Dell: Home Schooled By The Brass

As a member of the first classes of managers to go through Dell Inc.'s new Leadership Edge program, David Marmonti spent 10 days last September in Austin networking with 17 other fast-track executives, including three days of strategy talks with Chairman Michael S. Dell and CEO Kevin B. Rollins. Like many of the hypergrowth companies that shot up so quickly during the tech revolution, Dell had long relied on sheer momentum to keep managers like Marmonti challenged and the company humming. As it went from startup to powerhouse at lightning speed, Dell could ignore the niceties of human resources development. People were dying to work at such a dynamic company. Stock options were making millionaires of mid-level managers.

But as Dell, now with $49 billion in sales, charges toward its $80 billion goal, growth is getting harder -- and more of it will come far from its Austin (Tex.) roots. Dell and Rollins realized three years ago that the company's once magic combination of high-quality goods, low prices, and super-lean efficiency would no longer suffice; they had to figure out talent management as well. They ordered up a new training program, designed in-house, and taught primarily by Dell's own top managers, including themselves. The two chiefs submitted to 360-degree assessments in the hope of inspiring their executives to do the same. Pay is now determined in part by how well a manager does at nurturing people.

As a result, Marmonti has rearranged the way he does his job. He now spends 30% to 35% of his time on people, more than in the past, and personally mentors many more managers. "Once we understood the type of leaders and numbers we would need, we looked inside our business and said, 'Do we have what we need to get there?"' says Marmonti. He continues to have a coach and get regular feedback on his own performance, part of the long-term component of Leadership Edge.

Although not enough time has passed yet to know for sure if the broader program is working, Marmonti's group is doing well on the measurements that are available. Its score on Dell's employee satisfaction survey has jumped 20% in the last 15 months. The real test will be if Dell retains those employees and turns them into the next generation of leaders.

    Before it's here, it's on the Bloomberg Terminal.