Book Review : Direct from Dell

Direct from Dell - written by Catherine Friedman, is about Michael Dell, Chairman and CEO of Dell Computer Corporation.

I decided to read this book after we had the Dell case in our competitive strategy course. The case literally talked about the success of Dell and nothing much. I became interested in knowing the details behind the success factors. Also, success cannot happen always, there should have been failures, perhaps big ones too, that we don’t know and this was my opportunity to find out all that. So here is my notes about the book.

The book is all about how Michael Dell decided to enter the PC Business by starting his company from a dorm room in the University of Texas with about $1000 and then went on to build an empire worth billions of dollars today.

The initial part of book talks about the history and enormous growth of Dell.

So what made Dell unique on its road to success? MD (let’s call Michael Dell that way for convenience) says that its truly based on taking delegation and making the right decisions – whether it was cutting the middleman or not going public to raised money. MD decided right from the beginning to concentrate on – liquidity, profitability and growth. This formed the basis for any corporate decision that Dell made going forward. Dell also adopted the appropriate “time to market” strategy and this was evident when they came out with the 12 MHz PC at Comdex. MD also hired a bunch of talented managers from various other firms in the industry. This strengthened his internal talent pool, which was just MD himself when he started the company. MD used to say – Inventory has the shelf life of lettuce – and this reflected in his supply chain management strategies. His idea of collaborating with the suppliers from end-to-end was perhaps a key contributor to the Dell Story.

The later part of the book talks about the management approach and how the company shifted focus on staying ahead of competition. So, MD started the Dell Website and allowed customers to order online. There was a two way agenda that focused on customers to – understand their problems and listen to their suggestions, and anticipate their future needs well before time to be ready with just the right product.

The customer focus was routed through 360 degree feedback to employees and stock options called ROIC (expanded as return on invested capital). Employees themselves were actively part of the organizational decisions and policies. This created a system of checks and balances at every level and accountability was perfect.

Towards the end of the book, MD also talks about studying customers more than competition, exploiting competitors’ weaknesses, and virtual integration of businesses.

The book also talks about certain phases in MD’s life when Dell was in the downs. In such instances, MD almost lost hope but then decided to hang on and make a difference.

Let me end this here. I hope I have inspired a few of you to read the book.