Editorial
Home Depot CEO Frank Blake will likely retain his role while the company continues to reach for a growth trajectory. Whether he should or not, however, remains open to debate.
The nation's largest home improvement retailer needs Blake’s trusted, reliable style and ability to “stick his fingers in the dikes,” according to an individual close to the situation.
What’s less certain is whether Blake is the guy to lead the company back to growth, something that investors have been clamoring for since the original founders left the building.
The answer is clearly “no” looking at things on paper. Blake is a Nardelli (as in former CEO Bob) disciple, has no contract and is a lawyer by training. So far his tenure has gotten above average marks -- even despite the previous facts, which rarely define big company leadership. At a simpler level, ask a long-time Home Depot shareholder about what their stock is worth today vs. 10 years ago. Watch out. You'll get an earful.
Let’s be clear. Unlike the analyst of the day on CNBC, we’re not calling for Blake’s scalp. That’s silly. Our main interest is determining when a board should ask the interim guy to turn the keys over to a more growth-oriented leader.
What won’t continue to wash indefinitely is the following line. Blake is a breath of fresh air following his predecessor. Duh! -- as any teenager would snap. Fresh air aside, sentiment needs to be future-oriented with a feeling of trust and confidence. It’s more about what a forward-looking strategy feels and looks like, and whether three years down the road, the current CEO will be driving strategy through effective execution.
One thing is for sure. Turnaround CEOs rarely make growth-oriented leaders. The landscape is littered with casualties. Recently ousted Citigroup CEO Charles Prince is one, but there are countless others.
So the question now becomes: When will the board act and who will they get? Stay tuned.
Conventional wisdom says nothing will be done until the markets bottom and growth can be more readily forecast. But that’s not how these situations generally play out. If the board decides it needs to make a change, recessions have little to no impact on their decision. Until then, they have to keep asking the relevant questions.
Home Depot CEO Frank Blake will likely retain his role while the company continues to reach for a growth trajectory. Whether he should or not, however, remains open to debate.
The nation's largest home improvement retailer needs Blake’s trusted, reliable style and ability to “stick his fingers in the dikes,” according to an individual close to the situation.
What’s less certain is whether Blake is the guy to lead the company back to growth, something that investors have been clamoring for since the original founders left the building.
The answer is clearly “no” looking at things on paper. Blake is a Nardelli (as in former CEO Bob) disciple, has no contract and is a lawyer by training. So far his tenure has gotten above average marks -- even despite the previous facts, which rarely define big company leadership. At a simpler level, ask a long-time Home Depot shareholder about what their stock is worth today vs. 10 years ago. Watch out. You'll get an earful.
Let’s be clear. Unlike the analyst of the day on CNBC, we’re not calling for Blake’s scalp. That’s silly. Our main interest is determining when a board should ask the interim guy to turn the keys over to a more growth-oriented leader.
What won’t continue to wash indefinitely is the following line. Blake is a breath of fresh air following his predecessor. Duh! -- as any teenager would snap. Fresh air aside, sentiment needs to be future-oriented with a feeling of trust and confidence. It’s more about what a forward-looking strategy feels and looks like, and whether three years down the road, the current CEO will be driving strategy through effective execution.
One thing is for sure. Turnaround CEOs rarely make growth-oriented leaders. The landscape is littered with casualties. Recently ousted Citigroup CEO Charles Prince is one, but there are countless others.
So the question now becomes: When will the board act and who will they get? Stay tuned.
Conventional wisdom says nothing will be done until the markets bottom and growth can be more readily forecast. But that’s not how these situations generally play out. If the board decides it needs to make a change, recessions have little to no impact on their decision. Until then, they have to keep asking the relevant questions.
# # #
2 comments:
Despite being a lawyer I think Frank Blake may be the classic modest leader that surprises his critics. He seems to be about 'the troops' ie the customers and employees. Given time, that leads to a better customer experience and higher sales and brand loyalty. It's impossible to judge his financial performance in such a terrible industry environment. He could slash and burn costs even more aggressively but that might also break the fragile confidence of his employees and ruin the brand!
Give Frank Blake some time to prove his mettle. The employees trust him, shareholders should too!
I don't think it is "impossible to judge his financial performance in such a terrible industry environment." After all, HD is the larger company by far in a two-company industry, sometimes called a duopoloy. Most CEOs would kill for that kind of opportunity
Post a Comment