A Promising Proposition: Dell Rebuilds Its Brand
Seeking to rebuild its once-mighty empire, Dell has cultivated a compelling employee-value proposition to attract and retain top talent.
By Julie Cook Ramirez
The early 2000s was a rough time for Dell. While other manufacturers branched out into exciting new offerings like MP3 players and mobile devices, the Round Rock, Texas-based computer giant remained heavily dependent on the desktop PC market, which constituted 66 percent of its sales. However, U.S. shipments of desktop PCs were shrinking, forcing Dell to slash prices and demand deep cuts from suppliers to boost sales volumes.
At the same time, competitors like Hewlett-Packard and Acer succeeded in making their PC-manufacturing operations more efficient, eroding the price advantage that had largely been responsible for Dell's success. While Dell sought to become a major player in the fast-growing laptop segment, its reliance on internet sales caused the company to miss out on soaring notebook sales in big-box stores. When a battery caught fire inside a Dell laptop, spurring a recall, the company was on the receiving end of a massive amount of negative press. Sony was eventually found responsible for the faulty batteries, but the damage to Dell's reputation had already been done.
These converging factors proved disastrous for the once-leading computer manufacturer. Sales growth slowed considerably, causing the company to lose one-fourth of its stock value in 2005. By June of the following year, Dell stock was trading at $25, down 40 percent from just 12 months earlier. For the first time, Dell's growth was slower than the PC industry as a whole. By the fourth quarter of 2006, Hewlett Packard had supplanted Dell as the world's largest PC manufacturer. After four out of five earnings reports failed to meet expectations, Kevin Rollins resigned as president and CEO on Jan. 31, 2007. Determined to save the company that bore his name, Michael Dell resumed the role of CEO and embarked on an initiative to create Dell 2.0.
Recognizing the role its people would play in turning the company around, Dell embarked on a major restructuring of its HR function in 2010, moving from a regionally aligned structure to a functionally aligned one. In Dublin, Ireland, Marie Moynihan, head of HR for Dell EMEA, was promoted to senior vice president of global talent acquisition and tasked with overseeing the entire organization's hiring and employer-branding initiatives.
At the top of her list was creating an employee-value proposition that would help Dell attract and retain talent by effectively conveying what working at Dell was really like.
That question is increasingly garnering the attention of HR professionals as organizations large and small confront record-low unemployment, and the talent war rages on. The importance of a strong EVP cannot be overstated, according to Thomas Davenport, a former Willis Towers Watson consulting director, currently working as an independent consultant in San Francisco. The process of formulating an EVP challenges an organization to be honest about its strengths and weaknesses, to answer the simple, yet critical, question, "What do we really have to offer?" and often to improve its offerings so as to have a clear and compelling promise to convey to potential employees.
"If your EVP is strong, that's key to winning the talent war," says Davenport.
That was the mission Dell had in mind as it set off to formalize its EVP, a process that has involved the buy-in of a range of stakeholders, a strong communication strategy and a commitment to continuously revisiting its approach to ensure it is effectively meeting its goals.
According to a 2017 survey by New York-based global employer-branding firm Universum, 84 percent of the world's top 100 most-attractive employers (according to college students) have an EVP, defined as a strategic statement that communicates the company's values and ideals. More specifically, an EVP is the commitment an employer is making to its employees, says Maren Hogan, founder and CEO of Omaha, Neb.-based Red Branch Media.
"It's the distillation of the promise you are making to the people who work in your organization," she says. "It's saying, 'This is what we believe in, here's how it affects you as an employee and here's how we are creating that in the employee experience for you.' "
That message also extends to job candidates, adds Davenport.
"When a prospective employee asks, 'Why should I work here?' you can very quickly convey that to the individual in a clear-eyed, mindful way."
Generally speaking, the larger the company, the greater likelihood it will have an EVP, according to Universum, which found that 67 percent of companies with 10,000-plus employees have an EVP, compared to 55 percent with 1,000 to 9,999 employees and 30 percent of companies with fewer than 999 employees. With 145,000 people worldwide, one would expect Dell would have already developed an EVP. However, Hogan says, it's more often the age of the company that dictates whether it has an EVP rather than the size.
"For companies that have formed over the last 10 years or so, it's just something you do," she explains. "For an older company that's been around 20, 30 or 40 years, the need [for an EVP] may have escaped them."
Dell may not have had a formal EVP prior to 2010, but it surely had one, according to Brian Kropp, HR practice leader at Gartner Inc. in Stamford, Conn. Attitudes and impressions about what it means to be an employee of a given company evolve naturally, he says, so every employer has an EVP, whether it has consciously cultivated one or not. It's incumbent upon the organizationand particularly HRto take charge of that EVP and manage it so it is reflective of the kind of employment experience the organization wants to project.
Almost immediately upon taking over the talent-acquisition function, Moynihan immersed herself in developing Dell's EVP. She quickly discovered there was little consistency in how Dell was selling itself as a global employer.
