a Direct to customer is the best can to do business Reasons i- customers recieve orders directly I Reduced shipping time Park

product can be personalized according to the customers wishes of This reduced worry of clearing stock and investing in
inventory because the computer isn't made till the order comes in. - you produce exactly as much as you sell. Most
promising companies fail because they fail to adopt, or recognize changes in a fast moving market.

Trust in white products bought online is increasing. The internet changes the very volatility of competition. I Unheard of
companies launch a new feature or tech every day. To not have to worry about competing every day, create a business
model that completely separates you from the crowd.

IPOs are new viewed as invitations to invest in a vic food instead of on opportunity to invest in a established company. The
Interent has drastically increased the rate at which businesses can emerge and get established. The Internet for firmly puts
control to the buyer, not the seller - Because geography, arrival time and availability become irrelevant in price and product
selection a Businesses can no toy longer thrive because people have limited into or going to another store isn't fossil

for Businesses the immediacy in customer reaction online makes experimenting I mansioning I market testing, easier and
cheaper" In Direct to Customer method eliminate problems that resellers and distributors bring up I become your own

reseller and hangar wales' of your own product.

to

) Rules for Internet Revolutionaries > Applicable to every field. velocity is the ultimate competitive advantage - compress
time I distance a forward to customer 8 Backwards into supply chain - connect a suppliers directly to Manufacturers
Manufactures to customers through the cost a effective Internet

Efficiency in core business functions capris as important as the product - Delegate activites non-central to your business I use
the time and energy freed up from the above to invest in areas that provide further value to customers ? How easy you
make it to "BUY species your products For customers Ecosystems of

people you are able to pull is as important as the product itself a this is necessary for online brand differential

The web experience must be better then any physical (shop) experience to allow you to keep your Dac model over the Into
Successful Businesses where the quality of experience was newer a differentiate can easily be destroyed through the
Internet. Don't show the customers the ugly part of the process. Let them bring in a bashed car Directly give them their car
back, shining and immaculate.

> selling our Internet gives customers - Right Low-cost selection " convenience a personalization Experiment with Internet
businesses See what customers valve when they have all the info theater. Rapidly

convert your entire lines to the most stable, well-backed, known latest tech To do this in an ever-changing industry, keep
your lines flexible and not too dependent on a Specific technologies

> Extremely rapid growth can also burt - Liquidity Growth Profitability." In a premium - based industry, east provide cheaper,
but some quality. Visa-versa for cost -based Industries - convert them to status based fields - you'll need strong brand for
this.

Create a custom - link for customers to access support. I create simply - worded in depth step by step solution articles for
common diagnostic problems > This will free up your call centers. Make it very easy for customers to register a complaint.
This will reduce grudges, and quick responses

will increase "brand loyalty. use this info to conveniently upgrade your next models to perfection"

I Eliminate unnecessary steps] E you should have both the ability and willingness to do things differently'] I Opportunity is
part instinct - part immersion I in an industry, a subject. ect] ) you'll benefit most from opportunities that people refuse to
believe exist 2 Become a virtually integrated company with both your employees and your customers.

Dell convened his own auction to learn more about stamps and Be earn in the process. Have people consign their assets to
you Then promise them a fixed return, and pocket the rest. I Notice patterns in any criteria from the people that buy from

your Ex - Newly married couples and new homeowners bought Dell's newspaper subscription the most.

> find a way to isolate this group of people from the rest and go after every single one Ex :- Dells retrieved recent marrige
licences I lists for of montages from companies to find out phone no. of addresses of people who God were newly married
or new homeowners. I Go after the richest first car any group within that class that has the highest conversion rate) Ex.. Dell
first went after the ones with the highest montages.

a Personalize heavily for rich or famous people - It'll feed their ego. I find out what fury part in your product - does - sourced
from a alternatives a competitors OEM -(3) compare notes with others interested in your industry, and find gaps or
anomalies

in supply I demand

Many times, Shops started stocking a new tech just to its jump on the bandwagon - They don't really know much about the
product. - people are most likely to trust a growing popularity but we backed product if the company has done it before. of
customer supports isn't essential when demand is huge. - But this is what can put you ahead in your industry.

I bet framework of Learning while Already Entering a Market 1. What do I already know that I can use? What do I need to
learn How can I learn it? Becoming a lender allows, you to eliminate overhead costs of a store free up time for further value
- innovating - These two can be passed onto customer by providing better quality at lower prices.

2 When a device profoundly changes how people work I can work I Build It for scale immediately and become the first to
penetrate to everyone. Apple and IONS used retailers distributors because they needed He leverage. I loyalty such people
have over the local populus I Even though IBM was well connected, it couldn't folly use it's network to sell in the corporate
market. It didn't consider De's could be sold to individual employees via the company

It could've pitched the benefit of working from home even after coming back from the office to the for service companies ))
Sell to the people you already know, people who already trust you, before trying to run after customers who are strangers.
Rank potential customers on the basis of how easy it will be to sell to them

Family of friends Increasing DHACity connections san's. increasing volume to unknown customer r when finally going after
there after exhausting the first two, get to know them first. So The indirect channel is based on a marrige between the a
unknowing buyer - Unknowledgeable seller customers becoming more demanding of knowledgeable early year

Is once you're at the top, start educating the customers with selective into, to crush the smaller players. when there is
anomalies with the supply of high-demand products, two types of distributors emerge retailer willing to sell at less because
he of was sent too much Inventory retailer willing to pay more because he was sent too little inventory - Become the
middleman blue these two

contact the local salesperson of a reported company to How your network, is The more mistakes you make the faster you
learn - fail early I Growing at extreme rates will help you cover your mistakes a little easier > Because a bad decision doesn't
get enough time to deviate you significantly when it's the strategy changed every bear few days.

2) Always have order - shipped lists synced at updated in real time. !) Delegate unnecessary things to offer. - there's no
benefit in trying to control anything. :)) If you are a high-risk or rapidly changing or in of cover unstable company.. - Hire
people who want adventures seek innovation and are versatile.

In some areas, you'll need people with expertise I knowledge - However, gift

through resumes accordingly to find who suits which task. If you hire good people from big Cries I reputation-wise) areas,
more good people will follow. I Treat employees well especially when starting out, to ensure the want to work with your
> Get normal, inexperienced people to do what a customer would have to do after getting your product - Never, use the
people who made the product in its first plaice. :) Ensure your salestores has an intimate predates knowledge of the
products they Sell. > They should be able to fix problems that occurs at 'the start - They should help customers feel like three
are making an informed accent

constantly a Innovate a Question > unnecessary Steps - conventional methods. Explosive growth can help faster

commanderies 'can-do attitude "this is extremely attractive for young talented people. Everyone should help out when one
dept. gets overloaded.

8) It people feel that they are contributing significantly to something radically different, and they can see quick results. - they
won't mind compromising with more work or less facilities. :)) Routinely announce your explosive growth numbers - This will
motivate everyone, making them feel their sacrifices were worth it.

Explosive growth requires a good, reliable. Steady and large like of credit! A strong, known board will give you bugs a
credibility - Opportunities as a young company. I constantly talk with both prospective and ex old customers - This will
ensure of you know exactly what they

want more of I didn't like don't need

> This is extremely necessary when you are a young company and you too don't have the capital to experiment too much.
Orient the entire business from sales to design to manufacturing, based on recent inputs from real customers. - This into
should be gathered directly by asking clear questions not based vaguely on a customer's response.

The biggest problem large companies Dave with the direct route is that it requires and expensive amber some organizational
structure. In such a method no product goes unsold because you build it only after it's been ordered. > The money and time
saved by cutting out the middleman should be passed on as lower prices and value. to customers The Indirect method

also splits your sales forces.

One part sell to the retailer and - The other part ensures customers buy from the retailer. I However, there is only one bigger
and unified sales force in the direct method I Hire Salespeople who can go face-to-face and land bill corporate Clients
( governments, eat This is necessary because selling 4 individuals and selling fo corporations is extremely different.

2 the direct methods also helps sales people > They don't have to remember the specifications of lots of products. that too
relentlessly changing. 7- They only have to have enough knowledge about the slow-changing parts to help make an informed
decision, then note down his personalised order I Give out a money-back gaurantee of This dispels customer fears and gives

you a reputation for reliability.

) Make sure your product is seamlessly compatible with the infrastructure required to waste to it works with 2) form close
relations with suppliers and ensure that know your requirements.. :) The best performing tech Won't always be what you'll
be able to produce in bulk. As long as you're better then the competition currently, some the top-most level tech for later
This also reduces some of your burden for later...

" IBNI had an 6 MHZ PC Dell wanted to build on 8mHe They eventually made a 16 mil one, but started using (producing a 12
mHz One once I Directly does trying to design a 16 MHZ one would've led to then automatically get being about to make a
12 m² one Thus, always innovate way into

the future, but save the best for later. One innovation effort to discover an unnecessarily good product will say money and
time off earlier products.

Come day, you'd have to get so the 16 Hz anyway? 5) To grown you need to land big clients To do this, you need to provide
the industry's best support. I Don't make a complaintee taken Ship your product was back to the factory to fix it 7 Don't
blanket the close when expanding internationally.

- Reasons for Batteries, Opening, Dell UK :- " Language " & Lousy support service Bad quality yet still huge demand. I Learn
how different people are comfortable responding to an ad, or starting a Pos. Ex:- German people find calling directly in
response to on ad too forward However, they will easily respond to an ad that

11515 a far number.

find out the least- friction way of establishing a communication channel with your customers create a channel that they are
comfortable to use to reach out to you to buy your product. Across different cultures / religions countries, the methods of
reaching out to advertising to " Closing gathering feedback. from customers have to be differently

Ensure local management doesn't fall to understand your business model and build a hybrid according to their own
assumptions. Halle, do hire locals from a new region to manage things alongside a manager london you sent from an
established store He'll understand the ways and the needs of the locals best, while your manager will ensure your core

principles I Business model remains intact.

To become more credible with large customers. become a peer. Don't hire investment bunkers that try to tell you what '
they think you want to break. or try to sell you grand on how they can perform the best at what you want to do. 2) Hire one
who gives you real advice, and isn't afraid to contradict what you think best AT the one that advises for the best of your
company:

> Offer a private offering before going folly public 7. If the private offering flops. wait a few years > It if succeeds, still check
all the peripheries. :) Also get real-time to feedback of customers on your a Advertising " Support system These two things
should also be based on customer feedback, not general guesses / risks.

I Get customer feedback on every business activity a visible to the customer If This will ensure all your customer - focused
activities are always successful and backed. 7) Maintain a flexible efficient manufacturing operation to result in a
streamlined asset base. > I Build your products based on customer' orders, not dealer forecasts. I
when investors have real faith. in your company, the market won't affect your stock. This is a good reason to only offer
shares to proper business investors? capitalists / 'Sharks' that understand your industry, and know I trust you intimately.
Building a business on quality of price alone is not sustainable.

When customers trusts I are loyal to you, it

won't matter whose doing it cheaper. I Emphasize and train all employees! workers to understand what drives customer
satisfaction. 2) Try that competitors don't see you as a threat. > In projecting yourself so you'll become even more of a
threat, they just won't realize that.

; since growth is almost limitless for a small companies i Don't get accustomed to chasing only it. I with every new growth
opportunity. comes a commensurate levels of risks I Don't promise customers anything I Let them expect industry standards
- Then blow them out of the water with your qualities # under - promise then over - delivers"

Just because. Sales are rising very quickly, don't go overboard with ordering raw

materials. - Only buy as much as you need I the amount of orders with that specific part I be very careful on ourstacking in a
cyclical market. - prices can crash ournight, leaving you with very expensive inventory which is costing. everyone else
cheapin

S To mitigate this expensive inventory. you'll how to sell slightly higher while evermore is selling slightly cheeses. 7 crossing
the Street" technologically - When tech improved overnight, and you're stuck with a large amount of the outdated tech. A
Inventory is the worst thing to own in an industry that where the valve of material or into declines very quickly.

In markets where tech or into changes every second, over inventory is the worst.. I managing inventory is slightly easier for

industry leaders. :) Good relationships with vendors can help problems of overstocking. :) your Inventory recycle should be
extremely quick. They should be used almost as soon as they come in

I Don't forget to rationally forcast future orders with the same materials when growing extremely fast. 7) customers don't
always need all the whistles and clicks. So Give him what he needs. I Only go for such aspirational innovation if it won't cost
much if it fails I Never 'not listen to customer feedback. just because it wasn't what you wanted to hear or they rejected one
of your Ideas.

