Everything at CNBC, and in the rest of the financial press, is focused on personalities and numbers.
Never operations.
Yet operations are the real key to business success or failure. Once your business is built, it’s the day-to-day operation of the business which determines your success. Not your marketing. Not your financial wizardry. Not the personality of your CEO. Not the food at your press events. Not how sexy your people are.
Operations. Nothing else.
This is easy to see by the performance this decade of Hewlett-Packard and Dell.
H-P went for personality when they hired Carly Fiorina (left).
They wanted pizzazz, they wanted strategic sense. She had that in
spades. She was also a moron, who thought you could add 1+1 to get 3 in
the computer business when that trick never works. She was rightfully
fired because the Compaq merger was a disaster.
Her successor, Mark Hurd (right), is far less flashy. He came from NCR, a
company which has been around for more than a century, and which hasn’t
had a really Earth-shaking idea since the 19th century.
But Hurd understood operations. He understood the deceptively simple, non-sexy
tasks of factory management, of procurement, of assuring quality in operations, along with
the blocking-and-tackling of keeping costs down throughout the shop. Hurd has exercised an amazing turnaround. The value of the company has
risen 50% on Hurd’s watch, not bad in a fairly stagnant industry, when
the market cap coming in was over $2 billion and operations, at the time, were a complete disaster.
By contrast, Dell was flying high early in this century. When Michael Dell left
his CEO chair in 2004, the company was flying high. Its just-in-time
manufacturing system was the envy of the world. What could go wrong?
Plenty could go wrong. Mainly, Dell trusted idiots and thieves, men who
managed to the numbers rather than to operations, who fudged everything
and let the shop go ragged. By the time he returned early this year,
the damage had been done.
Michael Dell had never known hard times running Dell. He had a big idea, and he
had good people implementing the idea. But he was not himself the man to
implement big ideas, and he doesn’t really have any big new ideas to offer. He’s Henry Ford at a time when his company really needs Henry Ford II, someone who will hire experts and give them their head.
What Dell most
needs to see to succeed is accelerating change in the computing space, change
which will give U.S. based manufacturers an advantage over their
Chinese counterparts, change which will cause the value of parts to rot
faster on docks, so that when he gets your money before shipping you
the goods he makes maximum profit. Dell himself should be pounding the table against U.S. technology policy, which endorses monopoly, which stifles Moore’s Law, and which emphasizes costs over innovation.
Instead, he’s stuck wrestling alligators. Not his forte. And he has
given in to the nasty Texas streak of secrecy. He’s tried to hide flaws
and keep his people from talking truth to anyone, least of all the
press and analysts. As a result, when the problems have occurred,
stupid issues like bad paints on his notebooks, he’s had no goodwill to fall back on.
What Dell needs right now is someone like Mark Hurd. They don’t need a
visionary, nor an entrepreneur, no grand thinker. They need an operations
guy.
So does every company. That is the great lesson here. Without great operations guys you got nothing.
Will idiots like CNBC’s Erin Burnett (left) ever learn this? Or do they really think all that matters is cost, that it’s the other Americans who are idiots?
Until CNBC gets a Clue and fires this moron, and everyone at the network like her, the lesson will remain unlearnt. So stay away.
