By Ty Hagler | 5 Minute Read
We have been thinking a lot about leadership development lately. Theories of leadership are helpful, but experience suggests that when others model leadership principles for us, we are more likely to uphold and honor the example of our mentors.
I was exposed to the idea of the inverted pyramid while at Home Depot. Founders, Bernie Marcus and Arthur Blank, had expressed this concept as they built the culture and company that dramatically transformed the home improvement and retail industry. The inverted pyramid is a way of approaching a company’s organizational chart – a way of thinking about one’s place in the hierarchy – in which the traditional leader, the CEO for example, is on the bottom, not the top.
Herb Kelleher, CEO of Southwest Airlines was once asked if he prioritizes shareholders or employees. His response showed both a contrarian viewpoint, but also embodies the inverted pyramid perspective. "Employees come first. If employees are treated right, they treat the outside world right. The outside world uses the company's product again and the shareholder is happy."
While Home Depot started out with a strong entrepreneurial culture, it went through an incredibly difficult cultural shift when the founders retired and former GE executive Robert Nardelli became Chairman and CEO in 2000. By the time I joined the company in 2004, the inverted pyramid was spoken of in hushed whispers, wistful of a bygone era and employees had become resentful of the CEO having asserted himself at the pinnacle. Rather than have the CEO and executive team carry the burden of responsibility for their decisions, Nardelli placed it on the associates. The company had lost its way, resulting in lost market share and declining customer satisfaction, which had once been an untouchable strength of the Home Depot. Though Nardelli tried to course-correct and regain customer trust, it became clear that he did not have the moral authority to repair the damage and was forced to resign in 2007.
When Frank Blake stepped into the CEO role, he promptly reverted the burden of responsibility back to his shoulders and that of his executive team through the inverted pyramid. Though he had to divest Nardelli's merger and acquisition consolidation adventure of HD Supply due to the financial pressures of the Great Recession, he bucked the trend of cutting employee wages and made sure they received merit increases and 401(k) contributions. By investing in people during the downturn, Home Depot came out of the recession stronger than ever thanks to Blake's servant leadership approach.
I happened to meet Bob Nardelli during my time at Home Depot. We were in an elevator together and I was bold enough to stick out my hand and introduce myself. Though I was sure to thank him for the Olympic Job Opportunities Program and the incredible vision that I benefited from, he seemed repulsed by my forwardness and was quick to shut down the conversation. By contrast, Frank Blake was known to eat lunch in the cafeteria with the rest of the associates, picking a table at random and spending time asking questions and getting to know people.
It is encouraging that the culture that Bernie and Arthur founded was able to survive a misfit CEO. While the company as a whole was chaotic and experiencing massive upheaval, I personally had the amazing experience of working for incredible servant leaders who operated on their own core values. These managers acted as coaches, not bosses, in which they put the interests and development of the people who worked for them ahead of their own interests.