Jan 20, 2007
Suppliers Offer Growth Weapon to Home Depot
Major strategic over-hauls are certainly in vogue these days. Motorola. Ford. Dell. And now comes Home Depot who, after freeing itself from old-school strategy architect Bob Nardelli, finds itself in a serious strategic quandry. Continue to push into fundamentally new and unfamiliar wholesale distribution or fix the core retail model. Ralph Whitworth, of Relational Investors, is evangelizing for the latter. He's on to something extremely important to the company's future.
Indeed, evangelizing for change is greatly needed at THD – not only for shareholders, but for the vast number of product suppliers who desperately need more innovation in their go-to-market options. We’re cheering you on, and a few players genuinely hope to find a fresh angle for engaging the company in new strategic dialogue. They would enjoy a new chance to discuss how THD is under-leveraging the single greatest asset it has at its disposal – it’s largest product manufacturers.
Broad strategic collaboration would bring powerful new resources, ideas, and opportunities to the company. But that asset base is being squandered by low-level merchandising and buying functionaries. While it's common knoweldge that Lowe’s is performing better than the orange box these days, putting THD’s core retail operations back on a solid growth trajectory will take more than catching up with women-friendly offers, wider aisles and brighter lighting.
If Ralph Whitworth is able to get a Board seat or any influence at THD at all, we hope he'll consider seriously that top-to-top executive collaboration – with companies such as Bosch, Whirlpool/Maytag, GE, Kohler, DuPont and countless others - are the most powerful secret weapon new company leaders have in turning THD around.