Dictionaries tend to define innovation as the creation of something new. When spoken by CEOs and business managers, I don't believe this is what they have in mind. I believe they are talking about cost cutting. A recent news item crystallized this issue for me.
Dell Computers is getting rid of 8,000 jobs in Texas. "While reductions in headcount are always difficult for a company, we know these actions are critical to our ability to deliver unprecedented value to our customers now and in the future," said Michael Dell in a statement. They say they have too many employees. I say, they have too few customers.
In a past forum, he also said "It's all about speed, learning, and coming up with product innovation, services innovations faster." No hint of job cuts here. Unfortunately, true innovation might challenge Dell’s business model. But, few businesses today would dare to tamper with their business model. A past incident makes folly such reverent protection.
I needed a new laptop. I owned a Dell and, for travel, an extra transformer. My suggestion to buy another Dell, so I could reuse it was met with laughter by my coworkers. Some months before, they had been at a conference. All had Dell laptops and one transformer burned out and became useless. In panic, the others found that their transformers were not compatible. They did not have matching plug designs. Dell's business model forced buyers to buy new transformers along with their new laptops.
Neither is Dell alone in such innovation fraud. Hewlett-Packard does the same with cartridges for their printers. Each new model requires a new, incompatible ink or toner cartridge. All printer manufacturers have the same business model. I can imagine that some model changes are ONLY to make old cartridges incompatible, and their inventories unusable. That office supply commercial rings true. The one with people standing around a store employee calling out cartridge numbers. Waiting, like in a lottery, for their number to come up.
Imagine what the outcome had been if my coworkers had found they had compatible transformers. Every new laptop would be a Dell. As it turned out, they said they would never buy another Dell. What a wonderful business model. Sell an extra transformer; lose out on selling many more laptops. Such wisdom smacks of the manufacturing story. The one where the plant manager admits that he loses a bit on each product sold. But, figures he will make it up on volume.
CEOs scream for innovation, and it is right under their noses. It is innovation that helps CUSTOMERS. I think that is the true meaning of innovation. Helping customers.
I am in full agreement. When and if Dell decides that customers are what made his business then, maybe Dell would not have to reduce their workforce.
A couple of questions come to mind;
Q: Why did Dell decide to outsource their customer service to India?
A: Innovation, increase service, no, to save on labor cost. However customer satisfaction dropped to a new low. I would rather go through the push 2 routine then, not being able to understand or communicate with the person on the other end of the phone.
Q: Why can't Dell deal with one supplier?
A: I don't have one but, I have a statement.
The other day someone at work got a new Dell 745 OptiPlex and needed the sound and video drivers reinstalled. Go to the Dell site, enter in the service tag id and then go to drivers for the system. There were 3 audio drivers available from different manufacturers and 7 video drivers available from 3 different manufacturers. What really bothered me was the service tag should have identified what devices were installed, it used to work that way. Dell had a reputation of JIT assembly and entered the correct information about your system. Now, they purchase equipment from the low price supplier and put in what ever they have available that day. They make you download each driver and try them all until you find the one that works. Seems like Dell has gone backwards in service and can't find a dependable supplier.
Innovation = Cut Costs and personnel. Same definition they have for lean.
Posted by: Dell | April 14, 2008 at 10:41 AM