Michael Dell

It's 1984 A skinny 19 year old college student is sitting in a tiny dorm room at the University of Texas with screwdrivers, computer parts, and stacks of orders spread across the floor. Most people saw personal computers as expensive machines sold in glossy retail stores, but Michael Dell saw something everyone else missed. He noticed customers hated paying for features they didn't want, they hated markups, they hated waiting, and nobody was really listening to them. So, instead of building computers first and then finding buyers, he started with the customer. He would personally call customers and ask, what do you actually need this machine to do? Then he'd build it specifically for them, no middlemen, no inventory sitting in warehouses, no giant advertising machine, just direct relationships and relentless execution. Within a few years, that dorm room business became one of the fastest growing companies in America, but here's what makes Michael Dell's leadership story fascinating. He was never the loudest founder, never the most charismatic presenter, never the visionary showman like Steve Jobs. Instead, Dell built an empire through a very different kind of leadership, one that had customer obsession, operational discipline, humility, systems thinking, and an unusual willingness to learn from people smarter and more experienced than himself. He learned leadership from mentors like Lee Walker, operational rigor from Kevin Rollins, supply chain mastery from Sam Walton and FedEx founder Fred Smith, strategic thinking from Bill Gates, and even the importance of design and focus from rival Steve Jobs. This is the story of a leader who proved you don't have to be the loudest person in the room to build one of the most important technology companies in the world. With that, welcome back to Leaders, a podcast dedicated exploring the best leaders this world has ever seen, and your number one source for actionable business leadership insights. On today's episode, episode 56 we are covering Michael Dell. Michael Dell, today Dell is up to a $270 billion market cap, and Michael Dell is amongst the richest people on the planet, currently sitting at sixth. Michael has a great long leadership journey through Dell in terms of that founding story in his dorm room. Up until today, he has been at the company and been at been the leader for the company for such a long period of time, and he articulates that all in his book, Play Nice to Win, Play Nice but Win, which he published in 2021 and we're going to start with a few excerpts of people we mentioned that he surrounded himself with people that are smarter than him, and he definitely learned from a lot of that within his journey and his business career, and one of the people that he mentioned within the book and had a different perspective from was another technology leader, and one that we've covered here on leaders, and that would be mr. Andy Grove, which we covered on episode 10, and so we're going to read a little bit of an excerpt from later. On in the book, where Andy Grove is mentioned, and how Michael Dell was influenced by him, and so it says. So I sat in Intel's lobby, and when security asked me to leave, said I wasn't going anywhere until I got to see Dr. Groove. Grove, Andy must have heard about the annoying young man in the lobby, because I ultimately got to meet with him and tell him about my quest to transform PC Limited into a great company. He became a friend from that day on, as did Pat Gelsinger, Andy's technical assistant, who was just a couple of years older than me.

