Home Depot’s recent second-quarter earnings — with a 5.7 percent increase in revenue and a 22 percent increase per stockholder share from this time last year — mark a favorable end to CEO Frank Blake’s tenure as the head of the international home improvement chain. His seven years at the helm have proved profitable for Home Depot, overtaking key competitor Lowe’s in share price and making across-the-board internal changes to solidify the company’s standing in the market with $78 billion in revenue for 2014.
Now U.S. retail president Craig Menear will take the reins as part of a planned succession, with Blake staying on as chairman. He has already played a critical role in much of Home Depot’s marketing and merchandising efforts, including boosts to its newly booming online business, which brings in more than 4 percent of the company’s sales. He is well positioned to take over the leadership role as a 17-year employee who has, as one analyst told Businessweek, “grown up with the business.”
Home Depot has clearly planned this transition carefully so as not to lose any of the momentum gained during Blake’s term. But what did it look for in Menear — and find in Blake — that has made such a marked difference in the company?
Transformational leadership is the key to the kind of success that Home Depot enjoys today. Transformational leaders are the driving forces in their organizations, inspiring greatness and setting the course for their organizations by rewriting the rules of the game to gain a competitive edge. Frank Blake embodies our five facets of Transformational Leadership, and Menear looks poised to carry the torch. But if any leader wants to succeed during a transition or any other important business imperative, they should focus on these three key leadership characteristics.
A transformational leader has a vision for the organization, both near-term and long-term. They know exactly what the enterprise looks like — from offerings to competitors to the economy — in order to cast that vision for the future and create opportunities for outside-the-box innovation and set their organization up for Breakthrough Performance. A leader also has a passion to engage everyone in the organization in this vision, from the C-suite all the way down to the part-timer working in the mailroom.
It’s important for key leaders to communicate authentically with shareholders, employees, and customers. But transformational leaders aren’t just talking — they’re listening, too. They need to be able to discern the concerns, desires, needs, and problems that their employees and customers face, helping turn breakdowns to breakthroughs and inspiring accountability, commitment, and trust.
Leaders need followers, but transformational leaders need supporters. We believe that anyone can be developed as a leader, regardless of what title they hold in the company or role they might play. Transformational leaders are the ones who help develop the leadership of the future, and they do by inspiring others to take on the company’s vision as their own and make a personal commitment to the organization’s success.