I Don't forget to rationally forcast future orders with the same materials when growing extremely fast. 7) customers don't
always need all the whistles and clicks. So

Give him what he needs. I Only go for such aspirational innovation if it won't cost much if it fails I Never 'not listen to
customer feedback. just because it wasn't what you wanted to hear or they rejected one of your Ideas.
and Identify and mitigate potential problems as soon as you enter the industry. 7 All problems that could possibly occur
while after you Now should also he mitigated. ) "Big Bang Product Development" that takes time isn't valuable ( effective in
a rapidly changing marked.

Instead, gradually improve individual product lines. This is because it allows you to - take advantage of rapid tech changes -
offer the best quality! latest tech give customers what they need, not thing's that they won't buy. ) Remember, just because
a

customer finds your newest innovation useful / likeable, doesn't mean hell shell out more money to buy it.

- All your innovation goes down the drain if it's for a price that customers won't buy at. - or if it was for recent from your
latest succesful product. people won't buy your latest product if they just paid big to buy your second-latest product, even if
it's priced " the same. A Thus, space out products that you think will do really well. - or initiating an exchange Offer could be
tried.

for example, 1. Release your latest piece. (ex- laptop) Even if you have the newest best product ready within a week, wait a
fees month before releasing spare it. Vell If so ask your customers if they'd be willing to buy your latest piece, so soon after

buying your second latest one. - Before going into production, ask them. - It they say no, wait before going into production.
> Unless competitors are going to release a similar quality priced mode..

while waiting to vilas your latest tech, release another groundbreaker in another segment Ex:- while waiting to release your
latest laptop, release the best Ipad in the segment. > This will ensure you continue to dominate the industry. I Don't believe
in the industry norm " If we build it, they will come".

or Relevant Technology " Is what customers currently want 2 Carefully decide on "buy us make = Sometimes leave the RED
to the supplier > especially when there is no clear idea or clear opportunity However, when there is a

quickly closing but clear oppo. take caution Innow into your own hands

I Just because talented engineers make a product that flopped, doesn't mean youre should fire them. connect them to
customer input directly. This " ensures they only innovate of what the customers want a frees up your time that would
otherwise be spent consolidating input and telling them what to maker, ) Involving them in the product planning allows
them to understand ' the logic and behind the decisions,

-) Show them what their contributions means to the company 2 This will motivate them. immerse them into the logics
behind a customer is buying process - creating wall for the customers. 7 since they are bright and innovative this may lead to

them giving suggestion beyond the manufacturing

Huge ambitious efforts offer produce small, vowable innovations 'even if they fail themselves. If a huge consolidated
innovation project tails, break it up and use the individual innovations that came out of solving a bigger problem. as you
often won't know you're growing too fast on a day-to-day basis It's also something you can't determine from the numbers.
Ex - 509 may be under control growth in one industry, while Solo is too fast for another

After a ground breaking now industry opens, the following steps occur. 7 It starts with established, large players who
brought it 7. Smaller, newer players emerge who do it cheaper. 3 The ores who also do it better as well as cheaper rise

Quickly 4. They start taking on the grants and grow rapidly. So Soon, the market consolidates > If the giant is couldn't adapt "
If the small ores could it grows > It the mid ores couldn't become a brand. there all are in the consolidation tonle a few
players remain.

This could after last page) I When you grow too fast, you also outgrows your ability to manage your company 7) Figuring out
what not so to do is just as imp as fig. out what to do. I fury year, define several, clearly Stated, large I broad, high goals in -
liquidity a profits across growth Then, sequence them according to the size of oppo. and ability to achieve them :) focus
equally on infra as market oppose. " Hire / Train Retain talented people Build a systems " product leaderships

Then changes occur in your fund.

focuses / voles, ensure it is

we permitted to emp as well, who change and

) Grebes fast, but deliberately

Not fast /slow enough that run you

Can't estimate your growth

Channel your energy creativity equally

Into

creating now inness

- Enhancing / perfecting already

existing innows

Priorities cops. based on urgency

and capability to exploit them talk.

' Weigh new ideas with what you amazon

have on your fate, and combine

similar efforts

Shift employee focus from entrepreneurial growth

to conglomerate 'customer value' creation

' This will allows you to grow internally as a

compa

in early stages growth is more important then profit maximisation Don't burn but plough most of the earnings back into
growing 7 this can also to in the form of padding equity In the bank as cash. One - country monopolistions companies often
die in global consolidation. 7 When customers eventually start discriminating about brands and services, the market
consolidates at Usually occurs when the market is too now a child instead of an infants
If you don't grow you won't be able to "amortize'! your development costs our a large volume your prices will remain higher
than the growing competitors you'll become uncompetitive stuck in a visits cycle you'll be die during "consolidation you
must be large enough known enough,

dellegod enough to compete globally when the market' consolidates

Don't panic and enter channels that go against your values core competencies Take customer inputs to see how you can
grow by providing more value. :) Converting all your lines to the latest tech gous you a small window of upper to grow -
Exploit it before others copy your or bring in lower-priced models.

I Ensure you don't outgrow your infrastructure too quickly Ex - Dell grew from 890 mil to 2 bit in are year They on didn't have
the managerial expertise order / delivery system support system to handle such numbers However. If you build an
infrastructu for a too large company, it'll inevitably weigh you down Hill you get to that Level.

> Have confidence in " yourself to oppo. and build the infra. as you grow. profit is the speedometer cash flow is the gas tank
indian of focus equally on both first, ensured cash flow, then reduced costs for profits. 2) understand the economies of your
future branches before expanding. .) Don't waste time denying you have a problem or covering it up. I don't let it go public.
but don't cour

1 liquidity I Generates cash flow 2 profitability Give you cash In band 2- Growth Analyze, the profit -loss of each segment,
east bush off activity. Understanding what part is performing most efficiently, or which is the gas hogger will focus your
improvement efforts and ensure their succeed

Make the effect of > reducing costs > building recurrent sales increasing cash flow company-wide goal This will force
managers to take responsibility for the entire company, not just their little segment. Emphasize profit margins to your
Salespeople. > thrive them compensation / Salaries based on both' 'sales made " profit generated

When a product take off (esp. in a new category), quickly buildup the manufacturing capability to create it with same
quality, on time made as much sense as the treating children like mini- adults. Don't just shift your existing eng. to a make
products in a new segment! 2 New segments have to viewed differently, design-wise

when development is taking

too long, partner with

someone to create a basic

product to buy you some time > you

This ways you won't have

to reject customers just

because you don't have

a product.

communication is the most

imp tool in recovering from

mistakes

clearly tell the person who you

went to fix it

" This is the problem

- This is how it happed

" How can we fix It?

in

- By doing this, you reduce the fear of the unknown and imma focus on the solution. - You'll never lose your shareholders /
customers trust if you clearly tell them you

made a mistake and also tell them show you plan on fixing it (in what times. Make sous feel like lifetime members, not one-
time transaction Directly inform them of a new product line and it's support services Make sure your cust can rely on you for
everything a in each segment. Become a dependable, one-stop solution

lithium ion batteries were the first that could allow intellegence to be put into it. - If you are sure a breakthrough tell... or
inne. will work, fill out demand So that competitors can't run access the fell To showcase their new, record- break battery
life Dell put so ind analysts on a 5.5 her cross country flight. I Eventually grow out of the startup mindset in order to figure
what to focus on before talking on new challenges. Identify the oppo that make the most of your streets I Don't chase after

each upper I pace your investments to match your progress

2. There's a difference btw Independent and self sufficient - you're independent if you're self sufficient, but it's not necessary
visa-versa,

When things are working will (even

thought it's counter intuitive), you have to

- ask 'what's working - and why? "

establish a successful wear cause - and

effect relationship

this is harder to do than to play

a cause to a visible problems

understand the relations blue costs.

remove and profits, in each part

of the bus

stem internal disagreem about what's

worthwhile or not.

sit down and talk unbiased decisions, after

considering all the pros and coons.

In leadership, It's lap to be intuitive.

but four at the expense of facts,

Non data backed exaction - driven

decisions during bad times will only

The longer you take to accept new,

date that contradicts your carter

decisions / assumptions, the more

your being driven by emotion

Don't deny the data just because it contradicts you As a company grows, you feed to get too close to your own. Strengths
and weaknesses Therefore, it's called " believing your own press " " breathing, your own exhaust - like it sounds, it's harmful.
As outside Por is helpful when your dealing with a problem simple due to a lack of clear facts An outsider will be able to
room out of the daily bustle-bustle more easilyis

Permanently. but Imaginatively dissect the come into different parts -> separate coroners identities. Then, denise a set of
metrics to decide which components are suceed. or get # 450140 Responsibility accountability to the managers of each
component.

I ssmate (0= once each comprent. is evaluated separately, the managers will no longer be able to start responsibility but
blaming it on the total progress of the comp. when you significantly change company culture rules concerttens clearly
communicate the benefits it holds in the faster for shareholders, employees. cust. fed companies are always amalgamations
of various bus nes. serve each distinct bus by disaggregating the comp Most comes organize themselves around bus
functions sales I product did " management However

as you grow and hire more I each function has a bigger workload overall. each fund call segregate into and silas

Since managers don't our clearly told

how each division contribute to the total

come or how it goes band in heed

with others functions, they start

occasionally isolating themselves

They start thinking only now to grow

benefit their own ind function.

This may lead them to do things that

grow the division, but don't grow

the comp

In some cases it may go against your

sore value of "always thinking in

terms of value for just/come leme. "

of Pre- Into team will say their job is

to create into systems

instead or saying "our job is

to facilitate flow of info to

employees, cust, shareholders..

All one of Dell's biggest adv in early

stages was that anyone pitched in

to do everybody's works.

They'll Start saying "that's the her job.

20l baize "

This compartmentalization makes it capable

to

build links among divisions to

work too. for a common goal and keep

help with each other's workloads.

Instead of taking responsibility for

crything they can do

OR

talking actions that benefit the company

for them since that year task didn't

benefit their 'division', they didn't

want to do it

A company's success should always be

defined by it's

Strategies

"Ideas"

I and never be limited by the abilities of

the people running it.

When trying to grow, you need people's

experience, people who've been there

and can help you play for things

you near anticipated.

) However in RST (Rapidly Chancing Lodestone

you're often faced with situations to overs

ever seen before.

This. you need to strike a balance btw

Experience

Intuition

Intellect

Adaptability

last per. is not necessarily an indicator

at future part. I

So

for any some to sus. it's essential

top manage at Shares power successfully,

Respect each other's process

communicate as frequently as possible

I Hear let the kids know that sommer and

Daddy are fighting.

your partners should know all about

how to do your job as well just

like you should know how to do theirs

All of you should know how 125+

one will do it better

create a fluid give and take blow

workloads

schedules

tasks.

make sure you do long term planning

detail

-) Don't get caught up In short term goals.

Insert more discipline into your planning

process

- Planning is not a quarterly thing. Is

as our adapting / changing activity.

It involves every part of the

' supply chain

customer. base

emp.

long-term planning will always

reveal issues in the company.

This is because it pegs you current

standard to the standard you need

to have to achieve your long. Form

goals

Most of the time, short-term goals

can be achieved using your existing

standards

Thus, short-term goals never force the

standards to change.

The issues that will be revealed are

issues you will have in growing to

that point.

Not that you're not at that stage yet

freemine competitor cost structures,

facilities strategies ect, go to see

why they're winning.

find out where

- you need to joust

- you can west

" you can be agression

caution is warrenton

communicate these plans clearly to employ

and sit clearly.

There'll respond enthusiastically

This is because now they'll be able to

use their creativity to figure ways

to action these long term goals

instead of just using their manpower

to sole short-term problems that

have clear solutions

Develop plans carly with your suppliers

for volume of now materials you'll

peed incrementally as you grow

The key to creating a challenging plan

is to have enough data

and the expertise Listened to interpret it

The more data you extract from your

own comp buss functions, the more

you'll be able to plan to improve them.

and also see them strengths.

right plan is one that tells you

what you need to do to succeed.

its the gas that rallies your eme around

a few common goals

It's one that invokes

meeting the goals of SHII time I Just. (Supplie

Ensure all your products go through the

same development process

often, dif god managers based it.

ans to how does your product act

to market ill

This is essential when the volume and

diversity of your products increase

( This change will to slow to implement

as

you can't swoop in and disturb

ongoing prof

This process you emerge should be

agreeable to all and understandable.

to everyone working there

I start with a business contract

- Propose the product you intend to

deliver to
cust.

