made dramatic changes to try to build a platform for future success

Ensuring that disciplines like Six Sigma support Home Depot’s human capital strategy is at the core of Mr. Nardelli’sleadership approach.

Sources: Strategy and Business, Winning Hearts and Minds at Home Depot, March 2005

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It took our eye off the customer

It became harder to find anyone to help with a question, and once I did find someone, it was often apparent that I knew more than he did.

On the… American Customer Satisfaction Index, Home Depot fell eight points in seven years, …It was the largest drop for any retailer in the index.

Sources: Fortune, Sept 2008

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In 2007, we realized our mistake and changed course

Sources: Saporta Report, March 2011

“The benefit I had was that the culture at Home Depot set by our founders was a pretty strong culture. We actually wanted to reclaim the cultural distinction of business.”– Frank Blake, CEO Home Depot

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Stores are now measured on customer satisfaction and likelihood to shop with us againMetrics are diagnostic and addressable

Results display in real time

Results are visible from store manager to CEO

Metrics drive store focus and efforts

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One of the best

things we track is

customer praise

“My daughter & 3 of her friends are doing a routine for their school's talent show. Our girls are honoring all branches of the US Armed Forces by marching & singing to patriotic songs etc. I needed to find stands for the American Flags for the girls to use during their routine. The store was sold out of the stand

I needed so 2 of your team members came to my rescue!

I have to give SO MUCH CREDIT to Elijah V. & Daniel V. !!!

They were super creative and so helpful! Thank you GUYS!!”

“Both Robyn and Jamillion were absolutely fantastic. They both took the time to find the products that I needed, they then made sure they were available to answer any additional questions. They kept me abreast of the steps they were taking. They were both EXTREMELY personable,

professional and went above and beyond. They took the

time to make sure that I was happy and satisfied. It made such an incredible difference. They made the shopping

experience better. Thank you Robyn and Jamillion!!”

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We also give people the option to request a call-back

Dear WESTMINSTER Team,

A customer taking your In-Store VOC survey has requested a follow-up call from Store

Leadership. Please reach out to the customer at or near the preferred contact time.

If a phone number is not provided, please follow up with an email.

Notes:VOC Callback

Case Number: 07373177

Created Date: 7/6/2017

Store Number: 0647

Name: Jack F

Email address:

Phone Number: xxx-xxx-xxxx

Preferred Contact Time: Morning

Customer Feedback:

It appears HD is no longer carrying the item I purchase there annually. Now I must

waste time searching for it. Way to take care of your regular customers, HD.

Likelihood to Shop Again(LTSA) Score: Probably Will

Customer Service Score: Not Very Satisfied

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Rewarding associates for their customer-first behavior creates a committed workforce

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SUCCESS SHARING

EXECUTIVE RECOGNITION

HOMER AWARDS AND BRAVOS

A Committed Workforce Drives Incredible Results

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Home Depot’s blue print for a customer first culture

CUSTOMER

EMPOWER

MEASURE YOUR EFFORTS

YOUR PEOPLE

PUT THE FIRST

REWARD GREAT BEHAVIOR

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Thank You!#EXP18Medallia