Michael Saul Dell / b. 1965 / Texas, USA / Businessman, Entrepreneur, Founder of Dell Technologies
Every technology creates good and bad. You can sit here and say, “AI is really bad, we shouldn’t have AI”—that’s nonsense. We have to figure out how to use it in a responsible way, that’s our job.Reported by Chris Duckett, “AI shouldn’t be held back by scaremongering: Michael Dell,” zdnet.com, May 1, 2018.
Real transformations of major tech companies are extremely rare: I think because companies develop a particular capability, and a set of customers, and change is hard. You can’t take the stripes off a tiger. If you’re born a dog, you don’t die a cat.Play Nice But Win: A CEO’s Journey from Founder to Leader (2021).
If you think about decarbonization and climate and the environment, technology is the fulcrum. All of these problems, opportunities, challenges I believe are at some level tied to technology because their opportunities were computational power and networks and communications and all the ingredients of technology would go into solving the problems.Report by John Simons, “Michael Dell Has Been a Tech CEO for 34 Years. He Has Some Advice For Younger Founders,” Time, October 31, 2021.
Dell on Dell
I don’t know why people aren’t more curious, and why curiosity isn’t considered a more important leadership trait. A journalist once asked me if I was ever bored as a kid. I only had to think about it for a second: I never was, not even for a minute, because I was so curious. Every day I’d wake up excited by all the new things there were to learn about.Play Nice But Win: A CEO’s Journey from Founder to Leader (2021).
Sometimes it’s better not to ask—or to listen—when tell you something can’t be done. I didn’t ask for permission or approval. I just went ahead and did it.Direct From Dell: Strategies That Revolutionized an Industry, with Catherine Fredman (1999).
And with a forty-five-year-old genuine grown-up and experienced entrepreneur as president and CFO, we now had access to all kinds of working-capital credit we couldn’t get before. Unlike the twenty-one-year-old CEO, Lee Walker could go to people like Frank Phillips at Texas Commerce Bank and say, “Look, Texaco, Exxon, Monsanto—all these companies, not to mention the US government—they all owe this company money. Give us a loan based on all these receivables.” And the bankers would say, “Okay, Lee, we don’t know about the kid, but we trust you.”Play Nice But Win: A CEO’s Journey from Founder to Leader (2021).
Q: When you talk to these younger founders, what are they most interested to hear from you? What are they asking you about?
A: It’s interesting. They ask about how you grow and evolve a team, because they’re struggling with that—the hyper growth. And then they get into how you raise your kids and how do you make sure your kids don’t turn out to be horrible and stuff like that. They want to know a lot about how you raise a family and manage that balance.Report by John Simons, “Michael Dell Has Been a Tech CEO for 34 Years. He Has Some Advice For Younger Founders,” Time, October 31, 2021.
Our business is about technology, yes. But it’s also about operations and customer relationships. There are a lot of things that go into creating success. I don’t like to do just the things I like to do. I like to do things that cause the company to succeed. I don’t spend a lot of time doing my favorite activities.Reported by William J. Holstein in “Dell’s CEO Michael Dell: Exclusive Interview with Dell’s Michael Dell,” chiefexecutive.com.
I started the business with a simple question: How can we make the process of buying a computer better? The answer was: Sell computers directly to the end customer. Eliminate the reseller’s markup and pass those savings on to the customer.Direct From Dell: Strategies That Revolutionized an Industry, with Catherine Fredman (1999).
The magic formula in our business is figuring out what stage of the evolution a given technology is at and when it’s right for Dell to use its business model and customer relationships to make a product that is much higher in volume and lower in cost. Some would call it commoditization or standardization, but we constantly look at our business and say, “Well, where are these new technologies on the continuum? And when is it the right time for us to start a new activity? When is the right time to go after a new type of customer, a new geography? Should we be focusing more on large businesses vs. small businesses vs. consumers? What about services? What about professional services or financial services? We have many more choices than we could ever execute on. We’re not constrained by capital. We’re constrained by, “How many of these things can you actually achieve with a high degree of success and profit?” We’ve got that paradox.Reported by William J. Holstein in “Dell’s CEO Michael Dell: Exclusive Interview with Dell’s Michael Dell,” chiefexecutive.com.
This is a 19-year-old company, so we’ve gone through some pretty dynamic changes in a pretty short period of time. In that sense, it wasn’t all that different from other periods of change. Except here, while we might not have made our financial goals, we were still pretty nicely profitable and our business was pretty healthy. Whenever you adjust your strategy for the times, say for industry consolidation, a kind of logical follow-on to that is, “What is the right structure?” We consolidated some things.
We kind of started off with “Where are you growing, where are you expanding?” The right creative tension in the business is to examine those on a constant basis. So that you say, “Okay, we’re trying to expand into these nine areas, but the market is contracting, so maybe we should scale that back and only do three of those and save the other six for later because that’s what the times dictate.”Reported by William J. Holstein in “Dell’s CEO Michael Dell: Exclusive Interview with Dell’s Michael Dell,” chiefexecutive.com.
