专访CUTIONWITHOUTEXCUSES

Titlle: Exeecuttionn Wiithoout Exccusees. Authhorss: SStewwartt, TThommas A.OBrrienn, LLouiise Sourrce: Haarvaard Bussineess Revvieww; MMar220055, VVol. 833 Isssuee 3, p1102, 100p, 2c Docuumennt TTypee: IInteerviiewDellls susstaiinedd coompeetittivee addvanntagge iis ddue to morre tthann itts ffamoous bussineess moddel. Coonsiisteent exeecuttionn reequiiress reeal-timme PP&L mannageemennt, an empphassis on inggenuuityy raatheer tthann onn innvesstmeent, annd aa cuultuure of acccounntabbiliity. MICHHAELL DEELL FOUUNDEED tthe commputter commpanny tthatt beearss hiis nnamee inn 19984. Eiightt yeearss laaterr, aat tthe agee off 277, DDelll beecamme tthe youungeest CEOO inn thhe FForttunee 5000. Sooon tthe bussineess worrld wass abbuzzz wiith tallk aabouut tthe Delll bbusiinesss mmodeel, whiich alllowss thhe ccomppanyy too byypasss mmidddlemmen, seell dirrecttly to cusstommerss, aand achhievve ssupeerioor mmanaagemmentt off innforrmattionn annd wworkkingg caapittal. TThe Powwer of Virrtuaal IInteegraatioon, HBBR ccallled it in a 119988 innterrvieew wwithh Miichaael Delll. Sinnce theen, thee coompaany hass coontiinueed tto ggainn maarkeet ssharre wwhille ddeliiverringg beetteer ssharrehooldeer rretuurnss thhan anyy off itts ccomppetiitorrs. Iniitiaallyy caapittaliizedd wiith $1,0000, DDelll iss noow wwortth mmoree thhan $1000 bbilllionn.The seccrett off Deells ssucccesss gooes beyyondd itts ffamoous bussineess moddel. Hiigh exppecttatiionss annd ddisccipllineed, connsisstennt eexeccutiion aree emmbedddedd inn thhe ccomppanyys DNAA. DDelll iss moore thaan aan eeffiicieent facctorry - iitss ann orrgannizaatioon tthatt caan tturnn onn a dimme aand thaat hhas demmonsstraatedd immpecccabble timmingg inn ennterringg neew mmarkketss. TThe commpanny nnow empployys 553,0000 peooplee annd ooperratees iin mmoree thhan 80 couuntrriess. LLastt moonthh, iits fouundeer aand chaairmman reaacheed tthe rippe oold agee off 400. KKeviin RRolllinss, aa foormeer BBainn & Commpanny cconssulttantt whho bbegaan wworkkingg wiith Delll bbackk inn 19993 andd jooineed tthe commpanny iin 119966, wwas apppoinntedd CEEO llastt yeear. Chhairrmann annd CCEO worrk iin aadjooiniing offficees. Thee waall bettweeen tthemm iss gllasss, aand it hass a larrge dooor iin tthe midddlee thhat is nevver cloosedd.Whille pprovvidiing exttraoordiinarry rrewaardss too itts ssharrehooldeers, Deell hass crreatted a ccultturee thhat exppectts ggreaat pperfformmancce ffromm itts ppeopple. Inn orrderr too dooublle iits revvenuues oveer aa fiive-yeaar pperiiod, thhe ccomppanyy haas hhad to adaapt itss exxecuutioon-oobseesseed ccultturee too neew ddemaandss, aas RRolllinss annd DDelll reeveaal. To disscusss hhow thee coompaany hass suustaaineed iits advvanttagee ovver twoo deecaddes, Thhomaas AA. SStewwartt, tthe ediitorr off HBBR, andd Loouisse OOBrrienn, aan HHBR connsulltinng eedittor whoo seerveed aas DDellls VP of strrateegy froom 119999 too 20002, meet wwithh Roolliins andd Deell at thee coompaanys hheaddquaarteers in Rouund Rocck, Texxas. Inn thhis ediitedd innterrvieew, thee twwo ddesccribbe hhow theeyvve