I’m at EMC World 2016 this week and it is likely the last EMC World. Next year, the company will be called Dell EMC and operate as a unit under the Dell Technology Group. In what was an elegant hand off during the opening keynote, EMC CEO Joe Tucci passed the torch, figuratively not literally (though that would have been cool), to Michael Dell who will be chairman of the new combined entity.
Michael has not been known previously for being a great speaker but he really stepped up. His poise, timing and eloquence were a match for some of the best CEO speakers I’ve seen. One thing he seemed to want to get off his chest, though, was how much better Dell was performing than either of the new companies that HPE CEO Meg Whitman has formed. The term Michael used to describe what he’s doing is “build for the future”, not “cut to the future” which seems to be Whitman’s strategy. But Whitman’s larger, lifetime strategy appears to be more about “dodging blame” than building for the future and that likely is at the core of why Dell outperforms her.
Since we are in a presidential election year where various politicians are comparing their capabilities to run the country, I thought it would be interesting to compare Dell and Whitman in terms of their individual skills, experience and execution.
Getting the Job
Michael Dell got the job as CEO of Dell the old fashioned way; he built the company that bears his name. He stepped down as CEO in 2004 but returned to the position in 2007 when the company was in trouble and brought it back to success. In effect, Dell now has guided a successful startup to become global company under his belt, as well as leading a successful turnaround.
Dell’s other accomplishments include creating opportunities for women entrepreneurs, and being the major driver for entrepreneurs for the United Nations.
He seemed to recognize early that you need to create and store “seed corn” for any successful enterprise. Plus, Dell and Jen-Hsun Huang of NVIDA stand out as the two most aggressive CEOs insofar as working to assure their companies’ futures.
Not surprisingly, the two men are close strategic partners.
Meg Whitman’s path to becoming CEO of HP was far more convoluted. She ran eBay from 1998 to 2007, and helped put it on the path to success. But she wasn’t really a founder and as the firm grew out of her span of control she made some strategic mistakes, including overpaying to acquire Skype which was later sold at a loss. After Whitman resigned, she remained on the eBay board and held some consulting positions but none that stand out.
Whitman ran for California Governor but lost the election largely because of bad publicity when she abandoned her long-time Hispanic housekeeper when it was discovered the woman was undocumented. After her election loss, HP was undergoing massive churn on their board and Whitman was brought in to replace a departing board member. The board made a poor choice in hiring a replacement CEO (Leo Apotheker) due to the unplanned departure of previous CEO Mark Hurd, then a coup forced Apotheker out. Whitman, seeing an opportunity to recover both her finances and her reputation, opportunistically stepped in.
Doing The Job
Dell has been aggressive at fixing the core problems that he found when he returned to the CEO position in 2007. He did struggle with the mobile market but in all other areas the company improved sharply during his tenure. Of particular interest is his successful effort to take Dell private, something that was thought to be impossible given the company’s size and value. He put in place what is largely the strongest M&A process currently in the industry and also built an OEM/embedded PC business that is unique in the segment and massively successful.
Dell is currently the only CEO that has taken a tech company private at scale and the talent, loyalty and lack of churn in his core executive team makes it one of the strongest in the industry. Most recently, Dell has worked with EMC to create a new company that will be the largest and most powerful enterprise technology company in the world, potentially opening up access to an additional $300B market in opportunities for the combimned companies.
In contrast, Whitman has been aggressive at cutting jobs, inspiring executive departures and selling off HP assets. But as one of the most poised speakers in the segment, she has also been extremely effective at dodging blame for HP’s poor performance. The company currently has one of the highest executive churn rates in the industry, and of the executives that were identified as Whitman’s core team when she started, none remain. Outside of running HP, Whitman doesn’t appear to stand out in any other key area other than creative product packaging. But in HP’s case, that consists of bundling aging offerings as new solutions. Based on HP’s sales performance, most experienced buyers don’t appear to be fooled.
In comparing these two CEOs I’ve concluded that Dell would be the kind of politician we’d want while Whitman is the kind we’d most often get. It is interesting to note that the one area in which Whitman was clearly better than Dell was in public speaking but at EMC World this week, his performance was fully equal to her.
In every measurable way, Dell is the better CEO. He operates more strategically, gets the job done and doesn’t focus on blaming others. Plus, his people love him. Whitman is known for being difficult to work with and insular, strong in presentation but weak in execution and particularly weak in terms of executive and employee loyalty. In short, Whitman is good at getting the job while Dell is good at actually doing it. This likely goes a long way towards explaining the trajectory of both of their firms.
In many ways Joe Tucci, EMC’s departing Chairman and CEO, and Michael Dell are far more alike than Meg Whitman is to either of them. I think the shame is that much of Whitman’s failure, and that of Carly Fiorina before her, is because both focus excessively on appearance rather the fundamentals that Dell and Tucci are known for understanding and executing.