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 / Fall 2004 / Issue 36(originally published by Booz & Company)


How Dell Got Soul

These qualities are also exemplified in the behavior of the company’s founder. At 38, Mr. Dell is still a young man; in person, his affable and informal manner makes him seem younger yet, and more approachable than other leaders of multibillion-dollar concerns. Leading by example, he shows how much he personally values collaborative management and communication styles. Mr. Dell has historically shared the executive suite with a strong second-in-command. Before Mr. Rollins, there was Mort Topfer, who applied his experience building Motorola’s cell phone business to help refine Dell’s direct sales model in the 1990s; and before Mr. Topfer, Lee Walker, an East Coast entrepreneur, helped run Dell and take the company public in 1988.

Even after two decades, Dell has retained its informality and the energy to execute like a startup company. Dell is a prototypical flat organization. From the factory floor to corporate communications, decisions are made quickly and without the burden of superfluous hierarchy. If a supervisor on the factory floor sees ways to reduce component inventories, he simply does it, without going up the chain of command for approval. Dell’s internal communications have stayed efficient, so that decisions that don’t require the attention of senior management get made without them.

In April 2001, “when one of our major competitors announced they had missed their quarter at 4 p.m., by 2 a.m. the next morning we had a press release out that we were going to cut prices,” says Lynn Tyson, Dell’s vice president for investor relations. “Kevin and Michael said this is an opportunity, and Dell executed. That could not have happened with bureaucracy in the middle.”

The accessibility of management, from Mr. Dell on down, has made junior employees believe their ideas are welcome and heard. “You have freedom of communication to anybody,” says Matt Borgstrand, a product engineer in the enterprise computing group. Mr. Borgstrand designed a software diagnostic tool now used throughout the company, even though writing software is not part of his job. “There’s an openness here. I had an idea, walked into a vice president’s office, and he said, ‘Go do it.’ I didn’t have to go through layers of management,” he says.

Mr. Dell and other executives also insist that Dell’s direct “build-to-order” business model — bringing technology-rich products to market at a lower cost by eliminating the middleman and reducing costly stockpiles of inventory — benefits humanity by making those innovations more broadly affordable.

Finally, Dell is a company that does its best to make people feel comfortable expressing true feelings without fear, and with confidence that if they do speak their minds, they can make a positive difference for themselves and the company. For example, an anonymous, voluntary employee feedback survey that’s conducted online every quarter, called “Tell Dell,” encourages rank-and-file employees to let senior management know how they feel about the company and about specific leaders, and to flag problems in a nonconfrontational way. The HR department compiles results, and specific leadership teams share those results with managers throughout the company. Leaders of different departments set improvement goals for their teams. Every manager’s appraisal is based on improvements he or she makes on Tell Dell scores against the goal set for his or her team.

Tell Dell has also been integral to involving everyone in the company in the culture change process, and to measuring progress. Ninety percent of Dell’s global work force participated in the most recent Tell Dell survey.

Photograph by Vern Evans

Baring Its Soul
Dell’s core values — which include its drive to win, its direct business model, and the sense that there are many more opportunities for Dell to do well for financial and societal stakeholders — were codified in an official statement of values published in 2002 and named, not surprisingly, “The Soul of Dell.” (See “Focus: Dell’s Core Values Statement,” below.) It is the centerpiece for managing, measuring, and reinforcing the cultural elements Dell believes are its source of business success.

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  1. Gary Neilson, Bruce A. Pasternack, and Decio Mendes, “The Four Bases of Organizational DNA,” s+b, Winter 2003; Click here. 
  2. Terrence E. Deal and Allan A. Kennedy, Corporate Cultures: The Rites and Rituals of Corporate Life (Perseus, 1984)
  3. Terrence E. Deal and Allan A. Kennedy, The New Corporate Cultures: Revitalizing the Workplace after Downsizing, Mergers, and Reengineering (Perseus, 1999)
  4. Joseph J. Ellis, Founding Brothers: The Revolutionary Generation (Alfred A. Knopf, 2000)
  5. John P. Kotter and James L. Heskett, Corporate Culture and Performance (Free Press, 1992)
  6. Brook Manville and Josiah Ober, A Company of Citizens: What the World’s First Democracy Teaches Leaders about Creating Great Organizations (Harvard Business School Press, 2003)
  7. Edgar H. Schein, Organizational Culture and Leadership (Jossey-Bass, 1985)
  8. William E. Schneider, The Reengineering Alternative: A Plan for Making Your Current Culture Work (McGraw-Hill, 1994)
  9. Lynn Sharp Paine, Value Shift: Why Companies Must Merge Social and Financial Imperatives to Achieve Superior Performance (McGraw-Hill, 2003)
  10. AES’s values statement: Click here. 
  11. Johnson & Johnson’s values statement: Click here. 
  12. John Kotter: Click here. 
  13. Levi Strauss & Company’s values statement: Click here. 
  14. Edgar H. Schein: Click here.
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