The video is an amusing snapshot of the highly unusual partnership behind one of the tech industry’s most successful operations. Dell and Rollins have been running the $35 billion company for more than a decade, steering it through years of wickedly fast growth, then the bleak downturn of 2000-01, and, more recently, a string of profitable, if unflashy, quarters. While Michael Dell is the visionary, pushing the business into new markets like printers, corporate servers and MP3 players, Rollins has his hands on the wheel, steering daily activities and overseeing employees. And since the tech blowout, Rollins has made his mark in a more crucial way–morphing the culture of Dell from its chaotic entrepreneurial phase into something more appropriate for the grayer, mature years of the post-tech-bubble era.
Their effective marriage at the top of Dell raises a host of questions for other corporate leaders. Could Dell and Rollins represent a new model of management that other companies would be wise to investigate and emulate? Or is being the founder’s trusted right-hand man still tantamount to playing second fiddle? In ego-driven corporate America, such unequal “partnerships” are still viewed skeptically. Institutional fidelity and personal loyalty are one thing; human nature and ambition are another. “Ninety percent of the people in my field would tell you psychoanalytically, power sharing won’t work,” says Jeffrey Sonnenfeld, a Yale professor and the founder of the Chief Executive Leadership Institute, adding that Dell and Rollins have the temperaments and complementary skills that break the mold.
It also works at Dell because such power-sharing arrangements are almost as old as the company itself. When Michael Dell started the firm in his University of Texas dorm room in 1984, he knew he needed to surround himself with business veterans. “I had the approach that there is so much to be done, I shouldn’t try to do it all by myself,” he says. One early recruit, Motorola veteran Mort Topfer, assumed the vice chairmanship but effectively drove the train day to day. Topfer recruited Rollins as his successor from management consultant Bain & Co. in Boston.
Today Dell and Rollins, alongside Bill Gates and Steve Ballmer at Microsoft, are the best-known duo in American business. For employees, Wall Street analysts and the press, they go out of their way to present a unified front, handing down directives as “Kevin and Michael.” Three years ago, they went so far as to tear down the wall between their offices, replacing it with a glass partition and a door they never seem to close. Their desks face each other, and both say they discuss most major strategic decisions. They’re also personal friends whose families and kids–they both have four–socialize outside the office.
Employees say it’s actually the lesser-known Rollins who runs the company, with Dell playing a more inspirational and forward-thinking strategy role. Even though comparable No. 2s like Ballmer at Microsoft and Craig Barrett at Andy Grove’s Intel are titular CEOs, Rollins himself concedes he’ll never have the top spot at Dell, since Michael Dell is not going anywhere, despite his enormous wealth and relative youth.
But Rollins says getting the top title next to his name doesn’t matter to him–well, not that much. “Would I like to be CEO? Sure, next question. Because I’m not going to be,” he says. “Everybody has an ego, but I think the alternatives would be, ‘Go run a company that may not be as good’.” Rollins says he’s gotten offers to head “tier one” companies but is loyal to Dell and wouldn’t go anywhere. It probably helps that his paycheck matches up with those of other top honchos. Last year it included a $2 million bonus and options on half a million shares of Dell stock.
Rollins says he also sticks around because, at this stage of its growth, Dell reflects his work as much as anyone’s. During the ’90s, the computer maker was a frenzied place. The greatest internal challenges were simply filling empty seats and keeping Dell’s direct model–selling to the customer over the phone and on the Net rather than in stores–running smoothly. Rollins describes the old culture as “kick fannies, take names.” If managers didn’t meet explicit goals, they could be shown the door. “It was real tough and we were actually proud of that,” he says.
Rollins molded his own leadership to fit the times. Friends at Dell who knew him before he moved to Austin were shocked at his workplace demeanor. Back in Boston, the Brigham Young grad was gentle, considerate and brainy, as well as an ardent violin player. But in the Dell workplace, says senior vice president Paul McKinnon, " ‘abrupt’ was the best way to describe him. Was he barking, yelling? No. Did he seem to know your business better than you, and was he willing to point it out? Yes. It was not hard to feel intimidated." Rollins explains that he was trying to lash the company into shipshape and says he learned such brusque behavior from his predecessor, Topfer. Employees lived with such roughness because of their vesting stock options and the promise of glorious riches.
Like all other tech companies riding the digital revolution, judgment day for Dell came in the summer of 2000. The PC market stopped growing, Dell’s stock lost half its value between August 2000 and January 2001, and the whooshing sound heard in Round Rock cubicles was the air being let out of 40,000 stock portfolios. Two rounds of layoffs followed. The upstart that could do no wrong was now faced with a wrenching identity crisis, since greening bank accounts no longer mollified employees. That year the company’s sporadic, anonymous internal poll called “Tell Dell” found that nearly half of all employees would take a job at another company for comparable pay if presented with the opportunity.
Rollins raised the matter of cultural change with Dell and started asking questions about the company’s atmosphere. Why should people choose to work here? How do you continue to motivate employees who joined with an expectation of instant wealth? He held a series of leadership meetings in which managers had to analyze their own strengths and weakness in front of their subordinates. Rollins led off by assessing his own brash style. He admits it all sounded a little touchy-feely, like “corporate foo-foo.” So to demonstrate its importance to employees, he established Tell Dells twice a year, and tied raises and bonuses to manager’s improvement in each category of the survey. Rollins also knew he had to lighten his own style. He says, “I decided I don’t want to be remembered as the whip.” Instead, he’s striving toward a more “inspirational” approach that still focuses on the bottom line, but with the kind of self-effacing wink demonstrated in the “Apprentice” video. Dell vice president Thurmond Woodard says the change is evident. “He’s developed an empathy without giving up the idea of a meritocracy.”
The new style may be working for the company and its bottom line. In the most recent Tell Dell late last year, 57 percent of employees said they would stay at Dell if offered a similar position elsewhere, up six points from the previous survey. The stock is up 24 percent in the past two years, though the company currently faces daunting challenges as it tries to crack new markets of corporate servers, printers and consumer electronics.
Leadership theorists like Warren Bennis at the University of Southern California say tandems like those running Dell and Microsoft are still the exception–many more break down in power struggles and infighting. But when they work, they may be perfectly suited for a world of increasing global complexity and market volatility. “I think more and more we’ll see teams of two at the apex of organizations,” Bennis says. But, he adds, leaders will need to abandon their own egos and agree on a common goal and definition of success. Sounds a little like a real marriage. Donald Trump, for one, probably won’t be taking on an equal partner any time soon.