I Ask each dept

can a slewing it

can i manufacture it

can I finance it

can

support the cust on this

WISH Boo be able to sell it.

This-

Points out obstacles in a prod den, before

It can starts

- This says you from sunken cost losses

fosters unity and collective resp for

the prod to work

sons as a financial temple to how

the bus creates budgets.

goals

metrics

Enhances organizational structure.

Shows boss sell a product will perform

when combined with data from

cost. and did geo. economies

The planning process is both

Bottom-up So What the individual

bus can achieve

Top - Down I what we manage at

thinks it should

achieve.

in rapidly growing comp you can't have

Traditional function Based org

It'll end of being a booth of

unconnected groups with vestment

accountability
Now a completely decentralized model

I this'll end up being a mutual

fund lasted of a comp.

you need to maintain functional

this theologians

- To do this initiate a system

of dual reporting

Both to firm bead and individual

geographical / dept bead.

This is good because higher managers'

share confections and overlapping

responsibilities with other managers.

The key is complete ourtopping

accountability

Managers should share resp for the

sucess of the people they manage

through formal performance reviews

Sharing responsibilities results in

accountability

collaboration

Curse / sharing of ideas

A energy and enthusiasm

trust of emp on Some person

in higher management.

chanel this into action

and produce growth through

Segmentation

Divide and conquer huge fees market apps.

Segmentation ensures you can serves the

And cust even as you grow.

segment by customer instead of product

Split up people to study Just needs,

wants, expectations in small areas

- This will ensure full coverage and

better implementation in predict dev.

Becuase the collector only knows are

type and not 100 types of people.

Split your sales force and train them

specifically to sell to the following

type of cust

large see

Need-cap

Most Jost.

Educ. Inst

Small Businesses

Tad. Cust

How a customer Uses a product is

just as imp as why he uses it.

Each person uses the same product

for dif things in dif ways

optimus these diverse ways and see it

you can do something to serve them

better.

segmenting by cast. Deeds can simplify

the to it's link to your cost

structure

(which should also be

cost valve linked I

the securities of the

the cust come to the entire

comp. as

whole

However, don't only look at cust fact

Also look at product PZL

segment beyond sales

the producers To measure the financial

oppo of-a cust sega, know more

about it.
sedition allows you to see

Growth rates

Profitability

Secures level part

Market share

in each Beg.

Adapt accordingly to get high profit.

fast growing sega

classmate corporate environments places moor walk of networking sanity I confidentiality consistency of their platforms
There is a mid-sized cust beg. the large and small cust split the educational sega into kind -> 12 Higher Studies - They boy
different needs. large customers Hi seed 61 t come Comp Eduction anastomoses large comp federal States Education local

Small cost Ind

Fine the section a better forcasting on

when and what

cust. Will need

in future

coordinate this strategic into all through

the supply chain to suppliers

Effectivly substitute info for inventory

your product should be better good

But your latest services attached

to buying a prod. should be sunbathe

once there is enough momentum and

promise in a seq, break it off

and ist it ast as its own company

These to small 'comp' will allow you

to post huge sports while being a

Neither you for your competitors anthills

make money off retail

If you integrate all the factors and

look at it's Bbc closely

often put low performing dept under

notices

They might churn out great logos a

part in desperation

focusing singlely of direct model is

huge unifying force within the comp

Manu plants for retail how did specifications

he Dealing through retails also brings

the complaints of the reporters along

with the cust.

you'll be wasting manpower in support

dept

If you pull out of one action / bus model,

quickly give people something new radical

to rally around

Eliminating the reseller by selling direct

reduces the markup I cost of running a store

companies with long slow distribution

chains often indulge in "Channel Stuffing"

Since they have already produced the

models, they stuff distributors with

inventory that no one wants

This is a lose-lose for everyone, and

it creates anger in the distr..

They do this to try and

clear old tech

- Meet financial targets

Never try to meet current goals I

providing bad quality I out of date

products to just

is This will only ruin your image and

destroy future sales.

When you build only to already placed

demand you never have inventory you

don't want I can't sell

Align suppliers to deliver components

as you use them

- fix a bare minimum stock of a

now material and then under a new

one as seen as you use one

However, if tech changes, quickly start

ordering the new model as you use

the Leftover inventory

This shouldn't last for more than a

furs models

BIG

Quality volume of

Direct Cost. Into

Raw Materials Required

come who can't predict what the

just will want ban to how large

stockpiles

The more you can anticipate the cost

and the changing tech the less

inventory of werent parts you'll want.

Dell has around 6 days of lavatory

and none in the distribution channels

as

orders are pre placed and delivered

directly

competitors how 28 day inventory and another

30 days in the dist channel

(stock with distributors)

This is a difference of 49 days

In these 49 days, cost of materials

will decline around 6%

When you know when a customer will

leave on older product for new tech,

you can get out of that model's

market before it gets rickey.

Don't go for just a few mover days'

fact out Soon, and start introducing

these new tech yourself

The problems indirect come face when a

product reaches the end of its life

Chances of unwanted glut of older model

It just moved on too quickly

Rapid price drops

- If a sumpter dumps older modes

To the direct method

You won't have to subsidize losses by

changing higher on other products

main the product, such that they

supply chain has 'velocity'

and not just speed.

speed > uncontrolled

Being fast from the start

velocity - controlled with a direction

squeezing time out of rory actor?

7 for this,

- Try to capture the most market

with the least parts.

( you don't need a drives when you can

sorry ac% of the market with only fourth

configure your products to her

as many low cost components and

only a few expensive ones

The ones that cannot be

cost-optimized while retaining quar

The goal is
A velocity 3 .. Inventory Depreciation

To Health of Systems

Dell bad 220 mil in inventory when it

bad a 7.9 9 billion revenues

It had 233 mil ruben it grows to

a Billion

However, when you reduce inventory while

maintaining growth

to A lot of risk comes from drags from

one test to another transitions

You have to time the transition and

volume expected very precisely.

Don't discontinue the old like due to

lack of inventory when it still has

Strong demand

and you competitors don't you any

Tuck up their sleeves.

Calculate your drag costs per product

Ex - 30:50 l F See per PC

Excess for Obsolete

Calculate which - time buyers are

your core cost

first time buyer

I not just from your

Repeat

company from

- second, third time

the whole segment.

Emergence of largely - Spread systems

which demand compliance is a good

time to enter a new segment.

It - Bell entered somisers when windows

NI became an end. Standard

2 This will son you the huge costs

of developing proprietary tech

of the costs of acquiring a come

to enter.

use the direct model to shatter premiums

priced and s

I Rapidly build market share

- through good quality

force competitors to lower prices

) through aggressive pricing

I Helped by direct model

3 collapse their margins so they can no

longer subsidize losses from other segments.

I crush them in both segments

Enter with leading

entry

midrange

products

Then build volumes and use the profit

margin to build higher-end services.

create demand through

Field - based Executives

System Managers

Direct sales

Alliances I collaborations

find how much market share you

need to wrest to remain alive

after consolidation

Calculate the amount of units

you'd need to sell per month.

Talk about the need to succeed is

new segment in a fun, energizing

away,

- However, don't forget to clearly

explain the strategy

Tell your existing cust you're

entered a new market

I create word in the markets.

2 Become a Common same

This will help brand image.

Ask rust to ask competitor's

retailers to at least match Dell pricing

showing that

you care about them saving money

you aren't to

to buy a gas to force them

- You'll attract them to bury a sell

even more

also tell them that There higher creaks

losses

in other segments are being helped

by this the profits from these high costs

> This will destroy their image in

the cust mind,

Prepare the infra. needed to support

that new segment before expanding

Slow your growth just to find

an open path to new it up

again

as Like driving,

Devise a more efficient way of

structuring your

a profit centers

whole org.

Getting out of retail will allow

you to more fully exploit the

benefits of the direct model.

How well you predict and navigate

Inevitable

Revolutionary

changes in your ind determine your success

you need a computer to order a

computer onthis

) 19933 More Andreasen at University of

Illinois

created Musial browses

- Really Spiked public interest in Internet

Growth in a revolutionary new Industry often

is much faster than forecasted

Online commerce through Internet was

expected to grow to 67 billion $ by 2002

to

very sore, it was changed to 300 killin

by 2002

Aim new tech at quick, savvy, adaptive

people who care curious to fry new things

By on it al are

pay attention to the first compliment

your company reviews, or what you're

company is known for already

- joust further in this to quickly

increase brand image

if you are comfortable being association

with that perception forever).

Internet offers a logical extension

of the direct model

It augment salespeople - cost meetings

and provides costs with the info

they want more easily

hello com applied to all of it's

existing customer bases

as they already had a PC

Thus, it was very logical and successful.

find things like the Internet

which can allow you to grow are

bus fund without having to

grow head count significantly.

Things like the Internet are called

"scalable infrastructure"

Improving speed I volume of into flow

reduces your costs.

Thing like internet lower your ourhead

significantly as there is no cost for

any transaction.

often One cust segment will be

more open to a new service than otters.

Ex- Corporate cust were more hesitant

than ind. Cust s

farus on the group that is comfortable,

and observe them to figure out how

to remove things that are making the

others hesitate

A Increase quality assurance, security, est.

Don't announce a move you're not sure all

be able to execute well.

Mention all the ways people can buy

from you in your ads

people may Had an easier way to

buy from you

and thus the people who were I

busking due to too much persisted

effort of purchase, will also start buying

Make it very easy to purchase from

you.

The border I More lengthy I confusion

detail - asking! the process is, the

more likely cust are to leave mid-way

sell it before they can change

their minds

There will always be an interest

benefit of being out front with

a great version of an idea.

No matter how much better his istria

Implementation is the 28th guy

will always remain overshadowed

put your website on every product

that sees the light of the world.

I see It's better to overkill a good, frown to be right successful idea than to under exploit it insure all of your emply are call
used with any tech. I cultural changes the whole comp goes through. Ex- integrating internet into communication methods
within the comp. Enthusiastically held quizzes Encouraged people to buy a book off Amazon to familiarize with E-commerce.
Educated and reassures empty that a new teen will not automate their jobs aways Howser, Subtly put in a fore that they
better learn how to fully exploit this new techs or it will Dell for integrated email quite easily by asking simply .5 Did you get
that note Iseat our email? A No one likes to be clearly uninformed.

you can't isolate yourself feel into wish

to in a rapidly growing ind.

Always Understand someone before going

to meet I close them.

for a company, scour their website,

Most corporate cust how deeply

ingrained purchasing systems, and

they feel threatened that they don't

know how to exchange into effectivly

how these systems and the new

purchasing system.

some companies deciding what

30 mm series, because they

it and the actual purchase are

all carried out by diff dept.

Make Sure you are the favourite

amongst them all

Dell solved this problem by splitting

the purchase into steps

One step could be completed and

confirmed by one dept. then given

to another.

convince customers do to things in

way that benefits you

says time, energy morey west

- To do this, show them how they'll

benefit from doing that too

Show cust that ordering online

allows them to access into from

are place instead of three

This is the real benefit of

the Internet

(for everyone.)

However, most companies bought from

[Link] die to the additional

services it brought not because of

the simplicity

Notify your customers that coon them

current system won't be compatible

with the newest tech.

- Apologize and politely cake

i would you like to upgrade?"

Info readily available on Intern

if not a substitute to a call

center / sales representative

However, it arguments many of

their functions and bunce faces

up their time.

Calm each dept. a platform at

10015

always available,

To
help conduct there business

use synced onechins instead of

shuttling new versions of the

same Bits back and forth

Ensure your performance criteria

are available and updated in

real-time.

A Sales guide won't always be able

to remember the discriptions of

all the products you sell

Thus be should have an up-to-date

reference guide with all necessary

details for a with all the

latest, and newly coming products.

driving into through Internet install

If a son interactive brockeure

makes it easier to measure lost

interactions

and likings. (through

clicks Loews (reviews, Cats

Provide diagrams of how your

products are made to create an

intimacy of the product and cust

- While purchasing the cost will feel

he already knows the machine.

