THIS IS SHAPING up to be a good year at Dell. Most analysts credit the PC-making behemoth for weathering a stubborn tech downturn and positioning itself for a sharp upswing in profits now that companies and computer-lovers are satisfying—en masse—their appetites for long-postponed tech upgrades. And while Dell may have shaken up the Indian market when it recently dropped one small offshore project, the company is still expanding elsewhere on the subcontinent and beyond—aiming, of course, to fit the entire globe within Dell’s embrace.
Now presiding over its far-flung operations is a familiar face with a new title: recently appointed CEO Kevin “The Whip” Rollins, known across the company as the no-nonsense man who expects no-excuses results. As he prepared to take the company reins, American Way talked to Rollins about Dell’s next big leap forward, a leap that has him proselytizing about management soul and style.
The soul he’s speaking of is the “Soul of Dell,” and one of its effects, “Tell Dell,” a companywide program he launched to measure employee satisfaction, educate managers, and unify the company behind its goals, namely, reaching $60 billion in sales. It’s also, not incidentally, the reason he’s seeing company morale rebound after several years of restiveness in the ranks.
As for management style, Rollins is shaping his own with the help of employee feedback from the same program—and a little tutoring from the Founding Fathers. As CEO, he plans for a little less Whip and a lot more Washington.
When it came time for the promotion, who brought it up?
I can tell you what he felt: Since I was doing this job already, it was appropriate that I have the title to accompany it. I had not lobbied for it. I was not going to another job. He did not want to give up involvement. I said, “I’ll do it, but I’m not interested in having you step out to do it myself. It’s too big a job. I’m giving all the time I can give.” And he said, “No, I don’t want to step out. Let’s keep the relationship the way it is, keep doing just what we’re doing.”
I think what it is, is a nice recognition from Michael and the board for my contributions. Maybe that’s an understated comment on it. He just offered it, and I said, “Well, that’s great.”
When it comes to your partnership with Michael Dell, what are the strengths you bring to the duo?
I think I bring a bit of business acumen, a strategic skill set. I’m a strategy guy, really, from my consulting days [at Bain & Company]. I think I have a certain intensity on discipline and on execution. I think I have some overall capability to build Dell as an institution and to provide stability in terms of rolling out programs. You can’t run a $41 billion company like an entrepreneurship. There’s got to be institutionalization and process and development. I think I’m into those kinds of things.
Your reputation at the company has been as “The Whip,” the results guy. Does that change at all as you work on morale and motivation?
No. We don’t believe in best efforts, we believe in best results. Any senior leader’s role is to get the very best out of their people. And there are a number of ways to do that. One is “The Whip,” but I think we’ve learned over the past several years that you can do it without having a whip. You still have to push and prod — and that’s probably a better leadership style than literally a whip — but you can also inspire; you can promote.
[Employees] know that we’re intense and that we mean to be successful and that we mean for them to do their very best. And in that regard I don’t believe much will change. But I think over the last two years our people have seen a change in terms of the managerial style. Not pushy and harshly demanding. More to one of, How great can it be? What can you do more that you’re not doing? A little more of a shift in style.
Morale has improved. You’ve been surveying who wants to stay at the company, and that’s gone up from 51 percent to 57 percent.
It sounds like that’s not very much. Well, it’s a lot if it hasn’t moved in two years, and now you see a six-point jump. And it wasn’t just that one, it was a whole set of metrics. All of them popped, all 20 questions. They popped in all regions in the world and in all product categories. It was something systemic that was improving.
Which was the way we deal with people. The way we listen to them. Our notions about developing everyone. We gave scores to every manager so they know what theirs are. For those who didn’t improve — back to the whip — we said, “Why aren’t yours improving? Everybody else’s did. We provided the tools. You’re not adding your part to this. And obviously, if you’re not improving and the whole organization is, you’re doing something wrong. Here are some new tools, go back to school, study what you’re doing wrong. Talk to your people. Learn about that.”
And just the notion about talking to your people and asking them and sharing your information with them has had a tremendous effect on communication and morale and perceptions. Again, starting from Michael and me sharing ours with our people.
I’ve been studying leadership — predominantly with political leaders, the Founding Fathers. There are multiple leadership styles that worked for them. But there were some that worked that were good, and there were some that worked that I think were bad. And just as we asked all our people to be their best, we had a responsibility to be our best, too. We certainly made modifications to our style: More involving, more wondering. And then we tried to add a new dimension to leadership — which we would call inspirational instead of just operational leadership. And I think it’s been a transformation for us personally, as well as for the company.
What have you had to do personally?
I had to quit being so impatient. I had to quit being so abrupt, so harsh. I had to lis- ten more, ask more questions, involve more people — which I thought I was doing anyway, but [employees] didn’t feel that way. Give them more feedback, and you see the scores improve.
You’ve made a point about different management styles. Inspirational versus intimidator. Can you speak to that?
I was reading a book on George Washington by Richard Brookhiser [Founding Father: Rediscovering G. Washington]. He had made the comment that there are three types of leaders: Washington, Alexander Hamilton, and Aaron Burr. Burr was the consummate backslapper, a complimenter who would flatter people. That’s the worst professional style — it just isn’t honest. The second style was Hamilton’s; he was brilliant but figured that everybody would follow him just because he was very smart, because he was right. People would look at that and say, “He’s arrogant, kind of a little snot. You’re right, but I don’t like that.”
