Today’s Book: Direct from DELL – Strategies That Revolutionized an Industry – by Michael Dell
Today let us give floor to one of the most disruptive entrepreneurs – in 1992, Michael Dell, as 27-year-old CEO, became the youngest person to be ranked in the Fortune 500 companies list.
He began from a dormitory and disrupted the computer selling business from bottom-up – his 1000 dollars then have become around $90 billion now.
What he did 30 years ago is strikingly relevant today – in his own words:
“I think we’re going to see a whole new wave of rapid industry transition—unlike the slow transition of, say, transportation, in which it took many years to go from rail to air travel. In this transition, you will see traditionally structured companies being seriously challenged by new, smaller, more efficient entrants—right away.”
That is it – if you are NEW & SMALL you can disrupt the biggest guys – provided you can be more efficient – across the ENTIRE supply chain.
After reading this book you might NOT need another book on business, management or entrepreneurship.
In the Book Giveaway #009 The Three Keys to Empowerment, empowerment was identified as a core element of a successful enterprise. Here is a hardcore IMPLEMENTATION EXAMPLE from the book (helpfully provided in this detailed book review):
Think like an owner (ROIC):
To motivate an employee to think like an owner, you have to give her metrics she can embrace.
At Dell, every employee’s incentives and compensation are tied to the health of the business. And one of the best ways we’ve learned to evaluate its health is Return on Invested Capital (ROIC). ROIC became a focusing device. We determined successful strategies by measuring our ROIC and growth for each business.
We explained specifically how everyone could contribute: by reducing cycle times, eliminating scrap, selling more, forecasting accurately, scaling operating expenses, increasing inventory turns, collecting accounts receivables efficiently, and doing things right the first time.
We decided to reward employees around a matrix of ROIC and growth; higher performance directly correlated to higher ROIC, which came back in the form of higher compensation.
How does one begin? He says:
“Sometimes it’s better not to ask-or to listen-when tell you something can’t be done. I didn’t ask for permission or approval. I just went ahead and did it.”– Michael Dell, Direct from Dell: Strategies that Revolutionized an Industry
He does remind you, however, to do your independent thinking:
“As you start your journey, the first thing you should do is throw away that store-bought map and begin to draw your own.”-Michael Dell
Good Luck! God Speed to your (at least a few) Billion Dollars!