Why Is Bob DeRodes Leaving Home Depot?

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not forced, then perhaps nudged—on this decision. After all, he was hired under the previous, Nardelli regime, and now Home Depot has a new sheriff who is taking "orange county" in a different direction. Where Nardelli focused on big spending and business expansion, Frank Blake, whom the board appointed CEO in January 2007, is focused on the basics: improving Home Depot's core retail business, its stores, associates and customer service.

Mike Burgett, the founder, president and managing partner of CIO Partners of Atlanta, says Blake's back-to-basics focus and DeRodes' decision to leave the company signifies a shift in the company's approach to IT. He expects Home Depot, which has been hammered by the real estate bust and credit crisis, to scale back its IT spending.

The shift in Home Depot's IT spending may be dramatic. The company has "invested" over $1.8 billion in IT capital expenditures between its fiscal years 2003 and 2007, according to SEC filings. With sales and earnings down for the year in 2007 and the outlook for 2008 looking bleak, the money just isn't going to be there for technology.

What's more, Burgett says Blake may be questioning the value of all that money DeRodes spent on IT. He says there may be some concern that the company is not getting the return from the dollars DeRodes has spent.

It may be that, between the changing of the CEO guard and the economic downturn, DeRodes saw the writing on the wall and decided to leave on his terms.

Unfortunately, we won't know the reason behind DeRodes' departure until we hear from him or Home Depot.

Until then, Burgett doesn't think this is the last of DeRodes. "DeRodes will surface somewhere else. He's not done," he says.

It's unlikely that DeRodes will join another big retailer, such as Wal-Mart or Lowe's, since his employment agreement with Home Depot prohibits him from joining those companies for three years unless he gets written consent from Home Depot's EVP of HR.

What is likely, says Burgett, is that Home Depot will bring on board a different kind of a CIO, someone focused on cost-containment.

"I would not be surprised to see them bring in a CIO who has outsourcing experience," he says.

If that's the case, is it too early for Mitchell Habib to leave Nielsen?


Copyright © 2008 IDG Communications, Inc.

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