Business Transparency, Fearlessness, And Execution Without Excuses: How Dell Built Its Unique Culture
Michael Dell founded his eponymous company with $1000 capital in 1984. Today, the multi-billion dollar tech company is as renowned for its superior business model and culture of excellence as it is for its affordable, reliable products. While Dell's DNA may not be replicable, it can be instructive in creating and implementing your own (unique) genetic code.
Beyond the Business Model
A sound business model is critical to success. As Joan Magretta writes in HBR's "Why Business Models Matter:"
They are, at heart, stories - stories that explain how enterprises work. A good business answers Peter Drucker's age-old questions: Who is the customer? And what does the customer value? It also answers the fundamental questions every manager must ask: How do we make money in this business? What is the underlying economic logic that explains how we can deliver value to customers at an appropriate cost?
Dell's model, which encompasses information over inventory, just-in-time delivery, world-class manufacturing, and stellar customer service, answers those questions. It succinctly tells their story. And as successful as is, it is still unfolding. For example, Michael Dell said "The direct model has been a revolution, but it is not a religion." Dell has opened new chapters in its story (including a shift away from their past-its-prime direct-only sales strategy). What has remained constant is the culture. That is religion.
Culture Eats Strategy for Breakfast
According to Bain and Company research, 70 percent of business leaders believe that culture is the greatest competitive advantage. More than 80 percent think that without a high-performance culture, an organization is "doomed to mediocrity."
It's clear that the minds at Dell agree. Michael Dell says, "Culture plays a huge role." In a sit-down for Harvard Business Review, Dell and Rollins explain the various components of their culture and how they programmed it into the very DNA of the company.
Rollins explains, "History was the starting point for our culture." As a new company, Dell didn't have a large budget, so they had to innovate ways to "make do." Dell adds, "We didn't become asset-light just because it was a brilliant strategy. We didn't have any choice."
They didn't use funding as an excuse, and that eventually became the backbone of their culture. Execution without excuses. A few other key fundamentals of Dell DNA:
- Failure is not an option. When employees fail to execute, says Rollins, "our culture says, 'Fix it. Find what's wrong, and fix it. Or ask for help." Accountability is a mainstay of Dell life.
- "Irrational expectations." Rollins says, "When we hold somewhat irrational expectations and convince them they can do it, they come up with fantastic breakthroughs." They acknowledge being a manager at Dell is tough; but the challenge tests the mettle of managers and makes them stronger.
- Continuous improvement. Mistakes are inevitable in any organization, even Dell. The culture of continuous improvement, though, prompts people to learn from them and innovate new solutions. Likewise, training, development, and 360 feedback are critical components of the culture.
- No fear. Denial is a four-letter word. Employees are expected to have the hard conversations, speaking up when things aren't working or when they need help.
- Business transparency. Sharing is part of the Dell DNA. Rollins says, "It's the way we all operate. Everybody sees everybody else's numbers and gets to help with suggestions about their businesses. Here you can't tell your boss or your peers, 'Stay out of my business.'"
- Empowering employees. Managers are empowered to take quick, decisive action without waiting for permission. "Our organization is flat so that information can flow freely and quickly."
Ingraining Culture on the Cellular Level
It's not enough to say "We have a culture of continuous improvement," or "We believe in collaboration." In order to realize results, both in the bottom line and in the organizational environment, leaders must instill these values from the top down, throughout every facet of the company. Rollins and Dell clearly articulated their dogma of expectations - and then "drummed it into our people's heads, through presentation after presentation, what's good performance and what's bad performance." For example, if inventory levels were high, people were penalized. When they went down, they were rewarded. Dell adds, "By the way, the reward and punishment didn't come from us, it came from our people seeing for themselves how much better their businesses worked when they didn't have inventory."
That is another critical key to Dell's cultural identity: people buy in. The culture isn't a poster on the breakroom wall; it's a way of life within the organization.
Business models may tell stories, but cultures breathe life into them - and give people the incentive they need to keep listening. Dell's DNA is not replicable, and that's fine. You don't want to be an imitation; you want to create a unified, and unique, personality that encompasses your values and vision. Taking a few pages from Dell's book, though, can't hurt as you seek to codify that into a coherent culture and implement it in your organization.