HOME DEPOT: Communicating With Employees While Maintaining Corporate Culture

In 1991, Home Depot was well on its way to conquering the home improvement retail market in the United States. At the time, the retailer was supporting 28,000 employees in 174 stores throughout Georgia, Florida, Texas and New Jersey, and annual sales had soared to $5.1 billion. There seemed to be no end in sight to the company’s growth.

B ut as each new store opened, Home Depot faced a growing problem: How could senior management communicate important information to employees while maintaining the same cor porate culture at each of its stores? Home Depot founder Bernie Marcus and Arthur Blank came up with an effective solution: Deliver quality programming over a business satellite network. So in 1990, the retailer opened its first broadcast facility in Atlanta. Staffed with just three people, the facility was barely 4,000 square feet, recalls Bruce Covey, senior engineer of Home Depot Television.

Initially, programming focused on motivating employees and training them about the many different products carried in Home Depot stores. A key broadcast was a Sunday morning program called “Breakfast with Bernie and Arthur,” a culture-building show designed to make employees feel empowered, connected and part of the Home Depot family, Covey says. “In the early days, everybody was very excited about it,” says Covey, who has worked at Home Depot Television for the past 13 years. “The company was rapidly growing and had a strong entrepreneurial culture. The management team in Atlanta truly wanted to communicate with employees.”

Fifteen years later, Home Depot still relies on that same philosophy, and as the company continues to grow and evolve, so does Home Depot Television. The company is continuously discovering new ways to harness the network’s power as a delivery tool for corporate communications, product knowledge, employee news and operational strategies. Today, the satellite-enabled network delivers 30 hours of programming each month to Home Depot’s employees, who now number 325,000 at 1,957 retail and landscape supply stores and Expo Design Centers throughout the United States, Canada, Puerto Rico and Mexico.

Exploring New Avenues

When Home Depot Television was launched, the door was wide open for innovative programming and applications. Besides the obvious applications — using the technology to train employees about various products and corporate procedures — senior officers at the company’s Atlanta headquarters quickly learned about the technology’s flexibility. Through internal streaming capabilities, Home Depot Television began delivering news stories about Home Depot and interviews with senior executives that appeared on news programs, says Covey. Home Depot Television recorded the feeds, informed senior management via e-mail that the clip was available, and included a direct link for access on demand to their desktop computers. Home Depot’s public relations department routinely informed the network of upcoming interviews or features and provided instructions on how to access them. Senior staff also hosted a popular monthly show called “Welcome Aboard.” The program introduced new stores and their employees to the Home Depot family and addressed the many challenges and opportunities they would experience in this demanding retail environment. The program was presented in a light-hearted and sometimes humorous fashion that really drew new employees into the Home Depot culture.

Just like broadcast television networks, Home Depot introduces new shows every season. Home Depot Television began revamping its program lineup in the mid-1990s, as shows were being developed for specific company divisions because division presidents wanted their own version of “Breakfast with Bernie and Arthur,” says Covey. These programs combined motivation, product training and other necessary tidbits of employee information that were specific to each operating unit.

In its early days, Home Depot Television used the BMAC analog transmission system developed by Scientific Atlanta. This was one of the first business TV satellite platforms that allowed companies to turn broadcasts on or off in different parts of the country. In 1994, in partnership with AT&T/Tridom, Home Depot embraced a new product called the CLI Spectrum Saver, a digital satellite receiver that enabled the company to save money by compressing its signal and use a much smaller slice of space segment, says Covey. “At that time, we were still an ad hoc network,” he says. “We did not have a leased, dedicated satellite transponder.”

In 1997, Home Depot Television moved its studio into Home Depot’s corporate center and began a much more aggressive operation. The station’s new home was more than four times the size of the old production facility — approximately 18,000 square feet — and featured a 2,250-square foot studio with four cameras, as well as three editing suites and up to 10 phone lines for live, interactive programs. In 1998, the network switched to Scientific-Atlanta’s Powervu system, on which it still operates today. This MPEG-2-based system allowed the network to provide better video quality, tighter site control, higher reliability and further reduce its satellite bandwidth and costs.