It is very mmp that the cust is not

fearful your product will turn out

less value- for money then be expected

It should be the opposite.

You can easily check it an offer,

and zect is successful through

the Internet

you can test different versions and

launch the best within minutes.

2 Thus, experimenting costs almost

nothing and corrections definitely

cost nothing.

The feedback loop our the Iot

is highly

quick

rich

Traditional marketing gathers

significantly less into at large

intervals.

Instead of closely guarding

into databases, openly reveal

Hem to customers.

Bring them inside the org.

This is called a virtually -connected

org

connected by into,

But 24 aSENS

Best values while growing

speed to market

consistently high quality

precision in segment targeting

high actormanor

steer valve

Custom, personalised products (services

bestest relevant tech

Reduce the amount of steps from

supplier -> Manufacture > Cost.

Doctrines with All Suppliers

fewer Is Better

2 lesser stocking

- Move Rotation

complacency Kills

proximity pays.
culture is one of the most enigmatic

facets of management

It's hard to maintain the

" challenges innovator attitude

entrepreneurial Spirit

energy of a focused team

as you grow larger

- However, to do this

" make everyone feel they are part of

something radical great. Specials

hoge.

The best way to establish and

maintain a heather competitive

culture is to partner with

your people. through

- Shared objectives

Common strategy

A sense of unity

Develop "1 Team, I Strategy

- The ability to find and hire the

right people can break or make

camp

Dell ties it's cutters to a common.

very strong belief in the Direct method to

2 This transales into

shared Responsibility

Accountability for Results

An appreciation for timely into date,

Consistently and clearly convey your

strategies to the Global org,

after you here it to be perfect.

establish benchmarks for success, based on

Achievement of whole comp goals

value created for cast. ISH

Then articulate your objections Nearly...

The people who thrive in your ong.

should be

- result- orientated

self-reliant

even to lead

I calve them the authority to lead the

busy in a certain direction and

then provide them with the tools

too resources to meet their goals

If an entry-level bike

Thinks in a way compatible to

camp values

understand What the comp string for

prices

be will happily work hard to complete

his queen tasks, dad but will also

innovate creatively to benefit the org

The most imp trait they must

how is that they must be

drives to try and provide the

best cust exp possible i no

matter what dept. They're in

Emp will only help grow the comp.

and achieve goals complete tasks

beyond their immediate area of

responsibility, when they feel

that the comp is also committed

to their long for development.

there ahead of the game.

- This means bring not

just to fill vacancies

based of merit.

but on the candidate's potential to

grow and innovate, and adapt leam

you can it based his based entirely

an merit in fast-growing come

- A qualified person will soon find

theirselves Out of their League

within a few months of growth.

Thus, don't have only for what they

can do.

Instead, measure their skill in the

things they'll has to do in the near-futu

you'll have to find people who can

Simultaneously

as their current job well

Grow into a news One.

Don't bring in hires to do a job

Invite them to join the org

If you hire people with the

ability to adapt.

- you'll buy to hire less

He was it how to hire new

everytime a specification changes.

you'll have assets as well as

capacity

2 Recruit for succession

> Institutionalize it

A Part of surgeon's job is to

prepare a worthy successor,

and not just before 's he's about

to mou on to a fewer sale.

Qualities that male today's candidates

tom I's leaders

How questioning nature of students

Always ready to learn something new

> In fast, they eagerly seek it

Are not rigid with conventional Wisdom

open questioning, critically

analyzing nature

Have healthy balance of intellect

and experience

who expect change to be the now

Are unfazed by rapid change growth

liberated by the freedom to

solve problems differently,

I Solve with unprecedented solutions.

Eager to tacked a challenging

problem.

Everyone in your comp. should always

be on the lookout for good people.

Talk to a your summer interns

See what they're getting out of their

experiences of you come

Hear cos they observe I feedback

What new perspectives ideas they

have.

I Ensure they enjoyed I felt they

grew during their internship.

Exo if you don't kiss them you'll

have a good same along the lowermost

2), while interview people, try to judge

How they process into

Do they think in terms of

economic value?

How they related to lust.

Do they understand the strategy of

I the company their at

:) your company?
Many employers contribute to the

comp Strata without even knowing it

I focus on people who actively try to

improve spur strategy.

Ask candidates to share something they're

proud of

This will tell it they are one committed

to

There companies achievements and their

contribution in

OR . This own personal aggrandizement

Their actively disagree with them on

some random topic

- check it they have strong opinions and

the courage to defend them.

2 This is essential for people trying to

work against conceptual knowledge.

Tubs grow laterally with your company

And when you're a Bars

else the hardest a working, recently

promoted emp won't be able to

handle the growing responsibilities without

sacrificing personal dev.

Of facing burnout

There's no point in cultivating a system

where people emp can't succeed.

- It'll kill their motives both to

work well on their promoted job

The solution > Segmentation

( Increased focus so a potential

are always leads to growth?

As people grow, give them bigger jobs

onto a segment

Narrower allows for more focus

and efficiency.

How to do it

Bring in the ready talent

Split as

Bus knit

good org.

function

in a way the faces that it allows for

better focus on the bus oppo underneath is

Growth indicator in pell is that they

take half of your gf sequent away.

However, this halved segment will still be

larger than the whole seg two years

ago, due to exponential growth.

Make it clear that more focused

work less responsibility is a

promotion.

> This takes away the status fear.

Make ong tonal structure adjustment

by a certain date, not an

that certain date.

segmenting to create more jobs also

helps you realize your weaknesses

- you may even discover you don't

have enough people (talent to fully

exploit the market apps

segment the CFO

> soon you'll be our your head in things

you want to pursue and you'll

also bau things to do which you've

not good, at but don't buy the

time to learn! Improve them either.

Divide and conquer

- Marked by constant communication and

shared decision making

Try to keep the cameracie I food-

Sharing friendship even as you become here

Post hourly metrics on the factory floor

The more the factory produces, the

more everyone equally stands to gain

- They'll quickly start working together

and they'll be more motivated to

work harder sake

Emp will happily work border when

they can see the dorset correlation blow

Effort Put In of Benefits Recieved.

Change everyone's performance by a

360° eagle

- productivity, Efficiency, Now innovation

contributions.

A Grange them off feedback provided

by everyone they work with, not

just by the views of are

person (their sliced supervisor)

If you do these things, employees

will willingly help the people

lagging behind, be simply because

it is in their benefit to do so both

Direct compensation

Annual Reviews,

Encourage emp to openly share

their 300° evaluations with other

This way they'll chides and improve

each other on each other's weaknesses

I Create an environment where coop

work hard to be competitive

not political
All members of your comp. (including

you and higher management), should

be people who well up their sleeves

and get involved

in the details of every-day bus.

So you staying involved in all the

daily details increases - velocity

you'll be able to make decisions quickie

as soon as eppes spurge, because

you already know all the details

behind your company's capability

to exploit it, currently

similarly, when a problem crops of

you won't have to assign somecore

to figure out the issue

- because you already has all the

into in your mind, or somesisters

close by,

for You can't make good decisions

quickly without all the right date..

Thus, actively collect data, even it

there's no decision pending

" It's better to be the first to

risk being wrong then to the

1009 perfect when it's too late

Do this by screaming"

- Don't plan interactions; try to

gather Spontaneous feedback,

to

feedback where people are really

saying what's on their mind.

Try to happen upon are of your cap.

Stumped by a cust question

Don't chicle him, instead try to help.

This is because

. This is what an cop day's made of

This will give you lots on how

to close such late gaps.

Show sup unannounced on the factory

floor to bear their problem's

first band.

Don't assume things like

This is our new product, and our

salespeople will sell it..

the see what problems fly

are facing with selling it, or

what apprehensions Hey how

Encourage dept to openly shore

problems they are facing with you

Hourly, discourage many people

coming to you for the same problem

As a company grows, it's very easy

to start talkin' within ankle a

certain group of people.

This is ury dangerous

you must constantly immerse yourself

in the word of the market

Ask emp's

- What are cost telling you?

- Especially the ones that dante boy

How do you think the company's

products are doing?

what are you seeing in the market?

What are the challenges you're

facing

what are the threats you're

facing to your success

How can the company support

look for quality feedback on open

Chatrooms review videos on III

ect.

continually bring into from the

outer world late back inside

Retain the closely-bowed, fast, flexion

paced culture of a small

comp run after growing

> This is a huge competitive

advantage.

How to do this

1. Mobilize all emp ground a

grand Presences goal

I Make them feel part of something

special, exclusives to your comp.

This inspires real loyalty / passion

2. Invest in mutual Long-term

goals by hiring ahead.

3. communicate your commitments

to your people.

Don't leave the talent search

to just HR.

I cultivate a commitment to

your people's personal goals.

> build an intro the rewards

mastery.

- Allow people's jobs to change

with them.

I Reduce their mundane responsibilities

to give them space to give

and tackle new things

2 care
officer involved.

- Stay in fouch with all levels

of people in the org.

2 This allows you an inflow

of realtime, personal into

connect with the outside market to

stay aware

connect with the people inside to

stay healthy as an org.

It's one thing to create a culture that works

It's another to use that culture as a

sigint strategic advantage.

You have to engender a sense of personal

investment in your emp

This can be done through a Responsibility

Accountability

Shared Success

However, ind investment is almost impose

to a inspire externally

- some people just have it, otter's don't

unless, you build a company of owners

creating a culture where every person feels.

acts and thinks like an owner

requires you to show a direct link

btw their induid part and contribution

to company.

Their actions thoughts must align with

your comp greatest objective

I create Just. I SH valve.

you'll have to develop, clear quantitative

measures of these walls

A comp of ind owners focuses less as

Heirarchy
who got the

- Direst office

? largest bonus

and focuses more on achieving their goals.

2 This is because they've seen that

comp growth - Their growth

ownership Instilling Qualities

Veracity to constantly learn

- Approach learning from asking questions

what would make their job severe

ask them directly

easier?

more successful?

more meaningful)

more fulfilling

What do just want to see us do

Spend most of meetings of a floor

to ask questions instead of a floor

for giving states reports.

Wilby are we doing this

Why aren't see doing that?

Answer ques genuinely

I Ensure Everyone understands why the

company does somthing.

2 When they understand why they'll

are implement and propagate better

Really dive deep into why anything.

related to your bus. I industry

happens.

2 understand the costs and problems

of your manufacturers supplies

In reducing their costs or

problems, you'll buy lifetime loyalty

Forecast
- What would incentivere people

to buy from us?

understand the underlying economics

of markets to better understand

its and make a better decisions

ask the same questions to dir

groups in

your company

the market

3 Then compare the results.

So If one group is tremendously

successful with an idea. evaluate

it's validity in other segments

and spread rapidly.

use your company as a network

to be see and exploit all oppose

If emp don't understand the

significance of a new product!

tech, you they may work

slower and you may underexploit

as oppo.

All members of your comp. should

be able to spot, evaluate and

share potential oppo.

However it becomes dangerous and not like

of players in the comp starts thinking

similarly.

Thus, teach innovative thinking

Ask a dlf ques

- Or, just phrase the same que diff. by

By approaching the same thing with

diff perspective, you create space

for new Insights I learning.

Teach people to be more innovative by

approaching problems in a holistic way.

ASK cust

" what do you really want this thing

to do I bare ?"

2 Ask design team

- can we take make this

> cheaper - less expensive parts.

> easier -5 1008 parts

7 faster is quicker manufacture

Ask suppliers

- Is there any other way to albion

the same results?

Then come up with a solution that

inevitable exceeds original expectations

New products (that are thought to be

"revolutionary") but take away custis

freedom ownership to currently has

is used to

- will fail miserably.

:) However, keep an eye on such tech sun

if you don't jump in

- It's still a threat.

listen a new tech you don't like Blacks

gaining traction

- try to find out what need it is

fulfilling that current products anal,

of can you fulfill that need in

a better way?

Ex- Networked computers gave corporations

control our networks standards

reduced costs I wasted time

by users who's system stashed

precondition expos to look for breakthrough

ideas, so that they can come up

with brilliant solutions to bugs problems

fast.

" How can we challenge conventional

rules / knowledge and do things

better

Having a history of successes with

upconvention ideas is a big motivators

- Only the first few successes are

hard the rest flow themselves.

