Corporate Best Practices - Dinesh Chandrasekar

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outdated ones are removed from the company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. 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 Proflowers.com 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 Openair.com 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 OpenAir.com
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. 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. 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. 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. 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. 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.