Decision Pulse @ The Home Depot
In Built from Scratch, The Home Depot’s co-founder, Bernie Marcus tells a story about a wise guy in his golfing foursome who tells him: “You run some company! You’re gonna be out of business soon and you don’t even know it…your people are so stupid.”
To which Marcus responded “Indulge me. How are we so stupid?”
The helpful customer-cum-golf-partner explained that he had gone to his neighborhood Home Depot store ready to spend $200 on a new kitchen faucet. The employee helping him explained that actually he didn’t need to buy a new faucet. By spending only $1.50 in parts he could easily fix his old faucet. Marcus then asked the man who the employee was. When he refused to answer on grounds that Marcus would have the simpleton fired, Marcus replied: “What if I promised you I wouldn’t fire him, and that I’m probably going to give him a raise?”
The pulse at the Home Depot is “whatever it takes to serve the customer.” When they opened their first stores, Marcus would literally chase down customers in the parking lot who left without buying something. If the store didn’t have what they were looking for, Marcus would go to a competing store, buy the item, and then personally deliver it to the customer’s house.
Pulse Prepares You Even for the Unthinkable
Similarly, in 1993 when Timothy McVeigh bombed the Federal Building in Oklahoma City, District Manager Rich Lloyd applied the same Decision Pulse to his choice of responses. Forty-five minutes after the bomb went off, he had already decided to send over to the bomb site every garbage can, garbage bag, shovel and mask from all of his stores. He didn’t even have to call the home office for permission, because he already knew the Decision Pulse for all decisions…even those unthinkable decisions that have no precedent.
Let me be clear: “Whatever it takes” is not the Decision Pulse there because The Home Depot is run by a bunch of good samaritans. I’m sure they’re all swell people, but it has as much to do with The Home Depot’s strategy. They were founded–and continue to operate on–a strategy of unchallenged market dominance. In order to make their low-margin business work from a financial perspective, they must consistently push enormous volumes of merchandise. They can’t afford to have a small or even average-sized customer base. The can’t afford to have only a bunch of one-time patrons who are here today and gone tomorrow. What that means is that every single employee must flawlessly execute their strategy every minute of every day. That includes everyone from the hourly teenage cashier working just to save up some cash for prom all the way up to the CEO. They all must be making sure every decision selects the option that involves doing “whatever it takes to serve the customer.”
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