Allowing people the freedom to think

like owners glass them the courage

to take risks

To encourage people to innovate, you

how to make it sate, acceptable,

non- shameful to fail

However, failing means an idea was

tried and wasn't implemented.

The failure should occur before you're

lost anything more than time and effort

Experiments that lead to " This was our

logic for trying It didn't won't

work because

isn't a fail it's a learning experience

force people to innovate quickly through

the fear of the competition catching up

please it as " what if they prove they're

better than us by solving

this huge problem first?"

Sometimes you can't wait for all

the current date to arrive before

making a decision

In such cases, utilize all your

past knowledge, and try to predict

the present with of

Eventually, experimenting opens as

yunus that turns into "normal bus.

fx. Expanding into UK was hard.

After it's success france,

Germany. ect i wasn't hard.

share your comp and culture to

constantly absorb "course corrections"

- Never got "used to Something,

even operating in a certain way.

Date ready to even change your core

values if the date is compelling rough.

Make people good about trying something

- They're already excited to do something

new, just ensure they don't mask it

with fear.

I Never pride your comp

- constantly question evrything you do

and try to improve

That's the only way to stay ahead.

Hire leaders who can accept being

publicly corrected when they're wrong.

- This helps promote open debate and

reduces free inexpression of

doubts ideas due to fear

Acknowledge your camp's achievements

to keep up emp morale, but your

pride yourself on them and

I think this is thought

pride can create a false sense

of security, a feeling of invincibility.

- people start to think

a success begets success with

little effort

OR, run wore a success begets success

all on it's owe.

It's harder to see cracks in something

you're built.

- All the more reason to look border.

and more often

The time wasted in denying you

have a problem is Crucial'

you need to identify and start fixing

problems immediately.

- are good thing about always looking for

places to improve is you find

problems you never thought existed.

In the direct model, you get the

facts too loud and clear, very

quickly...

your metrics can be monitored

minute by minute.

cust are always supplying

feedback

Attach metrics to measure evry

activity in the comp.

Don't make something bad look better

then it is

- Don't cover up

when you can filter to clear facts,

someone will notice the problem

Don't muddle the real facts with what you

that's would want them to be

the Encourage people to stand up and

Say " be has a problem and we don't

or show to fix it."

- Encourage people to ask for help

instead of trying to hide problems.

Clearly tell your rmp what they need

to do to action the latest good

dayare in your comp should you the

sure answer promptly on what

concepts your bus is based on.

Hold annual meetings with curare

present to discuss your present and

your future aspirations

> Then answers day gust. Simple, not

in Corporate double-talk

celebrate and share successes our the

entire comp

It's motivating (competitively( jealousy)

and heartening to others.

are group will learn what benefited

Dell released magazines weekly or

emp. 4 Who ourcane a common fear,

and how they did it.

Ensure and the success you're demanding

looks achievable to everyone.

I achievable, not easy.

A sense of urgency in communicating

and solving challenges / problems is

essential I imperative

stay Allergic to Hierarchy

Apply the direct model to four

corporate structure as well.

flow of into from discoverer to targeted

person should be direct, and easy

Allow lower ranks and significantly

higher reals to exchange into regularly.

Don't requality business processes

- processes serve the business not vice-versa.

If they can come up with a better

process

and all concerned parties

are fine, let them change it.

Hierarchy woks layers upon layers

of approval and into channels

- It implies a loss of speed.

If something is troubling anyone (about

the company), be

should immediately

be able to address it to the whole

company, or the expert person responsible.

To do this

I Don't circumvent page management.

I when a speaking doubt of an employer

corresponds with cost feedback, it

should be made public knowledge

(within the comp.) and an agenda

for the next decision.

Eff Ray info doesn't appear as neck

and tidy date.

Thus, info should be able to How

quickly for effective and thorough

interpretation.

Mobilize everyone around a single goal

you can reduce politics in your culture by

focusing on results

aligning Still kmp. interests.

Make emp benefit out of whatever

benefits cust and St.

Dell matches with stack instead of

equal cash in 401 Ck) retirement plans

of emp

- If you do this from a pre-decided

and rigid pools you'll bow

- Have ready money as capital

Retain ownership

Howson, giving emp stock options should

demand their committment in return.

Best way to evaluate comp contribution

by amp." is Role

Return on Invested capital.

Treat all expenditure on a single camp.

as invested capital and see how much

monetary, clearly Visible SH value

they're created.

Applying Boys to dif bus functions can

also kelp identify who's doing well

and who isn't

Check Diagram

RO IC Drivers

Sales force productivity

forecasting

RS0

capacity Management

Int. Audits for est

logistics

In / out - bound

Quality last service

accounts Parable forms / timings

Inventory Backlog? lead times

Excess In obsolete Risk

Facilities Management

IBU Currency Risk.

clearly explain how she can contribute

the comp health (and this, their benefits

by

Reducing rotation cycle times

Reducing wastes

Selling more

Forecasting, just find changes accurately

increasing Inventory turns, decreasing

Single bulls

Actually going after accounts parables

receivable

I Doing things right the first time

Meanings Generated More Compensation

> Growth

sing the company's benefit is now this

benefit, the start thinging 'We", install

of me"

BOIS

- Reinforces into driven culture

Reduces ambiguities in definition

of values creation.

Helps keeps the bus a meritocracy

To do this

off make the constantly learning a

necessity,

If study the obvious for non-obvious

Solutions

22 8 you can't see so

2 If a cust raises a problems ask

him how bed like it to be

solved. on the spot-

Take size such solutions from various

complaintees, and ask your design

team for the best way out

I least to problems raised by only one

person, if they're genuine.

shift emp benefits to

creating more value

from

dealing up in the heirareby

A sense of price and a strong dose

of personal investment does wonders

to create accountability.

The direct link to your cost helps you

determine where to bat allocate your resources.

- Howur, Easter cust are becoming extremly

aware of their choices and the diff.

bow them.

latest tech, high quality and good valve

only get you a seat at the table these days.

The new differentiator

Emphasis of

i speed

" services.

you must delight your cust instead of

just satisfying him, again and again

- This crates true cust trust I loyalty,

The computer and emerged from

scientists passion to discover something

new, rather than to fulfill the reed

of people

If The early products of an ind coming

from Scientific be research rather than

an entreprenuer filling a gap in the

market, are hardly cust - approved,

or contributed

this results in just paying for

something that only partly fulfill's

their needs

lots of money a is wasted developing

tech that no are really wants in

such ind.

In the starting, of an ind. all products

are virtually integrated, closed.

This means they create all of this

comp. By themselves

2 This results in there being to

compatibility blow two products

from dif. companies

However as the ind. grows it becomes

more open, based on some tech

standards that all products must

be compatible saith.

A pricing is only Land of the cust.

decision making criteria.

The rest is quality and support

services

scale always reduces costs, through

the principle of scarcity.

lust today Day confidence when

buying any ec, because He knows

He's busting in something that

has a wide variety of applications.

He'll be able to learn run the

few system based on past

experience alone.

" He has choice

Is truly be differentiated from

comp. (who may also follow the same

principles of "care make to order")

is knowing what the cust. will

want before he himself realizes it

To know this, just ask directly,

you have to involve cust feedback

actively at evry step to create

great cust experience.

knowing what your lust doesn't want

is just as ipp as knowing what

this do want.

2) This will say you millions in

Bird cost, time and effect developing

unnecessary things.

Try to learn what you can do to

make whatever work they do with your

product

easter

> faster

I more productive effective

cost really valve being asked their

opinions

2 They fell obligated to buy whatare

you made off the feedback you

just took from Item,

Quickly explain to existing cuss.

how Have your new product can help

them succeed more

I get up exchange offers.

Most companies take feedback to

create a general tread"

I Don't do this

Instead fowls on indeed. complaints

and treat them as india problems that

have to the fixed by first model

(quack.

2) To fact, try to improve the

ones that hasn't come off

the factory floor yet

This will ensure not all of your

units of the same model ban a

problems.

2 Recall the ones that do than

the problem and replace it with

the Improved one.

This will save you the cost of

creating a am model just to

address a few small problems.

I Launch a few units of your

latest model and get feedbacks

before launching full production.

use Nike's 'Apple's immediately

sold out" technique to color of

that you're only launching a

small batch, for testing.

cost. will quickly tell you when

another company has a good

They'll ask

- "Why can't you do it like theme

Ensures your cost feedback recieving

they are shall want to the

criticism of the company,

- Male In see it as a

learning I growing oppo

Good ideas don't come to only one

person.

They key is how well you can hide

your own ideas and how quickly

you can implement ideas from

others

Immediately relay a expecting

feedback

Supervisor should weight it

quickly, but still after

considering all components

figure out how to really solve.

Male a manager focus on only

are segment

This will ensure hill only bear and

have to resolve similar types of

- Because diff cust segments

has hugely diff ideas.

when design team is looking for

ideas, encourage them to go

to salespeople to see what the

just- are saying.

211 Also engage managers to go

listen to cust feedback occasionally

2 this way, he'll be more directly

invoked with most of the details.

Automate things like order tracking

simple diagnostic problems on

common a website for cost.

' This will ensure a soles LHR

up is not wasting time helping

just do something he couldn't

done on his coup.

- This will reduce the no of

products coming in for span

and increase loyalty.

Rg.175

De internet-based personalization tools

to create customer data profiles.

and then suggest them things

according to it

keep a track of

Their and

what models they're bought

family members and their date

should be linked

What they use your product for

- What model (year version thy

boys.

when does it need updates, replacement

or servicing5.

Dell has It support website visits

for trouble shooting fore fury call to

support center for troubleshooting

- They then sure If per call.

The key is to to minute the time

and resources effort is takes to

fulfill Just needs seamlessly.

2 After you've fulfilled this current

needs; find ways to automate

simplify fulfilling their current

and also future Deeds.

If one way to do this is through

two-way - into transfer. electronically

- They provide feedback, you provide

the complete details.

use the Internet to free up support

people to provide even better ace to

one contract I support.

The key is to understand what caused

the cust to call you with a complaint!

could you have

Resigned

Shipped

provided info about

the product better?

- The best way to resolve cust.

complaints is to ensure they never

come in in the first place.

Make this se metric for your

design I manufacturing team.

set-up two or three large cust.

group interaction every day is

I use your people best with people

Don't do the "let's fly you to a

resort and bombard you with why

we're so great" pitches for cust

I Dell's Platinum councils

- considered by Micheal to be most

effective cust. Interaction forum.

a cust set agenda by bringing up

collective complaints

? Everyone asks the cust. how they

want it resold and dif teams

answer it its possible

(tell them to try the impossible

3. seniors bring up designs, features

ect of upcoming models and

collect feedback.

4. Higher to leaders introduce plans

for next few years.

:) This is also a great networking

group for the participants

- Extremely diff comps will still

face the same difficulties with ers.

Also ask things that don't directly affect

your commercial relationships with

Cust-

Ex - How did you manage the windows

2000 transition?
A you can make these things differentiate.

yourself from the comets who

think this doesn't matter.

Also engage people who don't really

talk to just because thy ban an

internal job (like design or mauriac tea

So they have first-hand into an

what the cust. values.

- This way, they'll make what the

lost wants the first time around

not something that has to be redesigned"

by suggest. from the sales IHR tem

(actively cust facing teams)

If This will reduce. the cast and effort.

Deepening cost relations like this way

builds brand trust and loyalty.

Remember that are size never

fits all.

segment more to ensure you can

fulfill small diff as in needs.

Diff Just S how diff & expectation

Ex.

- large companies want

Reliability

Consistency

control over a large networks

It is willing to sacrifice smell a little

performance and speed for this

Ind cust. want

fastest

long-lasting

Hottest peripheries

Best graphics

Latest Rup dries

thy feet don't need Much consistency

because they usually only run a

network of one.

Diff Just also I require diff amounts

and types of support.

Large companies require low amounts

of support but very technical and

highly valuable support when they do.

Ex- NASDAQ Simply can't haw technical

difficulties because the has to

provide the same quote in

milliseconds to die geographies a

> Thus, Dell has assigned a dedicated

team of system engineers to them,

low-a Ind costs require more support

but simpler ones

- These can be resolved by an

undedicated service technicians

12 Diff products has diff support requirements

- Desktop I PL ( Laptop' problems fissures

The raised during all the wine

- Server problems are communicated

during the night, after they're retired

from use from the day.

