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Exceptional January-June 2012 - Firing on all circuits - Dell Inc’s Michael Dell - EY - United States


Firing on all circuits: Dell Inc’s
Michael Dell

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"What excites me is all of the unsolved problems in the world and how technology is at the fulcrum of solving those problems."

Michael Dell has always been in a bit of a hurry. As a young entrepreneur, "I was always trying to go a little faster," laughs the computer magnate.

At eight, for example, he decided to graduate from high school, only to be told that he was too young.

Undeterred, young Michael set about finding alternative ways of getting ahead. By the age of 12, he was assistant maitre d' at a Chinese restaurant in his hometown of Houston, Texas, with a sideline selling stamps.

At 16, he sold subscriptions to the Houston Post and was soon out-earning his high school economics teacher. His early career sounds rather like a Hollywood screenplay, and Dell, now 46, once described it as being "like a big, big game."

Asked if it's still like a game to him, he is quick to say no. "That could sound like it's not serious, but it is," he says. "I like competition. What excites me is all of the unsolved problems in the world and how technology is right at the fulcrum of solving those problems. That is really exciting: to see the impact that technology has on our world, to see how our technology can help our customers grow."

It's the stuff of legend: Dell started building computers in his college dorm room in 1984 with US$1,000 in capital. He soon developed a direct-sales computer business and dropped out of college, making more than US$6m in his first year.

Five years later, at the age of 24, he was named EY's very first US National Entrepreneur Of The Year for his exemplary entrepreneurial spirit.

Since then, Dell Inc. has grown into a company of nearly 110,000 employees, with annual revenue of more than US$61b. And Michael Dell ranked 44th in Forbes' 2011 list of the world's billionaires.

Dell stepped down as CEO in 2004, but three years later came back. "The business was changing pretty rapidly, and we needed to make some swift and decisive changes," he recalls. "The board asked me to come back. I'm still a pretty young guy, and I wanted to do it. I'll care about the Dell company after I'm dead. That's a pretty long time!"

"As a company grows, there's a tendency not to want to take risks. But taking risks is different from being reckless."

"I absolutely care about the people, what the purpose of the company is, and the contribution it makes to the world."

Like its founder, Dell Inc. is in perpetual motion, constantly adapting to customer needs.

Returning to run the business, Dell said one of his goals was to reignite risk-taking. "The sense that we can grow the business and experiment, try new things, was really important in the company's early success," he explains. "That comes with an acceptance that not all the things we do are going to work. You have to take risks, you have to accept risks, and you have to make sure that learning occurs when things happen either positively or negatively."

"It's often the case that as a company grows, there's a tendency not to want to take risks," he adds. "But taking risks is different from being reckless."

Another strategy was reintroducing the company's customer focus, using modern tools such as social media to build customer relations.

For Dell, his customer base is everything. He credits this group with influencing and inspiring him more than any individual over the years. And he looks to his key customers when he needs advice.

"A lot of times, if we have a new idea we're working on, we'll sit down with the CIO of a really good customer, explain it in detail, and get their input," he says.

Most significantly, however, the company is shifting focus from being a product-only business to an end-to-end, diversified technology solutions company that offers server computers, storage and networking equipment alike.

Dell sees data as being key to this shift. "As we understand more of the actual problems our customers are trying to solve, we are able to build a much stronger and more significant business," he says.

"For example, Dell is number one in healthcare IT. We are providing health information systems and hospital systems, electronic medical records, evidence-based medical systems to thousands of hospitals and creating better outcomes for patients.

"Whereas before it was about the box," he adds, "the box by itself doesn't really do very much without all of these other systems and solutions. So that's really how business has shifted."

Sparking ideas

As company founder, says Dell, he has a certain liberty to make sweeping changes, especially in policies he originally put into place. "I do think that the founder has this kind of special permission that allows the company to fundamentally put itself on a different course," he explains, "but nothing is guaranteed."

There's no such thing as the perfect plan, he adds. "And to some extent planning is overrated, particularly in a business that changes very rapidly. You make your plans and then you kind of set them aside, learning by doing, learning by experimenting, learning by making mistakes, and then rapidly adjusting based on all the data that's coming in." There have been plenty of mistakes, he admits, but luckily nothing "really enormous."

"We have a culture at Dell that is very realistic," he says. "So if there's a mistake, people talk about it."

"That was probably one of the best pieces of advice I ever got. If you find a problem, fix it right away, instead of waiting a week, a month, a year. Problems don't get better."

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