Mohan-san: How did Michael do it to reach the mountain top? Here it is: (from IBD March 1, 1999)
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LEADERS & SUCCESS
Entrepreneur Michael Dell How He's Made
His Firm The Fastest-Growing Computer
Maker
Date: 3/1/99
Author: Nick Turner
When Michael Dell promotes employees, he gives them fewer
responsibilities, not more.
That may sound wacky, but the strategy - which Dell calls job segmentation
- has been key in ensuring his company's rocketing growth hasn't led to
flameout.
Over the past five years, earnings at Dell Computer Corp. have surged by
an annual average of 91%.
Sales in the same period are up by an annual average of 48% to $18.4
billion last year. While the increase in sales slowed to 38% last quarter from
a year earlier, Dell is still the fastest-growing maker of personal computers
and servers.
''When a business is growing quickly, many jobs grow laterally in
responsibility, becoming too big and complex for even the most ambitious,
hardest-working person to handle without sacrificing personal career
development or becoming burned out,'' Dell wrote in ''Direct From Dell:
Strategies That Revolutionized an Industry,'' which hit stores in February.
When Dell started job segmentation in the mid-1990s, employees were
confused. But the company's explosive growth as the leading direct
marketer of computers revealed the necessity of the plan. Even when
managers' business units were divided in half, those managers were soon
overseeing entities that were bigger than their original units.
Trying It On
Dell also has applied the strategy to himself.
Feeling overwhelmed, he brought in Mort Topfer, a Motorola Inc.
executive, in 1994 to share the office of the chairman. Dell focused on
products, technology and overall strategy. Topfer handled operations, sales
and marketing.
While Dell was working with customers on product development and
quality control, giving speeches and meeting with the press, Topfer focused
on the day-to-day duties.
In 1997, Dell segmented his job again, pulling Kevin Rollins, who headed
company operations for the Americas, up the ranks. Topfer and Rollins
serve as vice chairmen, while Dell retains the titles of chairman and chief
executive. But the three men run the company together, Dell says.
''I believe pretty strongly that you shouldn't limit a company by one person's
ego or by the abilities of any one person,'' he said.
''I've been very aggressive in sharing responsibilities with others. And it's
actually been quite easy, because there's much too much to be done. I'm
much more focused on getting it done than who did it or who got the
credit,'' he said during an interview with Investor's Business Daily.
That spirit is behind another key strategy at the Round Rock, Texas,
corporation: ''Everyone's job includes finding and developing their
successor - not just when they are ready to move into a new role, but as an
ongoing part of their performance plan,'' Dell wrote.
Thanks to the company's rapid growth, few workers have stayed in the
same jobs for long. Dell, who started the company in his University of
Texas dorm room with $1,000 in capital in 1983, now oversees a global
titan with more than 24,000 employees.
He learned one lesson early: Don't hire someone based on the company's
immediate job needs. Hire a candidate based on his potential to grow and
develop.
Success requires one ''to add talent and organize a business correctly,'' Dell
said.
He describes the ideal Dell employee as having an open and questioning
mind, a healthy balance of experience and intellect, and an eagerness to
make innovations even though the process will entail mistakes.
As the company has expanded, the chief executive has made a point of
staying involved in the details. That allows him and other top brass to make
quick decisions, he says, because they already know the specific issues at
hand.
How does he stay in the thick of things? Roaming around, both physically
and in cyberspace, he gets candid comments from employees and
customers. It's more important to know your customers than to know your
competitors, Dell says.
His best customers aren't the ones that buy the most or require the least
help, he says. They're the ones that teach the company the most.
The company learns through more than 300,000 telephone, online and
face-to-face interactions each week. Dell himself doesn't keep his distance.
He spends 40% of his time with the people who pay him. He'll
anonymously log onto chat rooms where ordinary users talk about the
company and its competitors, and he sometimes monitors customer-service
phone calls.
''I want to come upon someone who's teaching an elderly woman how to
turn her system on for the first time,'' he wrote. ''I want to happen upon
someone who is stumped by a customer's question - and help answer it if I
can.''
When asked why he devotes so much of his time to customers, he replied,
''I thought that was my job.''
Brown-Bagging It
To get unrehearsed feedback from employees, he shows up unannounced
at the factory and attends brown-bag lunches with people from all over the
company.
Dell says his company is allergic to hierarchy. If he has a problem, he won't
handle it through middle management. He'll go to the person who's directly
responsible. At the same time, employees are encouraged to ask him
questions, either at meetings or via e-mail.
Staying on the cutting edge makes it necessary for employees to embrace
new technology, Dell says. That's required some creative approaches at his
corporation. For instance, Dell realized in the mid-1990s that the Internet
would be key to his business. But he had to get his employees behind the
idea.
Dell developed an online literacy quiz called Know the Net, and asked his
employees to take it. He staged a scavenger hunt, getting people to find
information on the Web.
Some questioned whether employees might use the Net to slack off. But
Dell thought that was ludicrous. ''That's like saying, 'We don't want to teach
our people how to read because they might spend all their time reading,' ''
he wrote.
Dell had faced similar challenges in the mid-1980s when he had to
persuade employees to use electronic mail. His technique then was simply
to ask them whether they'd gotten the note he'd sent via e-mail.
''No one likes to be uninformed, right?'' he wrote.
Immersing his employees in the Net early on appears to have paid off. Less
than three years after starting to sell products over the Internet, Dell now
generates more than $12 million a day in revenue from its Web site.
(C) Copyright 1999 Investors Business Daily, Inc.
Metadata: E/IBD E/SN1 E/LAS |
