Chairman and chief executive officer, Office Depot
Born: ca. 1945.
Education: Idaho State University, BA, 1968; Stanford University Executive Program, 1984.
Family: Married LaVaun (maiden name unknown); children: two.
Career: Boise Cascade, 1968–1990, senior management; BT Office Products USA, 1990–1994, president and chief executive officer; Viking Office Products, 1995, executive vice president and chief operating officer; 1996–1998, president and chairman; Office Depot International, 1998–2000, president; Office Depot, 2000–, CEO and president; 2001–, chairman.
Awards: Honored by the Greater Miami Chamber of Commerce as Hispanic marketer of the year, 2003; given the Applause Award by the Women's Business Enterprise National Council, 2003; named one of the best managers of 2002 by BusinessWeek magazine; named entrepreneur business leader of the year by Florida Atlantic University, 2001.
Address: Office Depot, 2200 Old Germantown Road, Delray Beach, Florida 33445-8299; http://www.officedepot.com.
■ As CEO of Office Depot, M. Bruce Nelson came on board at a crucial time for the company. Among his first initiatives was closing unprofitable stores while at the same time opening others in expanding markets. He also worked to give the ailing company a morale boost after a failed merger with Staples by making the company a more attractive place to work. His strategy repositioned Office Depot for success in the competitive business of office products, even as retail sales continued to lag.
After completing his bachelor's degree in business accounting at Idaho State University in 1968, M. Bruce Nelson began
his career at Boise Cascade Office Products in Itasca, Illinois. He remained with the company for 22 years, leaving in 1990 to become president and chief executive officer of BT Office Products USA. Five years later, in 1995, Nelson moved to Viking Office Products as executive vice president and was soon promoted to chief operating officer. In January 1996 he became president and in November 1996 was elected the chairman of the board of directors. When Viking merged with Office Depot in 1998, Nelson remained as president and CEO of Viking, became president of Office Depot International, and was elected to the board of directors at Office Depot. Nelson became CEO of Office Depot in July 2000 and was named chairman on December 30, 2001.
At the time Nelson took over as CEO, Office Depot ranked first among U.S. retailers of office products, had an extensive presence overseas, operated a lucrative business services division, and enjoyed brisk Internet sales. Yet the company was struggling. Nelson assumed control of Office Depot in the wake of a Federal Trade Commission antitrust ruling that had ended a four-year effort to merge with Staples, another office supply company. Calling himself "an agent of change" in Retail Merchandiser (May 2001), Nelson immediately set about restoring company morale. He made the success of Office Depot the responsibility of every employee and introduced a new set of values to guide the company: "Respect for the Individual," "Fanatical Customer Service," and "Excellence in Execution." He also removed Shawn McGhee as president of North American operations and Barry J. Goldstein as chief financial officer.
Lagging sales in U.S. retail stores, however, lowered operating profits and marred the recovery. To address the problem Nelson, who had little experience in retail, undertook decisive but painful measures. In January 2001, after only six months at the helm, Nelson announced that Office Depot was closing 70 of its 855 stores, 67 in the United States and three in Canada. He also revealed plans to spend $60 million to renovate stores to make them more attractive to customers and to stock items that small business owners, the core of Office Depot's customer base, purchased regularly and often. Nelson hoped that these initiatives would lure customers into Office Depot stores, improve lackluster sales, and increase profits.
In the meantime, Nelson focused on expanding the number of Office Depot stores abroad, planning to add between six and 10 stores to the seven the company had already opened in Japan and between eight and 10 to the 22 already doing business in France. Additionally, Office Depot constructed new warehouses in Germany and the United Kingdom. "The business is going to grow quicker outside the United States," Nelson explained in DSN Retailing Today (January 22, 2001).
Office Depot showed marked improvement in performance during the fiscal year 2001–2002. Nelson could at last begin to savor his accomplishments 20 months into his tenure as CEO. Operational profits increased from $316 million to $747 million, with e-commerce alone soaring by 58 percent to $1.6 million. No other company except Amazon.com did more business over the Internet than Office Depot. International sales boomed, accounting for 27 percent of the company's operating income. The sale of computer software and office furniture in the North American market, though improved, again failed to show a profit. As a consequence, Nelson became committed to reducing North American retail sales to less than 50 percent of Office Depot's business.
Despite the resurgence that Nelson's various strategies had effected, he continued to emphasize the importance of people to the success of any business. As the keynote speaker at the annual Office Products International conference in 2000, Nelson told his audience that leadership in business did not depend on implementing strategic visions but rather on putting the right people in the right positions and then allowing them the freedom to make mistakes, learn, and grow. Too many CEOs, Nelson complained, believed that leadership involved only managing a balance sheet and executing a system. Effective administration, on the contrary, required human under-standing, empathy, encouragement, tolerance, patience, and loyalty.
Nelson practiced what he preached. Under his direction Office Depot earned recognition from the National Association for Female Executives as one of the top 30 companies for treatment of women executives and won international renown from Fortune magazine as one of the "great places to work" in Germany and Austria.
The positive financial trends of 2001 and 2002 reversed themselves in 2003, when Office Depot's profits fell from $310.7 million to $276.3 million, and net income declined by 11 percent. Even at stores that had been in business for over one year, sales had declined for consecutive quarters, and the company fell into second place among the retailers of office products. After profits had risen by $109.7 million in 2002, the board of directors had rewarded Nelson with a $1.87 million bonus. In the wake of the dismal news of 2003, the board responded in kind. Although Nelson's base salary remained $1 million, the board reduced his total compensation package by 59 percent, from $7.05 million in 2002 to $2.91 million in 2003.
See also entries on Boise Cascade Corporation and Office Depot Incorporated in International Directory of Company Histories .
"Leaders: Forget Strategy, Think People," Office Products International , December 2002, p. 59.
Libbin, Jennifer, "Office Depot CEO Outlines Future," DSN Retailing Today , May 21, 2001.
——, "Office Depot Takes Steps to Offset Soft Sales," DSN Retailing Today , May 1, 2001.
Masters, Greg, "Making a Difference," Retail Merchandiser , May 2001, p. 19.
"Office Depot Discloses CEO Pay Cut," Miami Daily Business Review , April 2, 2004.
Prior, Molly, "Office Depot's Nelson: Rebound is Under Way," DSN Retailing Today , May 6, 2002.
Troy, Mike, "Change Is in the Air at Office Depot," DSN Retailing Today , August 7, 2000.
——, "Office Depot CEO Outlines Plan to Fix Performance," DSN Retailing Today , January 22, 2001.
Vogel, Mike, "Full Nelson," Florida Trend , December 2000, p. 78.