Bob Nardelli is Watching

In 2003, Home Depot turned the corner. Since then, both the top and bottom lines have grown dramatically, thanks to back-end efficiencies and a growth strategy focused on contractors, services, and international expansion. Customers, too, are spending more, with the average ticket up 18% over five years, to about $58 in the second quarter of 2005. When asked if he feels vindicated, Nardelli won't answer directly. But a small smile says it all.

The Facilitator

7:00 p.m. / Monday
Leadership team dinner, corporate headquarters, Atlanta

Nardelli is an unapologetic data freak who never met a process he didn't like. Conversations with him inevitably turn to the latest average ticket or the upward ticks on an employee satisfaction survey. "Facts are friendly," he loves to repeat. But Nardelli also understands the value of emotional intelligence. Often that means listening, without needing to set the agenda. That's what's happening tonight at a casual dinner for his 12 direct reports in a wood-trimmed executive boardroom. Although the team meets every Monday for two hours to conduct a cross-functional, real-time business review, Nardelli also hosts dinners with them and other groups to create more unstructured discussions.

Although most team members are new to Home Depot, there are also a few holdovers, such as CFO Carol Tomé and Tom Taylor, EVP for merchandising and marketing. As the group lines up at the salmon-and-beef buffet, it's clear they feel comfortable with one another and equally clear that they operate as a brain trust, cross-pollinating ideas across different segments of the company.

Tonight's conversation jumps from hurricane planning to leadership programs to The Same Page, the company's live TV show that communicates weekly plans to store managers. Nardelli says very little. Everyone chimes in with ideas that stretch beyond his or her functional roles, and there is little of the deference to power so often seen in large corporations. Says Harvey Seegers, who runs the online and catalog business: "I see him doing the same thing he did at [GE Transportation, where the two worked together]. He's building a collection of very talented people and has instituted a no-BS performance culture. Everyone wants to work harder because no one wants to let anybody else down."

The Manager

9:00 a.m. / Wednesday
Meeting with Harvey Seegers, Bob Nardelli's office

"He really is the best manager, execution-wise, I've ever encountered," says Jack Welch.

It's 9:00 a.m., but Nardelli is already well through a morning that began when his alarm sounded at 5:15 a.m. He rose to watch two news shows simultaneously and pore over the previous day's numbers. He then drove to the office, just a few miles from the Atlanta home he shares with Sue, his wife of 34 years, in his black Lexus SC 430 two-seater. He's there by 6:30, early for an 8:00 a.m. sit-down with Frank Blake, EVP for business development and corporate operations. Blake has good news on a new contractor loan program, but Nardelli's eyes dart to the few problem areas on a chart measuring customer satisfaction with in-home installations.

As Blake leaves, Seegers bounds into Nardelli's office, holding a catalog for the new 10 Crescent Lane home decor brand. Seegers goes straight to the metrics. "It's a fairly routine custom with Bob," he says. "You start out with the numbers, and if business is doing well, you can proceed on to the next topic, and if not, the agenda gets changed right in front of your face." Nardelli seems enraptured as he leafs through the catalog, admiring some lamps and a pop-up gazebo. "This is our most successful catalog launch in the history of the company," he says. This is the one I'm most proud of--the feel, the touch, the texture, the aspiration of it." The next catalog, for tools, doesn't get the same response: Too "foofoo" for tough-guy customers, he says. "We were taking full pages to show a wrench. That's not what pros want when they throw this in the truck."

The Talent Scout

10:00 a.m. / Wednesday
Meeting with Dennis Donovan, EVP, human resources

In many companies, the head of human resources has little clout. The opposite is true at Home Depot, which will create 20,000 new jobs this year. Dennis Donovan, another GE expat, advises on nearly every executive decision, from new store sites (are there enough workers nearby?) to marketing (can the company's hot NASCAR sponsorship be used to reward top employees?).