Successful Business Leadership

Founder of Dell, Inc., a leading manufacturer of personal computers and consumer electronic products.

Interested in computers from a young age and began taking computers apart at 15.

While attending the University of Texas he started his own business, PC’s Limited, in his university dorm. Dell realized that his potential advantage was to sell personal computers directly to the end-user, rather than through distributors and retailers. Dell also figured out how to customize computers to a customer’s specifications.

The result of customization and direct distribution was a substantially lower cost to produce a computer by eliminating the margins of the middlemen and because component costs of a PC were dropping about every 7 weeks. Therefore, producing the computer when ordered enabled him to take advantage of lower costs while other PC manufacturers had higher costs in inventory (i.e., an 8 week cycle time to make a computer and get it to a store for the consumer to then purchase). Notice how Dell developed an understanding of the whole system from sourcing materials through getting the product to the customer.

In his book, Direct from Dell, he makes the following key points:

1. “What I saw was a great opportunity to provide computing technology in a more efficient way. That was the core idea of what became Dell Computer Corporation, and it’s one that we’ve stuck with ever since…I started the business with a simple question: How can we make the process of buying a computer better?”

2. “One of the first things I learned, though, was that there was a relationship between screwing up and learning: the more mistakes I made, the faster I learned.”

3. “Building a business solely on cost or price was not a sustainable advantage…What was really important was sustaining loyalty among customers and employees, and that could only be derived from having the highest level of service and very high-performing products…Engaging the entire company - from manufacturing to engineering to sales and to support staff - in the process of understanding customer requirements became a constant focus of management energy, training, and employee education.”

4. “A strength, when used to excess, can become a weakness.”

5. “You’ve got to build the infrastructure while you grow…We learned that it is possible to grow too quickly.”

6. “In leadership, it is important to be intuitive, but not at the expense of facts.”

7. “What is the right plan? It’s the one that helps you identify what you need to do to ensure success. It’s the one that rallies your employees around a few common goals - and motivates them to achieve them. It’s one that involves your customers’ goals and your suppliers’ goals and brings them all together in a unified focus.”

8. “Planning is nothing without execution.”

9. “Employees at every level can help to forward your company strategy and achieve goals beyond their immediate area of responsibility, but only if your company is genuinely devoted to their long-term growth and development…You have to hire based upon a candidate’s potential to grow and develop.”

10. “When I hire people, the first thing I do is find out how they process information. Are they thinking in economic terms? What s their definition of success? How do they relate to people? Do they really understand the strategy of the business they’re involved in today? Do they understand ours?”