Thus, Dell has a 24-br costs

support

Thus, become aware of diff lusts

diff needs as soon as possible

I Don't try to apply all the

problems of one segment to

another, vastly diff Segment

They have diff-problems and diff solution

eun for the same problem

Don't force your cust to become

an expert in your product just to

used' fix it.

:-) Encourage him to only exploit

your product till these it benefits

him and leave the rest to you

2). Install only the specific features in

teams within the same come.

will need.

Ex- finance people once has finance

tools

Manures. people only has

manufactories.

Howour link the peripheries.

A sales people and design people can

still use the same printers.

I secure all the Excess / obsoleted

replaced units of your prod. for

a company.

- Become your own reseller

Become such an integral part of

huge companies that they may not

be able to I will find it very

time effect consuming to pete

service without your

I Don't do this for small cust.

Take your cost. work business as

seriously as yours.

Try to understand what a cost

goes through when using your

:) Through this. You'll be able to

improv their experience overall.

Don't stop at listening to cost. feedback

about your and only

A Total Just experience is boundary less.

Everyone things from did industries may

affect the cust. experience of your product

Ex:- Problems with Chrome as a browser

or Fortnite as a game may lead

to less satisfactory PC experiences

work with fuse comp that affect

you in ways you never imagined.

I be available to the cust.

- some people just want an audience

Teach your sales people this

(support.

use tech like the Internet to bring

cust "Inside" of your org, and

connect them to every bus process.

If The mistake others coals is they

try to contact the cust only through

" dept.

Only a 1 of the dept is connected

to fall the waist.

Additionally their rate of into

How is the dept. Is also slow

dude to fairarchy and silos long

your best cust are the ones you

learn I grow from most

"They push you towards I suggest

solutions themselves to help you

provide more valle

2 The best way to predict the market

is to intimately I actually knowing

002003 K 40 projects for ground because

your cust.

I Become the comp. that sells the whole

solution instead of just parts of it.

 It's Identify time resource consuming activities cost. have to do related to your product, and do it for them Ex- Removing
parts they don't need Installing apps of to suit their business Ensure your cust don't have to do enter part of your lad. just
for four products to suit their needs perfectly. Even it it isn't related to your product, identify things that are hard and
expensive for spoon susy. but super easy for you. - If nothing, help that are tan meet MI. Doing this for cost significantly
increases the value of your product. This deepens just loyalty. You can learn more about rust when meeting them where
they do

business. - you'll get innovative Ideas when you walk through their offices.

The biggest differentiator for you will be that your competitors passively recieve cust Inputs and they fix it in the next
product launch. 2-3 years later (and cust. Will has to buy again I it Buy something from your competitors and see what pisses
you off. - the things that piss you off will most likely piss off offered Before trying to figure out what good you can do, tix
what your competitors are doing bad. Eastman Chemicals had their own softwares they had to download to every class
computer they ordered. well downloaded fill think softwares to a secure senior, and now wherever a computer is earmarked
for Eastman, all the software is immediately is downloaded without any human effort or time.

when you start out. only personalities for lange companies -) Only gives them the parts the area - know the rest Download
(Bundle any third-party products they might want. this when you grow coughs Till then, standardize for fad. cost calculate
the total cost a cost. locum from 1 Buying your product. So, repairs, upgrades, act ) Do Be Trashing! Reselling it Then try to
optimize these costs for them too Also try to ensure all the other times they're having to spend money on your product
lepers. Add-ons, it comes from your comp.2

Ensure your products are environment compatible, even before standards such regulations are applied (recyclable, less,
polluting Remember you'll eventually how to trash all the products you sell Ensure all

obsolete, broken Ci other words, new units that bay no where to go but trash come to you. 2) Dispose I recycle them
properly. so that you can be contrast within your heart. Push your design team to make your products mod recyclable easier
' to male. Ex.. Clips and sliding trays are more feasible in all metrics compared to nuts, ( bolts and screws. A Replacing ?
Recycling Manufacturing liking I understanding the hardware.

73. constantly advise cust so that they don't have too tell (that they don't need for a ROI. a cust subconsciously pairing new
feel with your old product model as may cause dissatisfaction in your product Help cost, manage this tech I features so that
their costs go down. - It needed, influence the ind. so that they don't endure with too much chick and whistles -) Test
demand

for features long before their systems are made 2). Testing your news tech with cust grants you valuable feedback, while
also readying them to accept such tech transitions when they come. - Since they don't know beforehand what news tech is
coming thy find it hard to adapt.

take them trust you to fifer new tech I into to jos the base, minimum they need to know! implement to grow this work. for
any new feature, diff companies offer their product own version of it until an indy standard is decided by Custer Aim to
become your cust advisor for your god. This will you you huge power- our your competitors. - They will come to you to try
and influences cust to buy their product Explain new tech (released by entered and also suggest when to / which are to buy
to extract the most benefit It you don't always
suggest your own products, you'll gain more

Don't Dupe up or reveal products that aren't ready yet - unless it is completely accessory for survival It Such hyped
unfinished products are called "Vapour wave! Just may often get influenced by the press and ask for something you know
will turn out a flop. 4 At such times, to being able to say no to the cust and explaining why that feature won't work is very
necessary fuel will appreciate the truthfulness instead being lead down a path of false promises. Ill for really popular
practices, make a prototypes. just to show that you can do it! If necessary Ex- Dell made a prototype of per computing
(replacing keyboards) but never really entered into it's market. That market actually failed.

Also fully analyses and prepare Is to -marketing strategies for such tech', eun it you don't instantly start producing it I
planning for a tech doesn't cast anything like manufacturing an unnecessary product would. However, it helps hedge the risk
title if you realize too late that you were strong. I shows the strategies to SH and cust. so that they are reassured Help Steer
cust through the storm of tech options, and they will help keep you bumble Just can often help you from dedicating
resources to tech the market's been buzzing about, but cust don't really want for expensive things, Just want to presents
their original investment. Thus, they worked yale compatibility from are generation of tech (ex- processors) to another.

for all offer PC companies decided the MATES processor was the better process to Motel's 380. - This they all (except Dell
started planing for, and making PC'S based on MIPS chips. Rell got down with it's just and discovered Do cust wanted the
new MEPS chip and the benefits it brought with it If They didn't want to have to buy a best PC. 711 Proprietary architecture
can after help you regain market share. > It prevents others from catching on quickly if it turns out to be a great
differentiator. I However, it will fail horrendously if it doesn't provide any new, radically different value than multi-
compatible options already available unless your idea is a great differentiator, cost- won't give up wide compatibility to go
for restricted vale.

Anything we do is aimed at either getting a just or keeping a cust." A Jack welsh, Of

It's you job to spend as much times as possible, learning and extracting feedbacks from' Just ask Just for How well are we
serving your outside the country of purchase? You - your products should to compatible (tech and support wise) all our th
globe, take sores Just feel you don't want affirmations of your strengths, or insincere praise when you ask them questions
Develop something to some your cust. combat, small problem - Then use it for something bigger. Analyze just feedback in
data for " Is this a one time event, or Indication of a freed? " Is this an oppa for expansion/developer our

2 Improve your cust better line individually... can you say them money? Lay bundling discounts free support) an businesses
in "How can you bele so they sees their cust. better constantly

delighting of cost. with better products (services will create strong loyalty. I creating an unmatched, Seamless, total
experience will create loyalty for life. cost. should think and tell others that buying from you was a smart and great idea.

you rears to be CRESCENT economical prudent when starting a business with little or an money Tmp aves - " Should we
manufacture these parts so house, or have someone else manufacture them to our specifications As a small company you
won't be able to develop many parts in house. - However, this allows you to leverage - Their expertise your sand > Time >
Money > Effort into actually creating valve for cust. Most huge, pioneering companies become experts in and manufacture a
huge variety of parts just because they think it's the only way to
access sure. Strategic partnerships and regular communication with suppliers will help you 1. Reduce delivery time 2. Keep
inventory low 3 Keep quality encompassed

forge relations with suppliers carly on so that your early stages are ores of very last growth Leveraging supplier and
manufacturer expanded Helps you scale quickly without having to become in an expert in your own pasts -). It also allows
you the oppa to counter conventional wisdom and create unthinkable vale for cust. Traditional knowledge says that you'll
four her control our quality in the many.. process if you don't build yourself I However, using outside suppliers allows you
aldate quality by choosing If you make partners' and not acquisitions of suppliers, you'll be able to adapt as and partier with

new firms easily when new tech drops. Amortize your risk by ordering / partnering with many suppliers, instead of
harbouring it all on yourself. :) This gets you what you need easier and more Its bly of

The deal is to know when how easily can you add valve to a process without sacrificing anything, and when you can't " "find
what you excel at, and find parties that excel at the rest your lust don't want to get into the Re business and deal with parts,
acts just so that they can use a BC. similarly all you should seed in a partnership, is to know you'll get what you want, with
the quality you want, and the quantity You need, Ya'll to well supported if something goes crone. Oh when you explain how
the direct model will help them, suppliers will happens supply this technical expertise with your

specifications.

The quick feedback from cust due to the direct model should be instantly related to suppliers. -) This will make you stand out
for providing insights, which no other company does for the suppliers. This allows suppliers to improv, and cut production of
parts that aren't popular ( working with cust, and also leave not to make parts like that again If If you actively (regularly
predict and tell suppliers which way the market is heading Care cust. makeing a charge from are coded I tech to anstart
they'll be able to change production quickly, which will improve both yours and there of inventory. Traditional businesses
arny able to get this type of accurate cost. insight to opinions, because they're relaxing with go-to days of old

outdated tech in the distribution channel.

suppliers may haul ideas, and you may have the insight on how to modify the idea to create few market space - deeply
penetrate existing space. -), your suppliers wall also benefit from working with you as you'll be able to get their latest tech to
market faster with the direct model. I Make sure they know that It Always quickly adapt row, relevant tech that you know is
gonna work. I keep asking how any scenic breakthrough (discovery can help erect vale for your cost. I 24 cust will come to
you with demands for features. They'll hardly ask for a specific tech. If You have to figure out the tech needed to fulfill this
demands. =) Do to do this, you has to far well connected (communicating with both lust and suppliers

Big enough companies hold the capability to order large enough volumes of a new tech to make it cheaper for evacuate, and
thus and industry standard. forum that your suppliers know that your demands for top-notch latest, innovative tech
delivered quickly will only help theme become more effective, production, and thus effect competitive often, are tech ture
starts evolving at rates that the supplementing tech can't keep up. Ex- Memory in some bell computers simply couldn't take
full advantage of highly effective processors. Rell salud this by getting the memory and processor suppliers together, and
made thin collaborate - And now, since they realized memory and processors are interdependent the memory and
processor Supplies always work together to make inter- compatible pairs of the latest tech.
promoting and only improving industry standards also helps deeper insted of creating unnecessarily proprietary tech to later
to cost. reeds helps Strengthen relations with suppliers - since they won't hay to do something s unique, only for Dell, they
won't charge you a premium. pairing with too many suppliers to remain flexible or meet decreed has one downside cust.
want the consistency that comes from Supplying parts from a limited no. of suppliers. 2) Thus form closer relations will
fewer suppliers other than going after numbers.

If you shouldn't add by to address the whole (10090) market if you can cater to most (90 98010) of it with for less parts. I -

That's the 'sweet spot of demand in the market. [ complexity kills Proximity Pays] Is find out how to optimize supplies and
which one, to cut off, I Put each competent through the ROI( metric and see which competent combination gives the post
vale and cours most of the demands. Things like speed of delivery control over quality exclusivity adaptability also affect the
Reis of a supplier Take your best local suppliers and ask them to cater to you on a global leur. I Make them set up many
plants that to you

I smite I So - Working with global supplies a Reducing duvall on of Suppliers in " Turning local suppliers core glazer over will
gla you consistency our your entire empire, and same your costs due to confusion take time out of the prod process. reduces
costs for cost. and now

and sunshine ready and by the direct model Just like you bass to, your parters have to respond to market info and demand
ASAP. when you're a high-growth company, the most imp thing you feed in suppliers is flexibility. They how to invest in
themselves to keep up with your rapidly increasing demand our the years.