Working side by side with Andy, Pat was the architect of the original 88 0486 processor, and rose to become Intel's first chief technology officer, and in addition to that, Pat Gelsinger, who was the head of VMware at that time, also had a definitely an influence on Michael, and in addition to that, another leader that we had covered off on that really had the backing of Michael at a very critical time, and that was who we've covered recently, and that is episode 48 main character Jamie Dimon, and so another excerpt from the book is, is here that in this case Michael was trying to really raise lots of money in terms of trying to acquire EMC and fold that into Dell, and what he needed at that time was someone to have financial backing and really back him up in terms of what he was speaking to as far as the financial position that Dell was in to do that, and so an hour or so into a large board meeting. There was a momentary silence. Then one of the board members broke it with a question. This merger, alluding to the Dell EMC one, would add a lot to your job, and your job is already big, he said. We're all kind of wondering how devoted to it you're going to be able to be. Look, this business has my name on it. Michael will go on and saying it's been my life. I said, then I smiled. But also, those of you with kids will understand, my twins are grown up. They're both off to college now. I have a lot of free time on my hands. This got a laugh, but once the room quieted down, another director gave him a serious look. Do you have the money? he asked. We're talking about a lot of money here. Before I could say a word, Jamie Dimon spoke up. Yes, he said, they have the money. The laughter was even louder this time. Then another silence as the stature and credibility of the man who'd spoken sank in. It was a moment I'll never forget, and something for which I'll always be grateful to Jamie. So obviously a critical juncture there from a financial backing that that EMC acquisition ended up being a very successful one for Dell, and certainly one that he had highlighted in his book of all the different back and forths that went along with how, how to acquire that. In addition to that, from an operational standpoint, we recently covered in episode 54 Larry Culp, who probably amongst the leaders that we've covered from an operational excellence standpoint, really had the fortitude and skills to build that into Danaher, and then later on GE, and so Michael talks about this in his book as well, and how he wanted to operationalize things within Dell that he saw similarities to from not only GE but also Toyota that we covered. There's a lot of overlap there, but he says each new product takes lessons from the previous prior generation in all areas, design features, manufacture ability, serviceability, and the same process occurs in the company at large, in sales, services, and support, supply chain, etc. The Japanese call this Kaizen, or continuous improvement, but for every company, Dell included, Kaizen is an ideal rather than a reality. Success is not a straight line up, it's fail, learn, try again, then you hope succeed. How successful you are is really a function of how well you deal with failure and how much you learn from it. Many people don't reach their greatest potential because they fear failure. In avoiding failure, they deprive themselves of a great teacher. Many others fall short because of lack of opportunity, capital, knowledge, or skills. Persistence is an all-important quality on the road to success, and success presents its own challenges, avoiding complacency being the first and biggest, which is why, along with Kaizen. PBNS, please, but never satisfied has been part of our culture since the beginning. So, what else, and who else was he influenced by? Ultimately, from a people standpoint, another person was Charles Schwab, another financier. Dell admired his customer-first disruption, so Schwab would transform stock brokerage by lowering costs and making investing more accessible. He used a similar direct consumer model in his PCs. Schwab also removed middlemen.

Schwab cut out traditional brokerage friction, while Dell cut out retail distributors and went directly to consumers. In some cases, trust and simplicity at scale was something Schwab did as well, building a mass market business around transparency and efficiency. In the opening, we also mentioned Fred Smith from FedEx. From Smith, Dell learned logistics as a competitive advantage, so Dell's build to order supply chain really differentiated himself from other makers of computers at that time, and that was heavily influenced by that world-class logistics thinking. Speed wins, rapid delivery, and inventory turnover became central to Dell's model, and then finally operational precision. So, Smith also showed that execution systems can become a company's moat. Definitely, someone we will cover off in a future leaders episode would be Fred Smith of FedEx, Sam Walton, who we covered off in episode 19. Walton was one of Dell's biggest business influences, and the key lessons from Walton that he was able to translate into his own career would be relentless cost efficiency, inventory management obsession, listening to customers and frontline employees, everyday low pricing as strategy, data driven operations, Dell has often been compared to Sam because both built empires through operational excellence rather than flashy branding, especially early on. Dell also learned from Bill Gates, and one of the few things that he learned from him was platform thinking, so thinking about software ecosystems mattering more than individual hardware products, forming strategic partnerships, so Dell and Microsoft became tightly aligned during the PC boom. Long-term technological vision, intellectual rigor, and analytical decision making, aggressive competitiveness without a lot of the emotional drama, Dell also admired Gates's ability to think several industry moves ahead, and certainly Dell, throughout the years, has gone through so much transform transformational change within the technology industry that they've had to adapt, most notably recently within AI and their most recent earnings even illustrates this of not being just a computer company, but a sort of AI server-centric company and infrastructure that has led to lots of success. In addition to that, episode two, we covered Steve Jobs, and Jobs represented almost the opposite sort of philosophy from Dell in many ways, but also Michael learned a lot of important lessons through Steve. One being design and user