The Soul of Dell: The Value of Corporate Philosophy Statements

Examine the attached case on Dell and its attempts to form, communicate, and change its culture.

Does The Soul of Dell define a meaningful and well implemented culture?

Analyze and evaluate the cultural change Dell rolled out? Will it succeed if this method continues as is?

Develop an action plan for Dell to improve upon its culture and change implementation strategy?

Evaluate the consequences of your plan and Dell's plan. Are there elements of Dell's philosophy at odds with its manifested culture? If so how can this be resolved? Are there values missing from Dell's new philosophy? To what effect?

 
 
 
 

Case On a warm and sunny morning at Dell's headquarters in Austin, Texas, in another of the regular meetings between Michael Dell and Kevin Rollins, a special issue was raised for the first time: according to Mr. Dell, they needed to "find their soul." Both Dell and Rollins knew that one of the top priorities for Dell Computer Corporation would be to articulate the basic values and beliefs of the company and create a guideline for their employees. Kevin Rollins knew that now, more than in all the preceding months he had spent as President and COO of Dell Computer Corporation, a new company philosophy statement was needed. It was May of 2001 and PC margins were decreasing, layoffs were frequent, and Dell's employees seemed to lack the motivation needed to work in a high-tech organization. Regular quality-of-life employee surveys, called "Tell Dell," revealed that people inside the company needed to have a higher standard than just doing their job properly in order to avoid getting fired. Many employees lacked motivation and wondered why they were working at Dell at all. Managing a rapidly growing company in an fast-paced industry, Dell and Rollins had never taken time to sit back and examine Dell's culture and what they aspired their culture to be like. As the worldwide economy slowed in 2001, they realized that the differentiator between a good and a great company would be its culture. 1 The next few months after Dell and Rollins' discussion of the company's culture took place were slow. But things got moving by September. Regional meetings were held in forums with managers from all over the world to identify the key tenets that would come to be known as "The Soul of Dell." During that same month, the terrorist attacks on the United States caused great impact on many people, companies, and countries around the world. Dell Computer Corporation was no exception. Company History In 1983, Michael Dell, an 18-year-old freshman at the University of Texas at Austin, spent his evenings and weekends pre-formatting hard disks for IBM-compatible PC upgrades. A year later, he dropped out of college to continue with his rapidly expanding business, which had grown from zero to $6 million in 1985, simply by upgrading IBM compatibles for local businesses. In 1985, Dell shifted his focus to assembling his own brand of computers and his business grew dramatically, with $70 million in sales at the end of 1985. By 1990, sales had grown to more than $500 million and Dell was able to supply a number of Fortune 500 companies. The company now had a broad product line of desktop and portable computers with Intel processors and had earned a strong reputation for quality products and service.2 Throughout the company's history, a big part of Dell's success was due to its unique and distinctive "Dell Direct Model." This model took efficiency to new heights by eliminating the intermediaries between maker and user of PC's and lowered costs by eliminating inventory with the help of an efficient supply-chain management system and Internet sales. Today, as the world's largest PC manufacturer, Dell Computer Corporation offers a great variety of computing products directly to customers, with build-to-order systems and comprehensive services that fulfill the needs of its customers. Dell's customers range from major corporations to individuals all over the world. Efficient cash management has enabled Dell to have both extremely high inventory returns and a "negative cash conversion cycle." Page 3 of 8 The Soul of Dell: The Value of Corporate Philosophy Statements $SAGE businesscases