Inverted pyramid management: The Home Depot approach to CX
People and Culture
Did you know that roughly 90% of the U.S. population lives within 10 miles of a Home Depot store?
Since its inception in the 1970's, The Home Depot has helped to shape the do-it-yourself (DIY) home improvement market that we know today. The company sees more than $100 billion in annual revenue, and employs over four hundred thousand employees, or as Mike Jones, senior director of customer care, affectionately calls them: "orange-blooded associates."
As part of the TELUS International Studios podcast, Jones shares how The Home Depot adapted to growth over the last 18 months, including the need to pivot quickly to meet the needs of their customers. He also emphasizes the importance of holding your values at the forefront of every decision. Read on for more highlights from the conversation.
Shift with your customers
In order to anticipate customer needs, The Home Depot has studied seasonal purchasing behavior, as well activity around storms and natural disasters. This enables the team to know when and where demands will spike, and equips them with a playbook at the ready for an accurate response. For example, pre-storm customer activity often means a spike in demand for generators, and post-storm buying patterns include debris clean-up materials and tools used to fix water damage.
Despite the company's proactive nature, The Home Depot was left without a playbook when the pandemic began in March of 2020. Like businesses all over the world, The Home Depot had to shift to meet the needs of their customers. For example, Jones explained that COVID-19 marked the end of the occasional, "DIY weekend warrior" customer. With a stay at home order in place, many were looking to take on more ambitious projects and the demand for products like interior paint and yard work tools skyrocketed.
"It's been fascinating to watch consumer behavior shift and consumer thought shift," explains Jones. "We became early and often observers of what those changes mean and then obviously being thoughtful [about our approach, we started asking]; how long lasting they are, how short lived they are, and how do we make sure that we can still meet the consumer demand?"
How did The Home Depot team make sure they were meeting the growth in demand? They had to adapt — and fast.
According to Jones, the biggest shift aside from an increased product demand, was the speed, ease and safety of order fulfillment, which forced The Home Depot to digitally transform their online approach.
"We introduced curbside pickup at our stores, and that really wasn't even on the drawing board for us… to be able to have a customer place an order via their app and go to the store quickly and have it delivered to their car," Jones explains. “Within a couple of weeks, we were able to take that from a proof of concept stage and a couple of stores, to the entire chain."
Equally as important as adapting to your customer needs is quickly adapting to the needs of your workforce. For The Home Depot, that meant deploying five thousand employees from an office environment to a home environment, as well as making sure all frontline associates were provided a safe in-store work environment.
Invert your management structure
The Home Depot is described by Jones as a value-led operation that puts frontline associates and customers at the forefront of its customer experience (CX) strategy. It's the company's core values in combination with an inverted pyramid management style that makes up the Home Depot's secret CX sauce.
Jones explains why the inverted pyramid is the best approach: "The top of that pyramid is our customers and right with them is our frontline associates and then all of the lower levels of the pyramid are the kind of management structure all the way down to the bottom of the pyramid, which is our chief executive officer. And that's very, very important to always keep in mind, because ultimately we believe that if we serve and keep our focus on serving our customers and our frontline associates who are serving those customers, then that's the right recipe for success."
One of the greatest advantages of the inverted pyramid approach is the consistent funnel of priceless customer feedback. "We believe that the best ideas emerge from those closest to the customer," says Jones.
"And by living that value construct and that leadership construct where you empower the frontline folks who are belly-to-belly with the customers in the aisles, or in our centers serving our online business, that you're going to get a much better solution. And it's also going to be much faster when you have a problem to be resolved. If it has to go up and down through a very hierarchical, rigid chain, you're not going to be successful. And when you think back of the landscape over the last 40 years, of all the retailers that are no longer in business, you could pretty much draw a straight line to leadership philosophies and how they've not been able to evolve and change rapidly with the times — to ultimately their demise."
The Home Depot has been fine-tuning their approach since the 70's, but nothing expedites digital transformation like market pressure. With a tried and tested value set, and an inverted pyramid structure that places its customers and orange-blooded associates' needs first, The Home Depot was able to take the last 18 months in stride — making quick, safe and thoughtful decisions that continue to pay off.
Listen to the full TELUS International Studios podcast with Mike Jones, senior director of customer care at The Home Depot here.