experience matter deeply. Brand emotion can be as powerful as the price or performance of a product, focus and simplicity within the work innovation requires saying no to many things. Integrated ecosystems create loyalty, and Dell later acknowledged that Apple's resurgence under Steve Jobs proved consumers would pay premiums for superior experiences, not just technical specs. In addition to that, his one of his first key leaders that he brings on is a more experienced veteran of the industry, and that was Lee Walker, early on, early on from Michael, who formed a formed a company when he was still in college, he needed someone to help him through some of those early years, and Lee really was that person that was critical for Dell having success during that time, and so the biggest lessons that he got from working with Lee seem to have been first, how to scale a company beyond the founders' instincts. Dell was a brilliant young entrepreneur, but Lee really brought the experience operationally and managerially to have discipline. Walker helped Dell understand the finance of the business, organizational structure, delegation, and how different parts of a business fit together. In addition to that, having lots of confidence as a leader, multiple accounts describe Lee Walker as a mentor with sort of a kind of quote unquote fatherly role inside the company. He helped Dell build Dell's confidence as a CEO and taught him how to lead people, not just the products and strategy. In addition to that, the importance of surrounding yourself with experienced talent. One of Dell's long-running leadership principles became hiring strong people who complement your weaknesses. Bringing in Lee early was an example of that lesson in practice, learning every part of the business. In addition to that, so under his guidance Dell became deeply involved, more so in operations, manufacturing, finance, and scaling processes, not just the sales or the innovation of it. And then finally, leadership is about people and culture, not just strategy. Walker emphasized encouragement, imagination, and relationships.

Those ideas later showed up in Dell's focus on culture values and organizational clarity as the company matured, and we'll, we'll go more in depth as to what the Dell values were, and maybe how they formed from the early years of Lee Walker, and some of the values during that time, and then later on today, how those values have evolved in some cases, some of those have stayed the same in some, some cases some of those values have shifted from Kevin Rollins. In addition to that, Michael Dell also seemed to have learned a different set of leadership lessons from Kevin Rollins, who was more of a operational kind of consult consultant background with operational rigor, strategy, and scaling executions. So, the key themes from him would be operational excellence matters as much as the innovation. In this case, Rollins came from Bain and Company, historically elite, a elite consulting business, and that was heavily focused on execution systems and strategy at Dell. He helped professionalize the company as it scaled globally. Dell increasingly focused on tech, tech, and customers, while Rollins drove operations and strategic execution. In addition to that, leadership is shared, not just solo. Dell repeatedly described their relationship as a partnership with shared leadership responsibilities. And then Rollins helped reinforce that idea that a founder doesn't need to personally dominate every area of the business. In addition to that, he built leaders internally, so Rollins emphasized talent development and admired General Electric's leadership training culture. Dell adopted stronger internal leadership development partially through his influence. In addition to that, humility and a team-first culture, Rollins often talked about not worrying about credit and prioritizing team success over personal fame that aligned with Dell's long-term culture of execution and low internal politics. In addition to that, Rollins was great at balancing analytical rigor with inspiration. He openly discussed learning that being the smartest person in the room wasn't enough. He admired leaders like George Washington because they inspired people emotionally, not just intellectually. That likely reinforced for Dell that leadership is both analytical and human. And finally, the dangers of over optimizing operations, the later struggles during Rollins's CEO tenure also became a leadership lesson for Dell analysts and observers, often contrasted his operational focus with Dell's entrepreneurial adaptability and customer intuition. When Michael Dell then returned as CEO in 2007 the company shifted back toward innovation and faster reinvention. Ultimately, Lee Walker helped Dell become a capable executive leader, while Rollins maybe made him more become of a world-class operator and strategist, while also showing maybe the limits of operational discipline without enough entrepreneurial reinvention. In addition to those people that influenced him. Let's go deeper into Michael's specific leadership style and traits. He admits in interviews that he really sees himself as having strength in strategy and not necessarily in that operational part. Hence, why he brought in someone like Rollins to kind of show him the ropes and get that under reins. In addition to that, he has vision and infinite curiosity in terms of trying to understand the business that I think are the key traits that differentiate him with other leaders in the space and even in business in general. Um, in addition to that, there are 21 things in the appendix of his book that he shares, 21 things that he believes that I think also articulate what his leadership style is and what things are important to him. These are in no particular order, he states principles, traits, ideals, and lessons that have helped him and his company succeed. The first one we just mentioned, but curiosity - have I mentioned curiosity already? It's so important. I'll say it again: always be learning. You want to have big ears, to listen, to learn, and to always be curious, to be open to ambiguity. Design your company from the customer back. We've seen this with other leaders that we've studied on on leaders here, definite infinite curiosity, lifetime long long learning, as well as the idea that you should start with the customer and really then work backwards from that. Number two, use facts and data to make decisions. Be objective and humble and willing to change your mind if the facts and data suggest that's what is needed.

