The Home Depot: Leadership in Crisis Management
Established in 1979, The Home Depot has proved to be a leading retail company founded upon providing excellent products at competitive prices sold from knowledgeable sales representatives. Through this concept, The Home Depot has dominated both professional and do-it-yourself sales across the world. In 1992, The Home Depot was faced with a new challenge. Hurricane Andrew struck with vengeance and devastated 75,000 homes across Florida. Since 10% of The Home Depot’s stores were located in Florida, this quickly became a corporate emergency. The Home Depot stepped up to the challenge and stood behind their customers. Depot froze prices for supplies the community would need to rebuild or even sold products at costs in some cases. Then-CEO Bernie Marcus stated “This is not a time to make money on the back of other people’s misfortune” (Herman). This attitude proved prosperous for The Home Depot when profits increased 44%. With this eye opening experience, The Home Depot decided to take further actions to prepare their employees and customers for future hurricanes. Paul Raines was hired by The Home Depot and eventually was made the Divisional Leader for the Southern Region. His experience in the third world countries made him the perfect candidate to lead Depots crisis management project. When 2004 rolled around, Florida was viscously attacked with four storms in a seven week period. Through the devastation, The Home Depot utilized this period as a learning tool. The storms of 2004 developed three main “Crisis Management” concepts for The Home Depots: speed, preparedness, and chain of command. Speed was crucial for the community and The Home Depot strived to open as swiftly as possible after the storms ceased. The Home Depot stayed ahead of the storms by having a surplus of storm relief inventory, as well as workers close enough to be called upon when the major threats had passed. Finally, the employees of The Home Depot understood who was in charge and calling the shots. From these concepts a “Crisis Command Center” was born for category two hurricanes or worse. The Command Center consisted of conference rooms where representatives could meet and develop a plan of attack. With the click of a mouse they were able to determine what their customer’s main needs were. The main goal of the Command Center was to insure employee safety, re-open stores, and make sure computer systems were accurately working which included pay roll and cash registers. In 2005 the Command Center was put to the test when Hurricane Katrina attacked the Gulf Coast. The Home Depot began preparations well in advance and was ready to reopen stores as soon as possible after the storm had passed. Managers worked eighteen hours a day, which paid off when of the thirty-three stores in Katrina’s path all but ten opened the following day. With such an elaborate Command Center and well informed staff, The Home Depot was able to provide the communities with the supplies they needed to begin rebuilding their homes (Herman).
In 2007, a new crisis was thrown at The Home Depot. This predicament was far more personal than any storm could ever be. Columnist Scott Burns verbally attacked The Home Depot in a published article on MSN.com. Customer service, products, inventory, and cleanliness were all under attack by disgruntled customers. In a short period of time, there were over 7,000 posts and 10,000 emails of customer complaints. Corporate Officials were outraged over the online posts. This was a delicate situation that needed to be dealt with. Official’s feared making a public statement would draw media attention to the article which had not yet been a hot topic for the television. Then CEO Frank Blake, felt he had no choice but to respond on the MSN post board. He made a lengthy apology to all disgruntled bloggers. He pleaded for all concerns to be forwarded to a private email account. He vowed to...
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