I would and discuss the future with them 1." our current forecast say we'll need a mil of these next year, but we - might
need as much as 6 mil -) What's very production capacity currently - Flows quickly easily, cheaply will the you be able to set
up a few plants " If the change from are tech model to the never occurs more quickly than we estimate, If will you be able to
adapt easily =) will we both be left with outdated inventory? Tell them your exact, daily needs instead of general, forecasted
need

for on the undefined time period. Ex- Not Active is 4 mil, we'll keep it on the shelf and keep using as we need it' V > "
Tommorrow we feed 91416 Deliver than by I AM."

Your suppliers won't be able to do actual parters unless they understands your needs clearly, and regularly know about
changes in your needs I Bring them into the comp. It your just insights flow I don't try to protect yourself from highly unlikely
betrayals from suppliers. 'The toughest cost always teaches get your standards for suppliers very clearly - How many defects
per million you'll tolerate - How flexible with demand they feed , to be How innovative they are proactively. Map their into a
"Supplies Report" card, which will sir as as 7 360° Evaluation for supplies =) comparison Standard with other suppliers

selling the same commodity

2 Defects per million = by to achieve If only 1000 defects per milliners. I power of Volume 95059 perfection (no defects) in
10 components multiplied to make a million has only 87% perfection for the overall volume. - Also evaluate suppliers based
on availability of tech compatibility with police business. - Your supplier must complement all your few initiative as a
company. set clear, aggressive quantitative criteria, and let them know how they're doing through regular of states reports.
Il tower suppliers main less errors and greater consistency. It creating such relations with suppliers is easy. using there for
competition advantages is differs I talks hard to converse suppliers to change their business system comply with stringent
Glandards But they'll willingly

adopt after seeing the benefit of partnering

Intervene distinct businesses so that your partners are treated as if they're inside pour complies file fund and flow of info
Reducing Inventory of Greater Speed Having the right into and ensuring it flows quickly and directly to these she can act on
it enables you to enhance your velocity. 2 It does this by either improving quality (indirect) improving logistics (direct) I Get
suppliers out of the mindercame show much inventory can we ship to them" 2 Through basic human nature, they'll want
you buy a lot at once; I Flip the narrative from desert supply and the demand to demand and then supply. Don't Ship
inventory from too suppliers to storage warehouses and this to ship again to manufasciant as they need it a ship

directly.. supplier > Manufactures

you'll be able to manage customizable commodity industries as long as you can get it to the cust fast enough. tell your
suppliers that if thy ship les product, more frequently, you'll buy poser. I Don't ship large contingents every month so that
we end up with 30 day inventory in our distribution channel. Ship of small contingents every hour or day according to the no
of orders Confirmed. ) This sex demand supply will terefit suppliers in many ways. - your demand will be consistent - The aug
of day to day orders usually comes out as a linear, steadily increasing line, with no massive spikes I occur when indirect
model runs out of a popular tech and panics.

),

It breeders than from the risk of chantel stuffing that Great scamp suppliers have to sometimes sit idle for weeks on time
because indirect model companies want to clean their district chantel before the order IM, " with you'll they'll know they'll
harm orders I Trading inventory for The when it comes to delivering for latest not legh - you're either quick or dead. I start
trusting some of your best SIR irs and the stop queries This says the time in a opening loves taking then to rest a testing
them repacking " then again loading in trucks

Ex- One of Dell's suppliers made top notch monitors and bad detect rates under 1000 per million - They told the logistics
comp to pick up to be amount of comp brain Dell's many plant, and '2' amount of monitors from ABC supplier. This way, at

least the monitors would only have to be loaded in a prune aree before delivery. telling your supplier the basics really
simplifies things for thin. Er :- Dell's suppliers know the barge orders only have to go to 1 off manu. Centers. If Increasing
Supplier Inclarity create a central, online repository with into everyone needs; inventory date quality date demand levels a
future plans (tech predictions. ) Then add suppliers to this repository..

‫كرة‬

collaborate 00 2 So the amount of money a comp invests in Sign of power - leading indicator of your comp. is > current valve
> future. Invest Separately in Tech that meets Cust needs Tech that helps improve your business processes (like Internet).
carefully decide between Buying from outsides Designing in house.. outsourcing

money Both designing and maniac is house 21 you can also subtly influence offers to improve their tech, rather than make it
yourself... I Be the first by any way (buying a self manus. I to deliver the best value -add on to your cuss.
2) General Martel Availability Test 2 If something is generally available from a wide variety of sources, of sufficient volumes, -
it's not band to dunlop. you won't be able to add much valve for your easy. If you start making it as well ( this doesn't mean
it won't sell if you improve and the make it). If If you're for late in starting to devils the most valuable latest tech, and a tow
big players has already entered, I don't waste resources entering the rees I as the 2155 horse. Instead, devote your
engineering courts to to figuring out who'll make the best model, so

you can farther with them. of The vale you can add to a tech doreen's come from manutacit in your plane. 2 it comes from
your technical expertise, - four inputs, ideal, and specifications. 2) Thus, partner up with the best, and help them By
providing these

Ask yourself Before " will I got a ROE that is commensurate with your companies objectives? will I be able to sustain this
return?" - Before developing a new tech yourself It's not even about value. It's about focus. Y you won't be able to create
pots of vale if you have your hands full with creating 108 value I considering the cust is working Environment Try to ensure
your product is ready to use as soon as it armies to your cuss. He shouldn't have to spend time configuring it and getting it
up to suit his unique reeds. to Especially if

he's a huge corp forchase needs are constant or predictable.

classmate Businesses for better things to do then to sit and configure their tools. - Make installation and setup easier
configure to multiple languages robins software management create software copies according to Just Decals 2 Make sure
your software easily recognise, and is quickly compatible with a cust. bright product configuration These Example previous
last Dell reduced set up and configuration times from 35- 40 mins to- 3-3 Mins by coming up with a software that.. 1.
Recognized the ogier comp contre 1. was fed the custis reeds, I was able to test. Vu compatibility of all existing software and
download the remaining reedus. + You'll realize that there's actually a finite no. of combinations (or

combination, types - Word processing uses data analysis when, coding uses).

I ssmate 10. And even less combinations are wry popular I frequent. - This, you'll be able to standardizes there all it you
segment leaks personal unique canfigs to bread groups. # Integrate Expertise Across Teams I When one team is facing an
issues encourage them to go to a dept that has already cracked this problem, or these problems are norms for thin. Ex-
Wren Bell Server Mandl Design team couldn't figure out how to peaks a server thisuser, the tired to the notebooks design
term, where primary objectives If to make the ie Slimmer. They fused the server fear miniseries the ports like they'd already
had done for this own Mi's,

This will only be possible it into flows

freely, and there is regular communication between teams of dif segments. you can it has each sept/ team function as a
closed community, distracting of outsiders. It Integrating Partner expertise 2 Similarly get all of your talent to work closely
and share ideas with all of the talent of the partner. If A Dell engineer, a manufacturing factory engineer, and an assembler
can all dress the same notes and ideas and work together on a project through the intercede # cultivating a culture of
Shaving I create a whole forum, accessible to all employees, and tell there to check it regularly. 2) AS Soon as someone has a
brilliant insight, input for idea Isolation, that may not kelp him but may tulp someone in your camp.. encourage him to post
it.

As soon as a someone is racial a problem and hard pares.. encourage them to past. -
The easier you make it to share solutions and inputs across dit. the that they could this point I Ensure curry employee has
the knowledge and - expertise of fury other employee at his trees] A someone will have be the solution to any problems that
anyone might have 18, you corp. People might fear looking incompetent by posting that they need help with a problem
they're paid to solve. I Howler, when ouryou understands that someone is posting a problem only because they want to
complete it faster Instead of caching their brains for days to come to the same solution. So that to company is more
effecting and efficient, the no one will caren

It Proper cost - BUS Relationship It's not "Here's what were selling - D'you want it?" It should be a Here's what you want.
let's

accomplish it together" If a cost calls in with a complaint on a particular products try to fix it better the next piece falls off
the manufact- line. 3) This will reduce the now of flows in subsequent products eva it the premiered product was hugely
faulting If supplies Cast Relations If when you are percieved as a comp who accurately understands what consumers want -
people (Suppliers parters will trust you when you advise then to start making a particular tech.

The Best Design flow 1 Problem arises > It goes on the come from 3. Somore has an ideas 4. It's tested till it works S lusts are
asked for feedback 6 Idea is ecfired to suit costs. I Got down with Suppliers to make it a faster a cheaper ? easier to consult
to another tech > compatible with all. It understanding cast complaints when a

cust. calls to say something's not working, I It doesn't always mean it's not functional It could also mean that there's some
detail of planes that's hesitating thin

I Don't test products seat by complainices' by your standards Try to imitate the lust's experience Worked environment, eat.
3 Example some assis started calling in to say the monitor wasn't function on a specific core... Dell couldn't figure out it was
a or I problem with the visibility and contrast in their completely different testing lab.. It Ch. Key Takeaways - There's a
difference blue simply sharing into and actually using it to create Strong, value - creating relationships with suppliers, costs
or parters Don't relegate suppliers to behind I'll Seert I status. - your competitive edge Comedy depends on how fast you can
deliver this things your justs. want

communicate directly with the decision-makers. Don't waste RED Irony I It should deliver real, tangible vale A hand inst in
creating Listen to do commodified inventions work to create clear differentiators. #ch 14 (By 199) when you've got single
digit market above, and you're competing with the big guess or at least with equals - you either differentiate or die.
Differentiation as a strategy just might be one of the biggest differentiators A Most companies adopt strategies that are
merely very slight variations of their competitors, unknowingly.

Dell's key Differentiators . Superior Cust. Service High velocity on inventory fastest device of latest tech focusing on total just
experience The direct Reader - focusing on knowing as loud as possible about cost

wants ? supplies capabilities 2 focus an costs, Not competition comp often spend more time looking our their shoulders at
competitors, rather thas looking ahead This negates your biggest advantage lying in front of you - your cats Dell's Direct
Method Don't be dotted by the fact that certain conventional ways - a specific business model, some assumptions, ect - ben
been around as long as the industry A Ese it as an oppo to be the first to represent something few..
Dell's direct model didn't sport just because it's the direct model I it worked because to used d to be able to access more
info about his custis I when competitors start very cooking your Strategies, know that your doing the right (most successful
thing. I Now that you're not the only ones in the water, for keep

focusing on beating them are by improving your an strategy. If you notice a repetitive pattern of competitors copying your
strategy and any changes in it 2 throw in a destroying but plausible looking bone to the world. Don't apply the crappy strat,
yourself, but show the world you are If you can do the same thing if years they're copping products Make a false horrible
product that looks good but you know, won't get fraction with costs.

Let them fit more and fill this warehouses with something no are wants, and while you sit not producing the product. using
the constant flow of info from your cust, you can decide which tech, sonia or offer to release listen, depending on what
competitor you want to destroy as you'll reavers notices from your cust that they're liking something about the camp. that

could threaten your throne Most comp realise that costs are liking something. of the comp too late - after rusts have made
this switch - due forth lack of constant and intimate cust info 2, competing Successfully in any & industry you boy to
understand the basic economics that can you insistry. fundamental economics can help reveal new cust. Opportunist quote.
Services products that can deliver yale to your we

Balanced success Market share I Resents Profitability Liquidity 6 cash Flow understanding the profit pool of your industry.
where your tempts. really make money is essential to take market share from them 7 launch an aggressive attack on a
competitor in a segment I nicks where tie is highly profitable and has high market share. I He won't be able to defend

without significantly reducing his profits. 2 Imo this strengths into their weaknesses If cutting compet off at the knees Most
large comp. subsidize their losses in other segments by ever- pricing in the off segment they're successful in Their products
in this segment are likely good, but they since then passing extra costs onto the east, the han low cust. loyalty.

launch equal quality products of hugely competitive prices in this segment. - They'll be forced to cost down profits in this
segment, and since they're already red heard in other segments they'll be crippled this is especially useful if you compete
with the same camp. across several sectors - Since they won't be able to subsidize from this segment, they also won't be
able to expand of price competitively in other segments as well,

where you also compete with them Being Second ) Being second with a better product is better than rushing to be first with
I had product Let someone else go fast, and let them fore it brand of lothal list mistrust, that always occurs with new tech.
just don't sit up 15th. Always tore I regional and were 'carointment avarice..

