A New Look at Michael Dell's Old Book

When Michael Dell first published his book, Direct From Dell in 1999, he billed it not as a memoir, but as a guidebook on business success. And in the years immediately following that book's release Dell was so successful it could have easily been considered a PC industry bible.

But today, in 2007, a look back at Direct From Dell provides a new look at the culture, philosophy and strategy that has led the company from startup, to Number 1, to a struggling vendor with declining sales.

"Pretty early on in the company's life, we concluded that we wanted to earn a reputation for providing great customer service, as well as great products," Dell wrote. "The idea was that building a business soley on cost or price was not a sustainable advantage. There would always be someone with something that was lower in price or cheaper to produce. What was really important was sustaining loyalty among customers and employees, and that could only be derived from having the highest level of service and very high-performing products."

Did Dell, the company, stick to the script? Seven years later, Dell's customer service was outsourced to India, it's laptops were exploding and it was near the tail end of its race to the bottom of the pricing ladder.

Dell, in his book, also describes the company's ill-fated effort in the mid-'90s to be a player in the retail market. He describes the efforts in-depth, as he evaluated Dell's retail success with his then-vice chairman Mort Topfer:

"Mort and I took a hard look at the data available to us, and realized an amazing thing," he wrote. "Even though we were successfully selling PCs via the retail channels, we weren't actually making any money -- nor, did we believe, was our competition!" So he decided to pull the plug on the company's retail effort. According to his book, "Never sell indirect" has been one of the company's three key rules (along with "disdain inventory" and "always listen to the customer.")

Today, there is mounting speculation that Dell will re-launch its effort at retail -- despite the company's architecture as a no-inventory, no-shelf-space PC operation.

A key question in the coming days and weeks will be this: Will Dell make up for straying from its key guiding philosophies by straying from its key guiding philosophies? Will it go into retail? Will it form a channel strategy?

A lot more is riding on Dell's decision than whether he can write a sequel to his guidebook for success.