ORGANIZATION PRINCIPLES

Report
ORGANIZATION PRINCIPLES
W. Frank Dell II, CMC
September, 2003
AGENDA
INTRODUCTION
STRUCTURE
ROLES & RESPONSIBLITIES
MOTIVATION
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Objectives
Introduce elements of organization
Bridge the theory and reality gap
Identify common problems and issues
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Definition
“A body of persons
grouped for some end
or purpose”
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History of Organization
Tribal Chief
– Division of labor
• Warrior
• Hunter
• Support
– Report to Tribal Council
Birthright Leader
King
Advisors
Earl/General
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Earl/General
Earl/General
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Element - People
Employees are the greatest asset of
every company
Types
– Striving to get ahead
– Takes pride in work
– Puts in time
A great plan without good people is
useless
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Element - Management
Organizations are built around management
Management skills
– Inherent
– Learned
You’re not a manager until you hired and fired
someone
A good manager is someone who is right
51% of the time
Traits
– Common sense
– Right and wrong values
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Element - Culture
Definition – “The sum total of ways of
living built up by a group of human
beings and transmitted from one
generation to another”
Types
– Motherland
– Company
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Element - Knowledge
Types
– Education
– Experience
Education
– Accounting & Finance
– Marketing
– Information Technology
– Human Resources
– Distribution
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Factor - Size
35
30
25
General
Medium
Special
20
15
10
5
0
Small
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Medium
Large
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Factor – Span of Control
Old – 6 to 1
1
2
3
4
5
6
New – 11 to 1
1
2
3
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5
6
7
8
9
10
11
11
Issue - Silo
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Issue – One on One
Boss
Boss
Worker
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Worker
Worker
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People Vs Structure
Build structure
around employees
– Management talent
– Span of Control
– Knowledge
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AGENDA
INTRODUCTION
STRUCTURE
ROLES & RESPONSIBLITIES
MOTIVATION
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Board of Directors
Senior most advisors
Maximum independence
Diverse background and experience
Board of Directors
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Managing Director
Chief Executive Officer
Strategy execution
Generalist
Board of Directors
Managing Director
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Management Team
Managing
Director
Merchandising
Store
Operations
Logistics
Accounting &
Finance
Administration
Core requirements
–
–
–
–
Merchandising
Store Operations
Accounting & Finance
Administration (Human Resources)
Optional – Logistics/Distribution
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Expanded Management Team
Managing
Director
 New direct reports
–
–
–
–
–
Human Resources/Personnel
Information Technology
Real Estate
Treasurer (public company)
General Counsel
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Merchandising
Store
Operations
Logistics
Accounting &
Finance
Human
Resources
Information
Technology
Real
Estate
Treasurer
Legal
Loss
Prevention
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Executive Board
Board of
Directors
Executive
Board
Board of Directors – Overall responsibility
including strategy
Executive Board – Daily operating
responsibility including tactics
– Similar to the Management Team approach
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Line Vs Staff
Line
Merchandising
Store Operations
Logistics
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Staff
Accounting & Finance
Human Resources
Information Technology
Legal
Loss Prevention
Real Estate
Treasury
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Marketing & Merchandising
Marketing – “the total of activities by
which transfer of title or possession of
goods from seller to buyer is effected,
including advertising, shipping, storing
and selling”
Merchandising – “to plan for and
promote the sale”
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Marketing
Competitive assessment
Customer identification
– Research
– Frequent Shopper program
Corporate image
– Advertising
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Merchandising Issues
Number of vendors
Number of items
Number of transactions
Information Technology support
Promotional strategy
Warehouse Vs Direct Store Delivery
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Merchandising Models
Buyer
Category Manager
Merchant Prince
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Buyer Organization
VP Merchandising
Buyer
Buyer
Retail Pricing
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Buyer
Administration
Space
Advertising
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Buyer Time Allocation
Data, 15%
Store Visit,
20%
Promotion,
15%
New
Products,
10%
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Replenish,
40%
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Buyer Alignment
Category
Vendor
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Category Elements
Manage the category as a strategic
business unit
Develop strategic category plans based
on category goals, competitors and
market conditions
Determine price, merchandising,
promotion and product mix
Collaborate with suppliers
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Category Process
Category Definition
Category Review
Category Role
Category Assessment
Category Scorecard
Category Strategies
Category Tactics
Plan Implementation
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Category Organization
Product Supply
Space Allocation
Marketing Services
Price/Data Integrity
Advertising Coordination
Retail Pricing
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Category
Management
Retail Merchandising
Category Analysis
Allowance/Cost Control
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Category Management Reality
Lacking education and
training
Ignoring process
Selling Category Captain
position
Result is Super Buyer
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Store Operations Issues
Alignment - format Vs geography
Training – support Vs Human
Resources
Technology - support Vs Information
Technology
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Store Operations Organization
Vice
President
District
District
District
Support
Store
Store
Store
Meat
Store
Store
Store
Product
Store
Store
Store
Bakery
Labor
How many stores per district ?
