Some Real World Corporate Best Practices

Some Real Corporate Best Practices for you.

Have a great Day

Dinesh Cha...
have also built up a top 40 list of the most talented
                                                 people in the world...
time and tools to get the job done. When I don‟t get
                                            my desired result, I‟ve f...
ready to act rather than someone who is acting. To
                                         do so invites the follow-up qu...
and bring their cars with them. The chief engineers,
                                                 the product planners...
innovative new products, the company‟s elaborate
                                                revenue projections inclu...
guarantees to call the claimant back within two hours
                                            with specifics of when a...
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Some Real World Corporate Best Practices Dinesh Chandrasekar


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Some Real World Corporate Best Practices Dinesh Chandrasekar

  1. 1. Some Real World Corporate Best Practices Dears, Some Real Corporate Best Practices for you. Have a great Day Dinesh Chandrasekar DC* Area Company Practice Innovation 3M 3M has specific metrics to measure innovation performance 1. 30% of sales must be generated by products launched within last 4 years 2. 10% by products launched in last year 3. Number of patents awarded. Culture of innovation generates enormous satisfaction for those who work at 3M. Culture of innovation is backed up by a culture of communication. There is an unwritten rule that allows employees to spend 15% of their time on a project of their own invention. There is acceptance of a high failure rate – 90% of ideas fail at one of the various gateposts before reaching status of formal project. Key is to spot losers early. Tolerance and delegation are critical. Change Management Richer Sounds/Wal-Mart Richer Sounds has a Cut the Crap Committee which meets monthly to review processes and ensure that outdated ones are removed from the company manual. At Wal-Mart they call this ETDT – eliminate the dumb things. Innovation ?What If! On the last Friday of every month the whole company stops work for the afternoon to join in a stimulus sessions involving something people would never normally do. The aim is to structure some freshness into the work place to break patterns Innovation Asda Every manager is encourages to think for at least two hours undisturbed. This is signaled by the display of a red hat. Organisation Bolt Inc Developed Hive Mind seating systems to break up departmental them-and-us attitudes, improve on-the- spot brainstorming and bonding towards one overarching goal. Recruiting Electronic Arts EA‟s recruiting process involves not asking for a resume when people click through to web site but for answers to a few basic questions - type of work they are looking for, interests, experience and where they live. If there is no current fit, EA asks whether candidate would like to receive future correspondence – strategic updates, notification of new openings. (Roughly 60% have said yes). EA
  2. 2. have also built up a top 40 list of the most talented people in the world who, EA hopes, will someday work with the company. Recruiting Vignette Vignette aims to close on 25% of its hires within 24 hours and it does so by: 1. Everyone recruiting (employee with most referrals won two year lease on Mercedes S500) 2. Leverages its own software 3. Gives first interviews over the telephone 4. Uses tag team interviews – 8 people focusing on different areas Growth Illinois Tool Works When a division reaches $50m in revenue it is split into 2 or 3 units with their own general manager, often someone in their 20s. Customer retention Harley Davidson Harley owners group boasts 450,000 members and sponsors an annual rally where the tattoo contest is one of the most keenly followed events. As the company says “it‟s one thing for people to buy your products. It‟s another for them to tattoo your name on their bodies. Innovation GE Capital GE Capital‟s senior managers spend a lot of time searching for „popcorn stands‟ and trying to grow them into pre-bubble ventures. [A bubble has to generate $25m in profits per year]. Product Development EMC EMC will not release a new product until its replacement is in testing Sales training Great Scott Broadcasting Great Scott have a trivia quiz every Tuesday morning to test sales team on audience demographics, marketing protocols, etc. Customer Service During peak demand periods – Valentine‟s Day, Mothers Day – rather than bring in temps everybody gets involved in customer service. As well as avoiding morale problems it helps everyone to feel the customer. Everyone gets trained in customer service, even the programmers. And the front-line experience helps them be more customer-sensitive in their everyday jobs. Customer Service Rather than wait for customers to contact them (usually only if there is a problem), within 24 hours of a new user registering on the site an staffer will ring up to check everything is OK – bonding rather than telemarketing. This involves virtually everyone in the firm. There is a standing meeting the following day to review customers comments. Threats Loudcloud Marc Andreessen keeps a list of the 10 most serious threats to the company. Its called “Ten reasons why we are going out of business”. It builds up what seems like paranoia but is really clear-eyed objectivity. Leadership Mike Abrashoff, Today if someone doesn‟t comply with my wishes, I Grassroots Leadership want to figure out why. I first look inward and ask myself 3 questions: Am I clearly articulating the goal? Am I giving that person enough training to accomplish the job? Am I giving that person enough
  3. 3. time and tools to get the job done. When I don‟t get my desired result, I‟ve found that 80% of the time the answer to one of those three questions provides me with a reason why. Innovation Caleb Atwood Instead of rejecting bizarre ideas, say “Yes if [you can explain to me how we would…]” Innovation Los Olivos Women‟s Anyone heard firehosing contributes 25 cents to a Medical Group fund. Training Springfield At SRC 86% of the training budget is spent on turning Remanufacturing employees into business people (The Great Game of Corporation (SRC) Business) – how to read a balance sheet, monitor cash flow, how each person affects income and profits. Customer service Northwest, Delta and Sent frequent flyers books of coupons to be handed American Airlines to employees “caught” doing something right for customers. Strategic Planning GE Rather than a plan that can be beaten, GE operates a stretch environment with teams producing “operating plans” that reflect their dreams – the highest numbers they think they have a shot at. Discussion revolves around new directions and growth. Everyone leaves with a good idea of what the business will do and what the team will try to do. And an operating plan is drafted to reflect that reality. The team knows that it will be measured against prior year and relative performance against competitors, not against a negotiated internal number. Innovation Whirlpool Five tenets of innovation 1. Focus on consumer 2. Invite innovation from everywhere 3. Take a portfolio view of innovation – short/long term, incremental or disruptive 4. Speed – customer experiments to learn quickly and cheaply 5. Manage intellectual property – patents, etc Innovation P&G Look for contradictions in the market (e.g. don‟t want pain but don‟t want to take painkillers because of side effects) and see it as an invitation to create a breakthrough product that resolves paradox without trade-offs Change management Motorola Rather than waiting for a crisis to erupt, postponing action until he could come up with the perfect strategy, hiring outside consultants to implement a prepackaged program, Galvin plunged his managers into the change process. At a May meeting of more than 100 senior officers, he announced that the corporation would begin a large-scale change initiative. What he neglected to say was how. (HBR ref: 94109) Action-orientation EDS In the monthly “performance call” (conference call with top 100 managers) the latest numbers and critical activities are reviewed in detail. Those who are behind must explain the shortfall. It is not enough to be assessing or reviewing or analyzing the situation – those are the words of someone getting
  4. 4. ready to act rather than someone who is acting. To do so invites the follow-up questions – when you have finished your analysis, what are you going to do? When are you going to do it? Culture change Alberto-Culver Each year, one of the most important meetings is dedicated to what we call “macros and irritations.” On this occasion the attendees are split into four subgroups and given just 15 minutes to agree on what hey think are the four biggest challenges confronting ) our business (the macros) and the four most annoying aspects of life at Alberto-Culver (the irritations). Fifteen minutes is pretty much the right amount of time because if an issue doesn‟t come quickly to mind, it isn‟t a big deal. We then combine the lists and they are voted on to get the top 4. Customer experience Progressive Progressive uses the understanding of loss rates that it gets from its highly detailed segmentation to price risks more accurately than its competitors, a strategy that has enabled it to take share from Allstate and State Farm while maintaining an enviable profit record. Progressive also advertises its rivals‟ prices on its web site. Sometimes these are lower, but Progressive still posts them. According to Tom King, Progressive‟s treasurer “When someone underbids us and writes the policy, it‟s because they have made a mistake about the risk.” Prioritisation Staples Ron Sargent, Staples CEO: “I said we're going to squeeze the daylights out of every imaginable cost except two: We are not going