Reinventing Dell One Executive at a Time

Wednesday Jun 30th 2010 by Rob Enderle
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An industry analyst opines that sometimes it’s the things you didn’t know about a company that redefine it in ways you couldn’t have imagined.

Last week I was at Dell with a truckload of financial analysts and a busload of industry analysts. We saw the normal corporate talks and were reminded that Michael Dell is still one of the few founders still running their companies in the technology segment.

Dell was clearly feeling their oats as their financials were trending positive and they were showing progress in most segments. However while the financial analysts had their own focus the industry analysts were taken to meet with Dell’s superstars and some of the stuff we found out is little known.

Plenty of us who cover technology have Dell as a client and I’m no exception. I’ve actually come to know and admire Michael Dell personally as one of the few approachable and candid CEOs in this segment.

Often we don’t realize that companies can change in ways people can’t by replacing the parts that make decisions. None of the major companies are the same as they were 10 years ago. And they were different then from what they were 10 years previously. That is part of what was made clear to me last week.

Dell is having a tough week as a lawsuit was filed against them for selling faulty computers 5 to 10 years ago. This was one of the things that resulted in Michael Dell coming back in to run the company and replace a large number of executives and fix a large number of problems.

Let’s cover 3 of those executives this week. One’s building an entirely new business for Dell, one’s focused on making sure the problems like the recent lawsuit don’t recur and one’s focused on improving Dell’s image and sales.

Dell’s OEM Business

When I saw this meeting on my calendar I had a “What the Frack” moment. Dell is an OEM and I’d never heard of Rick Froehlich, the guy running this unit.

So I went to the meeting thinking that it was likely going to be a huge waste of time. It was anything but. Apparently, and few know this, Dell is the largest PC company building PCs for things like medical equipment, airline kiosks, in store displays, manufacturing equipment, gaming (both for video games in arcades and Las Vegas), and other embedded uses.

This is a market I’d thought was largely dominated by little companies that build custom hardware integrated into this stuff. What Dell has been doing is taking over this market with standard PC component boxes at lower prices with Dell support that can be built into all of this equipment.

The end result is a massive amount of revenue and profit for Dell (they won’t let me share the number but this business alone would put the company in one of the more lucrative technology categories) while their customers are enjoying lower manufacturing and support costs coupled with higher customer satisfaction.

The business is reportedly growing like crazy because no other large player has yet figured out the secret sauce of relationships and hardware to create true competitive challenge. This was like finding an incredibly revenue-rich and profitable company within a company. It amazes me that no one outside of Dell seems to have known about this until we were briefed.

This has to be one of the best-kept secrets in the industry.

The Rising Dell Champion

Inside every company there is often an executive that is seen as kind of a champion. They move from organization to organization and their touch is like magic on the company. This magic seems to create success wherever this executive goes. You don’t often get a sense of who this champion is except by watching the company in-depth, either from inside or outside, over a decade or so.

I started following Steve Felice’s successful career back in the late 90s when I’d flagged a Dell support problem and got kind of vocal about it. Back then several of the other firms actually started making fun of me for pointing out what they thought was a non-problem -- until their own customers asked them why they too weren’t both reporting it and doing something about it.

Steve, who was working at Dell at the time, rather than stonewalling, looked into what I’d pointed out, confirmed there was a problem and put resources on fixing it. After making a number of staffing changes Dell support improved dramatically. He then went from job to job inside of Dell fixing problems and improving the units he managed.

I can’t tell you how rare it is to see an executive who first looks into issues before firing from the hip, someone who actually spends more time on the problem then shooting the messengers. If Steve had been the one in power, the problem putting Dell in the news this week would not have occurred. I’m confident with him in his new role it won’t happen again either.

My meeting with Steve at Dell’s event confirmed he was still that kind of guy. He’s focused like a laser on improving Dell’s PC business. I don’t envy anyone that gets in his way.

Marketing by the Numbers

It is rare, outside of Apple, to find a marketing organization that is led by someone who could actually teach marketing. Most people either are hired out of careers that initially had nothing to do with marketing or are hired out of other industries and can’t adapt to the new market they are in.

Erin Nelson, who now heads marketing for Dell, is one of those rare people who has a solid background in both marketing and has been working in and around Dell long enough to understand its unique needs.

She has driven consistency into Dell’s marketing, has begun doing solid demand generation work, and has eliminated most of the ad hoc advertising efforts and most of the massive number of advertising agencies that seemed to be paid by Dell to confuse and confound customers.

Trust me when I say that you don’t see this kind of talent often and that, to me (who also has a bit of a marketing background), running into it is always a treat and one that I value highly. The only issue is that she is under resourced against what she could be doing. And, I’ll bet, were she given a larger fraction of the budget an Apple has she could do some amazing things.

She has a daunting task because Dell’s image is tainted but she is one of the few I’ve met who is by background capable of addressing it.

Wrapping Up

Dell is having a few issues this week having to do with some suppliers that sold them some faulty parts nearly a decade ago. Michael Dell has stepped in and is building a team that seems to be more than capable of putting the shine back on the company.

On top of that there is actually some really interesting stuff going on inside the company and the surprising success of their secret OEM group left me almost speechless. I left expecting amazing things coming from Dell’s future and with the thought that sometimes it’s the things you didn’t know about that redefine a company in ways you couldn’t imagine.

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