After months of speculation and one bad headline after another (SEC probes, exploding laptop batteries, wilting market share), Dell Inc. (NASDAQ:DELL) did what most people expected and replaced Kevin Rollins as CEO with company founder Michael Dell. The move continued a long tradition of "encore CEOs" who get called back when companies they founded or led to greatness fall on hard times.
Experts say it is rare for a company to go back to its executive roots. The movie signals both a sense of desperation and a need for a proven hand at the helm.
The question now is whether Michael Dell will be the next Steve Jobs or the next Ted Waitt. Jobs famously saved Apple Inc.(NASDAQ:AAPL), which lost its way in the 1990s and saw its already-small market share in PCs shrink dangerously. Jobs revitalized the company, pushing for a new operating system (OS X), new designs (the iMac) and new products (the iPod).
But on the other hand, there was Ted Waitt, who started Gateway(NYSE:GTW) and became an icon (as much for his ponytail and cow-spotted box as for his computers). At the peak of Gateway's strength Waitt handed over the reins, but when the dot-com bubble burst Gateway started to suffer and Waitt stepped back into the corner office. All of his skills and long hair were not enough, though, to turn the company around. He left Gateway again (this time entirely) in 2005.
Other CEOs have done it, with mixed results, among them Charles Schwab at his eponymous firm (NASDAQ:SCHW)(which has gone well) and Ken Lay at Enron (which did not go as swimmingly).
It raises the question, though, of the long-term future for Dell (the company), and it may prove instructive for any business looking to make a leadership change.
At some point, you have to move on.
Michael Dell can not run Dell forever. Bill Gates could not run Microsoft (NASDAQ:MSFT)forever, and knew it, ergo Steve Ballmer. Mom-and-pop businesses that thrive do so because son-and-daughter are ready to step in when the need be.
Some suggest that poor prep work by a corporate board (or Mom and Dad) is to blame for bad transitions. A business has to be preparing itself for new leadership all the time. The recipe seems to be something like this: come to terms with the need for new leadership, swallow your pride, find someone qualified, and then get out of the way and let them run your business for you.
Even if it does feel like cutting off a finger.
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Reader Comments (Page 1 of 1)
2-05-2007 @ 8:26AM
elliot r said...
i think that there is no one better to know there company then the one who's been there alone from the start
2-05-2007 @ 9:15AM
ROY BARBER said...
THE VERY FIRST THING HE NEEDS IS TO GET OUT OF INDIA AND TAKE CARE OF BUSSINES HERE IN THE STATES
2-05-2007 @ 9:28AM
DOT WHIRLEY said...
Seems Dell has so many things going in so many direcetions nothing is really complete anymore. Michael should focus on what he did right and let all the other "stuff" go. Keep it simple..do what you do best...take care of your own and they will take care of you.
2-05-2007 @ 9:56AM
Linda said...
Dell has been a disgrace for 2 years now. We are dealing with a projector and laptop issues that have not been resolved in almost a year. We came to Dell due to Gateway servicing gone bad after many years of using Gateways as desktop computers. Our dealings with Dell have been so futile. It's a disgrace! We will NEVER buy a Dell product again. We don't know that anyone can pull Dell out of the hole they are in now. Dell needs to have service and support in America for the first thing, have proper training for their staff. And to make consumers their first priority. Good luck! You will need it!
2-05-2007 @ 10:43AM
VIVIAN J said...
My son encouraged me to buy a Dell when I bought a 2nd computer to use in my sewing room. I have been very disappointed in their support. I paid extra for a 3 year "in home service contract". The problem is getting them to come out. I had purchased all previous computers from Best Buy with the extended warranty and now Dell tells me my 3 year contract was not a warranty. Next time I will go back to Best Buy. Dell's online support is OK; however, still having the same problem.
2-05-2007 @ 11:36AM
Allen said...
