Dell Report
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In business, a lot of words and phrases are overused to the point that they lose all their original meaning. “Paradigm” has to be one of the worst. The one that comes to mind when discussing Dell is “revolutionary”. Dell is one of the few examples where a word this strong really applies. Taking $1,000 of startup capital to build custom PCs in a dorm room all the way to becoming the worlds leading computer manufacturer and the highest return on investment company in history (ROI = 14,000%) is impressive, but there have been many such basement-business-to-boardroom success stories. The revolutionary part was building the first manufacturing operation that relied on mass customization of an extremely complex product, and succeeding at it. Before Dell, such a technique was considered impossible.
I was struck by the Randian style of Dells life. Oblivious to the critics laughing at his seemingly nave attempt to challenge the large, dominant, and established players in a complex and technical industry, Dell proceeds to create an entirely new business and eventually dominates those same critics. Dell is a modern day, real life Henry Rearden, a prime mover whose success benefits the world over. He makes the impossible seem natural, and his modest demeanor masks an unimaginable and limitless drive for success.
Readers expecting an autobiography of Michael Dell may be disappointed; he glosses over his own life in barely half a chapter and quickly gets down to business, so to speak. I was mildly disappointed by this, as Dell seems like a very interesting guy. This was the right choice though, and considering Dells own personality of economy this seems fitting.
It seems Dell has always been an uncannily direct person, starting in 3rd grade when he purchased a high school diploma from a mail order company in an attempt to save himself another 9 years of unnecessary education. This was a child destined to succeed. He was born with dollar signs in his eyes and was all about the Benjamins before most of us even knew what a Benjamin was. This pattern continued as he earned $2,000 by selling stamps on consignment though an advertisement in a stamp collectors journal. At age 16 Dell earned over $18,000 in one summer by selling newspaper subscriptions by targeting newlyweds from lists he compiled by canvassing county courthouses (the really funny part about that story was that when he told his high school teacher about this, she became angry because it was more money than she made). Finally, the real turning point: Dells interest in computers leads him to begin upgrading computers for friends of the family. This becomes such a profitable hobby that Dell buys himself a BMW which he drives himself off to college in upon graduation from high school. You all know where things go from there.
From this entrepreneurial beginning, the book succinctly describes Dells early struggles and eventual rise to power. The book is written really as a managerial primer on what it really means to create a “customer oriented” company (again with the buzzwords – but in this case Dell really means it). Dell knows his likely target audience (as always) and the book is divided up into short chapters, each carefully labeled for quick reference. Each chapter is written like an executive summary, with bold headings marking each major subsection. Now thats high “skim value”.
Obviously, this is one of those “books every manager should read”. Otherwise the books appeal to the general pubic is probably pretty low. Still, anyone who likes a good story of success would enjoy most of the book, and could skip the business-heavy sections. Anyone with an entrepreneurial inkling really should consider checking it out though.
Dell succeeds in distilling the major reasons for Dells success into a fairly compact book. And he goes on to describe how his philosophy is applicable to any and every company. While most management books are meaningless buzzword dictionaries, Dell crafts a real world guide to creating a successful company. Being customer oriented is more than a buzzword for Dell, it is a philosophy. Dell claims to spend upwards of 40% of his time dealing directly with customers, finding out what they want, need, and are unhappy with – name another CEO who is this committed to his customers. Dell respects his customers, which is exactly where many firms fail. Similarly being direct is no gimmick. To organize your entire firm around and just one level away from the customer is a guiding philosophy for the design of Dells corporate structure.
The story of Dell Computers is an enjoyable story of how an entrepreneurial young Michael Dell couldnt contain his enthusiasm for his business idea and took it all the way. Without much to guide him beyond his instincts he made some mistakes, but he admits to these and describes them so readers can learn from them as he did. Of course, far more can be learned from what he did right. One of the more noteworthy approaches he mentions is that Dell rewards success by *reducing* the responsibilities of the successful manager- an act many use as a negative disciplinary measure in other companies. The reasoning is that after a division grows from a $10 million market to $200 million, by cutting it back to $25 million, it will be easier for the manager to focus on this smaller block, understand it better, and again grow it to $200 million or more.Whether youre an entrepreneur, a manager, a marketer, or a passionate loyalist of the compelling and always competitive offerings from the star PC firm, this semi-memoir will let you in on the madly tight ship thats known as Dell.
Its a fairly compact fluently-written book that distills Dells lessons for business (p.s. its NOT a biography of Michael Dell) that lends itself to some pacy in-flight reading.
But thinking back, I have a couple of