Maybe I should drive (cont.)

If it sounds as though Dell has a plan, that's a tad misleading. He has a lot of plans, all of them up for discussion at the weekly gatherings of his new, slimmed-down leadership team. Dell has just 11 direct reports, compared with 24 under Rollins (with one open slot for a marketing guy, a job he's been trying to fill for at least two years). They meet in Rollins's old office, which used to be separated from Dell's office by a sliding glass partition. Now that partition is a wall, and the office is a conference room - the Dobie conference room, in fact, named after the Dobie Center, the company's mythical birthplace (actually an off-campus luxury high-rise) where Dell lived while briefly enrolled at the University of Texas.

It's a not-so-subtle evocation of the spirit Dell hopes to recapture during what he's calling an "amnesty period." Attendance at the weekly meetings is mandatory. "Even when I'm in Asia," says Dell. "We're talking about the business. 'How's it going? What are the results? What's working? What's not working? What are our competitors doing?' It's real time. We had lost the real-time touch with the business."

Everyone agrees that on the way from $31 billion in sales in 2001 to nearly $60 billion last year, "we did not absorb the sheer size and the exponential increase in complexity well," according to Paul Bell, who led Dell's expansion in Europe, Africa, and the Middle East, and was recently reassigned to the Americas. Carty has a more succinct analysis: "You can't grow op-ex faster than revenue. Duh!" Which is why Wall Street is clamoring for layoffs, and will probably get its wish.

Cannon, meanwhile, is taking a hard look at Dell's traditional strengths: manufacturing, procurement, and supply-chain management. "We need to make some adjustments," he says. Translation: Expect closer relationships with fewer suppliers and a greater reliance on outsourcing. "Focus on the things that make Dell Dell" is how Cannon sums up this initiative, "and rely on partners for other things."

Geographical expansion is another key. The chunky little EC 280, or some version of it, will probably turn up soon in other emerging countries (that's what EC stands for), with local production to feed local demand. Plants are coming online this year in Brazil, India, and Poland.

We've heard Dell talk about consumer products before, and we've seen what it came up with: TVs that don't sell, MP3 players that don't excite. Now, in Garriques, comes a Motorola vet with the ambition to put Dell "firmly in the middle of the consumer electronics industry" and a notion of who the real competition is that's expansive enough to include Nokia, Samsung, Sony, Motorola, and Apple. Five years from now, says Garriques, "we're all making phones, we're all making computers, we're all making desktops, we're all making PDAs." First up: a push to revive Dell's laptop sales with a new line available in eight colors, due this summer.

If that reminds you of Apple ten years ago, then you can begin to appreciate how much ground Dell is trying to make up with consumers. Some of the most compelling suggestions are coming from outside the company. Dell has a new website, IdeaStorm, that invites customers to post ideas and vote on the best ones. Predictably, there's a vocal contingent for Linux and other open-source alternatives to Microsoft; others are pushing Dell to install built-in webcams on laptops and to open retail stores.

IdeaStorm sounds about as sincere as your typical suggestion box, filled with slips of paper no one reads. But the CEO really seems to be paying attention. "How many of you have visited IdeaStorm.com?" he asked a gathering of employees in China. Only a few hands went up. "Wow. Not nearly enough. So let me give you all an assignment ..."

It's too early to know where all this will lead. There's the SEC investigation to worry about, and a 400-page shareholder lawsuit, filed in January, alleging that Dell Inc. received hundreds of millions of dollars in illegal payments from Intel (Charts), inflating profits and preventing earlier adoption of technologically superior AMD (Charts) processors. None of which seems to be weighing heavily on Michael Dell. "You know what excites me?" he muses, en route to another appointment, this one with a big bank in Tokyo. "Left to my own devices, I would spend all my time with customers and the products, but those things alone don't cause the company to succeed." He shrugs his shoulders. Back to work.  

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