volution. It’s always some new kid on the block that spearheads the next new thing.

The consumer has probably now reached a stage where he wants to walk into a store and see what he’s getting for his money as opposed to just reading specs on his computer and talking to an outsourced person in India who is absolutely clueless about American culture.

In the last five quarters, Dell has missed on the estimates that it has given Wall Stree

At one time Dell Computer was one of the extraordinary growth stories in America. Michael Dell could do no wrong. There then comes a time in every entrepreneur’s career when he or she has to recognize, it’s time to step aside and let new, historically proven managers come in and run with the ball.

Michael Dell stepped down two years ago, and turned the ball over to Kevin Rollins who runs the company on a day to day basis. Dell either has to be kicking himself in the butt for turning the reigns over to Rollins, or be happy that he himself is not on the firing line at the moment.

Dell was innovative in selling directly to the consumer as a business model. It worked brilliantly for years. The firm had no equal in the direct to consumer market. Dell also was encouraged to sell big time to the corporate market. All great technology oriented growth companies hit walls. My work shows that it tends to happen about 7 years or so into the growth process. The exceptional growth company can take longer before it hits the wall, and has to reinvent itself. The word reinvent is the correct one to use.

Microsoft has now entered such a period, having become a cash cow as opposed to being a growth company. In my history of technology investing which goes back 35 years, I have never found a growth company that has not hit a wall somewhere in the growth process.

What happens is that companies at some point tend to rest on their laurels, their past successes and glories. They become so committed to what they are doing, that they become incapable of seeing the next revolution sneak up behind their backs and challenge them for supremacy. It always happens and it’s always the same way with the same result. Never have I seen a single growth company that could reinvent the revolution. It’s always some new kid on the block that spearheads the next new thing.

The consumer has probably now reached a stage where he wants to walk into a store and see what he’s getting for his money as opposed to just reading specs on his computer and talking to an outsourced person in India who is absolutely clueless about American culture.

In the last five quarters, Dell has missed on the estimates that it has given Wall Stree

be kicking himself in the butt for turning the reigns over to Rollins, or be happy that he himself is not on the firing line at the moment.

Dell was innovative in selling directly to the consumer as a business model. It worked brilliantly for years. The firm had no equal in the direct to consumer market. Dell also was encouraged to sell big time to the corporate market. All great technology oriented growth companies hit walls. My work shows that it tends to happen about 7 years or so into the growth process. The exceptional growth company can take longer before it hits the wall, and has to reinvent itself. The word reinvent is the correct one to use.

Microsoft has now entered such a period, having become a cash cow as opposed to being a growth company. In my history of technology investing which goes back 35 years, I have never found a growth company that has not hit a wall somewhere in the growth process.

What happens is that companies at some point tend to rest on their laurels, their past successes and glories. They become so committed to what they are doing, that they become incapable of seeing the next revolution sneak up behind their backs and challenge them for supremacy. It always happens and it’s always the same way with the same result. Never have I seen a single growth company that could reinvent the revolution. It’s always some new kid on the block that spearheads the next new thing.

The consumer has probably now reached a stage where he wants to walk into a store and see what he’s getting for his money as opposed to just reading specs on his computer and talking to an outsourced person in India who is absolutely clueless about American culture.

In the last five quarters, Dell has missed on the estimates that it has given Wall Stree

that it tends to happen about 7 years or so into the growth process. The exceptional growth company can take longer before it hits the wall, and has to reinvent itself. The word reinvent is the correct one to use.

Microsoft has now entered such a period, having become a cash cow as opposed to being a growth company. In my history of technology investing which goes back 35 years, I have never found a growth company that has not hit a wall somewhere in the growth process.

What happens is that companies at some point tend to rest on their laurels, their past successes and glories. They become so committed to what they are doing, that they become incapable of seeing the next revolution sneak up behind their backs and challenge them for supremacy. It always happens and it’s always the same way with the same result. Never have I seen a single growth company that could reinvent the revolution. It’s always some new kid on the block that spearheads the next new thing.

The consumer has probably now reached a stage where he wants to walk into a store and see what he’s getting for his money as opposed to just reading specs on his computer and talking to an outsourced person in India who is absolutely clueless about American culture.

In the last five quarters, Dell has missed on the estimates that it has given Wall Stree

ewhere in the growth process.

What happens is that companies at some point tend to rest on their laurels, their past successes and glories. They become so committed to what they are doing, that they become incapable of seeing the next revolution sneak up behind their backs and challenge them for supremacy. It always happens and it’s always the same way with the same result. Never have I seen a single growth company that could reinvent the revolution. It’s always some new kid on the block that spearheads the next new thing.

The consumer has probably now reached a stage where he wants to walk into a store and see what he’s getting for his money as opposed to just reading specs on his computer and talking to an outsourced person in India who is absolutely clueless about American culture.

In the last five quarters, Dell has missed on the estimates that it has given Wall Stree

volution. It’s always some new kid on the block that spearheads the next new thing.

The consumer has probably now reached a stage where he wants to walk into a store and see what he’s getting for his money as opposed to just reading specs on his computer and talking to an outsourced person in India who is absolutely clueless about American culture.

In the last five quarters, Dell has missed on the estimates that it has given Wall Street. In the last quarter there has been a 51% decline in quarterly profit, and now a recall on 4 million laptop batteries to boot (no pun intended). This is not the way to run a major Fortune 100 company. Things always get worse before they get better

When a growth company hits the wall and starts to decline, the decline usually has to go for quite a while before a new management team takes the reins and starts to engineer a midcourse correction. This is like turning an aircraft carrier around. First you have to make the decision to go another way. You then have to get everybody else on board quickly. It takes several miles to get a carrier turned around at sea; it’s not easy for corporate management to do it either.

Dell will have to re-examine its direct to customer sales model, because right now Hewlett Packard is eating them for lunch. The stock is down 60% from its high for good reason. The stock market is telling you something. Is anybody listening down there in Texas.

Dell bet big on the corporate market, and completely failed to take into account the changing sentiments of the consumer market. Dell needs to grow bigger outside the United States. Everyone agrees that the US market is not really a growth market at the moment. The firm must increase international sales to a point where it’s growing 15 to 20% internationally. I don’t see it happening.

Somebody and not Rollins has to address the lackluster customer service in this country. Why not Rollins? It’s because he was in charge of the company when the problem became a problem. You never want the guy who was involved with the problem to be the guy who fixes the problem. He’s too busy protecting himself than to fix the problem. That’s management 101.

Dell use to be almost perfectly run.