Direct from Dell: Strategies that Revolutionized an Industry
Michael Dell, Catherine Fredman
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At nineteen, Michael Dell started his company as a freshman at the University of Texas with $1,000 and has since built an industry powerhouse. As Dell journeys through his childhood adventures, ups and downs, and mistakes made along the way, he reflects on invaluable lessons learned.
Michael Dell's revolutionary insight has allowed him to persevere against all odds, and Direct from Dell contains valuable information for any business leader. His strategies will show you effective ways to grow your business and will help you save time on costly mistakes by following his direct model for success.
relationships, holding our suppliers to the same high standards regarding social and environmental impacts. Our Supplier Principles enable us to communicate these expectations consistently to a broad base of global suppliers. A company the size of Dell has the opportunity to make a significant positive global impact. Beyond the contributions we make through our products and services, we take great pride in the difference our team makes through volunteer work and a social focus. One in three Dell
of course, the challenge in building a business like ours is that you’re constantly confronted with situations no one has ever seen before, so you need to strike a balance between experience, intellect, and adaptability. Someone with tremendous experience might be able to tell you exactly what has happened in situations past, but as they say in financial prospectuses, past performance is not necessarily an indicator of future performance. The best combination is a management team that has both
Industry analysts said it was a mistake; they, too, predicted that our growth would slow. And despite the many improvements we were making structurally within the organization, there was still doubt among some of our people internally as to whether retail was superior to dealing direct in the consumer market. The benefit of exiting retail was not just the change in our financial condition, because that was relatively minor. The real value was that it forced all of our people to focus 100 percent
To encourage people to innovate more, you have to make it safe for them to fail. Many companies say that they welcome and expect innovation but also tell people, “Just don’t screw up.” Failure, however, takes on many different definitions. If a team experiments with something and says, “These are the facts. This didn’t work and here’s why,” that’s not failure. That’s a learning experience and, typically, an important milestone on the road to achieving success. Our business is by definition full
cycle times, eliminating scrap and waste, selling more, forecasting accurately, scaling operating expenses, increasing inventory turns, collecting accounts receivables efficiently, and doing things right the first time. And we make it the core of our incentive compensation program for all employees. We decided to reward employees around a matrix of ROIC and growth; higher performance directly correlated to higher ROIC, which came back in the form of higher compensation. What was most remarkable