Programming was transmitted to the Vyvx Upsouth Teleport in Atlanta, then uplinked to a satellite. Each Home Depot store was equipped with a Scientific-Atlanta Powervu satellite receiver, a television, VCR and RF distribution system located in a computer room, with additional monitors on carts that could be placed in different areas of the store. Employees could view broadcasts on site, usually in the store’s break room or training room.

At peak staffing levels, Home Depot Television employed about 16 people, including producers, editors, technicians and management staff. The network not only supported multiple, targeted broadcast vehicles like print, but also produced materials for large corporate events and speaker support materials for the company’s executive tier.

But big changes were on the way, which would lead to a leaner and stronger business television network.
New Leadership, New Direction

In 2000, Robert Nardelli was hired as Home Depot’s president and CEO. Nardelli, who formerly ran General Electric (GE)’s Power Systems, introduced some of GE’s practices in order to improve efficiencies and processes at Home Depot. Likewise, departments were reorganized, reporting structures were modified and the workforce was trimmed, including that of Home Depot Television. While some of the changes were painful, Covey believes they ultimately improved the network’s efficiencies and helped expand its capabilities.

Home Depot Television reduced its in-house operation and began using contractors or freelance producers and editors. The network now supports a core management team consisting of four people: Dave White, manager of Home Depot Television; Covey, who oversees the physical facilities and satellite network; John Devendorf, operations supervisor; and Michael Cartozzo, production supervisor. Devendorf and Cartozzo select and manage numerous contract resources to achieve the network’s broadcast and production goals. “What we have evolved to now is a core management team that is the face of the organization,” Covey says. “Two years ago, I would have said, ‘No. Going to a contractor model is not a good idea.’ But so far, it’s worked well.”

Part of the reason for the success is because of the production facility’s location in Atlanta. The market offers tremendous access to high-end video production personnel, Covey says. Many of the network’s freelancers work regularly at large TV stations or Atlanta-based Turner Broadcasting System Inc., known for creating CNN and major news and entertainment programs for the basic cable industry.

Now all Home Depot Television needed was a new service provider that could handle its expanding needs. In 2001, the company invited bids from other service providers for managing the business television network. Globecomm Systems Inc. won the bid and now manages the space segment and installs and maintains satellite equipment at each new store. “Globecomm rapidly transitioned our sites to a new satellite and continue to manage our installations, maintenance and network segmentation with excellent results and fantastic customer service,” says Covey. By 2002, Home Depot Television was on the air 24 hours a day. A new monthly program, “InFocus,” was launched to feature best practices for employee safety and address issues regarding lost or stolen merchandise and inventory processes. Covey says the program draws faithful viewers who implemented the recommended procedures within their store. That same year, Home Depot Television also became a recruiting tool. The company was still growing and needed to hire up to 100 people to operate each new store. By then, a labor shortage for skilled workers had taken root in the United States, so to help recruit qualified talent, Home Depot partnered with the U.S. Department of Human Resources to broadcast a program called “One Stop Shop.” Managers of unemployment offices across the United States viewed the program, which introduced a fast track hiring procedure for qualified applicants, at local Home Depot stores.

Home Depot Television also provided easy access for news organizations like Fox News and CNBC into Home Depot Television’s studio, where the news channels regularly conduct live interviews with the company’s senior executives. The public relations payback was huge, Covey says. For example, during almost every hurricane season, Home Depot executives are interviewed about the company’s efforts to provide relief to areas affected by the storms. Most recently, Carl Liebert, executive vice president of Home Depot Stores, discussed the retailer’s post-Katrina response. “It’s very advantageous to state Home Depot’s position, especially on some of the financial broadcasts,” Covey says.

Home Depot Television also has gone outside to h elp fill air time, contracting with The Weather Channel and the Associated Press to broadcast select information into stores. This material appears on the Info Channel, created in 2002. The channel displays a news ticker on the bottom of the screen while the left side features product promotions or basic information employees need to know, such as updated information about the company’s stock purchase plan or a reminder about open enrollment for benefits. The Info Channel also features employee success stories; updates on Tony Stewart, driver of the Home Depot-sponsored car on the NASCAR circuit; and short merchandising segments — which appear in the upper right portion of the screen — targeted to specific store departments.

