Friday, May 12, 2006

ROCI #4: Corporate Suicide (Totally Awesome Computers)

At first glance, it's hard to know where to begin with TAC. But when I think about it a little more, it's immediately clear: Dell Schanze.

There's been a fair amount of TAC, and more specifically, Schanze bashing on this blog, but I really believe we can take some even-handed lessons from the demise of TAC, and I intend to glean them herewith.

First, this: What do TAC and Enron have in common? Denial. Great big, heaping servings of it. Both of these companies had people at the very top telling their subordinates, "Calm down, everything's fine." Enron and TAC each hid money problems and tried to save the farm by ripping off customers. And Ken Lay and Dell Schanze both insist to this day that they've done nothing wrong, in spite of mountains of evidence to the contrary.

The difference between Ken Lay and Dell Schanze? Shareholders. If Schanze had brought TAC crumbling down with thousands of shareholders to face after doing so, then Dell's claimed need to carry a gun might not be the simple self-delusion that it is.

And before we go on, I'd like to make this clear: I am not anti-gun. I'm anti-stupid.

Dell cares more about guns than he ever cared about TAC. Lay cares more about money than he ever cared about Enron.

And that's sad, and it's a bad sign for a business. A CEO or President position in a company is a commitment that you'll live and have priorities in accordance with the best interests of the business. I shouldn't be CEO of Apple Computer, because I like Windows, and recommend it to my friends. Maybe it's ok for a data-entry drone to go in every day, do his job, and hate the company all the while. But the guy at the top must care.

And even more importantly, he has to have a clue. Ken Lay was approached by his staff within Enron who had concerns about accounting practices. They were dismissed.

I know former members of Dell's inner circle. They told him to stop talking about guns. Stop carrying a gun. Stop putting gun stickers on your trailers. Stop being so crazy in front of media types. Stop buying time on late night TV to talk about religion. Stop comparing yourself to Joseph Smith and Jesus Christ in public. But as you can see below, Dell just doesn't get it.

And so, Jake's Rule of Customer Interaction #4 is a Special Dell Schanze Edition.

ROCI #4: If your staff are telling you something is wrong with the way you're running the company, SOMETHING IS WRONG. You've probably made smart hiring decisions, and if you haven't, then none of this matters anyway. You must listen to the people who have concerns. That's your job. In other words: Don't let your company die because you can't listen or change. If necessary, step down and let someone better suited to the job run the company.


Jake said...

It's not hard to find pictures of Dell looking really crazy, but I didn't feel that taking the cheaper shots would help to make a point.

So instead of using a photo from Dell's hated news media, I pulled the "clueless" photo from one of his own ads. Seems kind of...appropriate.

And for the record, unless I've got something new to say, this will be the last TAC post.

I will say, though, that it's hard not to take a shot at such an easy target. Dell is just such a natural victim, and he's honed that role through meticulous practice. You'd think that he could come up with something a little more original than blaming the media, though.

Anyone with her head on straight in business knows that a media blamer's problems aren't really with the media.

Stan said...

My sweet wife said to me the other day, "I feel bad for Dell. I really pity him."

I don't feel the same. Dell built a great company. He just didn't know how or why.

Dell likes computers. A little more than 10 years ago, he built a computer for a family member and brought it to work one day. A coworker asked about it and offered to buy the custom machine. And, quite by accident, Dell found a niche in the market.

Custom built computers with top quality, interchangeable parts. Sounds good, doesn't it? On top of that, these custom built machines could sell for a reasonable price and yield an enormous profit. Tack on an unbeatable warranty and you have all the makings for a really great product.

Dell also had the luck of hiring really good people. In the beginning, he surrounded himself with them. Employees saw the makings of an enduring great company and worked their best to build it up. The company grew.

Dell's downfall. The "it's all about me" complex. Dell couldn't let go of the steering wheel. He couldn't let smarter and more capable men take the helm. He tried, but quickly put himself back in the driver's seat. Why? Because he saw the company surviving and thriving without him . . . Dell couldn't accept the awesome truth . . . it wasn't all about him.

It isn't really that Dell didn't care about TAC or cared more about guns. To me it always seemed that Dell cared most about feeding his gigantic ego.

Jake said...

Good point, Stan.

I felt a little iffy about the "Caring" part of this post, but I left it in to make the point.

And I guess the point is that he didn't care enough about the business to fix the problems he was making.

And I think you're right about all the ego. It's all about Dell...just ask him.