dispatches from the new world of work

Thank You, Dell!

BusinessWeek last week had harsh words to describe Dell's recent freefall. (Its biggest shareholders are, to put it mildly, liquidating.) The story was of immense value for my talk at the InfoWeek confab yesterday. It underscores one of my "Top 5" points-in-life. No "business model" is "the last word." Not GM. Or IBM. Or Sears. Or, doubtless, Microsoft or Dell. (And, equally likely at some point ... Wal*Mart.)

Hats (waaaay) off to Dell! Along with Wal*Mart it did proffer a spanking new approach to "supply chain" organization and management. Most everybody, including the Army and Marine Corps, have assiduously copied.

And while there are some pretty good runs on Broadway (IBM's dominance stretched over two decades—and "unassailable" GM was on the King's throne for about 25 years), no model is "the last word." "Perpetual revolution" is my message in general, and especially to the likes of CIOs who are dealing with what are still immature technologies.

(NB: I'm one of those "former Dell customers"—who cut and ran courtesy crappy service.)

On the other hand, Austin offered up a success story that also dovetails with another of my principal "teaching points." It looks like Freescale Semiconductor will command a LBO price in excess of $15 billion—the biggest ever in the industry. Why am I giggling at that? Motorola dumped what became Freescale in 2004, because it had no great future ahead! And Freescale once again is demonstrating that misfits-"losers"—if disentangled from overbearing bureaucracies—can become winners almost overnight.

(Attached you'll find a wee Special Presentation titled "Dell Doldrums+". It includes some quotes from the BusinessWeek article on Dell—and a couple of Slides on what happens when "losers" are let loose.)

Tom Peters posted this on 09/12/06.

Comments

Great service is not the problem- it's the reaction to the problem...think Tylenol!

Posted by scott swift at September 12, 2006 4:52 PM

Mediocre products supporting an antiquated operating system is a formula for disaster.

Look at the other end of the spectrum: Apple.

Products that are evolving many times per year, supported by an operating system, OS X that has been updated, oh, four or five times since Winders XP arrived.

I bought my first Apple computer, an iMac on February 28, 2001 at 8:35 PM at the Apple retail store at Tysons Corner Mall in McLean Virginia.

Since then, our family has purchased three iBooks, a Powerbook, and a new Macbook, five iPods, an Airport, and an Airport Extreme.

Posted by Erick Blackwelder at September 12, 2006 10:20 PM

gotta agree with Erick...last Dell, support was a disaster. Happily a total Mac business now. Great phone support...and design to boot. I purchased my 80 year old Mom a Dell with the whole home maintenance thing....four months later, swapped it out for an iMac. Michael Dell morphed into Richard Wagoner

Posted by Mike Neiss at September 12, 2006 11:20 PM

I agree that no business model stands the test of time, if it does not change. But a business model built on a foundation of change, flexibility, calculated risk-taking, innovation and reinvention can serve a business forever, and serve it well. I'm not sure what you mean by "on top"; however, I define it as being one of the best companies in a variety of ways: great place to work, customer-focused and driven, action-oriented, and ever-better products and services, just to name a few of the measurable criteria.

Posted by Lewis Green at September 13, 2006 1:04 PM

Beware of those jumping ship. Don't hire them. It all goes back to "what have you done" and if they have worked for Dell for the past 5 years....run when you see the resume. Dell's management like GM's and Ford's are all in the maintenance years of there careers, only caring about obtaining power and creating their fiefdoms.
Just goes to show that making cost reduction, efficiency and process your number one goal gets you nothing if you don't have design and innovation.

Note to HR: Do you really want non game changing managers, directors, or executives in your organization. The resume may look nice with the big fat DELL on it, but again remember â€œWhat have you done this year.â€ I can assure you the innovative people from Dell left many years ago.

Thanks, Jason

Posted by jgervin at September 13, 2006 1:27 PM

Hey Tom, hope you made it back from the gut wrenching family discussion that you blogged about. Appreciated chance to provide comment then and will do so again. You know you cant believe everything you read in Business Week. I commented on several of the inaccuracies in that story.

You, like so many others equate our business model with one thing: supply chain management and efficiency. True it helps there. It also allows us to deliver technology customized to specific customer needs. Helps there too.

The business model is also all about our 1:1 relationships with customers. No middlemen. That too is a competitive advantage that we are focused on revitalizing and investing $150 million to improve. Already, we are seeing our leadership on this front beginning to be re-established and while we arent there yet...we are focused on re-asserting our leadership on this front.

At the same time, we are refreshing our product line and adding new design considerations. No business has completely linear growth, and at just over 20 years old,we have some challenges. We've hit a couple speed bumps before and emerged stronger because of it. I expect the same to occur under current circumstances.

We just emerged as the #2 computer maker in the Asia-Pacific-Japan markets. We are still number 1 in the US and still growing. We are investing in the business for the long term, something none of our competitors are doing. Our leadership and global teams are focused.

We are not a one trick pony, and our corporate culture and direct-model, seems to me, are under-estimated and more complex than you think. Like I said in my other comment, glad to join you anytime and clarify the facts and your understandings.

Posted by RichardatDell at September 13, 2006 2:46 PM