Washington was the best. He inspired people with his force of character and the fact that he told people things about themselves that they did not know. I thought, I’m probably number two. I’m probably Hamilton right now. Mr. Smarty Pants. I get the right answer, but people don’t like that. They want to be inspired, too.
We as a company are more like Alexander Hamilton, too. We’re right a lot; if you look at our financial performance, it tells you we are. But people wanted more than that. They wanted to be right — and inspired and appreciated and liked. And so we said, “Why don’t we throw a dash of Washington into the things we do?” So we started studying other people who did that. And it sort of changed our overall approach.
Right now the trends are pretty good. Projections on PC sales are up. Most analysts would say you’ve weathered the downturn pretty well. So what are the things that keep you up at night?
Well, the same thing. We set a goal to double the size of the company. And that’s still the goal. At the time we set the goal we were at $30 billion and we wanted to grow to $60 billion. This past year we hit 41 and a half. That’s ahead of plan for the second year, but we’ve still got $18.5 billion to go. So we’ve got a long way to go. I think the thing that has changed is that people believe we can do it, right down to their toes. And I think Wall Street does, too.
The challenges remain the same. Can we find, retain, train enough people at the pace we’re on, with the dollar-volume growth we’re on, to keep it moving? That’s part of the realization of management change — what we call the “Soul of Dell.” The whole cultural evolution was required in order to achieve our financial goal. You had to have it. You could not continue the way we were and expect the growth to happen. So that’s the challenge. Unless we inspire people, they’re not going to be here to help us grow. So let’s focus on people retention, people training, leadership development — let’s get really good at that, and if we do good at that, our business model is successful enough that we can accomplish our financial goals.
Steve Jobs recently compared Dell to a Ford Taurus. What kind of car would you say Apple is most like?
Maybe like a Ferrari. We call [Apple] the Bang & Olufsen of our business — very, very small volume, but great design. So we give them credit where credit’s due.
Well, Dell is a conglomerate. Dell could be a Chrysler/Mercedes, Dell could be all of GM. Dell could be a Toyota. It’s not really a brand, because we have servers and storers and desktops and consumer products, corporate products. We’ve bridged them all. It’s like having a truck department, a small-car department, and a sports-car department. We’re more broadly based, whereas they are very unique, small volume, design-focused, kind of like Ferrari.
Where do you see most of the growth coming from in the next couple of years?
Probably more from business. We’ve had a very good run with consumers over the last several quarters. If you look at worldwide growth for the past five quarters, it’s been growing, and in the fourth quarter at a pretty torrid pace. That comes from consumer upgrades, which tells you that consumers are not done. They’re finding new uses [for computers] and the whole digital home will continue to evolve. And so this spurt is not the last one, either.
But now you’re going to see corporations upgrade. And they need to upgrade across the whole IT front. They bought a lot of technology in the late ’90s, they were digesting it in the downturn, and now as we start ramping up again they’re going to upgrade, refresh, and retool to make sure that the productivity gains they’ve made are going to continue.
How does outsourcing overseas fit into the company’s strategy for keeping costs and prices down?
Well, if the truth be told we have continued hiring in India. We shifted what we were hiring there for a bit, but we continued to ramp the growth and will. But we will also continue to ramp the growth in the United States. We continue to grow in China. The notion of a zero-sum game and the U.S. loses is false, because the opportunities for Dell are global.
Some of the largest markets still left untapped for technology are China and India. How in the world are we going to go tap and sell into those markets if A.) people can’t afford technology, and B.) we don’t provide any jobs; the only jobs we provide are in the U.S.? We have to have local people sell, make, service, and support those products to be able to sell them there. Well, they have to have jobs to be able to buy them there.
So we think it’s a very healthy thing for U.S. companies not just to tap into those markets for low-wage labor — which you can and we do — but also as a market. And if all we did was go in there and sell our system, I guarantee their government would have a fit. So part of our plan is to not only use a great resource there — which is talented, trained, educated labor — as we grow, but it’s also to develop those markets as the next wave of growth for U.S. enterprise and U.S. capabilities.
Consumer electronics has become a big focus at Dell, with flat-screen TV sets and so on. How does this fit into the company’s strategy?
Our overall strategy has been to take standardized technology components — meaning available in mass quantities — and you start plugging those things into things. The PC used to be very expensive, very unique. Now it’s a commodity. The same thing has happened to notebooks. The same thing has happened to servers in corporations. It’s happening in storage. What we saw is that in the consumer electronics arena, it was happening there.
You might be surprised to learn who is the biggest purchaser of flat-panel monitors. It’s Dell. Well, televisions are basically an extension of that. The raw ingredients are. It’s flat panels, TV tuners, chips. So now we’re seeing the commoditization of consumer electronics. Why wouldn’t we take our buying power, our know-how, our knowledge of the customer, and move into those product categories, too? And so I think what you’ll see is a continued commoditization, simplification, standardization of consumer electronics using PC technology.
More of the products in your home — your computer, your TV, your camera, your printer, your music devices — will converge more and more into the PC. The PC will be where you store all your devices and will be the emitter of the technology you use in every room. This digitization of the home using PC components is just going to continue.
"we don’t believe in best efforts, we believe in best results."