Direct Business Model
You actually get to have a relationship with the customer and that creates valuable information, which, in turn, allows us to leverage our relationships with both suppliers and customers. Couple that information with technology, and you have the infrastructure to revolutionize the fundamental business models of major global companies.Reported by Joan Magretta, “The Power of Virtual Integration: An Interview with Dell Computer’s Michael Dell,” Harvard Business Review, March-April, 1998.
Let me back up to the early ‘90s. We were producing enormous numbers of computers and it’s doubling every year. And at some point, you kind of figure out wow, this is a machine with a defined lifespan. At some point, it’s no longer useful. What the heck happens then? We better think about this pretty carefully, because if you make a million of these things, eventuality there’s a million that are no longer being used. Then you make 10 million, you make 100 million, et cetera. You start to think deeply about the lifecycle and the materials and the ingredients that go in these things. What if these things end up in a stream somewhere or a dumpster or a ditch? So I challenged our team. Let’s really do a molecular level look at everything we’re putting in our machines to say which of any of these ingredients could possibly, over time, be dangerous or harmful. How do we eliminate those? So we started thinking about how do we use the cleanest, greenest materials. We started thinking about recycling and life cycle. When I was going to sleep at night, putting the head on the pillow, I’m thinking, “Holy bleep, all these things have my name on them.”Report by John Simons, “Michael Dell Has Been a Tech CEO for 34 Years. He Has Some Advice For Younger Founders,” Time, October 31, 2021.
If you want to sustain excellence over a long time, you’d better come up with a system that works well. Anyone can sprint for a little while, but you can’t sprint for forty years.Attribution unconfirmed.
Try never to be the smartest person in the room. And if you are, I suggest you invite smarter people . . . or find a different room.Commencement address, University of Texas at Austin, 2003.
For-Profit vs. Philanthropy
I had a dinner at my house on Friday night with about 10 founders of companies, and they were all, I’ll say, 10 to 15 years younger than I am. A lot of super interesting companies, some of them are already public, some are about to go public. And these companies were born more with the purpose orientation that we now have. I’m investing in a lot of these companies that have a deep belief that they can make a positive impact in the world. Philanthropy is great, and I support philanthropy and do a lot there, but actually I think the for-profit enterprises that have an intention of doing things that benefit society are driving a lot more progress than philanthropy by itself. And you’ve seen this time and time again in finance for example, and microfinance, with microlending. You see for-profit enterprises making a huge impact.Report by John Simons, “Michael Dell Has Been a Tech CEO for 34 Years. He Has Some Advice For Younger Founders,” Time, October 31, 2021.
I do think a founder has special permission to make sweeping changes across an organization.Reported by Connie Guglielmo, “A Private Conversation with Michael Dell, ‘The Man In The Arena,’” October 30, 2013.
Growth covers up a lot of sins.Play Nice But Win: A CEO’s Journey from Founder to Leader (2021).
Ideas vs. Execution
Ideas are commodity. Execution of them is not.Attribution unconfirmed.
Our lean beginnings created the strategic management principles that define our culture: Less is more. Information is better than inventory. Ingenuity is better than investment. Execution is everything. No excuses.Direct From Dell: Strategies That Revolutionized an Industry, with Catherine Fredman (1999).
Innovation and Risk Aversion
At the root of it, you have to erase risk and you have to raise experimentation and incubating new ideas and testing things. You have to be explicit about the desire to go after these new opportunities, with the knowledge that they’re not all going to work. Risk is not a bad thing. One of the things that happens in companies as they get bigger is they become risk averse. Nobody wants to take a risk. Well, turns out, if you want to innovate, you’re going to have risk. So we make heroes of the innovators. We celebrate the patent awardees. We have, I think, 32,000 patents now. You want to see an exciting thing, come to our patent awards celebrations that we have and see somebody get an award for getting 50 patents or 100 patents during their career. It’s always experiment, test, fail, try again, and then eventually, hopefully you get some success. You want to encourage that.Report by John Simons, “Michael Dell Has Been a Tech CEO for 34 Years. He Has Some Advice For Younger Founders,” Time, October 31, 2021.
We have lots of hack-a-thons and contests inside the company, those kinds of things. We have a pretty developed process to fund internal new ventures. And of course innovation occurs not just within the boundaries of the company. You have partners and alliances that you’re always collaborating with. You have companies you acquire because they’re at the bleeding edge of experimenting with new things and so that can accelerate innovation. And then we have another thing which is very important: Dell Technologies Capital, which has invested in about 130 companies [since 2012]. It’s all about 5G and AI and machine learning and cybersecurity, and things that are relevant to our future. And these companies are experimenting and some of them will be successful. Most of them will fail. That’s just the way the ventures work, but we’ll learn a lot from those companies.Report by John Simons, “Michael Dell Has Been a Tech CEO for 34 Years. He Has Some Advice For Younger Founders,” Time, October 31, 2021.
We have this history of setting outrageous targets internally and occasionally will talk about those externally. You have to be careful about doing them externally because they become a forecast and have a very different implication.
