Dell’s Turnaround Formula
Last night, we were at a HBS event honoring Charles Schwab for the magnificent turnaround that he has instituted since his return as the CEO of the company he had founded thirty years back.
Today’s news proclaims the return of Michael Dell to the CEO spot at Dell, replacing Kevin Rollins.
Interesting development, although, my read about Kevin Rollins is that the crash of Dell is not necessarily his fault.
The market has changed. The low cost, high operational efficiency, disastrous customer service formula that Michael Dell invented doesn’t work anymore. Lenovo is also cheap. HP’s Mark Hurd has engineered a superb turnaround as well, and HP has emerged as a very strong competitor. And bad customer service is such a turn-off, that Dell’s reputation has been widely sullied on that account. All this, plus the world’s increasing fascination with Applesque design!
It would be very interesting to see what Mr. Dell will do upon his return, to engineer his own turnaround formula. The stock is down. “Wall Street is starting to lose its patience with Michael Dell and Kevin Rollins. Shares of Dell have plunged 16% over the past year while HP has soared 33%. Even Sun Microsystems Inc. (Nasdaq:SUNW) has outperformed Dell.”
The world is moving to a place where the laptop needs to become much more than just a laptop. An integrated mobile device is in the cards, that is the combo PC-Phone-Music Box. May be, even Camera.
Dell needs to figure out a way to latch onto this trend, and find a hit product.
iPod saved Apple. What will save Dell?
Related reading:
* Should Dell Acquire Palm?
* iPhone and the Future of Laptops
* 2 Billion Convergence Devices by 2015
* Dell Needs a Convergence Device Strategy Badly
* Dell’s Turnaround: Not Bad
* Apple Has Too Much Cash
* RIM is already replacing Laptops
David Kirkpatrick from Davos:
Nicholas Negroponte, longtime director of MIT’s Media Lab, was toting around a working version of his so-called “$100 laptop” (which will initially cost about $150). Everyone from Michael Dell to Google’s Vint Cerf was seen playing with it. The little green-and-white computer is so sexy that many pronounced it “cooler than the iPhone.”
Hah! May be Michael Dell should take this project over …