Managing in a High Peformance Organisation: Dell Computers

At Dell Computers, the General Manager (GM) of a business unit lives his/herworking life surrounded by some of the most sophisticated business processes and levers of influence available in any modern business.

At the end of a financial year the executive begins their process for putting in place a business plan for the following year.The process begins with the reception of the key macro variables handed down by the SVP of the business area, variables that will have come from the strategy developed at the office of the CEO. The usual key macro variablesare:

1) Planned growth inmarket share
2) Planned product mix
3) Planned revenue and margin growth mix
4) Planned P&L efficiencies.

With these macro variables established, the GM will begin to draft and shape their business plan by developing their forecasted end of year Profit and Loss (P&L) statement.

From there the GM works backwards developing individual quarterly P&L plans for the four quarters before finallybreaking the plan down into individual daily plans for each of the 63 working days in the first quarter, with allowances made for holidays and seasonality.

The GM works with his marketing and sales teams to develop these plans. Dells direct sales model requires developing sufficient customer traffic to its two main sales gateways, its website and its contact centers where their direct sales teams convert the incoming calls into sales.

This is necessary in order to determine the sales and order entry staffing levels required at the contact centers. A major effort is made to drive as much traffic to the web as possible, given the huge efficiencies that arise in using this channel.

The second step is to determine the number of website hits and inbound calls re-quired given the expected sales closure rates of the channels.

From here a daily marketing plan and budget is developed that will generate the number and mix of calls & hits requiredto achieve the necessary levels of sales volumes, sales mix, sales margin and product mix targets.

Together these combine to create the daily P&L against which the teams daily results will be compared. As each day goes by the GM and his team receive daily feedback on any variances from plan on the P&L.

Each Wednesday the GM meets with his fellow businessunit GMs, the SVP and the CFO of the business area. Each GM presents their resultsto date for the week explaining any discrepancies to the team and the plans they have to bridge any shortfalls that have occurred.

Where the GM is ahead oftarget, pressure is exerted to commit to maintaining the improved level of activity, particularly if one or more of the other business areas are lagging behind.