CHAPTER 1 Leading a Breakthrough Service Is Different

What great service leaders know: leading a breakthrough service is different.

What great service leaders do: they take steps to ensure repeated memorable service encounters.

Robert Nardelli left General Electric to become CEO of Home Depot in 2001. Expectations were high for Home Depot, the home improvement retailer whose growth had slowed when Nardelli took over. After all, he had already led several GE manufacturing operations to great success.

At Home Depot Nardelli found that the stores were staffed with knowledgeable, full-time employees, sometimes more than were absolutely necessary. He led a move to hire more part-timers, many with less expertise in home improvement, in order to size the retail workforce to customer traffic patterns. The move backfired. Customers noticed immediately that their favorite employees on the floor were no longer there. Soon after, Nardelli was no longer there.

Nardelli found that leading a service organization is different from leading a manufacturing organization. In manufacturing, if the factory labor force is too large, there is a simple solution: downsize. Consumers are rarely aware a change has occurred. But at Home Depot, consumers did notice. Heading up a service organization proved to be very different from his previous job. In fact, there are many subtle differences in leading a breakthrough service organization which, if not understood, can pose real challenges for a manager with other kinds of experience.