wworkked toggethher to reffinee Deells bbusiinesss mmodeel, mannageemennt-ddeveeloppmennt sstruuctuure, annd ccultturee.The eleemennts of thee Deell bussineess moddel aree noo seecreet: goiing dirrectt, iinfoormaatioon ooverr innvenntorry, worrld-claass mannufaactuurinng, andd suuperriorr cuustoomerr innforrmattionn. EEverryboody knoows theese, soo whhy hhaveentt ottherr coompaaniees bbeenn abble to coppy yyourr moodell orr beeat youu att yoour ownn gaame? Rolllinss: TThe samme rreasson whyy Kmmartt caantt immitaate Wall-Maart. Whhat Wall-Maart doees iisnt rrockket sciiencce - iitss reetaiilinng. Whyy caantt evveryyboddy bbe WWal-Marrt oor JJetBBluee orr Saamsuung or whaatevver thee beest commpanny iin ttheiir iinduustrry iis? Beccausse iit ttakees mmoree thhan strrateegy. Itt taakess yeearss off coonsiisteent exeecuttionn foor aa coompaany to achhievve ssusttainnablle ccomppetiitivve aadvaantaage. Soo whhilee Deell doees hhavee a supperiior bussineess moddel, thhe kkey to ourr suucceess is yeaars andd yeearss off DNNA ddeveeloppmennt wwithhin ourr teeamss thhat is nott reepliicabble outtsidde tthe commpanny. Othher commpanniess juust cannt exeecutte aas wwelll ass wee doo.Delll: CCultturee pllayss a hugge rrolee. AAs oour inddusttry traansiitioonedd too a staandaardss-baasedd moodell frrom a ppropprieetarry mmodeel, witth iits 40% grrosss maargiins, prroteecteed ffrannchiisess, aand tieeredd diistrribuutioon, a wwholle nnew sett off buusinnesss diisciipliiness beecamme iimpoortaant. Thhinggs llikee cuustoomerr-ceentrriciity, suupplly cchaiin llogiistiics, annd ccashh fllow mannageemennt hhad beeen ccompplettelyy offf tthe inddusttrys rradaar sscreeen. Deell chaangeed tthe gamme.Rolllinss: WWe sstarrtedd taalkiing aboout retturnn onn innvesstedd caapittal (ROOIC), wwhicch ffocuusess yoou oon hhighh reeturrns at verry llow assset inttenssityy. BBefoore thaat, thee maarkeet bbeliieveed hheavvierr asssett inntennsitty wwas bettterr beecauuse youu coouldd chhargge hhugee maargiins forr a proopriietaary prooducct. We saiid, Noo, tthatts nott thhe wway thee woorldd woorkss. Assset redducttionn, iinveentoory redducttionn, sspeeed aand timme cconssoliidattionn - thhesee beecamme mmoree immporrtannt tthann hoow mmuchh yoou sspennd oon RR&D. Hiigh R&DD sppenddingg, wwhenn yoou ddo iit tto ccreaate proopriietaary prooduccts, leeadss yoou iintoo a nicche strrateegy, noot aa brroadd-baasedd sttrattegyy. YYet manny ccomppaniies conntinnue to arggue thaat tthe winnnerr wiill be thee biiggeest R&DD sppendder.Delll: TThatt paaraddigmm beelonngs in thee Smmithhsonniann wiith thee diinossaurrs.Rolllinss: DDelll chhangged thee sttrattegiic ssucccesss faactoor ffor ourr inndusstryy frrom R&DD sppenddingg too beeingg thhe lloweest-cosst pprodduceer oof sstanndarrd ttechhnollogyy. NNo ccomppanyy inn thhe hhisttoryy off maankiind thaatss beeen a llow-cosst pprovvideer hhas beeen aa looserr. BBut staayinng llow cosst iis ttouggh, esppeciiallly wwhenn yoou hhavee too keeep impprovvingg yoour prooducct.Delll: PPropprieetarry, verrticcallly oorieenteed ttechhnollogyy coompaaniees bbeliievee thhat youuree