All change

In an exclusive interview with CXO, Dell President and CEO Kevin Rollins speaks about the company’s radical plans to overhaul its business model.

Sometimes we all need a kick up the backside to get our house in order – to correct those areas in which we have gone awry and to find new impetus to do better going forward.

With exploding batteries – resulting in one of the largest recalls in electronics history – disappointing financial reports and ongoing investigations into the company’s accounts, it would be fair to surmise that this year has truly been an Anus horriblus for Dell. And, to add insult to injury, HP were recently reported by Gartner to have overtaken Dell as the world’s leading PC supplier. Ouch.

One would imagine the computer giant might be unrepentant, resolute and defensive in the face of such adversity. So what exactly is the company going to do about it? Well... quite a bit, it seems. With a planned overhaul that promises to leave no corner of the company’s operations untouched, Michael Dell and his right hand man Kevin Rollins aim to leverage both the problems of the past year and the feedback from its waning customer base, as a springboard to much bigger and better things.

Of course, when you’re as big as Dell, holding your hands up is never going to be easy, especially when your proposed solution is a radical, reexamination of everything you do. There will always be cynics among us that suspect the company’s motives are not entirely squeaky clean – that the changes, which appear to place greater emphasis on customer needs are the result of a forced hand rather than any real company soul-searching. But are they wrong to think this way and just how deep do the planned changes go?

Rollins is quick to correct me on my first point, explaining that Dell’s focus on customer satisfaction is nothing new. He also defends the company’s satisfaction ratings, which continue to be very strong among its corporate and government customers, who make up about 85 percent of our worldwide business. So the negative press? “What you reference is primarily a drop in our customer satisfaction in the US consumer marketplace,” clarifies Rollins. “There, we simply did not keep pace with the growth of new customers in our consumer space and did not deliver the level of service normally expected of Dell.” Summarising the response to this, he says: “We are making investments in people, processes and tools to improve our performance and are beginning to see positive results. It will take time to regain our historic standing, but we are committed to providing our customers the best experience available everyday and every time.”

It may be nothing for a company to say it wants to do better, but it is refreshing to hear an organisation stand up and admit it isn’t perfect. As Rollins says when I raise the point: “Honesty is always a good policy.” He goes on to explain that conducting its business with the highest degree of ethics includes admitting its mistakes. “We also have a direct business model that makes us the single point of accountability for our customers, from the biggest corporations to the individual consumer. They know if we have not met their expectations. They also know when we are meeting and exceeding their expectations, which we clearly do the majority of the time.” Importantly, the company learns a lot from its customers. “We are always listening closely to what they are saying,” says Rollins “We can’t imagine another way of doing business.”

Dell’s new strategy, which it has named Dell 2, was launched recently in the company and aims among other things to improve customer service operations, although, as Rollins points adds: “Isn’t it always about the customer?” Good point. “The Dell 2.0 initiative really builds on the strong base of Dell 1.0 that everybody knows,” explains Rollins. “At its core, it is about how we deepen, improve and evolve our relationship with our customers. It’s about providing innovative products, and providing great service and support. It’s about examining every element of our business to determine what is working and what needs to be changed in order to exceed our customers’ expectations in every aspect of their experiences with Dell.” No small thing then...

With a huge online presence – Dell.com is one of the largest e-commerce sites in the world – the website and its tools will also see a revamp. “With US$16 billion a year in revenue from online sales – that’s nearly as much as E-Bay, Amazon.com and Yahoo! combined – Dell.com is a very important part of our business,” says Rollins, putting it into perspective. “We have completely redesigned the website in the past year and added many new tools that make it easier to select and configure our products. We’ve added Avatars and online discussions of technology and component options to help customers better understand their choices.”

The company is also building tools that it believes will redefine how a company provides service. He gives the example of DellConnect, an online tool that lets a Dell technician access the customer’s system to diagnose and solve their problem. “Why would anyone want to pay for someone to come to their home when they can have our technicians work remotely for free?” explains Rollins. “It’s clear it works, since we’ve had more than 1.5 million DellConnect sessions with satisfaction rates around 94 percent. These are examples of our commitment. There is more to come.”

Returning to Rollins’ earlier point about customer satisfaction ratings, I’m interested to know how, if at all, Dell are changing their approach to their corporate market, for which ratings have continued to be high. “As I mentioned before, commercial business – corporate, government, education and healthcare customers – makes up 85 percent of our worldwide revenues, so we certainly pay constant attention to those relationships and how we can improve their experiences.” This, he adds, takes many forms. “It means listening and responding with the products customers want and need. It means understanding their businesses and delivering solutions – hardware, software and services – that help them to be more successful. It means having services that anticipate and react before problems occur, and providing them value – not in price alone, but in quality and reliability.”

As history has shown, Dell has been through its fair share of peaks and troughs before, but it has always come out of them fighting. But it isn’t unheard of for the mighty to fall, and this trough was pretty deep. So is Rollins positive about how well it will climb out of this one? “Absolutely,” he says without hesitation. “We have the best business model in the business and with our Dell 2.0 initiatives under way, we will further improve our ability to serve our customers.” He adds that while the US continues to be the company’s largest market, big opportunities lie elsewhere. “We have tremendous growth opportunities outside the US, especially in emerging markets such as China, India, Brazil and Eastern Europe. In every one of these markets, the direct model is an advantage for us and we are building out our asset base for growth. Why wouldn’t you want to work directly with the manufacturer to receive product built to your specifications?” He closes our discussion on the same positive note with which it began, saying: “We’ve never had a stronger product line or greater choice for customers than we have now. And we have 75,000 dedicated employees who look to make improvements every day that benefit our customers. I’m very optimistic about the future.”