Culture as a Competitive Advantage

Walk into any branch of The Home Depot, and signs of the company’s culture are everywhere. It’s in the time and attention associates devote to customers, and it’s even prominently displayed on the iconic orange aprons. There, the company’s values wheel spells out its priorities, including excellent customer service, an entrepreneurial spirit, building strong relationships, taking care of its people, and doing the right thing, among others.

Peter Muñiz, vice president and deputy general counsel, points out that the company’s culture is also guided by the inverted pyramid—a version of the servant-leader philosophy—in which the needs and well-being of customers and associates are considered top priorities, even ahead of managers and executives.

“There is a family atmosphere here that nurtures respect and caring for each other,” Muñiz says. “It’s built into the DNA of the company and engenders a sense of loyalty, which helps us serve customers better, and, ultimately, makes the culture a competitive differentiator.”

He works hard to bring that same spirit to his legal team. That has resulted in an environment in which team members feel empowered, don’t allow the fear of failure stop them from introducing innovative solutions, and are comfortable constructively challenging one another. That includes Muñiz himself, who is frequently called on to justify his perspective on a range of roles and responsibilities, project priorities, and risk profiles on various transactions.

That atmosphere is challenging to create and maintain, but he believes it produces benefits that are worth the effort.

“When there’s enough trust, transparency, and candor, you organically help solve problems in ways that balance opportunities with risk,” Muñiz says. “The goal is never to create a ‘gotcha situation.’ It’s an ongoing dialogue in which we challenge ideas, not each other, in pursuit of the most effective and appropriate approaches.”

Challenging ideas is a trait that has appeared throughout Muñiz’s leadership roles over the years, says Maurice A. Watson, chairman at Husch Blackwell.

“He is continuously challenging himself to learn and master new skills and serve in new roles, excelling in each job while looking toward new challenges and demonstrating humility at all times,” Watson says.

As the team’s leader, Muñiz helps set the tone by admitting that he doesn’t have all the answers. “Just because something comes from the top doesn’t mean it has to be right,” he says.

According to Muñiz, that overarching culture—along with leadership that’s humble and willing to listen to external voices—was largely responsible for the way that The Home Depot responded to the 2008 financial crisis, which went against the prevailing wisdom at the time.

It took the servant-leader philosophy to heart by listening to its customers and letting them lead its response. So, while many other companies pulled back and hunkered down to ride out the economic storm, The Home Depot invested significant capital in its supply chain, which left it better prepared to respond to customer demand and preferences when the financial environment stabilized.

The entire team contributes to interconnected strategies with other departments and business lines that help The Home Depot react effectively to dramatic changes that are impacting the entire retail landscape. That means finding ways to say yes to clients and business partners even when what’s required goes outside the legal department’s comfort zone.

This was the case when the company partnered with the Google Express Online Marketplace and its voice-activated Google Home platform. The business needed to react quickly to customer demand, but the time frame to consult with internal IT and marketing teams, assess risk, and negotiate with Google would typically have taken the legal team many months. But consulting with critical business partners and negotiating and entering into a contract was done in a week.

“Being part of an interconnected strategy means being aligned with business priorities, removing obstacles, and giving my team the resources they need to work as efficiently and effectively as possible,” Muñiz explains. “When you’re trying to go where customers want you to be, speed to decision-making and to market become clear competitive advantages.”

To further facilitate that type of response, Muñiz encourages the legal staff to engage directly with clients to fully learn their businesses and understand their key drivers. That approach enables the team to provide solutions to clients’ issues in the same way that the company offers answers to its customers’ home improvement challenges.

Like staff at all levels throughout the company, legal associates in the Sales Support Center spend time each year working on the floor in the stores. This gives them first-hand experience with what is happening on the front line and gives them the opportunity to see how initiatives they’ve helped develop are impacting customers and associates.

In this same spirit, associates themselves are all encouraged to go directly to store, district, and regional managers with feedback on which efforts are working, which are not, and whether specific products are meeting customer expectations.

In both instances, Muñiz and his team are highly responsive to ensure that decisions they make are providing the intended benefits and outcomes.

As he strives to consistently live up to the company’s values, Muñiz repeatedly checks to confirm that he and his team have done the right thing—something he feels every lawyer should do every day. But he is also guided by a quote from Bernie Marcus, The Home Depot’s co-founder: “If we take care of our associates, they’ll take care of our customers, and everything else will take care of itself.”

By always taking care of his legal team and their clients, Muñiz believes the results will be the same.