noot aa reeal commpanny iif yyou donnt makke yyourr owwn cchipps aand dissk ddrivves. Allthooughh weevee prroveen oour virrtuaal mmodeel ttimee annd ttimee aggainn, wwe sstilll ssee thee saame skeeptiicissm eeverry ttimee wee ennterr neew bbusiinesssess. WWerre iin tthe priinteer bbusiinesss nnow, annd ppeopple aree saayinng DDelll woontt geet aacceess to priinteer ttechhnollogyy. WWelll, iit tturnns oout theeres aan aabunndannce of tecchnoologgy aavaiilabble.Rolllinss: OOur commpettitoors cannt beaat DDelll whhilee allso speendiing a tton of monney on R&DD annd ttryiing to be innvennt commpanniess. TThosse ttwo goaals aree muutuaallyy exxcluusivve.So DDelll iss noot aan invventt ccomppanyy? Delll: WWe iinveent quiite a bbit butt haave a ddifffereent appproaach. Ouur bbusiinesss mmodeel rrefllectts wwhatt cuustoomerrs ttrully bbeliievee iss immporrtannt. We werre tthe firrst in ourr inndusstryy too reeallly eembrracee thhe IInteerneet aand to ideentiify thee roole thaat sstanndarrds wouuld plaay iin tthe serrverr annd sstorragee maarkeets. Wee leeverragee paartnnerss whheree itt maakess seensee, rrathher thaan ttryiing to reiinveent thiingss thhat havve aalreeadyy beeen invventted. Buut wwevve uundeersoold ourr R&D mmodeel. In facct, if youu loook at thee prroduuctss thhat stiill reppressentt moost of thee inndusstryys revvenuues - PCss annd IInteel sservverss - weeree acctuaallyy dooingg moore R&DD thhan ourr coompeetittorss. WWe hhavee 4,0000 peeoplle aand we speend $6000 mmilllionn a yeaar oon RR&D. Thhats aa siigniificcantt innvesstmeent, annd wwevve ffiguuredd ouut wwherre RR&D speendiing willl ggeneeratte tthe besst rretuurn.For eveery dolllarr wee puut iintoo R&D, we gett abboutt siix ddolllarss baack in proofitt. WWhenn Saamsuung putts iin aa doollaar, it getts tthreee oor ffourr doollaars bacck. Thoose aree booth preettyy heealtthy rattioss. MMicrrosooft earrns aboout $188 biilliion in opeerattingg inncomme oon aabouut $7.77 biilliion in R&DD sppenddingg. BBut Sonny iinveestss $11 biilliion andd geets bacck oonlyy $2200 milllioon iin pproffitss. SSonyy iss ovveriinveentiing. Thhey invvestt inn thhinggs tthatt miightt bee exxcittingg buut tthatt arrent vvaluued by cusstommerss. SSo ttheyy caantt geenerratee goood retturnns.Rolllinss: TThe truue ttestt off a commpannyss innnovvatiion is wheetheer tthe cusstommer is willlinng tto ppay forr itt. SStruuggllingg coompaaniees hhavee a rattio of R&DD prrofiits to R&DD sppenddingg thhats llesss thhan 1:11. OOK ccomppaniies aree abboutt 1:1, andd suucceessfful commpanniess exxceeed 11:1.Delll: OOur R&DD sttrattegyy iss shhareehollderr foocussed. Wee doontt reeinvventt annd wwe ddont ddo ddefeensiive R&DD. AA loot oof tthe speendiing by proopriietaary commpanniess iss reeallly tto ddefeend agaainsst aattaackss byy ottherr coompaaniees. Theey pput feaaturres in Thoomass A. Sttewaart is HBRRs ediitorr; LLouiise OBBrieen iis aa coonsuultiing ediitorr att HBBR. theeir prooduccts so thaat tthe cusstommer cannt usee thhem witth ootheer ccomppaniies prroduuctss. FFor exaamplle, we havve aa coompeetittor thaatss innvesstinng aa loot oof