to cut back on marketing, and we are not going to cut back on in-store service. In fact, we're spending more in both of those areas.” (Quoted in BusinessWeek th April 5 , 2004) Customer experience Pret-a-Manger Andrew Rolfe, Chairman and Chief Executive: It‟s very important that everyone in Pret remembers we are here to serve the customer and create great customer experiences. So to reinforce this, four or five times a year we empty head office and make everybody go back and work in their „buddy shops‟. Everybody has a buddy shop. Mine is Cannon Street. By constantly forcing people from head office back into the shops to make sandwiches, to serve customers, to experience it, we keep reminding them what it is we do. Otherwise you lose touch. (Quoted in Building Great Customer Experiences by John Shaw and Colin Ivens.) Customer experience Amazon Everyone spends time in front line operational areas, packing boxes or answering emails in busy run-up to Christmas. Customer orientation FT Board is based in centre of building on same floor as customer service to give a powerful message about importance of customer service Customer satisfaction Ford Ian McCallister, former Chairman and MD, Ford Motor Company Limited (Quoted in Building Great Customer Experiences by John Shaw and Colin Ivens) To see how we can improve our customer satisfaction we often ask two dozen or so customers to come in
  5. 5. and bring their cars with them. The chief engineers, the product planners and I join them and ask each customer why they bought the car. What did you Uke about it? What don‟t you like about it? What would you improve? This really helps us identify things our people wouldn‟t have thought of. Contingency planning Red Arrows Justin Hughes, former Red Arrows pilot (speaking at 2004 IOD convention and published in Director): We have a culture of contingency planning. We have contingencies written into our standard operating procedures and, more importantly, we think about contingency options every time we go flying. Every morning in the met brief – our daily weather brief – we will talk about an aircraft emergency, and in every brief before we fly we will talk about a potential problem in the show and how we would deal with it. How would we get an aircraft out of the formation? – low would we fly the rest of the show with that aircraft missing? How would we change the smokes and the shapes to ensure that we still achieve symmetry? We go right through to how we taxi in and land with that aircraft missing. We do not just scratch the surface: we are not interested in vague ideas, we try to take things through to their conclusion. Debriefing Red Arrows Justin Hughes, former Red Arrows pilot (speaking at 2004 IOD convention and published in Director): I work with all sorts of corporate teams now in different sectors and I reckon probably less than five per cent of the people we come across debrief regularly. To me, that seems strange. If you do not debrief, how do you learn from your mistakes? How do you stop yourself from making the same mistakes again and again? On the Red Arrows, we always debrief. In the winter, we make 15 sorties a week and we debrief every one. In the summer, we do 60 or 70 public shows and we debrief every one. We are constantly learning how to do it better next time. The debrief is about analyzing what went well and why, and what went badly and why, and the tone for the debrief is set by the leader. The leader‟s performance is on show just as much as that of the rest of the team Product innovation Gillette Consider Gillette‟s sophisticated management of its Quoted from Bringing innovation pipeline. Over the past 30 years, the Customer into the company has parlayed its unparalleled understanding Boardroom, HBR of men‟s grooming needs to drive the development November 2004, reprint: and mass adoption of successive razor R0411D; Gail J technologies…Today, Gillette dominates its market, McGovern, David Court, with more than a 65% dollar-market share in North John A Quelch, Blair America across its portfolio. Given its strong position Crawford in the category, Gillette has to be extremely thoughtful about the timing and strategy for each new product launch so it can grow the category while minimizing cannibalization of existing product sales. Since the introduction of its trendsetting Trac II, the company has rolled out a series of increasingly advanced razors, including the Atra, SensorExcel, Mach3Turbo, and M3Power, each of which outperformed its predecessor. For each of these