But we find that our people are very motivated by big goals, whether it’s providing customers with absolutely the best value or entering a new market with great success or achieving a particular milestone. I think of them as milestones. You have plenty along the way. It does focus the attention of the organization on what we’re trying to achieve.Reported by William J. Holstein in “Dell’s CEO Michael Dell: Exclusive Interview with Dell’s Michael Dell,” chiefexecutive.com.
People have often told us that what we wanted to do couldn’t be done. Our success is due, in part, to not just an ability but a willingness to look at things differently. I believe opportunity is part instinct and part immersion—in an industry, a subject, or an area of expertise. Dell is proof that people can learn to recognize and take advantage of opportunities that others are convinced don’t exist.Direct From Dell: Strategies That Revolutionized an Industry, with Catherine Fredman (1999).
One of the things I learned early on was that not everyone had the same values and beliefs. We had to be very explicit about what was OK and what wasn’t OK. As you expand a company, especially around the world—this is maybe not the most elegant way to put it, but—there are places in the world where if they didn’t catch you doing it, it’s OK. Well, that’s not OK in our company. So we had to be super explicit about that and I think by being explicit, we hopefully didn’t attract people that wanted to operate in a different way. And when there were things that were consistent with that, it wasn’t like a, “Hey, I’m sorry, I’ll never do it again.” It’s like, “No, no. You don’t do that. You’re gone.” And I think having an extremely clear boundary around what’s acceptable and what’s not acceptable . . . some might say wow, it’s really harsh.Report by John Simons, “Michael Dell Has Been a Tech CEO for 34 Years. He Has Some Advice For Younger Founders,” Time, October 31, 2021.
I don’t want to be known as the guy that created an environmental catastrophe, right? When all we were trying to do was make computers.Report by John Simons, “Michael Dell Has Been a Tech CEO for 34 Years. He Has Some Advice For Younger Founders,” Time, October 31, 2021.
You’ve probably seen some of the same data I have, but the Gen-Zers… I think a high percentage of them believe that companies should aim to do good in the world. I don’t think that was the case 40 years ago. And maybe this is because organizations have a bigger role in the world than they used to. Maybe it’s because other organizations have a lesser role. I don’t really know. We don’t feel compelled to weigh in on every issue, but there are certainly issues that we feel sort of intersect with our business and our stakeholders and our shareholders and also things that we can do something about, and meaningfully impact.Report by John Simons, “Michael Dell Has Been a Tech CEO for 34 Years. He Has Some Advice For Younger Founders,” Time, October 31, 2021.
Success and Failure
You don’t have to be a genius or a visionary or even a college graduate to be successful. You just need a framework and a dream.Reported in “Michael Dell: Taking the Direct Approach,” Entrepreneur, October 9, 2008.
How successful you are is really a function of how well you deal with failure—and how much you learn from it.Play Nice But Win: A CEO’s Journey from Founder to Leader (2021).
We have a long history here of integrating the technologies closer together. This is what customers have been asking us to do. It is what we are doing. It is working extremely well. There is much, much more to come here.Reported by Mark Haranas, “Michael Dell: ‘Much, Much More To Come’ on Dell EMC VMware Integration,” crn.com, June 11, 2018.
The way I describe this when talking with businesspeople is that the domain of technology is no longer in the IT department; the whole company is technology. I’m talking about all companies. If you’re trying to make cars or medical devices or any kind of product at all, and you want to have new customers, technology is the fulcrum of progress in everything you’re doing.Play Nice But Win: A CEO’s Journey from Founder to Leader (2021).
I think we’re going to see a whole new wave of rapid industry transition—unlike the slow transition of, say, transportation, in which it took many years to go from rail to air travel. In this transition, you will see traditionally structured companies being seriously challenged by new, smaller, more efficient entrants—right away. The logical extension of the Internet’s cost efficiencies means that market share will flow to the most efficient companies, not the largest or the richest—companies that can deliver the greatest value to their customers will earn a higher profit while requiring far fewer assets. The productivity of their capital will be significantly improved over the traditional model because they will have replaced physical assets with information assets.Direct From Dell: Strategies That Revolutionized an Industry, with Catherine Fredman (1999).
I love this idea of human-machine partnerships because in my mind it’s always been very clear. It’s not about humans or machines, it’s about humans and machines.Reported by Jessica Lyons Hardcastle, “Michael Dell Says Robopocalypse Is Fake News, Future Is Software Defined,” sdxcentral.com, April 30, 2018.
When the company started, I don’t think we knew how far the direct model could take us. It has provided a consistent underlying strategy for Dell despite a lot of change in our industry. Along the way, we have learned a lot, and the model has evolved. Most important, the direct model has allowed us to leverage our relationships with both suppliers and customers to such an extent that I believe it’s fair to think of our companies as being virtually integrated. That allows us to focus on where we add value and to build a much larger firm much more quickly. I don’t think we could have created a $12 billion business in 13 years if we had tried to be vertically integrated.Reported by Joan Magretta, “The Power of Virtual Integration: An Interview with Dell Computer’s Michael Dell,” Harvard Business Review, March-April, 1998.