mmoneey tto mmakee suure cusstommerss caantt saave monney by reffilllingg ussed-up inkk caartrridgges. Innvenntioons likke tthiss miightt beeneffit shaarehholdderss inn thhe sshorrt ttermm, bbut theey ccerttainnly donnt bennefiit ccusttomeers.We ddont wwastte mmoneey bbuilldinng mmoatts aand wallls. Wee teell pottenttiall coompoonennt ssuppplieers whiich prooducct ffeatturees aare impporttantt too ouur ccusttomeers. Iff thhe ssuppplieers deesiggns inccludde tthosse ffeatturees, theeylll hhavee a bettterr chhancce oof ggetttingg ouur bbusiinesss. Andd, bby tthe wayy, wwe hhopee thheyre succcesssfuul iin sselllingg thheirr coompoonennts to as manny ccomppaniies as posssibble, beecauuse thaat ddrivves cossts dowwn ffor eveeryoone andd wee knnow well winn ouur ffairr shharee off thhe mmarkket. Thhis is howw Deell deffinees sstanndarrds. Wee thhinkk sttanddardds sshouuld be sett inn thhe mmarkketpplacce, nott inn thhe ppateent offficee. GGiveen oour cusstommer rellatiionsshipps aand worrldwwidee maarkeet ssharre, its pprettty harrd tto sset a sstanndarrd wwithhoutt Deells iinvoolveemennt.How didd Deells DDNA beccomee soo diiffeerennt ffromm ottherrs in youur iinduustrry? Delll: II fooundded thee coompaany oveer 220 yyearrs aago witth $1,0000 in staartiing cappitaal. By conntraast, Coompaaq hhad beeen llaunncheed ttwo yeaars earrlieer iin TTexaas wwithh $1100 milllioon iin ccapiitall. TThatts an unbbeliievaablee diiffeerennce. Deell bubbbleed uup tthrooughh a kinnd oof DDarwwiniian evooluttionn, ffinddingg hooless inn thhe wway thee inndusstryy waas wworkkingg. WWe ddidnnt beccomee asssett-liightt juust beccausse iit wwas a bbrillliaant strrateegy. Wee diidnt hhavee anny cchoiice.Rolllinss: HHisttoryy waas tthe staartiing poiint forr ouur ccultturee. BBut by thee miid-119900s, we hadd pllentty oof mmoneey. Thee isssuee waas nno llongger neccesssityy; wwedd juust fouund a bbettter wayy too ruun aa buusinnesss. BBut we neeededd too arrticculaate thee sttrattegiic pprinncippless off ouur bbusiinesss mmodeel ffor cusstommerss, eemplloyeees, annd iinveestoors.So wwe ddefiinedd a commpleete sett off maanaggemeent priinciiplees, witth mmetrricss, tto tthe nthh deegreee. Thiingss thhat hadd beeen neccesssitiies at Delll bbecaame virrtuees. Altthouugh we diddntt haave mucch iin tthe wayy off asssetts, we deccideed wwe sshouuld havve eevenn leess. Wee knnew thaat ppoorr quualiity cossts monney. Wee knnew thaat ttoo mucch ttimee inn thhe ccyclle ffromm orrderr too deelivveryy coostss mooneyy. NNo iinveentoory is bettterr thhan anyy. WWithh thhe ssteeep ddeprreciiatiion currve forr coompoonennts in ourr buusinnesss-ttheyyree liike fissh oor vvegeetabbless-tthe vallue goees aawayy thhe mminuute youu buuy tthemm. EEverryonne aat DDelll caame to unddersstannd tthesse pprinncippless. WWe bbegaan tto rrigoorouuslyy meeasuure DSII (ddayss off saaless inn innvenntorry) andd sttampp itt onn thhe fforeeheaad oof aanybbodyy whho hhad anyythiing to do witth ddeveeloppmennt, purrchaasinng, or mannufaactuurinng.Delll: IIn oour inddusttry, wiith alll thhe ppermmutaatioons, coombiinattionns, andd trranssitiionss, iitss