A Tale of Two CEO’s

The Jan 15 2007 BusinessWeek Magazine has an article about Bob Nardelli’s ouster at Home Depot (another good article about his ouster is at the New York Times). The BusinessWeek article of Nardelli’s ouster doesn’t contain any new information, but it does bring up Nardelli’s apparent ego and stubbornness and his approach to running Home Depot. According to the report, Nardelli took over the reigns at Home Depot and immediately began making changes which would eventually lead to 98% turnover in Senior Management since his arrival. Nardelli reportedly stated during a meeting soon after joining Home Depot that “you guys don’t know how to run a f—ing business

Within the BusinessWeek article, another small ‘breakout article’ titled “Being Mean is So Last Millennium” provides a comparison between Nardelli and another former GE alumus James McNerney. For those that don’t know, Nardelli and McNerney where in the running for the CEO position at GE, along with Jeff Immelt, when Jack Welch retired. Immelt was selected for the role and McNerney and Nardelli both moved on to take over CEO positions at other firms with McNerney joining 3M as CEO and eventually moving on to Boeing while Nardelli took the role as CEO at Home Depot.

This ‘breakout article’ does a great job of comparing the types of leaders that Nardelli and McNerney supposedly are. Apparently, Nardelli is a hard-charging, callous, egotistical, stubborn and heavy-handed leader while McNerney is a much more level-headed CEO who has embraced the people and culture of the companies that he has led. The article even goes so far as to call McNerney “a modern-day Dale Carnegie” and states that he is “loved at Boeing“. That is a far different story than Nardelli at Home Depot. According to the article:

Nardelli clearly cared about Home Depot. When it came to measures like profitability, his push was paying off. What he neglected was the touchy-feely stuff: the enthusiasm of his people, a sense of humility before his board, the care and feeding of his shareholders. It all seems so soft and irrelevant, until the injured egos decide to fight back.

Whether the information from the article about Nardelli’s and McNerny’s leadership styles is accurate or not, it does a great job of comparing two leadership styles: The top down, autocratic style (i.e., Command & Control) of Nardelli and the relationship building style (i.e., Command & Connect) of McNerney. Read more on my thoughts of Command & Control vs Command & Connect leadership styles in my blog post titled “On Leadership” and on Erik Mazzone’s post titled “How to Lead like the Godfather“.

I am a big believer in relationship building leadership. Nothing is impossible if the people working for a leader really trusts and respects them. I have worked for and with people who try to lead using the autocratic style and most times, the working environment under the autocratic leader is not a good one.

[tags] Leadership, Bob Nardelli, James McNerney, Leadership Styles [/tags]

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Eric BrownErik MazzoneCharles H. Green Recent comment authors
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Charles H. Green
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Well said. I was wondering about the GE connection with Nardelli and McNerney (I had forgotten his name). Interesting to see how differently McNerney came off; it tells me that the GE style was not as cookie-cutter as I might have surmised.

For two such very different styles to emerge from the same company actually speaks well for GE. Apparently the lesson Nardelli took from GE is that everyplace is like GE; the lesson McNerney took away is the importance of fitting in with your company’s culture.
A much better lesson.

Eric Brown
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Thanks Charles. I had the initial impression that the “GE Way” was a cookie-cutter mentality but it does appear that there are individuals throughout GE.

Erik Mazzone
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Great post, Eric, and thanks for the mention!

It’s illuminating to see Nardelli and McNerney placed side-by-side like that. I totally agree with your assesment of autocratic workplaces. As you note, the 98% turnover in senior management speaks volumes on that issue.

I wonder how much of Nardelli’s take-charge personality was responsible for the $210 million severance package.

Eric Brown
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Thanks Erik and you are welcome.