Saturday, December 17, 2011

Secret Sauce from Dell on getting acquired

I just LOVE the writings of Dave Gardner is a management consultant, speaker and blogger who resides in Silicon Valley. Check out more here: www.gardnerandassoc.com or via Twitter @Gardner_Dave

Here are nine “secret sauce” attributes of Dell’s acquisition process distilled from my interviews:
  1. Dell has a clear respect for heritage, culture, intellectual property, intellectual capital, and risk that the entrepreneurs took in each company it acquires. 
  2. Dell preserves the acquired company’s identity. The acquired company appends the Dell name in front of its business name, e.g., Dell KACE, Dell Boomi, Dell SecureWorks, Dell Compellent, etc.
  3. The acquired company must elevate the Dell brand; the Dell brand must elevate the brand of the acquired company. It’s a two-way street.
  4. Dell provides each acquired company with its own profit and loss statement so it can measure and understand its individual performance over time. The company doesn’t get lost in the larger corporation or a business unit reporting. [Note: This financial reporting is for internal use only.]
  5. Dell carefully examines and seeks to understand what each firm is doing in terms of core processes, insisting that core processes change only if there is no great differentiation from standard Dell core processes. If an acquisition has a better approach that is working well, it may continue with that approach. This has been applied in terms of marketing approaches, web sites, customer support, etc. Best practices within an acquired company may be leveraged in other business units of Dell. 
  6. Dell doesn’t buy a firm because it can--it buys a company for the underlying value the company brings to Dell customers.
  7. Dell doesn’t look at acquisitions as a means to acquire talent.
  8. The process of accelerating sales starts the day an agreement is signed by both parties. There is no reason to delay the integration process. Dell does ingredient acquisitions (contrasted with blockbuster acquisitions), meaning no U.S. or international regulatory approvals are required for the merger to be finalized. Most acquisitions close in 90 to 120 days. The integration process starts day one while the paperwork is being finalized.
  9. Dell conducts a thorough review of each acquisition after integration is complete to see what process improvements can be incorporated, making it easier for those companies that are acquired later.

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