This scientific method works in business, so definitely analytical, but also adaptable to change when decisions may not necessarily want to go the route of what the numbers say. Number three, commitment drive grit, determination, perseverance, indominal will. You must have these qualities. Four, try never to be the smartest person in the room. Surround yourself with people who challenge you, teach you, inspire you, and push you to be your best, and learn to recognize and appreciate people's different talents. The people section we highlighted before, definitely highlights that, that he's taken learnings from other people, he's brought in people that are smarter than him to help him grow and learn the business. Number five, trustworthiness, ethics, and integrity are paramount. You can't be successful over time without these values. Markets are long-term efficient. If I make a commitment and don't meet it, or if I deliver a bad product or service, no one will want to buy from me again. Number six, the rate of change is only increasing. It will not slow down in the future. That's definitely true of specifically today, and definitely Dell is adapting to that. Number seven, to go along with that, you must change or die. These are only the quick and the dead, there are only the quick and the dead. Organizations need to constantly reimagine themselves understanding and anticipating all the factors, including and especially technology, that will impact them in the future. Eight ideas are a commodity, execution of them is not. Coming up with a great idea or strategy is necessary, but not sufficient for success. You must execute this, requires detailed operational discipline and understanding. Number nine, teams win championships, not players. Always put the team ahead of the player. 10, life is about taking a punch, falling down, getting back up, and fighting again. And he alludes to number three, there, the commitment, drive, grit, determination, persistence. The excerpt we read before, to alluding to the idea of of embracing failure and learning from that number 11, never let a good crisis go to waste, and if there is no crisis, create one as a way of motivating change in progress. During a crisis or any other time, focus on what you can control. Crises often create new opportunities, instead of wallowing in your problems. Find the opportunity. Certainly, being a company that has lasted 4050, years in time, they've gone through a series of crises that they've been able to easily, not easily, but navigate well. Number 12, don't be a victim ever. Victimhood is a losing mindset. Self-determination requires focusing on what you can control and drive forward. 13, confidence not arrogance, humility not ego. Number 14, everybody gets angry, but don't stay angry. Angry is counterproductive. Instead, be motivated by a desire to help others, and love, family, country, compassion, and mastery be as we like to say at Dell, please, but never satisfied. This means improving continuously what we alluded to before. The Japanese call it Kaizen. It means being in a race with no finish line. Celebrate and appreciate achievements, but always look ahead to the next goal or opportunity. Number 16, success. Success is a horrible teacher. See numbers three and 10. Setbacks and failures make you stronger over time if you let yourself learn from them. 17, be willing to take risks, experiment, and test things as the rate of change increases. Small experience will build a path to success. Number 818. he says. See number 13, which is the confidence over arrogance, humility over ego, humility, openness, fairness, and authenticity. Number 19, have respect for others and treat them as you want to be treated. 20, optimism, obviously finding ways to grow optimism in your. Or yourself will make you much happier, and finally the 21st one that he believes find purpose and passion in your life by being part of something greater than yourself. So those things that he believes in, I think help guide a lot of his leadership principles and style. If we can distill it down, maybe to like seven principles of leadership, I think it, it starts with, in this case, number one being relationship relationships with the customer. For Dell, the customer relationships are the center of the strategy, not just a department.