Changing Strategies for concept It'll take here for corps to copy your strategy, run after they decide to This is because they ill
bay sores Mirastructure ass coated with their old strategy that will inevitably slash with your strategy Dell's comp couldnt
easily connect to the direct model beause the infra of the indirect model was stopping them Not only did their distribution
channel became worthless the reseller thy postured became their corps This will only draw more attention to you a

th person who's been doing this from the start. just Service Apprehensions The main reason costs are afraid of buying caine
is that old-fashioned cust need to associate a product with a physical shop someplace they can come to anything goes
wrong,

The risk of sending an expensive thing like a camp through the mail to Precise it in the first place read for repairing also
scares them.. I Servicing through Direct Model Most Indirect dell competitors thought they would always haw better
servicing beause of this " reseller " distributors (localized and more in number) I well destroyed this by offering house calls
service - Just register a complaint, and a " technician will come by within 15 7 business day They could do this because this
amount of complaints they got was for ur low seventh because trying " low

supplier defect rate small Software errors could be fixed by the user Mumsclues using Dell's website, high compatibility
(replacing a faulty part is casus

Toppling Monopolies / Existing leaders Players with very large market share in a local area often think they can do whatever
they want - and the cost has no choice but to comply These players have such large market shares due to lack of options,
and due to very Strong lust loyalty Thus, each monopoly is built off one thing (like best quality or cheapest product), but they
also how one interent weakness -) If you can perform better of their strength and also cover their weakness (low
compatibility no support Is anything the cust wants but isn't getting youll I topple then like a pack of cards. Expanding
Globally Always ensure your first global expansion Then, use it as

a springboard to succeed

Turning lawsuits into Opportunity Getting sued by a huge player, especially for your claims in ads will bring you waste the
limelight. The comply. overreaction to your claims will make to their costs to see if there I actually sure truth in your claims -
Them sueing you will also result in other huge competitors of them will approach you to partner. ) Differentiators - into and
Recreation Execution )) The key to sucess isn't about safeguarding a flagship product or patent It's about properly executing
the best strategy. A Earlier lack of capital was the main barrier for entering an industry Now a days, companies can start with
nothing send still become huge by obtaining knowledge about suits, and applying this hosted capital to only the most ware
creating avenues.

cost Advocate Meetings where salespeople act as advocates' for the costs they recieved complaints (feedback from :)
Actions were assisted on the spot to address any process /detail that man decrease cust satisfaction It was observed that
most feedback! complaint was about what the ind. considered little things Whether a charger was provided - Whether or
not the box was reusable for household purposes. Delivery was exactly when it was promised It's big things of the industry -
not tech, latest features were never complained about, because they were largely satisfied =) But everyone was missing the
little things that actually turned out to matter the most for the costs.

el son te love

Responsibilities of Direct Model In opting to be the best using the direct model, If you can't blass & improper providing of
small things to the dealer. Motivation from other Industries Ex.. Ore day delivery for replacement parts in in the computer
industry is accepted However, fedex would pour be as successful as the are without delivering on time, or delivering as soon
as possible, Set Stretch Canals Hour rest on your laurels. You're actually the weakest when you feel like you're invincible
after winning. - people are most likely to stop looking for improvement and growth and more This is when you're most
vulnerable to fulfil, by your comp..

age Create an environment where a bugs accomplishment only pushes people to achieve a bigger goal. I get a your goals

accordingly. They shouldn't be high enough that people get busted out too quickly It should be just barely out of the working
hard will action this sore, so that people are forced to work smarter. and innovate Don't pluck numbers for goals out of this
air. Carefully analyze 100m Overall market - opportunities growth, and then decide a bumper that will require a little more
effort. Additionally, don't assume you'll achicas a goal is isolation I keep in mind both your suppliers and employees
strengths and limitations.
Balanced Growth To consistently protect your throne - constantly sproul your strengths convert your weaknesses into fun
bigger strengths Encourage employees to find problems then come up with the best solution no matter how hard it is to
implement internally. Allow them to think "

I could make this goal if someone from another dept Start doing this Allow and encourage all employees to work as
collection teams, instead of groups under as certain business vertical. Encourage thin to kelp and adjust, so that everyone
seen but this targets. The bigger you become the less intense you risks should become, as you shred how more experience
on what works or doesn't 2Th fewer establish norms, the more asks you need to take

21

Allowing If employees to experiment freely. On their terms, to actress as goal I will give them endless motivation to drive for
improvement. stay Ahead of compet. The best defense is after a good offense, Don't run or stay where the rain last fall,
move to where d's most likely to fall text. Before

your comet reach where you are, you should already be in a more strategic or stronger position I Don't wait for them to
catch up and then move Predicting the "Rain" you how to keep looking at the changes elements of business - changes in cast
behaviour tech existing comet. potential compete

Before improving external things fully impress what you're already doing. Ensure fury poorer process you do, it's being done
in the best, most efficient and most value - creating way. " what has to be done, will be done" 2 This means if something can
the improved, someone will find a way to improve it eventually. That person better be you. Increasing Market
Transparency . Tech is changing taster and fast ousts are getting more knowledgeable day-by-day " with the improvement of
the internet, to

geographic location will stop being a limiting factor and costs will have all the cards face up. costs will start having move
control over tomorrow's products due to this - In such transparent markets, yesterdays assets can quickly become liabilities.

when everyone knows that these factors constantly change, they'll be more aware of them, and will help anticipate these
changes before the even happen Hey Takeaways :- competitors represent an accumulation of the past, and they're
associated with old actions costs are the future representing new ideas through now wants. work to maintain a healthy
sense of urgency and crisis a Europe should be working on something that is just barely out of their Capability All great
companies have weaknesses. 2) But the best thing

you can do it concert their unprotected Strengths (no one tries to bide a strength) into a weakness.

Actively look for oppose especially sober it isn't readily visible - If it's quite visible then everyou can see it, and you'll lose the
decent of surprise. - Additionally, the oppose that aren't easily visible are the ores that can create the most value, not the
blowing ores. If the comet did or didn't do something. today that gives you an oppo, would you be able to recognize and
exploit it on times?" swing for hits, not bore was. If your compl. are bitting 300, go for - 400, because no one's bitting 1-000 I
Try to focus on maintaining a stringent base like that's about the campy best, then doing the extraordinary as often an
possible

No product lasts forces - you'll only be consistently Successful from - constantly innovating being ready to change in an start
always executing properly. Complacency Kills I teach people to think i how can To use this bugs win to grow further And not
" Tween had a huge win How can I defend what I won?" Manufacturing your own product will allow you to know more
about yourself (your products than a reseller or distributor. Talk to the real users of your products and not just the
procurement group. :)) Not all user feedback reaches the procurement group, and end less reaches you.

classmate A healtheir purpose based, efficient ecosystem will allow you to bin and easily train the best talent, because they
actually want to work with you Resellers are often unprofitable because

He manufactures squeeze the margins too hard. -) This is why a reseller never reaches the global level.. The indirect channel
often ends up playing perpetual defense to the naturally aggression direct model

Changes no longer represents the occassional need to read to far reaching treads. It represent the chinese contrast of to
danger and oppo are the same word " Dealing with Change Near say "Dealing with change" because change is news for a
temp thing that has to be dealt with their moved on, or something to be contained. The key is to seek' change, treat change
as something to be wanted I change only appears ove when you assure "things are good as they are " Observant Camp
spend seen countless dollars and effort in trying to control or minimize change - This also

may be because they have my rigid orginal caucuses, that require huge effort and money to change, Dell to is fluid to sects
charge

1 There's no hiding from change in an into- fed direct model. Constantly changing gives you bugs oppo to grow 2 The larger
you become, the harder it becomes to keep adding people, tech, suppliers. infra, with that mindset of seeking change to
grow constant and freely flowing into about the eppes implicit in a changing market or changing cost will reduce employee
fear of charge. 2 This will also create a cooperative approach to charge, where everyou knows what to do. deliberately build
a healthy stage of ambiguity into your ong. I so that it grows, adapts and changes on it use own, at it is own pace. Telling
cmp to actively Seek

charge will also enable you to deal with excises unexpected crises easier. To thrive on change, you have to learn to give into
it flow with it Is the strength from it

i Rapid and robust into flow saves time and money .. It eliminates paper-based function flattens distance blow org layers
Integrates global operations Higher into Reduced costs of computing Increase is speed of economy function How the
economy is configured. - This is because the cost a cust pays is after largely made of the lost of the actual transaction
physical assets are being replaced by intellectual assets closed businesses are converting into collaborative partnerships...
This causes businesses and industries being more dependent on each other than ever.

I ssmate Due to the huge amount of info, propriety a products and differentiation in products will die to give rise to process.
Lexcaution differentiation The internet. has shrunk dist and time in the supplier Is manufactures -) cust chain to bugs extents
The Internet is one of the largest levellers of the playing field. As Any small comp with a few pc's and Internet can acess the
tools equivalent to a huge corps The interest will cause market shore to flow from trusted, traditionally structured
companies to the most efficient ones " least assets required pa fastest execution greatest value productivity of capital will
increase greatly by replacing physical assets with volatile Into assets.

6: since into assets are much easier to move, Buch businesses will be able to get out of mistakes they really very quickly and

also leapt easily to this volatile mental. - This will allow them to grow at huge rates for long time periods Once cost.
Structures are minimized and simplified, and efficiency luls bit that revels due to the Internet Service Personalization bill be
differentiators is convenience Ease of interaction Hypergrowth can indeed be sustained for long periods contrary to popular
belief, and traditional wisdom To sustain or experience hypegrowth. you need superior product or served fundamental
understanding of industry economics opportunities and their after occurence

A single product live, no matter how good, can create hypergrowth but "never sustain It alone To maintain that growth you
have to keep adding relevant I related a Services (leasing) to product: lies ( desktop 3

notebooks) " geographies (New countered that build on each other's momentums The biggest and are of the only problems
secret for the four scaling intro to match growth without building intra too far ahead. It Benefits of Hunsrgrowth companies
This lack of a past (long-established traditions mindsets or procedures) allows thin to improvise as they go 7) Their survival
depends out on making as less mistakes as possible ( like traditions companies thus see but rather to bull out learn from
many mistakes guidelines

If you see a path to sustainable hypergrowth, quickly roust to the management skills and controls that will allow you to do
that- Because resources are stretched, they don't hav surly formal or rigid orginal Structures. # Integrate

Virtually The key to success now is to integrate virtually instead of vertically. - the best situation is combining of the tightly
coordinated supply chains of vertically integrate comps the versatility of adaptions and super growth, and info flow from
costs of a visually integrated comp Unfurl integration only requires late assets. vertical integration requires physical asset
acquisition,

It Improving Cost. Exp vital integration brings the proximity and info flow required to improve the overall cast exe 22 you key
to start looking at things I from exactly the cost perspective. so that you can fix anything unsatisfactory you'll only recieve
more inspiration and ideas to grow eun better in cust. service when you look outside your industry, ". How can we make
tracking a Dell ... Package 252054 as

tracking a of. The toll effect of virtual integration comes from integrative. in your employees and suppliers into one big unit I
so that everyone works in syne

A Effects of interest on Relations Manufactures can no longer treat suppliers as of oranges to wring all possible profit out of
Comp cannot treat lusts as a market for products and services with no strings attacked at the lowest prices. I you have to
treat bette supplies and the costs are collaborators you collaborate to " Create yale and efficiency across the whole vale
chain, not just trying to profit in their own domain - This creates deeper and more enduring relationships that result is
shared (compiled valve and efficiency.

Ill simple integrating like this - cust you

(comp) as If suppliers. won't work. you have to integrate it 7.#Cust. I you Supplier as I Manufactures 2 There's no risk in
preserving the status I que 2 but no profit either 21 The best way to increase efficiency is to partner to eliminate
unnecessary, unproductive i not your strength tasks from your plate. I'll strive to be the best in the world in every vertical
(servicing, the cost. experience, prodod quality yet.) and not just is 'your own industry.

The potential limit of as industry is decided by its fenestration % in toms or total population, out in the monetary vale of the
ind. Ex- The comp PL industry is one of the largest in the world, but Only around 20% of It world has access to a PC. This
characters there is immense space for the pie to grow. you can always grow more,
especially if you are under soon in a fully penetrated industries. There are always make 7 product likes geographies growth
strategies Targeting cust of 1 - Building to order I True Roots of successful country " knowing your strengths Being open to
experimentation Learning from mistakes Balls to challenge conventional wisdom courage to follow the untread routs Innate
fascination to eliminate unnecessary steps