Dell – A Harbinger of the Future?

Wallstreet . . . the bastion of gambling, quick money and short-term thinking took a hit today.  This is positive news for the masses.  An act that removes an organization from the clutches of the investment world and some of the underworld figures that run it may become a trend.  We can only hope.

David Packard -co-founder of Hewlett-Packard – echoed this notion long ago.  His sentiment about expanding a business was an equation.

“The percentage increase in sales which you can finance each year is equal to your percentage of profit after taxes times your capital turnover.  Capital turnover is defined as the dollar in sales you can produce per year for each dollar of capital you have invested in your business . . . Your capital includes working capital (that is the money to be used to buy inventory, to finance your accounts receivable, to provide some working cash, etc.) and fixed capital would be the amount of money you have spent to buy facilities, tools and equipment.”                                       – David Packard (from Growth from Performance address to Institute of Radio Engineers; April 24, 1957)

Even Henry Ford was a proponent of stockholders being active in the business.  Believing that those who were active “will regard the company as an instrument of service rather than as a machine for making money . . . Hence, we have no place for the non-working stockholders . . . If it at any time became a question between lowering wages or abolishing dividends, I would abolish dividends.” (Henry Ford, My Work and Life)

Dell has an opportunity to do the right thing and not just do things right with this move.  Making decisions based on the long term is a start.  This will allow the design of a system that does right by customers and Dell workers.

A tough road ahead?  No road is easy, but the fundamental shift in thinking leaves the door open for greater possibilities.  Go Dell!  But there will be the devil to pay if you fail.

Tripp Babbitt is a service design architect.  His organization helps executives find a better way to link perspective to performance and use workers to build and refine your service.  Read his column at Quality Digest and his articles for CustomermanagementIQ.com. Reach him on Twitter atwww.twitter.com/TriBabbitt or LinkedIn atwww.linkedin.com/in/trippbabbitt.

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