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Manage-Wise
Secrets behind Dell’s expansion
 The
founder and CEO of Dell Inc, Michael Dell, tweaks his management style to lead
the company to even higher revenues and profits. How Michael Dell runs his business
should awaken anxieties among CEOs who are targets of his expansion drive.
Listen to feedback
When Dell CEO Michael S Del and President Kevin B Rollins met privately in the
fall of 2001, they felt confident that the company was recovering from the global
crash in PC sales. Their own personal performance, however, was another matter.
Internal interviews revealed that subordinates thought that Dell, 38, was impersonal
and emotionally detached, while Rollins, 50, was seen as autocratic and antagonistic.
Few employees felt strong loyalty to the company’s leaders. Worse, the
discontent was spreading: a survey taken over the summer, following the company’s
first-ever mass layoffs, found that half of Dell Inc’s employees would
leave if they got the chance.
What happened next says a lot about why Dell is the best-managed company in
the technology industry. At other industry giants, the CEO and his chief sidekick
might have shrugged off the criticism or let the issue slide. Not at Dell. Fearing
an exodus of talent, the two executives focussed on the gripes. Within a week,
Dell faced his top 20 managers and offered a frank self-critique, acknowledging
that he is hugely shy and that it sometimes made him seem aloof and unapproachable.
He vowed to forge tighter bonds with his team. Some of the people in the room
were shocked.
They knew that personality tests given to key executives had repeatedly shown
Dell to be an “off-the-charts introvert”, and that such an admission
from him had to have been painful. “It was powerful stuff”, says Brian
Wood, the head of public-sector sales for the Americas. “You could tell
it wasn’t easy for him”.
Michael Dell didn’t stop there. Days later, Dell and Rollins Began showing
a videotape of his talk to every manager in the company—several thousand
people. Then they adopted desktop props to help them do what didn’t come
naturally.
A plastic bulldozer cautioned Dell not to ram through ideas without including
others, and a Curious George doll encouraged Rollins to listen to his team before
making up his mind.
The status quo is never good enough
To some, the way Michael Dell handled sagging morale might seem like just another
tale of feel-good management. But to those inside the company, it epitomises
how this Round Rock (Texas) computer maker has transformed itself from a no-name
PC player into a powerhouse brand. Sure, Dell is the master at selling direct,
bypassing middlemen to deliver PCs more cheaply than any of its rivals. And
few would quarrel with the idea that it’s a model of efficiency, with a
far-flung supply chain knitted together so tightly that it’s like one electric
wire, humming 24/7. Yet all this has been true for more than a decade. And although
the entire computer industry has tried to replicate Dell’s tactics, none
can hold a candle to the company’s results.
It turns out that it’s how Michael Dell manages the
company that has elevated it far above its sell-direct business model. What’s
Dell’s secret? At its heart is his belief that the status quo is never
good enough, even if it means painful changes for the man with his name on the
door.
Excerpt from ‘Strategy Power Plays’. Reproduced
with permission © 2007, Tata McGraw-Hill Publishing Company Limited. Price:
Rs 299. E-mail: vishwanath_mum@tatamcgraw-hill.com
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