The board hired GE's Robert Nardelli, who focused on metrics over culture. He optimized for profit but killed employee morale and customer service, causing the stock to flatline. This proved a company's unique, founder-instilled culture is a tangible asset that can be destroyed by purely data-driven management.

Sears' decline was epitomized by a CEO who felt like a "stranger" in his own stores and pursued abstract corporate strategies. In contrast, Home Depot mandated that every executive spend time on the floor, ensuring that strategic decisions were grounded in the reality of the customer experience.

When Home Depot's culture began to erode due to a mindset that prioritized cost over people, the board's solution wasn't a new initiative, but a leadership change. Ken Langone credits the new CEO, Frank Blake, as a "founder" for his role in restoring the company's core cultural values.

On the verge of closing a crucial deal, Bernie Marcus threw a Boston VC out of his car for demanding cuts to employee healthcare. He prioritized culture over capital, believing the company's foundation rested on taking care of its people, a non-negotiable principle even when facing failure.

Instead of starting from a textbook, WCM developed its effective culture by identifying the negative traits of its original founder's regime—control, opacity, and stinginess—and deliberately doing the opposite. This 'inversion' method provides a powerful, practical template for cultural transformation.

Home Depot's decentralized model gives regional presidents significant autonomy but with clear, unspoken boundaries—the "invisible fence." This fosters local ownership and agility while ensuring alignment with core company principles. Crossing the line results in a "zap," maintaining strategic cohesion without micromanagement.

To truly build a people-first culture, give the head of HR (rebranded as 'Chief Heart Officer' to change perception) more political clout and decision-making power than the Chief Financial Officer. This organizational structure ensures that employee retention and happiness are prioritized over pure financial metrics, leading to long-term stability and success.

Home Depot's culture inverts the traditional corporate pyramid. The most important person is the frontline employee interacting with the customer, not the CEO. This philosophy ensures that the entire organization is structured to support the people who directly create the customer experience and drive sales.

Contrary to a shareholder-first dogma, these leaders operate on an employee-first principle. They believe that well-treated, empowered employees provide superior customer service. This creates loyal customers, which drives sustainable profits and ultimately delivers superior long-term returns for shareholders.