Communication Best Practices at Dell, General Electric, Microsoft, and Monsanto

2. Best Practices at the Dell Computer Corporation: Benchmarking a High-Speed Management Communication System

15 2 Best Practices at the Dell Computer Corporation: Benchmarking a High-Speed Management Communication System We’re in a world that is obsessed with speed. “Time” has won the race to become our most valued resource. . . . Time to market, that is, the elapsed time between product definition and availability . . . is becoming a highly competitive issue for U.S. companies, and . . . it may be the single most critical factor for success across markets. . . . Speed to market creates opportunities in market share, market leadership , and profits. (Versey, 1991:23-26) Fraker, writing in Fortune described a new set of economic forces which were dramatically affecting organizational performance. These forces included (1) quick market saturation, (2) unexpected global competition, and (3) rapid technological breakthroughs. These forces taken collectively required a new management theory based on responding to rapid environmental change, shifting customer needs, and competitors’ adaptation to those needs (Fraker 1984:62-68). Between 1984 and 1988 those economic forces gave rise to a new High-Speed Management Communication theory which focused on the use of computers, telecommunication, and extremely well-crafted messages to provide a rapid-response system adapted to customer needs and competitor products. Such a rapid-response system has placed pressure on research in organizational communication processes to more precisely and economically create message contents which were adapted to a specific audience and instantly intelligible. This new High-Speed Management Communication theory was presented in its most 16 DONALD P. CUSHMAN AND SARAH SANDERSON KING complete form by the authors in 1995 and 1997 and by Cullin and Cushman in 1999. High-Speed Management includes new, welldeveloped theories of environmental scanning, value chain performance , continuous-improvement programs, leadership, marketing , and teamwork programs. High-Speed Management is a communication theory rooted in two philosophic and empirically verifiable propositions. First, reducing the cycle time an organization takes in getting its products or services to market yields several significant outcomes . More specifically, decreasing organizational cycle time yields increases in productivity, quality, market shares, profits, management, worker motivation and commitment, and customer satisfaction (Versey 1991; Dumaine 1989). For example General Electric reduced the cycle time it takes to deliver a washer or dryer to market from three weeks to three days, saving millions of dollars and yielding all the above mentioned benefits (Stewart 1991, 119). Second, improving an organization’s communication processes is the most significant ingredient for reducing organizational cycle time (Cushman and King 1995). Removing communication bottlenecks, standardizing information transfer, developing rapid-response systems, and improving message quality and adaptation to all an organization’s stakeholders are the central outputs that yield decreased organizational cycle time. For example , General Electric put in place a rapid-response communication system between customers and managers which reduced the cycle time GE took in responding to specific customer needs from four weeks to 7 days, saving GE millions of dollars while increasing customer satisfaction (Cushman and King 1995, 1997; Cullin and Cushman, 1999). The purpose of this inquiry is to benchmark the Dell Computer Corporation and its top two competitors in the PC computer market in order to discover how Dell achieved dramatic success in cycle time reduction through improved organizational communication processes . Our benchmarking case study will proceed in four stages: (1) an examination of the competition in the personal computer market, (2) a benchmarking of Dell’s rapid-response systems, (3) an examination of the effect of Dell’s rapid-response systems on Dell’s customers and competitors, and (4) the drawing of come conclusions regarding the benchmarking of Dell’s reduced cycle times and High-Speed Management theory. 17 BEST PRACTICES AT THE DELL COMPUTER CORPORATION Competition in the Personal Computer Market Making PCs has become, is, and will continue to be a nasty business. It is a business in which companies cut prices literally every week, where the product you make is obsolete just months after you make it, where customers choose between your boxes and similar boxes made by several rivals. (Serwer, 1998:59) The computer industry represents fertile ground for our inquiry. The market is highly visible, rapidly growing, and competitive, with several well-managed dynamic firms seeking increased market shares. In 1998, the $148 billion computer market had four main segments: main frames, minis, workstations, and personal computers. PC sales represented 46 percent of total computer sales. Table 2.1 tracks the performance of the top three...