Marketing is about the profitable satisfaction of customers needs. We all know that. However, the marketing philosophy can come into disrepute if there is too much emphasis on the “profitability� and too little on “satisfying customers’ needs�. In this article from Stefan Stern out of the Financial Times on Tuesday, he talks about Dell’s failure to deliver satisfaction and, worse still, an apparent delusion (if you read the mission gobbledygook on its web site) that it is doing so.
We come across examples like this every day. These companies start out with a good idea, they do deliver satisfaction and therefore they grow.
As they grow there is a disconnect between the original good idea and the new business model. In the now huge behemoth, the staff begin to lose track of what they are really about, the management believe in their own success and become remote from the customers, and the company falls into decline. It is classic life cycle stuff. Will Dell manage its way out of this problem? It will take a few years to find out.
My two weeks in hell with the tortured Soul of Dell By Stefan Stern
Published: November 7 2006
Greetings from Dell hell. Today’s column is brought to you courtesy of various internet cafes in south London and the surprisingly efficient wireless laptop owned by my silver-surfing parents.
After the sudden demise of my old PC a few days ago, the inevitable call to the Dell customer hotline was made. And 48 hours later a new machine arrived – on the wrong side of town. The world may be flat, but there appears to be a slight wrinkle in the London area.
You will not want to hear about the tragically predictable crises that unfolded once the new PC had finally arrived – the overly aggressive firewall, the disappearing internet connection. Suffice to say, two weeks later, your columnist is still languishing in the information super-lay-by.
You may say I’m a whinger, but I’m not the only one. Last year, the web guru Jeff Jarvis wrote on his blog about his difficulties with Dell and provoked an enormous, sympathetic response from fellow sufferers. The company’s share price is only now beginning to recover from this eruption of negative feeling. So, while this column has been inspired in part by personal trauma, there is a wider purpose to all this: the stark management lessons that such episodes have to teach us.
Great businesses get a few simple things right. They deliver what the customer wants, on time and in full. They offer value for money. They are not looking for an opportunistic one-night stand with their customers but try instead to build long-term relationships.
Dell has spent the past two decades trying to become a great business of this kind, and, to a large extent, it has succeeded. In recent years, more business school case-studies have been written about the company and its “direct” business model than just about any other.
Perhaps its mistake has been to believe too much of this hype. On the company website you can find a statement of corporate philosophy called the “Soul of Dell”. But compare and contrast the now well-documented actions of Dell managers and staff with the high ideals and, you have to conclude, here is a Soul in trouble.
As far as customers are concerned, Dell says, the company believes in “providing a superior experience”. Superior to what? Open-heart surgery without anaesthetic? The hours spent by Dell customers dealing with “technical support” or pleading with “customer care” staff are seared on the memory of those who have dialled up in their hour of need. This sort of “superior” experience creates customer loyalty, the company believes.
Hmmm.
Dell says it wants to build “direct” relationships. But what is direct about remote call centres staffed by people who inevitably run up against the profound cultural challenge of dealing with pushy, impatient customers from the other side of the world? What is direct about getting staff to work their way through rigid, impersonal scripts, which limit spontaneity and ability to solve customers’ problems? Dell says it wants to foster “open communications”. It succeeds mainly in creating the opposite.
This also militates against the next stated desire of Dell’s “Soul”: to develop “global citizenship”. Managing large, international businesses is highly complicated. Importing and then imposing alien business language on new staff does not build “a healthy business climate globally”. It creates a synthetic vox Americana which is both irritating and insincere. (”Thank you for choosing Dell,” said one tired call centre employee to me, even after I had bellowed and bullied my way through the preceding 20 minutes.) I am picking on the company that was unwise and unlucky enough to anger an FT columnist in the past two weeks. Others could have come in for similar treatment – the charter airline that left my family stranded for eight hours this summer, or the mobile phone company that seems determined to cut off all my wife’s calls. They are all guilty of the same crime: claiming to believe in the familiar business goals of excellence, customer delight, quality and service, while failing utterly to translate shiny vision into reality.
In a new paper for the ongoing “Tomorrow’s Global Company” enquiry, the business writer George Binney explores the trouble with statements of corporate purpose and values. The words used in these declarations, he says, are often very similar and seem to support unarguable aspirations.
But employees, suppliers and customers find them ridiculous, he argues, because the behaviour of the businesses concerned rarely lives up to the stated ideals. Better not to have any declared vision or mission at all, he suggests, than to pretend to care about customers (or the environment) while cutting every corner in the quest for “shareholder value”.
Jim Collins and Jerry Porras’s analysis of “visionary companies”, in their 1994 classic Built to Last, remains the key text in this area. “We did not find an explicit and formal statement of purpose in all of our visionary companies. We sometimes found purpose to be more implicitly or informally stated,” they write.
“An effective purpose reflects the importance people attach to the company’s work – it taps their idealistic motivations – rather than just describing the organisation’s output or target customers. It is like a guiding star on the horizon – forever pursued but never reached. Yet while purpose itself does not change, it does inspire change.”
David Packard, co-founder of Hewlett-Packard, asked some of his senior managers in March 1960: “Why are we here?” He continued: “I think many people assume, wrongly, that a company exists simply to make money. While this is an important result of a company’s existence, we have to go deeper, and find the real reasons for our being.”
Collins and Porras say: “Listen to people in great organisations talk about their achievements and you’ll hear very little about earnings per share.” Someone tell Michael Dell – if you can get through to him.
