Can Michael Dell Become the Next Steve Jobs?
Yesterday, Dell announced that the company would let go of 8,000 employees, or nearly 10% of their global work force. This despite the fact their first quarter earnings were up 8% from last year.
It’s the most recent move by CEO Michael Dell on the road to recovery for the company he began in his college dorm room. Things have not gone well for the computer maker since Mr. Dell decided to step down from the CEO position over 3 years ago. It lost the top spot in global PC sales to Hewlett-Packard, and U.S. sales have dropped over 15%. In January, Michael returned to the CEO position (replacing hand picked successor Kevin Rollins) in order to personally right the ship he himself built. It’s a script the computer industry has seen before…
When Steve Jobs returned to Apple as CEO in 1997, he faced a company in turmoil. The stock was at a record low, and Apple had lost over $700 million in the 2nd quarter. Faced with a dire situation, Steve did the unthinkable by entering into a pact with Microsoft and long time nemesis Bill Gates. When protests arose within the ranks, Steve quieted them with the following:
“If we want to move forward and see Apple healthy and prospering again, we have to let go of a few things here. We have to let go of this notion that for Apple to win, Microsoft has to lose. We have to embrace a notion that for Apple to win, Apple needs to do a really good job. And if others are going to help us that’s great, because we need all the help we can get, and if we screw up and don’t do a good job, it’s not somebody else’s fault, it’s our fault. So I think that is a very important perspective. If we want Microsoft Office on the Mac, we should treat the company that puts it out with a little bit of gratitude; we like their software. So, the era of setting this thing up as a competition between Apple and Microsoft is over as far as I’m concerned. This is about getting Apple healthy, this is about Apple being able to make incredibly great contributions to the industry and to get healthy and prosper again.”
By putting the needs of his company first, and his pride second, Steve formed the partnership necessary to get Apple back on it’s feet. This lead the way for numerous innovations that the company would experience under Jobs, including the resurrection of the Macintosh computer (iMac), Final Cut movie editing software, and of course, the iPod. Despite a $1 yearly salary, Apple chief executive Steve Jobs still managed to top Forbes’ list of highest paid CEOs for 2006, raking in more than $646 million through stock-based compensation.
So is Dell on the same turnaround path thanks to the return of it’s creator? It’s too early to tell, but what makes this such a striking comparison is the fact that Michael Dell is showing a similar strategy by picking an odd partner as a bed fellow. Just last week, he declared that Dell would shift it’s policy of selling PCs primarily via the phone or internet, and partnered up with the 800 lb. gorilla of retail chains, Wal-Mart.
Yet the biggest irony here is the fact that Mr. Dell has had a long standing feud with Apple. Back in ‘97 when Dell was asked what he would do if he owned then-troubled Apple Computer, he said “I’d shut it down and give the money back to the shareholders.” The feud does appear to be over, since Dell and Apple reached an agreement for Dell’s online store to sell iPods.
Further proof that sometimes great leaders form unlikely alliances in order to secure the long term futures of their organizations.
Michael Dell, Steve Jobs, Dell, Apple, strategic alliances
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