Michael Dell’s second stint as CEO of Dell Computer is failing.
This should not be a surprise. Most business comebacks fail. Most entrepreneurs have just one act in them, one twist that separates them from the pack. In the case of Dell, it was mass customization.
But under new CEO Mark Hurd, H-P has copied that trick. Their sourcing is better. For a variety of reasons, slower innovation in the server space has given China ever-more control of the hardware market.
Dell’s attempts to appear innovative have been all show and no dough. Putting Ubuntu Linux on a few PCs is not innovation. Pushing Dell hardware in Wal-Mart is actually a step backward.
Dell’s failure also demonstrates just how unique a man Steven Jobs has turned out to be. Like Dell, Jobs was pushed out. Like Dell, he came back. But Jobs has re-invented Apple as a consumer products giant, and in this decade he has ridden the wave of change rather than paddled against it. It’s this decade, not the 1970s, that will make Steve Jobs a legendary business leader.
So what could Dell do different?
- Open plants in more places, closer to demand. Assemble in Brazil, in Argentina, in South Africa, in Poland, in Abu Dhabi. Mass customization can still deliver savings in those markets, and bring Dell important market intelligence it needs badly.
- Find other stuff to make. If mass customization is your thing, find other products that can use that skill and become a job shop. Either compete with Sanmina-SCI or buy it.
- Scale your services business, as H-P did.
- Think about becoming an ISP and Web host.
- Get into Always-On, building systems which use WiFi routers as software platforms.
- Create a unique niche, like low power, and sell that as part of the brand.
Or sell out. All these ideas are valid. Which can bring the huge boosts to revenues Dell needs? That’s what you need once you’re a large company — home runs, not singles.
The question for Michael Dell and Barry Bonds is the same. And the pitching in the Fortune 500 is much tougher than in the National League.
