strategy+business is published by PwC Strategy& Inc.
 
or, sign in with:
strategy and business
Published: August 25, 2004

 
 

How Dell Got Soul

“The Soul of Dell” was written to make Dell’s corporate values explicit, and to address the immediate business problem that senior management acknowledged in 2000. It helped impose discipline during the unruly early stages of corporate change.

“Now when people ask, ‘If I’m not going to be rich, why would I want to stay?’ the document allows us to answer those sorts of questions,” says Mr. McKinnon. “It says this is the kind of place we want to be.” In the tradition of J&J, AES, and Levi Strauss, “The Soul of Dell” is also used as a guide to continuous improvement of management practices as the company matures and embarks on more change and adaptation.

In keeping with Dell’s nonhierarchical approach to management, creation of “The Soul of Dell” combined top-down and bottom-up input and action planning. In late 2001, the company had a series of worldwide meetings at the vice president level (in person and by videoconference) to gain broad perspective and polish the document. Dell engaged an outside firm to perform a “cultural audit,” a common questionnaire-based process, to identify strengths and weaknesses throughout the company. The audit showed Dell’s strong push for winning and operational excellence, but exposed weaknesses in the areas of career development and work/life balance.

In codifying what the culture represented and examining the conflicts in “real life” at Dell through the cultural audit, “pretty frank” feedback began to surface, recalls Michael George, Dell’s chief marketing officer and vice president.

“There are two or three fair criticisms we could make of ourselves,” Mr. George says. “One is we have folks who get great business results, but they break too much glass along the way. They’re not collaborative with their colleagues. We probably tolerated that too much.” The audit also showed that the company was not investing enough in personal development and career guidance resources. Dell’s rapid growth and relentless focus on gaining market share had created a culture in which making the numbers often came at the expense of teamwork and customer satisfaction. And surveys showed that certain sales leaders were routinely rewarded and promoted despite trampling on the feelings of their team members. New hires complained that they had been thrown into the most challenging position of their lives with little support or backup from superiors.

“We saw there was a little too much of a sink-or-swim mentality,” says Mr. George.

These negative aspects of Dell’s culture had remained submerged as long as Dell’s financial performance and share price appreciation had offered the promise of great wealth. But employee concerns came to the fore when growth slowed. To their chagrin, Mr. Dell and Mr. Rollins also learned from a Tell Dell survey that about half of Dell’s employees would leave for another company if they were given similar compensation.

Even some top performers said the relentless pressure had wearied them. “I know that for me, the only thing that mattered was making my numbers, but I also knew that shaking the money tree was going to get old,” says Amy Rathburn, a major-accounts manager for school districts in the greater Austin, Tex., area. “My passion is really the kids, sitting down on the floor with the third graders with their laptops. ‘The Soul of Dell’ gave me the space to figure that out, so it’s not always just selling, selling, selling.” Today, although sales growth is as vital as ever, living “The Soul of Dell” means sales are not the only thing that is important to business performance.

One seemingly symbolic act that helped to reinforce the importance of “The Soul of Dell” was that members of senior management began sharing the findings of their own appraisals with their direct reports. That practice has now spread to every level of the company.

 
 
 
Follow Us 
Facebook Twitter LinkedIn Google Plus YouTube RSS strategy+business Digital and Mobile products App Store

 

Resources

  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.
 
Close
Sign up to receive s+b newsletters and get a FREE Strategy eBook

You will initially receive up to two newsletters/week. You can unsubscribe from any newsletter by using the link found in each newsletter.

Close