CEO Dell: We're losing our religion

That's us in a corner

Dell today leaked a memo to the press, hoping to prove that it's serious about making a strong comeback.

CEO Michael Dell penned the memo that went out first to employees and then shortly thereafter to the Wall Street Journal, once Dell's PR team gave the all clear. The e-mail made ample use of broad statements and rhetoric to rally troops around the Dell 2.0 concept, which has a revitalized Dell trying new things like being nice to consumers to get back in the hardware game. In particular, Dell will work to make its management, manufacturing, supply chain and customer service more efficient, CEO Dell said in the memo.

Most reporters covering the leaky letter focused on two sentences.

"The direct model has been a revolution, but is not a religion," Dell wrote in the e-mail. "We will continue to improve our business model, and go beyond it, to give our customers what they need."

But Dell already used the "direct model is not a religion" shtick in a March speech to Duke University MBAs.

"I think first of all we have to state that our direct business model is not a religion," Dell told the students. "It's a strategy, a strategy that works pretty well, has worked well in a number of countries, a number of customers. But that's not to say that we can't have other strategies as well to sell our products, so we have a great distributor business throughout the Middle East and in a number of countries in Africa that's thriving."

[Has it really come to plugging sales in Africa? - Ed]

Poking fun at the 180 twist in direct model rhetoric proves easy. Every executive, including founder Michael, has turned to the "direct model" as an answer for Dell's successes and the answer for how it will fix failures.

"The direct thing is a religion," said (cough) former CEO Kevin Rollins, in an interview. "That's what we do, that's the basis. We have a better cost structure than any of our competitors, we can offer better customer support, so no. We'll experiment with things from time to time, but the core of the model is going to be direct."

And, er, there was that pesky interview with UCSD where the questioner asked Michael Dell if there was "any company religion?".

"Go direct to suppliers," Dell responded.

We've beat up Dell plenty over dishing the "direct model" line as a response to any question and thank the heavens that the company has finally decided to modify its marketing.

Beyond the direct stuff, Dell promised to craft a more efficient company.

"We need to streamline our management structure to speed decisions and remove bureaucracy," he wrote in the memo. "We're making improvements in pricing, product development and fulfillment, and customer experience."

Again, however, this is old news.

http://www.theregister.co.uk/2007/04/28/religion_dell_michael/