The Cultural Fit Between Dell and EMC

By LAURA LOREK
Reporter with Silicon Hills News

Steve Price, senior vice president of human resources at Dell, courtesy photo.

Steve Price, senior vice president of human resources at Dell, courtesy photo.

During the last seven years, Dell spent $14 billion to acquire more than 30 companies to reinvent itself into an “end to end solutions company.”

“We have developed this real muscle around taking in companies, integrating companies and incubating companies,” said Steve Price, Dell’s senior vice president of human resources. “We have learned a lot from all of that activity. It has reinforced this entrepreneurial culture inside the company.”

And that experience is why, in part, Dell knows its merger with EMC will succeed, Price said during an interview at DellWorld 2015 on Wednesday.

Maybe seven years ago, Dell might not have been prepared to take on an acquisition like data storage giant EMC Corp., but now it’s ready, Price said.

In one of the largest tech deals ever, Dell announced recently plans to merge with EMC in a $67 billion deal that would add another 70,000 employees and $24 billion in revenue. Dell has $58 billion a year in revenues and 100,000 employees including 12,000 at its headquarters in Round Rock.

“I say you probably give these things a 50/50 hit rate under normal conditions,” Price said. “But we go into this one with a spirit of optimism and excitement for a couple of reasons.”

In the last year, Dell did a culture study inside the company with 50,000 employees voluntarily participating. The study spelled out the top three things that matter most to Dell’s culture. Dell’s relationship with customers ranked number one, a competitive spirit and passion for winning ranked second followed by a drive for results, Price said.

When Dell looked at what was important in EMC’s culture it was the same top three things, Price said.

Price, who has been with Dell for 19 years, has seen the company go through a lot of changes and he has seen it intentionally foster a cultural of innovation and entrepreneurialism.

But it wasn’t always easy, Price said.

During the dot com crash, Dell had its first company layoffs. It was the first setback for a company on rocket-ship growth, Price said. Dell created a lot of wealth, its stock was splitting all the time and it was a darling of Wall Street, but then the slowdown served as a time for reflection, Price said.

In 2001, Dell started to focus on cultivating its culture and the quality of its leadership and the development of its team, Price said.

Dell had this amazing period of growth again, Price said. It lowered pricing, took a bunch of market share worldwide and grew from a $30 billion to a $55 billion company in a five-year period, he said.

In 2008, the financial crisis hit. Dell went through another realignment and began to embark on its journey to become an end-to-end solutions company, Price said.

“Then when Michael took the company private a few years ago this entrepreneurial DNA inside the company was unleashed again,” Price said. “Culturally that’s really powerful.”

As Dell has gone through its acquisitions, it has gained an appreciation for the different cultures of the companies it buys, Price said. It likes their simplicity, direct communications and focus on innovation, he said.

“I think what we learned is it’s not about homogenizing all of these companies and cultures and making them one thing,” Price said. “It’s about identifying and understanding what is unique, specific and special about these various cultures.”

When putting Dell and EMC together, there’s not a tremendous amount of overlap in customers and products, Price said. EMC is strong in the enterprise space and Dell is strong in the medium to small business space. Already, both companies are trying to get commercial agreements in place to begin sales because the opportunity is so great, Price said.

The companies are already familiar with each other, Price said. In 2005, Dell entered into a partnership with EMC. It grew into a $2 billion business over a decade, he said.

“When you think about integration and what gives you a higher probability of success it is the fact that we know them already and they know us,” Price said.

The Dell and EMC merger is expected to close late next summer or early fall, Price said.

Michael Dell’s entrepreneurial instincts and his boldness and risk taking nature are key to the deal, Price said.

“It’s more heavily weighted that we can do this and do it well, than not,” Price said.

At the heart of its culture, Dell has a history of doing things that people said couldn’t be done, Price said.

“They said Michael would never be anything more than a mail order catalog company,” Price said. “He’ll never be in the corporate PC space. Dell is number one in the corporate PC space.”

“Never move into workstations, just not that kind of company,” Price said. “Dell became number one in workstations.”

“Never move into the server space. Just not an enterprise sort of company – became number one in servers,” Price said.

“Never be able to take the company private, got issues with the board, blah, blah, blah, took the company private,” he said. “Never would become an end-to-end solutions company well pretty much overnight we became the world’s number one end-to-end solutions company. Never be able to integrate Dell-EMC, I’m not betting against it.”

Editor’s note: Dell has provided sponsorship of Silicon Hills News

Comments

  1. I beg to differ.. I am not critic. but luckily i have been dealing with them both as partner level.. there is a HUGE and very significant gap between both companies and their employee attitudes. while i am saying it.. i have been dealing with them from last 7 years.. EMC .. i have always admire their market approach. their strategy . their pre sales .. sales & post sales people are well equipped and very well updated and the most reasons that I have found from EMC customers that level of customer satisfaction is high and response time is best.. where as DELL.. in middle east.. mostly employees are “Fixed” internally.. there are multiple nationalities “Mafia”. and they dont want anyone else besides their country mates (seems they have fear of being exposed that they are not credible for their job). very very slow response time.. always on “vacation” or “travelling” .. i dont see their customer satisfaction is high in EMEA.. and above all.. sales and pre sales guys dont know anything about their own products.

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