• December 9, 2016

The phenomenon called ‘culture’: Dreyer’s Grand Ice Cream Case study

 

I walked down the road with my best friend this evening- she was trying to give me some good memories and show me around the city. We were in Houston , Texas for a short meeting and discussion with a company. I stood by the road while she went in a busy store to get us an ice cream- and I was a bit worried she wouldn’t take another Ice cream except the Dreyer’s Grand Ice Cream . Old fashion lady.

When we got back to our rooms, I decided to spend some hours researching this company and I got some exciting findings.

A quick background that maybe helpful here.

This company was started in 1906 a cook’s helper in a ship- he basically invented a cool mix of sugar, flavour and nice chocolate. This galley boy shared the creamy substance with everyone and they loved it. The captain loved it and the young man named William Dryer after 15 years started a company that he called Dreyer’s Grand Ice Cream. Very slow execution, right?

It was a hobby business but it didn’t go Nationwide. He ultimately turned it over to his son and some other key people at the company and did that as William retired. This was around 1963. They kept going with the company, cruising with little vision of how big this could turn.

14 years later, they sold it to Gary Rogers and William Cronk. At a business valuation of 1 million USD although the company was at 6 million USD sales. Not sure what the valuation story was. But they were ready to go big.

So the first thing they did was to create a ‘Business Charter’. It was called Grooves. The groove represented what the company would represent and how it will treat it employees. It was a set of principles to guide the employees. It was culture document, not a to-do agenda.

The Groove Agenda had some great lines.
1. Management is People: We wont have a HR department or legal department. People’s management must be coordinated at the departmental level and that is the ultimate role of the managers. Inspire and coach people, don’t just command them.

2. Hire Smart: No mediocrity allowed. We cant allow mediocre people to come in andn influence our current people and our current people need to know we will only hire smart people to work with them

3. Have respect for the individual: We will liberate you from oversight and micromanaging and will motivate you to be trusted to get your job done

4. People’s involvement: Its about people, not numbers. Numbers will take care of itself when people are very active.

5. Ownership: Own your job and its functions.

6. Hoopla: Let’s celebrate alittle bit when we get something done. When we introduce a new flavor or just meet monthly goals.

7. Train, Train, Train: Equip people when you hire and promote them.

8. Communication: Important communication must be face to face. Whether its feedback or instructions or solving issues.

9. Remember its an upside down organization: Everyone out there on the front lines has a face-to-face with the customers, face-to-face with the stores, and they know better than the management. They must be involved in management decisions

10 Ready, fire and aim: Not to be negligence, or crazy. But to be fast, and execute. Move from thoughts to actions.

The company grew over the next 17 years. Between 1981 to 1988. Now in 1988, they were in the middle of a 4 year plan to go big and they called it ‘THE GRAND EXPANSION’. At 1998, the company had reached 600 million USD in sales.

What does the ‘Grand Expansion’ entail?
1. More consumer marketing
2. Expanding distribution
3. Create little interesting super premium delicacy ice cream for the super elegant ice-cream people for premium price. The idea was to use the little space left on the trucks to get this distibuted. They created a market distinction- so that the high premium ice cream doesn’t compete with the great Dreyer’s category.
4. Other things like accelerating products, introduction of a coffee flavored ice cream.
5. The company invested in technology to monitor performance.
So, the company signed Ben and Jerry for a broad nation-wide agreement to handle the distribution.

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