The following is the entire email that Michael Dell sent out, after he assumed the CEO position.
Friday, February 02, 2007
From: Corporate Communications
Sent: Fri 2/2/2007 14:57
Subject: Leadership Message from our Chairman and CEO
To: Dell Team Members Worldwide
From: Michael
We held a meeting this morning with our Vice Presidents and Directors. I’d like to share the highlights of this meeting with all of you.
I told our team that I remember the great times and many successes with Kevin Rollins, but now it’s time for a change. We are not doing a COO or CEO search. I plan to be CEO for the next several years.
I remember what it’s like to start a company. We’re moving fast. There is no luxury of time. The competitors are fierce. The difference is this time we have many new assets and some hidden ones that can be brought out.
We have great people . . . but we also have a new enemy: bureaucracy, which costs us money and slows us down. We created it, we subjected our people to it and we have to fix it!
The #1 Tell Dell issue is bureaucracy and getting cooperation from other organizations.
I am asking each of you to look across your organizations and eliminate redundancies, think about what is best for Dell, and provide the clarity and focus of leadership that we need.
Last year, we worked really hard and there were many sacrifices. Thanks!
We had great efforts, but not great results. This is disappointing and it is unacceptable.
The result is that there will be no bonus this year. I know this is a big deal for you and your teams. We’re going to fix that so that our efforts translate into great results and success for our teams.
But we still have great people who made great efforts. It’s important to recognize your hard work, though our results fell short. Limited discretionary awards will be available to all but the most senior people. We can’t cover everyone, but it will be a tool you can use.
And we are also budgeting for above-market raises this year.
For stock awards, we will shorten the vesting period from five to three years for future grants and move to restricted stock units.
And we’re going to set the annual bonus plan against realistic targets.
We have a tough couple of quarters ahead. We didn’t get here overnight and we won’t fix things overnight either.
OPEX (operating expense) grew too fast. We need to grow into what we have, hold cost and eliminate marginal activities. If you have some, please stop them now and if you’re not sure, bring them forward. We must focus and wring out savings.
Long-term, we will be the technology leader known for strong operating performance, a great experience for our customers and a great place to work!
We will have clear priorities and a focused strategy.
We will grow Small and Medium Business (both with business and public customers) and expand Services.
We will continue to build the enterprise Server/Storage business. In Services, we will build, partner and buy.
Product Group will shorten design cycles, increase speed and innovation/design that create real differentiated value for our customers. We will transition to a light touch ODM (original design manufacturer) model.
We’re going to introduce new brands and products with a focus on Consumer and Small Business. We will ensure quality, stability and predictability for our larger customers.
We will complete our dual processor supplier strategy.
We’ll restore loyalty and continue CE improvement focusing on the activities with the best ROI. We will bring excitement and pride back to our brand.
In emerging markets, we’ll take new approaches and introduce new products.
In Consumer, I believe the dramatic de-scaling is a mistake. We will focus on return on invested capital (ROIC), cash flow and variable costs. We will have a new product cycle, we’ll fix CE and we will not run away from a cost fight!
When I started in 1984, it was just me. But now we are blessed to have an awesome team, many great assets and $11 billion or so. It won’t be easy, we’ll have to make some tough decisions and we won’t be shy about those. Our focus will be on building Dell into the company we all know it can be for our customers, our people and our shareholders.
To summarize, we will differentiate with CE (customer experience); deliver value, but go beyond this with our unique understanding of customers; move to Solutions and Services; use database marketing and targeting for smaller customers; leverage our unique supply chain; regain our cost position; and build some new sources of sustainable profit including using intellectual property to differentiate.
It’s all part of Dell 2.0.
We will unify our leadership structure, from well more than 20 direct reports to 12. I’ll be decisive, but also push many decisions to our leaders. We will speed decision-making and make decisions closer to our customers and have clear responsibility and accountability.
I have asked Paul Bell to return to Austin and lead the new Americasorganization, which will include Small and Medium Business, Public, Commercial and Americas International. We expect to name the replacement for Paul to lead EMEA from a choice of internal candidates in the next few weeks.
Asia Pacific/Japan will continue to be led by Steve Felice.
We are creating a new organization called Global Operations, which has responsibility for all manufacturing and procurement worldwide. We’re conducting a search for this position and hope to complete it soon.
Global Services will be led by Steve Schuckenbrock.
There will be a Consumer group which will also include online, S&P and Brand. We’re conducting a search for this position and we also believe we have a great internal candidate.
Our three Product Groups will remain largely unchanged. The Consumer Product group will be led by Alex Gruzen; the Business Client Group by Jeff Clarke; and the Enterprise, Server & Storage Group by Brad Anderson.
I have asked Don Carty to take on several responsibilities in addition to Finance, including IT, HR, CE and Support and IR and Communications.
Our Legal group will be led by Larry Tu and our Strategy team will be led by Tim Mattox.
We will be bold in our thinking and swift in our action.
I ask you to commit with me to the future of Dell. Show confidence with your teams and our customers. We will fix this business and take it to new heights!
All the Best,
Michael
