Home Depot messes with success, fails

Just yesterday, I was having a far-ranging discussion with my co-workers that eventually turned onto how badly Home Depot screwed up. It used to be a big, dare I say "exciting," place to shop and enhance the domicile. Now it's a chore - a drudgery - to go to Home Depot because the employees treat you like an inconvenience. Business Week saw it coming a year ago:

But among many of Home Depot's 355,000 employees, especially rank-and-file workers in its orange big-box stores, there was little sympathy as [former CEO] Nardelli dug himself into a deeper and deeper hole. They resented the replacement of many thousands of full-time store workers with legions of part-timers, one aspect of a relentless cost-cutting program Nardelli used to drive gross margins from 30% in 2000 to 33.8% in 2005. As the news of his resignation on Jan. 3 shot through Home Depot's white-walled Atlanta headquarters and reached stores, some employees text-messaged each other with happy faces and exclamation points.

It's said that the downfall of a number-based management is that it's difficult to attach a value to intangibles such as customer satisfaction. Now the pursuit of short-term gain has threatened the long-term health of a former giant:

The Atlanta-based company, under different leadership, a different growth philosophy and amid an ailing housing market, put the brakes Thursday on some of its future expansion plans and said it would do what was previously unthinkable -- close 15 of its underperforming flagship stores.

It is the first time the world's largest home improvement store chain has ever closed a flagship store for performance reasons. The move, to be completed within the next two months, will affect 1,300 employees.

I'm sure the housing slump hasn't helped Home Depot, but the company's policies were set for failure long before. How did Lowe's sneak into a market that Home Depot dominated for almost a decade? Big Orange took their eye off the customer, that's all.