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Replenishment
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Store
Manager
Front End
Meat
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Produce
Bakery
Grocery
Back
Office
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Logistics Issues
Capital – own Vs lease
Management – operate Vs 3rd party
Replenishment – Logistics Vs
Merchandising
Production – warehouse Vs direct
report
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Logistics Organization
Vice
President
Transportation
Warehouse
Maintenance
Inbound
Receiving
Outbound
Selection
Replenishment
Industrial
Engineering
Shipping
Inventory
Control
Production
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Finance & Accounting Issues
Payroll – Finance Vs Human Resources
Computers – Finance Vs direct report
Control – checks and balances
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Finance & Accounting Organization
Vice President
Controller
Payroll
Internal
Audit
Information
Technology
Tax
Budget
Accounts
Payable
General
Ledger
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Human Resources
Issues
– Payroll
– Training
– Culture
Vice President
Recruitment
Payroll
Training
Compliance
Headquarters
Stores
Logistics
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Real Estate
Issues
– Own Vs rent
– Remodeling
– Equipment selection
Vice President
Site Selection
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Contract
Management
Construction
Maintenance
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Loss Prevention
Issues
– Safety
– Shrink
Vice President
Stores
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Warehouse
Headquarters
Safety
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Dual Management
Dotted line reporting
Effective
– Policy
– Procedures
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AGENDA
INTRODUCTION
STRUCTURE
ROLES & RESPONSIBLITIES
MOTIVATION
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Board of Directors
Quarterly meeting
Responsibilities
– Strategy approval
– Budget approval
– Audit
– Executive compensation
– Treasury
– Shareholder communication
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Management Team / Board
Monthly meeting
Responsibilities
– Strategy development
– Budget development
– Daily operations & execution
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Department Interact
Merchandising
Stores
Logistics
Headquarters
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Responsibilities
Merchandising – Supplier to shelf
Distribution – Purchase Order to store
Store – Receiving to customer
Accounting – All transactions
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Associate Communications
Training & Educations (how)
Directions (what & when)
Technology interface
– Protocol
– Methodology
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Control Components
Standard
Operating
Procedure
Goals
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Budget
Job
Description
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Job Description
Written
Components
– Minimum requirements
– Reporting relationships
– Specific responsibilities
– Corporate responsibilities
Updated annually
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Operating Procedures
Corporate
Store Operations
Warehouse Operations
Transportation Operations
Merchandising
Accounting
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Methods - Checkout
Shift start – Sign & check cash drawer
Customer – Log into register
– Greet customer
– Scan all items
– Process payment
– Bag items
Break – Lock register
Shift end – Cash drawer to office &
balance
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Method - Receiving
Walk from office to receiving area
Open door and set dock plate
Count
– Cases per layer
– Layers per pallet
– Record count
Walk to office and log in delivery
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Budget Management
Submit a realistic budget
Category
– Controllable
– Non-controllable / allocations
Authorization
– Approval levels (amount)
– Positive approvals
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Management Goals
Set annually
– Review semi-annual
Driven from company strategy
Above & beyond normal job
Include some reach goals
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AGENDA
INTRODUCTION
STRUCTURE
ROLES & RESPONSIBLITIES
MOTIVATION
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Management is the Role Model
Walk the walk
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Talk the Talk
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Not Pay Alone
Title
Pay
Perks
Benefits
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Reinforcement
Positive
Negative
Recommended
Long term
Use sparingly
Short term
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Lessons for Leaders
Timing is (almost) everything
Anything is possible if you share the
glory
Trust, once broken, is seldom restored
Leadership is about building
connections
Leaders learn from their mistakes
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Lessons for Leaders (Cont.)
Confidence – not just in oneself counts
Effective partnership requires devotion
to one’s partners
Renewal comes from many sources
Leaders must be talent brokers
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W. Frank Dell II, CMC
President
DELLMART & Company
125 Hardesty Road
Stamford, CT 06903 USA
Tel: 203-968-8609
Fax: 203-968-8613
e-mail: [email protected]
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