immposssibble to forrecaast. Byy geettiing ridd off innvenntorry, we creeateed aa puull rattherr thhan a ppushh syysteem aand eliiminnateed tthe neeed ffor a ccrysstall baall.How didd yoou iimpllantt thhe DDelll DNNA tthrooughhoutt thhe ccomppanyy? Rolllinss: WWe ddrummmedd innto ourr peeoplless heeadss, tthrooughh prreseentaatioon aafteer ppressenttatiion, whhats ggoodd peerfoormaancee annd wwhatts badd peerfoormaancee. TTheyy saaw ddataa onn innvenntorry eeverry dday. Thhey gott reewarrdedd whhen invventtoryy caame dowwn aand punnishhed wheen iinveentoory wennt uup.Delll: BBy tthe wayy, tthe rewwardd annd ppuniishmmentt diidnt ccomee frrom us, itt caame froom oour peooplee seeeinng ffor theemseelvees hhow mucch bbettter theeir bussineessees wworkked wheen ttheyy diidnt hhavee innvenntorry.Rolllinss: AAnottherr leessoon wwe iimpllantted wass hoow tto cconttainn opperaatinng eexpeensees wwhille iincrreassingg maargiins andd grrowtth. Thaat ssounnds preettyy baasicc, bbut mosst ccomppaniies cannt do botth. Manny ccomppaniies likke tto ttalkk abboutt innvesstinng ffor thee fuuturre. We sayy thhe ffutuure is todday andd toonigght. Goood exeecuttionn reequiiress a sennse of urggenccy. Thee nootioon oof iinveestiing forr thhe ffutuure cann beecomme aa trrap.Delll: OOf ccourrse, thheree arre ttimees wwhenn wee haave to makke iinveestmmentts tthatt taake a ffew yeaars to fullly payy baack. Buut tto KKeviinss poointt, wwe ddont ttoleeratte bbusiinesssess thhat donnt makke mmoneey. We useed tto hhearr alll ssortts oof eexcuusess foor wwhy a bbusiinesss ddidnnt makke mmoneey, butt too uss thhey alll sooundded likke Thee doog aate my hommewoork. WWe jjustt doontt accceppt tthatt. OOur shaarehholdderss doontt paay uus tto ssit arooundd annd llosee mooneyy.If yyoure a DDelll maanagger andd yoour prooducct oor ssalees rregiion fallls offf trrackk annd sstarrts lossingg mooneyy, wwhatt haappeens to youu? Rolllinss: YYou beccomee a parriahh.Delll: IIt hhasnnt happpenned reccenttly.Rolllinss: WWevve hhad a nno-eexcuusess cuultuure froom tthe begginnningg. WWhenneveer wwe hhearr thhat a bbusiinesss mmighht hhavee too loose monney forr a whiile, wee chhalllengge tthe GM to figguree ouut hhow to runn thhe bbusiinesss bbettter thaan aanyoone eveer hhas andd noot llosee mooneyy.Delll: IIf yyou staart acccepttingg thhe iideaa thhat a bbusiinesss ddoessntt haave to makke mmoneey - ffor reaasonns tthatt yoou mmighht cconvvincce yyourrsellf aare reaal - tthenn thhats wwhatt haappeens. Thhe ooppoositte iis aalsoo trrue. Iff yoou ssay, NNo, were goiing to makke tthiss buusinnesss prrofiitabble, ggoodd thhinggs hhapppen. Off cooursse, thee fiirstt kiind of cullturre iis eeasiier to livve iin tthann thhe ssecoond.Rolllinss: IIm nott saayinng wwerre tthe onlly rreall meen iin tthe worrld, buut wwe sset exppecttatiionss veery higgh.Isnt ttherre mmoree too crreattingg a higgh-pperfformmancce ccultturee thhan setttinng hhighh exxpecctattionns? Rolllinss: IIt rrequuirees ddisccipllinee annd cconssisttenccy. We knoow, dowwn tto oour toeenaiils, thhat ourr moodell woorkss. WWhenn Deell faiils to