Francis (Frank) Blake needed more than a hammer and a few
nails when he got the top job at Home Depot. Blake took over as
chairman and CEO of the U.S.s fourth-largest retailer in
January 2007, just as the financial crisis was starting to
fester. In a surprise appointment the executive vice president
replaced Robert Nardelli, who had overseen the Big Orange
Boxs dramatic growth during the U.S. housing boom.
Nardellis top-down management style clashed with the
warmer Home Depot culture instilled by founders Arthur Blank
and Bernard Marcus.
Self-effacing and candid, the 62-year-old Blake is the
opposite of his predecessor and former General Electric Co.
colleague. But he still had to confront some ugly economics.
Seeing that the home improvement chain itself needed major
repairs, he laid off 11,000 staff, sold HD Supply in 2007 and
closed the Expo Design Center division in 2009.
Blake rebuilt Atlanta-based Home Depots supply chain
and rethought its retail strategy. To this day he still taps
Blank and Marcus for advice on how to improve customer service
and stay true to the original values of the company they
launched in 1978.
Today things are turning around for Home Depot, which had
sales of $68 billion and earnings from continuing
operations of $3.3 billion in 2010. Thanks to Blakes
renovations, its performed well during this years
weak housing and job market. Raymond James Financial upgraded
Home Depot shares to a strong buy from market perform after a
solid second quarter; net earnings were $1.4 billion, or
$0.86 per share, versus $1.2 billion, or $0.72 per share,
during the same period last year. Diluted earnings per share
grew 19.4 percent over 2010.
To rally his 321,000 troops at the more than 2,200 Home
Depot stores in the U.S., Canada, Mexico and China, Blake
relies on down-home courtesy. Hes proud of his tradition
of hand-writing thank-you cards to employees on Sundays.
His inspiration for this gesture: thenVice President
George H. W. Bush, for whom the onetime lawyer served as deputy
general counsel from 1981 to 1983. Hed spend an
hour every morning writing notes to people, recalls
Boston native Blake, who has a JD from Columbia Law School.
As a staff member, I remember the feeling of getting a
note from the vice president of the United States saying
nice job on something. That makes a
For much of his career, Blake moved between government and
industry. He traded law for business at GE from 1991 to 2001,
starting as general counsel for GE Power Systems on his way to
becoming the parent companys senior vice president of
corporate business development. He then returned to Washington
to serve as deputy secretary of the U.S. Department of Energy,
where he managed a $19 billion budget. In 2002, Home Depot
recruited Blake to lead its business development and corporate
operations; he was named vice chairman of the board in October
Blake recently talked with Staff Writer Julie Segal about
Home Depots leadership, culture and turnaround.
Institutional Investor: You have an unusual
background for a CEO.
Blake: Half of my career was spent as a lawyer. I was in and
out of governmental roles, and I had a private practice. Then
when I went to GE, I moved from the legal to the business side.
Theres always a little bit of legal training thats
relevant, maybe just in terms of how you phrase questions. I
joke that law school consists of taking normal people and
getting them to worry about what no sane person would worry
about. Theres a level of worrying that comes with that I
guess you keep.
What business leaders have informed the way you run
Ive been fortunate in my career to work for some
extraordinary leaders, first among them [former GE chairman and
CEO] Jack Welch. When I got this job, I asked Jack if hed
spend some time with me. He was very gracious and spent a whole
afternoon. I had in my GE career done many pitches and
presentations to Jack where you needed to know everything about
the business from the smallest number up. So thats what I
did for him. But he didnt want any of that. He said:
Take me through your organization. Describe the people
what you see as their strengths and weaknesses, how you
are going to develop them, how you are going to deal with the
people you think arent contributing as much as they