  6. 6. innovative new products, the company‟s elaborate revenue projections include detailed analyses of revenue sources and, crucially, the potential effect of these new products on existing product revenue streams. Product innovation Samsung Korean consumer-electronics giant Samsung offers Quoted from Bringing another example of a shrewdly managed innovation Customer into the pipeline and marketing machine. Five years ago, Boardroom, HBR Samsung bet the ranch on digital technology and November 2004, reprint: transformed itself from a middling manufacturer of R0411D; Gail J analog televisions into one of the leading consumer McGovern, David Court, electronics companies in the world. Samsung‟s John A Quelch, Blair 17,000 scientists are charged with translating insights Crawford gleaned from the company‟s massive customer research programs into a flow of new product concepts that can be moved from the drawing board commercialization in less than five months. From among to these innovations, the chief marketing officer selects and most likely to win in the marketplace and is given additional marketing dollars to back them.‟ Marketing Proctor & Gamble Procter & Gamble excels at product positioning, Quoted from Bringing advertising strategy, and account management….. Customer into the Most consumer goods companies, for example, have | Boardroom, HBR been slow to transition from mass-marketing November 2004, reprint: programs targeted at consumers to tailored marketing R0411D; Gail J plans developed in partnership with major retailers. McGovern, David Court, Their expertise in advertising and brand building may John A Quelch, Blair have served these companies well in the past, but Crawford what they increasingly need are skills in push marketing and major-account management so they can collaborate effectively with power- ful retailers like Wal-Mart. Operations Wal-Mart Wal-Mart pioneered a great many innovations how it Quoted from: Deep purchased and distributed goods. One of the best change: how operational known of these is cross-docking, in which goods innovation can transform trucked to a distribution center from suppliers are your company; Michael immediately transferred to trucks bound for stores Hammer, HBR April 2004, without ever being placed into storage. Cross- Reprint: R0404E docking and companion innovations led to lower inventory levels and lower operating costs, which Wal-Mart –translated into lower prices. Operations Progressive A claimant can reach a Progressive representative by Quoted from: Deep phone 24 hours a day, and the representative then change: how operational schedules a time when an adjuster will inspect the innovation can transform vehicle. Adjusters no longer work out of offices from your company; Michael nine to five but out of mobile claims vans. Instead of Hammer, HBR April 2004, taking between seven and ten days for an adjuster to Reprint: R0404E see the vehicle, Progressive‟s target is now just nine hours. The adjuster not only examines the vehicle but also prepares an on-site estimate of the damage and, if possible, writes a check on the spot. Progressive has created such a culture; leaving well alone is a principle with which the company is systemically uncomfortable. It recently revised its very successful Immediate Response claims process so that the representative no longer attempts to assign an adjuster as soon as the claimant calls. Rather, the representative
  7. 7. guarantees to call the claimant back within two hours with specifics of when an adjuster will see the vehicle. This two hour window gives the company the opportunity to assign the right kind of adjuster given the specifics of the case, so that a junior adjuster is not confronted with a complex accident beyond his level of expertise. Operations Shell Lubricants In 2002, Shell Lubricants reinvented its order Quoted from: Deep fulfillment process by replacing a group of people change: how operational who handled different parts of an order with has cut innovation can transform the cycle time of turning an order into cash by 75%, your company; Michael reduced operating expenses by 45%, and boosted Hammer, HBR April 2004, customer satisfaction 105% all by introducing a new Reprint: R0404E way of handling orders. Operations Toyota Toyota has confidently opened its factories to visitors Quoted from: Deep from other automakers and yet continues to expand change: how operational its productivity lead. innovation can transform your company; Michael Hammer, HBR April 2004, Reprint: R0404E Value Creation Cemex Cemex, like all traditional cement companies, sold Quoted from: concrete by the cubic yard. But Cemex‟s customers MarketBusting: did not particularly value cubic yards of concrete… Strategies for What they did value were deliveries – in other words, Exceptional Business the right amount of concrete delivered just when it Growth, Rita Gunther was needed. To figure out how to accomplish this McGrath & Ian C goal, Cemex staffers studied how FedEx, pizza MacMillan; HBR March delivery companies, and ambulance squads worked. 2005, reprint: R0503E Eventually they developed digital systems that allowed Cemex to adjust, in real time, where trucks were bound. They learned to optimize delivery patterns across a whole region; customers who unexpectedly needed concrete could be served, often by shipments that had unexpectedly been postponed by other customers. Cemex can now deliver concrete within hours – sometimes even minutes.