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05/26/2022

One-on-One with Jim Inglis

The former Home Depot merchant wrote the book on ‘Breakthrough Retailing.’

Jim Inglis walked the aisles in the early, formative days of The Home Depot. His sixty year career in home improvement included 13 with the orange-colored Atlanta upstart – from 1983 to 1996 – now the world’s largest home improvement retailer.

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Stories and strategies from those early days are featured in his book “Breakthrough Retailing: How a Bleeding Orange Culture Can Change Everything.” The book includes history, heroes (Pat Farrah), villains (Bob Nardelli), plus ten chapters drawn up as a blueprint for retail success—any kind of retail.

As president of Inglis Retailing, Inglis has traveled the world providing expertise to leading retailers. His experience also includes executive roles with Dixieline Lumber and Carpetmax, but he’s best known for his work as executive vice president of merchandising for The Home Depot.

Inglis, whose honors include a Lifetime Achievement Award from the Global Home Improvement Network and the European DIY Retail Association, recently spoke with HBSDealer about highlights from his career and his book.

HBSDealer: Early in the book, you describe the ill-fated approach that most traditional home centers took to Home Depot’s expansion. You write that they were grossly mistaken to think that remodeling their stores was a solution.
Inglis: Exactly. By remodeling their stores, they increased their overhead. They aggravated their customers and they ended up with the store that was diametrically opposed to what we were doing. And, it wasn't just one case. It was every case and when we went to every market, we saw the same pattern.

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Jim Inglis
Jim Inglis

HBSDealer: The business’s focus on the right performance metrics also seemed to be crucial early on.
Inglis: Gross margin return on investment. That's what drove our business, and that is what the other home centers didn't understand. The key is not high margin percentage, but high gross margin dollars. One of the things we liked about that metric was that increasing inventory turn became a high priority for the store managers, and also a high priority for the merchants, so they weren't working against each other. They were working together to maximize the return.
And if you ask, ‘What's the best way to maximize inventory turn?’ Well, a lot of people would say, ‘lower the inventory.’ Wrong. The right way to increase inventory return is through increased sales, and so you get the store management and the merchants both working on how do we drive sales so we can increase inventory turn.

HBSDealer: In the book you describe the ideal role of the merchant as “lawyer for the customer.”
Inglis: That’s right. The typical name for a merchant in most companies is “buyer.” Well, that’s because they spend all their time focused on the vendor. We called our buyers “merchants,” because by definition, that means they’re focused on the customer.

Cast of characters

On Pat Farrah’s contribution:
“The initial concept of a warehouse home center sprang from Pat Farrah’s vision Pat had been the general manager. Of National Lumber, a traditional home center in the Los Angeles market. Pat left National Lumber and, with the financial help of some friends and business associates in 1977, opened Homeco in Long Beach, California, which truly was the first big-box home improvement store.”
Breakthrough Retailing, page 57

On Bob Nardelli’s management
“… [the early Home Depot] culture could not coexist in the new centralized world of rigid General Electric processes. Experimentation and risk taking were no longer part of the culture. The dynamic nature of the business had changed, to the detriment of the employees and the customers.”
Breakthrough Retailing, page 168

HBSDealer: One of the phrases that jumped out at me was: ‘Very few light bulbs of creativity fire up while people are sitting at a desk in a corporate office.’
Inglis: On Monday mornings, we got in a plane and we headed out to the stores and we spent the whole week in the field. And that's where we found the problems. It’s where we found the opportunities. You don't really understand the problems and you don't really see the opportunities when you’re sitting in an office.

HBSDealer: Among the characters in the book are (founders) Arthur Blank and Bernie Marcus, but also (early merchandise leader) Pat Farrah and (former CEO) Bob Nardelli.
Inglis: Pat was the creative genius of the real concept, the concept of the big warehouse store. And he was also the spirit of the culture, of whatever it takes to delight the customer we will do. And he was also the guy that encouraged us to be non-orthodox.
If you were to take a continuum of management styles and put Nardelli at one end, Pat would be at the other end. I mean, there would be no common ground.

HBSDealer: What’s been the reaction to your book?
Inglis: The most gratifying thing about the book has been how my clients that I've worked with over the past 20 years have embraced it and are using it as a textbook for their employees. And in the back of my mind, that was always why I was writing the book: to give that kind of a tool to my clients. They say that over time people fade away, but words and books last forever.

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Retail is Detail

Adding thought-provoking interest to Breakthrough Retailing are scores of “Retail Details,” including the following:

No. 30: “Whenever I talk about balancing the art and science of retail, I’m careful to emphasize that we will always start with the art.”
—Ted Decker, current CEO, The Home Depot.

No. 33 “Hierarchies were built for a slower, older time when we could all wit in line for an audience before the throne.”
– Kevin Hancock, CEO, Hancock Lumber

No. 37: “Retailing is a race with no finish line.”