Notes on Nardelli

April 30, 2009 at 6:35 pm Leave a comment

With Chrysler’s bankruptcy, it has been announced that CEO Bob Nardelli will step down once restructuring is complete. Nardelli’s departure is another slow-motion fall from corporate grace, widely anticipated and deemed long overdue by many.

Much has been written about Nardelli’s stumbles, both at Chrysler and previously at Home Depot. BusinessWeek recently published the equivalent of his obituary. He will also go down in history as the also-ran to Jeff Immelt when the acclaimed Jack Welch picked his successor to run GE, a process chronicled in Mr. Welch’s book, Jack: Straight from the Gut.

Admittedly. my PR hackles went up regarding Mr. Nardelli after reports of his efforts to stifle feedback and dissension at a Home Depot shareholders meeting. Upon losing his post at the home improvement giant, his severance package presaged the bonuses and golden parachutes decried during today’s economic crisis.

BusinessWeek points out that Mr. Nardelli was known for wielding the budgetary ax at Home Depot and Chrysler. It is one thing to eliminate waste; it is another to amputate brand elements and critical product development. Distraction by non-core endeavors compounds the problem.

As recounted in the BusinessWeek piece, while at Home Depot, Mr. Nardelli replaced veteran (i.e., expensive) people on the floor with younger, cheaper staff. At the same time, he delved into a wholesale enterprise, at odds with Home Depot’s retail focus. We can look to the teachings of marketing experts Al and Laura Ries to understand how these moves violated Home Depot’s brand. The company’s positioning: the ultimate home improvement store featuring salespeople with product knowledge and experience. Not a wholesale supplier to professionals. Not a place where harried homeowners go for little advice and lots of frustration.

Perhaps no one could have saved Chrysler. But an absence of PR and positioning chops made this outcome especially apparent for the automaker and Mr. Nardelli.


Entry filed under: Leadership, Marketing, Public Relations. Tags: , , , , , , , .

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