First let me say that I went fron Gateway to Dell because I was told and read that Dell's hardware and support were "superior" ... that was soon disproven ... even though I purchased (at quite a significant expense) a multi-year extended warranty.If Michael Dell wants his company to be on the right path" then "he" should pay attention to his customers complaints and not insulate himself from them. It is virtually impossible to "reach" ... by any "method" ... anyone in a position of authority that is willing to listen, let alone do anything about any customer service issue ... as far as the comment about "getting out of India" ... BRAVO ... anyone that has had the misfortune to speak to an Indian call center can now appreciate why it is cheaper to operate there ... THEY DON'T CARE ABOUT DELL'S CUSTOMERS! In all my years of business experience ... I have never seen a company literally "trying" to "drive away" customers to ANY competitor!
2-05-2007 @ 11:44AM
Dee Clingman said...
Dell needs to focus on new priorities of customers, employees and investors. If one takes care of first two the third one will take care of itself. Customer service reps need to speak English NOT Punjab! Perhaps move the company to India and discontinue US sales and service to better serve their intentions?
2-05-2007 @ 11:54AM
weldware.com said...
We have been an online business for over ten years.
Our phone number is (800)281-3355 (3355) spells Dell, several years ago we started getting calls from Dell customers trying to order computers or seeking service. The last couple of years mostly for complaints, sales and service.we have contacted Dells management personaly and by a hired Attorney with no results. Even Dells Corporate ofice gives our number to customers.Does anyone know a good Attorney?
2-05-2007 @ 12:13PM
Greg Mulkey said...
I had heard that dell provided excellent customer service(word of mouth).When I started my own small business,I purchased a dell.It was a good purchase.However, when I moved my office,I needed a simple hook up question answered. It turned out to be a free trip around the world and a lesson in a language I don't care to speak. I was told my warranty was expired and it would cost $100.00 to answer my question.Word of mouth can be your best advertising or your worst enemy. I have learned in over 20 years of sales that" A CUSTOMER DOES NOT CARE HOW MUCH YOU KNOW UNTIL THEY KNOW HOW MUCH YOU CARE."
2-05-2007 @ 12:49PM
Carole Meeske said...
The comeback of Michael Dell may put back the C in care and customer service that went south in the past 3 plus years without him at the helm. It may get us former Dell computer owners to purchase another Dell. I know that I was turned off by customer service treatment under the past management. I even tried to send my thoughts to Michael Dell this past Novenber 2006.
2-05-2007 @ 12:55PM
Dee Dee said...
Yes, they need to go back to their executive roots. I had a problem with their laptop, so I hand sent it back to them to be fixed. Dell lost my laptop so they sent me a new one. I asked them if them were going to merge my old account with my new account (monthly payment plan)a Dell representative said yes. Next thing I know my account was sent to collections because they didn't merge my account and I was sneding them money for a laptop that they lost. No one knew where my payments were going to, so i had stop paying.
Dell needs to get their act together.
2-05-2007 @ 1:32PM
Matt Wigggers said...
I have bought 15 DELL's in the past, but the last laptop I bought 10 months ago is still not working and the help from India is just terrible! A chage is so badly needed!
2-05-2007 @ 2:09PM
prov1312 said...
I appreciate the fact that Dell has extended credit to me, and also the fact that people in other nations need to make a living. However, dealing with the intractability and superficial British politeness of Indian customer service representatives has been dreadful . . . I'm stuck in the 20th century with a limited-use computer . . . what might Mr. Dell do for me now?
2-05-2007 @ 2:27PM
scottaud said...
Why would anyone buy a dell? It is overpriced and has poor customer service. Go to Tigerdirect.com since I have purchased several computers there that are better priced and better served.
2-07-2007 @ 3:38AM
weldware.com said...
We have been an online business for over ten years.
Our phone number is (800)281-3355 (3355) spells Dell, several years ago we started getting calls from Dell customers trying to order computers or seeking service. The last couple of years mostly for complaints, sales and service.we have contacted Dells management personaly and by a hired Attorney with no results. Even Dells Corporate ofice gives our number to customers.Does anyone know a good Attorney?