He built Dell entire original business model around direct interaction with customers, selling PCs directly instead of through retailers, listening constantly to feedback, customizing products to customer needs, shortening the distance between user and company. He believed companies fail when they became too internally focused, instead of externally focused. In leadership, he spends time with the customers directly. As part of that, the feedback loops are fast within Dell. Problems are surfaced early. Trust matters more than short-term margin. The customer tells you where the market's going. Number two, drive what he looks for in his employees, he consistently values people that have internal motivation, curiosity, competitiveness, ownership mentality, and a bias towards action. He tends to prefer people that have the idea of solving problems independently, being energized by difficult challenges, people who keep improving systems, people who move fast without needing constant direction. At Dell, Drive is not just work about putting in time and working long hours, it meant intensity, resilience, accountability, and continuous learning. On the converse, he dislikes complacency, bureaucracy, politics, entitlement, and protecting turf instead of improving outcomes. Number three, leadership quality, judgment. He sees judgment as a separator between intelligence and leadership. A leader can be smart, but he can still make poor decisions because of ego, emotional reactions, lack of data, inability to prioritize, and slow adaptation. Good judgment for Dell means balancing data with instinct, making decisions quickly with incomplete information, understanding second-order effects, knowing what matters most, hiring the right people and allocating resources correctly. A major philosophy within Dell is speed matters, because delayed decisions are often worse than imperfect decisions. He also learns from mistakes, missing mobile trends, reacting slowly to some consumer shifts, and over optimizing operations during certain years, and those have really sharpened his emphasis on being adaptive in terms of your judgment. Number four, vision for Dell is not just inspiration, it's seeing structural change before others do. He had a vision and saw early that PCs were going to become mainstream, direct sales became really powerful to do that. Supply chain efficiency became strategic, enterprise infrastructure was consolidating, and that cloud and data growth was exploding. Dell's version of these visions includes pattern recognition, understanding technological shifts in the industry, long-term thinking, and anticipating customer needs before they fully articulate. He was very systems-oriented, operational, and ecosystem-focused within his vision as a leader. He then had to understand where the organization was going, why it matters, and then how today was connected to the future. In addition to that, having a big vision is also to be really optimistic, as practical rather than emotional, not blind positivity, but belief that problems can be solved, industries can evolve, setbacks are temporary, and that smart teams can adapt that really mattered in a lot of these different waves that Dell experienced, the.com crash, the intense PC competition, activist investor battles, taking Dell private, and then massive acquisitions like we had with EMC. Why optimism matters from his leadership standpoint. Teams borrow emotional energy from their leaders. If leadership becomes any level of fearful, reactive, or pessimistic, the organization slows down. Dell is really known as being calm, rational, and forward-looking optimist. In addition to that, he has great humility, and that's number six. That's one of his most underrated traits. Maybe, despite enormous success, he's often brought in experienced operators early, admitted mistakes publicly when making them evolved his thinking, listened to experts, and avoided founder worship culture. Humility allowed him to really learn from Lee Walker early on, partner with Kevin Rollins, study competitors like Apple and Steve Jobs, and then reinvent Dell multiple times throughout his career, humility and practice also for him is willingness to change, willingness to listen, low ego in meetings and operationally accepting when others know more and focusing on truth over status. Number seven, selfish selflessness. and alignment on common goals. That principle is really about strongly valuing a team first execution, low internal politics, shared objectives, collective wins over individual credit. It also means sacrificing personal recognition for company success and helping other teams succeed by aligning some of the incentives that he puts out, that mindset helped them really to scale globally, because large organizations fail when leaders optimize locally instead of collectively. One of his recurring beliefs is that great companies operate as integrated systems, not as isolated silos.

