Passion helps Home Depot CFO weather tough times
Despite downturn, Carol Tome tells Kellogg students she’s optimistic about the home improvement retailer’s future By Amy Trang
9/26/2008 - Carol Tome, The Home Depot chief financial officer and executive vice president of corporate services, already was “bleeding orange” before she worked at the firm’s headquarters in Atlanta.
Tome’s enthusiasm for her company was eminent when she spoke to Kellogg School students during a visit Sept. 24. The executive leadership presentation was sponsored by the Retail Club, Finance Club, Business Leadership Club and Women’s Business Association.
Tome recalled what she told her husband after her initial trip to a Home Depot location in Atlanta in the early 1990s.
“It’s cool; we need to buy stock,” Tome said, eliciting a laugh from an audience of about 150 Kellogg students gathered to hear her speak in the school’s Owen L. Coon Forum.
Ironically, Tome almost said no to working at Home Depot, the world’s third-largest retailer after Wal-Mart and Carrefour, and the world’s largest home improvement retailer.
Pursued by an executive recruiter, Tome said she didn’t think Home Depot would provide a challenge for her. Her previous position was vice president and treasurer at global packaging company Riverwood International Corp. But Home Depot was just on the edge of entering the international market when Tome joined in 1995, having launched its first non-U.S. venture into Canada the year before. Today, the firm boasts 2,259 locations in Puerto Rico, U.S. Virgin Islands, Guam, Mexico and China.
Tome recounted how she changed her mind after a conversation with one of Home Depot’s co-founders, Arthur Blank. What Tome would achieve would be up to her, Blank said.
“He said to me, ‘We will give you every opportunity to reach your highest potential,’” Tome said.
Tome, a 13-year veteran of the company, faces her toughest challenge yet: keeping the global retailer afloat amid a slumping economy and housing market. The Home Depot has faced eight quarters of declining profits, but continues to focus on its international expansion, after acquiring 12 stores in China in 2006.
“It’s a crazy time in our country,” Tome said. “I’ve seen good times and bad times and I think the best of times are ahead of us.”
Two questions Tome said she is often asked are, ‘When will the housing market hit rock bottom?’ and ‘When will it improve?’ She pointed out that historical trends indicate the market has not hit bottom, but is getting close to it. She also added optimistically that history shows these markets are cyclical, which means they will turn around.
But for corporate leaders looking to survive in this tough environment, “communication, resolve, humor, passion and little sleep” are key, Tome said.
Under the leadership of CEO Frank Blake, Home Depot has focused on its most important asset — its people. The company distributed about $40 million in employee bonuses in 2007 to recognize top-performers, an incentive that other companies might be tempted to eliminate to cut costs, Tome said.
Home Depot also recently reorganized its supply chain and introduced a new pricing strategy that includes permanent budget items, a move designed to entice customers looking for enduring values, rather than seasonally discounts.
Tome said that she attributes her long tenure at Home Depot to her enthusiasm for the company and its values.
“[Company] culture is important,” Tome said. “You have to understand the culture and keep it alive. Passion is absolutely essential in everything we do because with passion you can do everything.”