Dell Needs A New Business Model--Can Michael Dell Provide It?

Bruce Nussbaum

The real news behind the news that Michael Dell is coming back to run the company he founded is that the business model innovation he invented doesn't work anymore. Can he provide another one?

Dell's brilliance was in process innovation--building a whole new level of supply-chain efficiency that matched corporate demand with incredible global manufacturing and transportation of product. But efficiency has been commoditized in recent years. Lots of companies can do efficiency well.

Dell needs to move from a cost control model to an innovation that develops new, personalized solutions for people. And, from what I read this morning, it needs to move away from a top-down, command-and-control leadership culture towards a much more open, collaborate and integrative culture. The fact that Dell couldn't hire a marketing chief for three years under Kevin Rollins may have been symptomatic of the centrality of power under his reign.

Leading open, global collaborate networks is perhaps the single most important CEO skill these days. Think distributed information, power, creation and production. Building an innovation culture that iterates off deep knowledge of your consumer base is just as important.

Bringing Michael Dell back may revive morale but it doesn't solve Dell's real problem--designing a new business model around innovation and design thinking. Read Wikinomics to get a better understanding of this.

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