In addition to that of his leadership positioning, there's a lot from a team value standpoint that we alluded to back in November of 1988 a few, a few months before he went public, he wrote a statement of values for their new corporation, attempting to codify their culture. It was a one-page dot matrix printed document passed out to our little motley crew of 200 odd team members for their perusal, and I wanted them to peruse it, because I meant every word and felt deeply about what every part of what I'd written. So, the headlines that he has within when he first formulates this out in 1988 are four four key statements. Number one, provide high quality products and excellent customer service the business. Number two, treat people with respect, the people. Number three, employees will learn and be growing at all levels. The process, and number four, be the best at everything we do. The standard going more into more from number one, Dell Computer Corporation's mission is to provide high-quality computers directly to end users with a high level of customer service. We are committed to being very responsive to our customers, our one on one relationship with our customers is key to our success, because it provides the framework under which we respond to the ever changing needs of the customer. The company will strive to satisfy the legitimate claims of all parties that have a stake in the business: customers, employees, suppliers, special interest groups, communities, and shareholders. Number two, treat people with respect. The company will encourage and reward initiative, teamwork, responsibility, and excellence among employees. We will provide high-quality products with responsive and courteous service at a good value. We will always observe the highest legal and ethical standards in all dealings. People are the greatest asset of the company. We will provide an environment that attracts, motivates, and retains the best people in our industry. Employees will participate in decisions that affect their own work and receive the rewards that come as a result of their efforts. We will always reward superior performance. Number three, learning always flexibility, change, and responsiveness are the key characteristics that the organization will embody to succeed forever. We should always maintain a learning attitude in which we constantly anticipate and understand changes in the competitive environment and create strategies that will capitalize on new opportunities. We will apply what we have learned and always challenge the assumptions that the business operates under a manager will empower others and remove the obstacles that prevent others from being fully productive. Four is short and sweet, but the company will be the best at everything we do. So that was again written in 1988 In addition to that, he publishes some new value statements later on that are written more so in the early 2000s so they called it the soul of Dell. Meanwhile, our new value statement was coming together in November and December. A document began taking shape in our regional forums in January 2002 a. We distribute it to regional executives for that review, and later that month, during our global executive management committee meeting in Austin, we made final revisions to this declaration of values. They called it the soul of Dell. It was designed for in-house use, but we noted it - we'd be proud for the world to see any part of it. The statement in this case before it was four values, now it was five that were pretty succinct, and I think these again articulate the leadership values and the things that he believes in really well. To wrap this up, so number one, customers we believe in creating loyal customers by providing a superior experience at a great value. Number two, the Dell team. We believe our continued success lies in teamwork and the ability each team member has to learn, develop, and grow. Number three, direct relationships. We believe in being direct in all we do. Number four, global corporate citizenship. We believe in participating responsibly in the global marketplace. And five, six similar to the last value in the 1988 one. Winning, we have a passion for winning in everything we do. It evolved naturally from that 1988 value statement.

He says when they were really just getting started as a player by 2002 they had proved themselves more and globally, but still wanted to reassert some of their basic values and talk about some of the new ones, and he talks through some of the key differences. In 1988 he described the mission as providing high-quality computers directly to end users with a high level of customer service. In 2002 they spoke of providing the best products and services featuring the highest quality and most relevant technology. Products became plural, and services were a world away from just plain service, and they were really trying to position themselves for the 20-first century transition from being a primarily PC company to now include servers and to enter the software and services market in a big way. Certainly, that has paid off more recently as their positioning of not only being a traditional computer company but being a server infrastructure play has led into a lot of great success recently, and that is one to highlight with Michael Dell, a lifelong learner and leader of Dell, and he will, I think, continue to succeed as a leader of Dell up until he, in no shortage, probably decides to call it quits, but he will leave a great legacy within the company that he has built one in which should be studied, and one in which his leadership style should also be studied, and what we did here. So, with that, that is episode 56 on Michael Dell. We'll be back here shortly with episode 57