The first big thing that Bob Nardelli wanted to be was a pro football player. But at 5-foot-10 and 195 pounds, he was the smallest guy on the line at Western Illinois University. "The rest of the world got bigger, and I didn't grow any more," he recalls. So he got practical about his future, earned a business degree, and took a job at General Electric, where his father had worked a lifetime in the factories.

The second big thing that Bob Nardelli wanted to be was CEO of GE. Though never a blazing intellect, he logged the longest hours, tackled the toughest turnarounds, and became "the best operating executive I've ever seen," says Jack Welch, his former boss. But again, somebody outgrew Nardelli. "I had to go with my gut," Welch told him in November 2000 when he passed him over for the polished, Ivy League-educated Jeff Immelt.

It's been said that luck is what you have left over after you give 100%. If that's true, Bob Nardelli never got his due until the day he lost the GE succession race. Minutes after the new CEO was announced, Nardelli, who was then in charge of GE Power Systems, got a call from Ken Langone, a GE board member who is also an influential director at Home Depot. "You probably could not feel worse right now," the raspy-voiced Langone boomed, "but you've just been hit in the ass with a golden horseshoe. And I've got the horseshoe." Within a week, Home Depot's board pushed out co-founder Arthur Blank and installed Nardelli as CEO.

At first, Nardelli looked like a pretty lucky loser: Immelt, not he, was the one grappling with rampant criticisms of GE's accounting practices and a falling stock price (down 25% since Welch's departure last September). During Nardelli's first six months at Home Depot, investors cheered the new guy. The company's shares, at $39 when he arrived in December 2000, rose to $53 by the next May. But lately Nardelli hasn't been looking so lucky. "This is one of the most unpredictable periods in my 35 years," Nardelli, 54, says over breakfast at his Atlanta office, three days after he announced a 35% increase in Home Depot's first-quarter profits, beating the Street's expectations. Promptly the stock sank more than 10%--now it sells for about $40. "I can understand not getting rewarded," he says, "but I don't understand getting punished."

Today Nardelli is having one hell of a time convincing investors that he's leading a go-go growth company. Rival Lowe's is stealing his customers and investor favor. Analysts worry about his aggressive efforts to transform Home Depot's legendary culture from loosey-goosey to disciplined--and to transform the business from an operator of big-box home-improvement stores to a multidimensional provider of goods and services. Some say his goal of increasing sales from $53 billion in 2001 to $100 billion in 2005 is too ambitious. Others wonder whether Nardelli is the right guy to lead the company. Not only is he the first executive without retailing experience ever to become CEO of a major nonfood retailer, he is also one of the very few outsiders to take over a well-known company from a founder.

But don't count the new CEO out. The essential thing to know about Bob Nardelli is that he is driven by much more than a simple desire to see his company excel. He's also driven by a burning personal need: to prove that Jack Welch picked the wrong guy.

If you spend time with Nardelli, inevitably he will cite his core belief: "There is an infinite capacity to improve upon everything you do." That faith in human performance has guided him his entire life. A mediocre student, Nardelli got B's and C's in school, but he hustled and excelled outside the classroom. He was an altar boy, a Boy Scout, a star athlete, editor of the yearbook, a class officer, and an ROTC cadet. At Western Illinois, no football player prepped harder than Nardelli, the co-captain and fierce offensive guard. "He was always the first in to study the films of the games," says his coach, Bob McMahan. "He was one of the few kids who really cared that he was carrying his load and doing right." Football gave Nardelli his first lesson in Six Sigma quality control, which became his gospel at GE: "Everybody had to do his job impeccably well. A case of 'we all win or we all lose.' "

Nardelli sold his motorcycle to raise the cash to buy an engagement ring for his college girlfriend, Sue, and they married in 1971, the year they graduated. And after rejecting the idea of becoming a football coach because he was wary of the unpredictability of the profession, Nardelli started at GE that same year at the lowest salaried level, as a $9,600-a-year manufacturing engineer. He worked his way up, taking night MBA classes at the University of Louisville. Jack Welch, who met Nardelli in the late 1970s, says that the young man hounded him relentlessly about Nardelli's own performance. "He would always say, 'What am I doing that I need to do better?' " In 1988, Welch refused to give Nardelli, then a manufacturing VP, a general management job. Nardelli quit. "The issue is not between you and I," he told Welch when Welch tried to persuade him to stay. "It is what is between you and I." Nardelli didn't get the grammar right (a perception that he's inarticulate marked his image early on at GE), but his point was that he needed a business to run to prove he was a worthy contender for CEO of GE.

Nardelli spent the next three years as an executive vice president at Wisconsin-based industrial-equipment maker Case, where he ran the worldwide parts and then the construction divisions. He returned to GE in 1991 to run the company's appliance business in Canada--and was on the CEO track at last. Within the year, Nardelli got the top job at GE Transportation, where he showed the right stuff. In three years he pacified hostile unions, modernized the product line, expanded into services, took the business global, and more than doubled profits. He abided by the one firm request that Sue Nardelli has made in these past 31 years of marriage: that they never live overseas. But he globetrotted all the time. "He was everywhere getting orders--Africa, Mexico, China, Eastern Europe," says GE alum Larry Johnston, who has known Nardelli for 20 years and is now CEO of food retailer Albertson's. Still, Nardelli has never missed a summer vacation with Sue and their four kids, now ages 16 to 27. Welch calls Nardelli "the perfect dad and perfect husband."