Monday, November 22, 2004

fast company on dell

fast company interview with dell ceo kevin rollins:

FC : Your Austin PC factory has cut the amount of inventory it holds to just five to seven hours, and yet recently you challenged them to slash their order-to-delivery lead-time in half. Why do you set such a high bar?

Rollins: If I asked them to reduce it by 3% or 5%, they'd come back with 3% or 5% improvement. But if I ask them to improve by 50%, they might not hit that number, but they may well come back with 30% improvement. When you give people a massive challenge, you get a massive change in performance.

I was just in Japan, where I talked about kaizen, the Japanese principle of continuous improvement. Usually it refers to very small, incremental improvement. I told the team in Japan, "No, we want big kaizen -- big improvement. Multiples." When you challenge them to achieve multiples, they come back with big changes to get those multiples. That's the watershed mindset.

FC : What does it take to be a hero at Dell?

Rollins: Historically, we had heroes at Dell who would cause their own crisis and fix it. But that's a bad way to run the ship. Heroes have a short half-life here because the issue for us is, "What did you do for me today?" You can't run a company as big as ours by super-human acts. You need to create great business institutions and constantly beat [your numbers.] That requires superhuman planning and design, and an ability to tweak that design constantly. The way you get to be a real hero is to deliver heroic results.
FC : You've certainly set yourself some Wal-Mart-sized goals. Dell is well on its way toward surpassing its goal of $60 billion in revenue within the next few years. Is there a sense that you've arrived?

Rollins: We're not satisfied with the company yet and we don't think we've seen our best days. In the PC marketplace, which represents just 60% of our business, we've only got 19% of the global market. And we only have 3-5% of the entire IT industry budget. We're so small, compared to the total of what we could be. To have any thought that we've arrived is nuts. We look at new opportunities, new portions of the industry and share of existing markets, and conclude that what we've achieved is peanuts. If we double the size of the company we'll have 6% of the IT industry -- still nothing. What about 40% of the industry -- what would that look like? Then people say, "We'd have to quadruple." Well, yeah. Let's quadruple.

on a side note, here's a couple other things i found interesting from the fast company feed:

overcapacity, advertising: "The cost of a 30-second spot on Monday Night Football is now twice as much as it was 10 years ago, in inflation-adjusted dollars. The size of the audience has declined by roughly a third."

career success factors: "What we call 'masculine-identified men,' who really want to play the game, are doing better. So there is some evidence that the stereotypic male, what the feminists would call 'hegemonic males,' are doing well. What's interesting, though, is not all men fit that category and anybody who doesn't is doing less well."


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