In the vignettes, a Home Depot associate and vendor demonstrate how a product works, then introduce a creative strategy on presenting and selling the product to customers. These five-minute vignettes focus on anything from tools to bug zappers, and the network will broadcast up to a dozen of the segments each week. These vignettes “catch a certain amount of eyeballs each day,” says Covey, referring to employees who watch them while in the employee break room.

Since 2002, Home Depot Television also has been supporting a pair of 24-hour channels, which are subdivided into six virtual channels that allow simultaneous transmission of a video signal in three separate languages — English, French and Spanish. These channel assignments are managed by Globecomm at the direction of Home Depot Television programming staff. The flexibility of this system allows Home Depot to reliably target materials to narrow audiences on an on-going basis.

The network also continues to introduce creative programming. “Same Page,” which debuted in 2005, is broadcast every Monday afternoon to store managers. It features Liebert and the senior store leadership team, who communicate weekly goals for stores and other pertinent information.
Measuring Success

Since it’s first broadcast, Covey says the company has experimented with different ways to measure t he network’s return-on-investment. However, none were truly successful. “It’s very hard to measure the results of communication,” he says. To determine if a program is successful, the company relies on the general perception of the senior management team. When senior executives visit a store — a frequent occurrence — they check out every aspect of operations, ranging from how merchandise is displayed and promoted to which safety measures are being implemented. If best practices that were introduced on Home Depot Television made their way into the store, then management has an indication of the success of the programs.

Another measuring stick is cost, Covey says. Anytime Home Depot has compared satellite to other delivery methods, satellite delivery is less expensive than other options by millions of dollars. He says the satellite network has saved Home Depot millions of dollars in delivering communications since 1990.

But not all types of information can be effectively delivered over a satellite broadcast. Training employees on specific ways to use equipment, for example, is best done face-to-face, Covey says. Likewise, there have been several occasions when department heads requested a new program, but managers realized that a traditional broadcast was not the best way to communicate information. Any department that needs ab solute closure or assurance that employees understand what is being communicated cannot rely solely on satellite broadcasts, Covey says. Consider an elaborate benefits enrollment. Employees must not only fully understand the information being presented, but must also take some sort of documented action. In this circumstance, satellite can still be used if it is one component of a broad communications campaign, which may deliver or convey information via e-mail, print or the company’s Web site.

Although satellite is a very cost-effective medium for point-to-multipoint communications, Covey says before designing or implementing any business satellite network, companies must understand their employee base and what in formation needs to be communicated to them. “Too many times, I’ve seen companies spend a lot of money (on networks) and three years later, everybody is laid off and the organization is shut down,” says Covey. “Know what you want to communicate. Then ask yourself if satellite is truly the best vehicle to do this.”
Joining Forces

While Home Depot may be using satellite for years to come, Covey anticipates that the network’s future will involve building a much stronger partnership with the company’s information technology department (IT) to develop a more cohesive approach for the delivery of communications and training materials. In the early days, Home Depot Television and the IT department worked somewhat independently of each other. But as the company explores future technologies, the two departments are forming a seamless relationship to deliver rich content that will drive the network’s future needs. “We cannot exist separately anymore,” he says. “Where we appear to be heading and where forces are beginning to build is doing a more cohesive effort of e-learning, training and communications primarily delivered over a satellite mechanism to some type of device at the store level, that allows video-on-demand, live video and computer streaming video. We’re beginning to look into this. It makes a rich media experience.”

Throughout the years, the network has helped Home Depot achieve many accomplishments, including achieving the biggest goal of all for any retailer: staying in tune with its employees and customers. “We’re very proud of it,” Covey says. “It’s been a very successful business television network.”

Carol Patton is a freelance business writer in Las Vegas. She frequently covers training issues for Satellite Business Solutions.