Biggest Challenge For Dell Will Be Internal

Dell's new emphasis on driving business through indirect channels is both a large opportunity and a difficult challenge for the company. While the Austin, Texas, systems behemoth isn't the first vendor to change direction and decide it needs to drive business through indirect channels, it faces some unique obstacles.

ROBERT FALETRA Can be reached at (781) 839-1202 or via e-mail at rfaletra@cmp.com.

That internal obstacle is not to be discounted, because it is both the reason for Dell's past success and has the potential to sabotage its move to the future. What I'm talking about is Dell's DNA in direct sales. The majority of its business comes from direct sales today, and this will continue for a long time—perhaps permanently. Structuring and managing a dual sales strategy is not impossible, but it is incredibly difficult.

It can be done, however, and because Dell is still led by its founder Michael Dell, the company may have an advantage in that he is such a historic figure in the industry and, of course, within his own company.

One critical change to make will involve compensation structures, which must evolve to support Dell's indirect initiative in such a way as not to harm current sales. There will be thousands of Dell employees that really don't want to see this move be successful because they have convinced themselves it will be bad for them personally.

And that speaks to the internal talent pool.

Dell needs an influx of channel expertise. At the same time, it needs this effort to be led by someone who knows where all the bodies are buried. It needs internal champions. There needs to be someone with such a strong relationship with Michael Dell and a take-no-prisoners attitude that he or she can walk into Michael's office and tell him the truth about what is going on with the politics behind this effort and not fear for his or her job.

That may not be easy for Dell. There may not be anyone with that type of relationship.

There are many difficult meetings to hold, policy and people decisions to be made, and leadership challenges to be faced that will push this company into uncharted territory.

And while all this is going on, Dell faces a competitor in Hewlett-Packard that is hitting on all cylinders and continues to put more distance between them.

I could write 10 pages about the obstacles I know Dell faces. I'm certainly not betting against the company's effort, and I certainly believe it is the right move to make. It's just that if anyone thinks this is a slam dunk, they are stark raving nuts.

WHAT ARE DELL'S CHANCES OF SUCCESS?
Make something happen. e-mail CMP Channel Group President Robert Faletra at rfaletra@cmp.com.

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