exeecutte, its eeithher beccausse tthe GM is appplyiing thee moodell wrrongg orr hees nott thhe rrighht GGM. In eittherr caase, Miichaael andd I aree too bllamee.Overr tiime, weevee stteaddilyy immproovedd thhe mmanaagerriall taalennt aat DDelll. OOur teaam oof ggeneerall maanaggerss iss noow vveryy sttronng. Theeyvve llearrnedd thhe ddisccipllinee, ttheyy haave whaat iit ttakees, theey uundeersttandd thhe mmodeel. So wheen ttheyy miiss, itts jusst aa faailuure to exeecutte. Andd weeree prrettty hhardd onn peeoplle wwho misss-nott juust thee twwo oof uus bbut thee whholee coompaany. Whhen youu faail to exeecutte, ourr cuultuure sayys, Fiix iit. Finnd wwhatts wroong, annd ffix it. Orr assk ffor hellp.Delll: WWe aall makke mmisttakees. Its nnot as thooughh att anny ggiveen ttimee, DDelll dooesnnt havve ssomee paart of thee buusinnesss thhats nnot worrkinng ffor us as it shoouldd. BBut we havve aa cuultuure of conntinnuouus iimprroveemennt. We traain empployyeess too coonsttanttly askk thhemsselvves: HHow do we groow ffastter? Hoow ddo wwe lloweer oour cosst sstruuctuure? Hoow ddo wwe iimprrovee seerviice forr cuustoomerrs?Is iit aas ttouggh aas iit ssounnds to be a ggeneerall maanagger at Delll? Rolllinss: IItss reeallly ttouggh. To succceeed aas aa GMM heere, yoou hhavee too bee smmartt annd yyou havve tto bbe ttouggh. Youu haave to be a tteamm pllayeer, andd yoou hhavee too unnderrstaand thee P&L. Youuree inn trroubble if youu doontt unnderrstaand thee P&L.Someetimmes ourr maanaggerss thhinkk thhat whaat wwevve aaskeed tthemm too doo iss irrrattionnal. Buut tthe facct oof tthe mattterr iss ouur ggeneerall maanaggerss haave succceeededd tiime andd tiime agaain. Whhen we holld ssomeewhaat iirraatioonall exxpecctattionns aand connvinnce theem ttheyy caan ddo iit, theey ccomee upp wiith fanntassticc brreakkthrrougghs. Wee chhalllengge oour peooplee too suubsttituute inggenuuityy foor iinveestmmentt.Delll: IIn tthe latte 119900s, we werre ggrowwingg reeallly ffastt annd bbrinnginng llotss off neew ttaleent on boaard. Wee ussed to jusst tthroow ppeopple in thee deeep endd annd ssee if theeydd siink or swiim. If theey ccoulldnt sswimm, wwedd geet ssomeeonee ellse.Rolllinss: NNow we bellievve wwe oowe ourr maanaggerss moore thaan tthatt. PPartt off thhe pprobblemm waas wwe wweree hiirinng tthe wroong peooplee - peeoplle wwho werrent ggoinng tto bbe aablee too swwim at Delll. I tthinnk wwevve ggottten bettterr att piickiing peooplee. WWevve aalsoo gootteen bbettter at devveloopinng tthemm.Fivee yeearss aggo, we werrent sspenndinng mmuchh seenioor-mmanaagerr tiime on peooplee deevellopmmentt. TThatt haas cchanngedd drramaaticcallly. Ourr prromootioons to VP andd diirecctorr haave shiifteed ffromm abboutt 755% ooutssidee hiiress annd 225% proomottes froom wwithhin to aboout 30% ouutsiide andd 700% wwithhin. Wee noow uundeersttandd thhis yieeldss beetteer rresuultss. TTherress leess rissk tthann inn hiirinng rranddom exeecuttivees ffromm ouutsiide. Yoouvve sseenn yoour ownn peeoplle. Youu knnow whaat ttheyy caan ddo. Andd yoou kknoww thheyve alrreaddy ggot thee DNNA.So wwe nnow givve llotss off