"That was my big 'Aha!' when I entered the job," says Moynihan. "We were selling something different in every country and every region. The question we had to answer and articulate was, 'What are we selling as an organization?'"
While she singlehandedly spearheaded the EVP-writing process, Moynihan didn't completely go it alone. She sought input from other functions across the organizationa crucial component, according to Jonna Sjovall, managing director, Americas at Universum.
"Usually, it lands on HR's table to start working on this project, but it's important to remember that it's not a siloed HR exercise," says Sjovall. "You need to involve different stakeholders, especially business leadership, to hear their view on the company's strategy and the type of people they need, and then engage as many people internally as possible to learn what they think is unique about the company."
Grounded in Reality
While she didn't directly involve employees in the initial EVP-writing process, Moynihan was careful to incorporate feedback from Dell's annual employee survey, particularly as it related to "what people seemed to be most happy about and what they valued the most." Employee feedback can also be helpful in identifying gaps between what management perceives to be the organization's value proposition and the reality of what employees live every day, says Pam Hein, partner in strategic advisory communication at Aon, based in Lincolnshire, Ill. That then provides a "roadmap" for improving the employee experience, she says.
Recognizing that tech employees tend to be fairly mobile, Moynihan studied the EVPs of other large IT companies, paying special attention to those from which Dell draws talent and those to which it loses talent. What she discovered was "a lot of people are selling the same stuff."
That comes as no surprise to Kropp. One of the biggest challenges in cultivating an EVP is making it stand out when everyone is emphasizing the same values, promises and opportunities.
"When you look at the way most companies articulate their value proposition, it is exactly the same across companies," says Kropp. "Everyone cares about their employees, they are high-performing, there's great work/life balance and wonderful opportunities. But when everyone says the exact same thing, it all tastes like chicken."
Dell's EVP consists of several key elements: an entrepreneurial culture with the resources of a large company; the freedom to dream big and develop one's career within or across functions; a focus on highly ethical, inspiring leaders; diversity and inclusion; and a commitment to community and the environment.
Moynihan concedes there are many commonalities between Dell's EVP and those of other employers, particularly in the tech industry. However, she is confident the company can overcome those commonalities by striving for authenticity in the way it communicates its EVP, both internally and externally.
"It's about what our employees value about working here," says Moynihan. "An employee-value proposition needs to be reflective of reality and an authentic message based on what your team members are actually experiencing."
That's where the workforce actively enters the picture. Moynihan relies on employees, particularly Dell Champions, a select group of team members who feel positive about the company and are interested in engaging externally via social media about the Dell brand. Periodically, she turns the "Life at Dell" Instagram account over to those employees to share their stories via photos and videos.
"We say, 'You run it for the day, showcase what you are doing, show videos or pictures, do whatever you like,' " says Moynihan. "That enables us to ensure the stories are genuine, real and authentic."
Initially, Moynihan was apprehensive about giving team members the ability to post "in the name of Dell," but a little training about the responsibility they were being given, along with a heavy dose of trust, went a long way.
"When we started out with Instagram, we were nervous about handing over the reins and letting people at it, but it proved to be really powerful and effective," says Moynihan. "The more you engage your team members and trust them, the better."
Moynihan regularly engages employees in focus groups to ensure the EVP remains relevant and to determine which aspects should be communicated at any given time. As other tech companies have rolled back their flexible-work arrangements and mandated that remote workers spend more time in the office, for example, Dell has been communicating its Connected Workplace program and its goal of having as many as half of all team members working remotely.
Dell's strong, authentic, employee-influenced, creatively communicated EVP not only empowers the company to recruit new team members, but to keep the ones it already has. That's going to be especially important moving forward, as Dell invests in new products and partnerships to push back against encroachment from cloud providers such as Amazon and Microsoft, all the while keeping long-time competitors like Hewlett Packard at bay.
"If I am a computer engineer and the company where I'm working has a great value proposition for me, it's going to be harder for the competition to pry me away," says Kropp. "They would have to pay a lot more money to make it happen."
In late 2016, Dell joined with data-storage-systems leader EMC in a massive $67-billion merger that created the world's largest privately controlled technology company. Just one year later, things were already looking up for the beleaguered computer giant. Thanks in part to a surge in demand for servers, networking equipment and computers, second-quarter sales rose 48 percent from the previous year. In September 2017, Dell inked a deal to become General Electric's primary IT infrastructure supplier, and the company signed on 10,000 new business customers in the year following the merger.
In the eight years since Moynihan drafted Dell's original EVP, she says, the core has not changed dramatically. What has changed is the level of emphasis she and her team place on specific aspects of the promise. As Dell 2.0 becomes reality, they are focused on communicating two specific aspects of the EVP: the freedom to dream big and the opportunities for career development at Dell.
"We are a much bigger company now with many more opportunities," says Moynihan. "We are really trying to emphasize that we are stronger together and the more we collaborate across organizational lines, the more we can deliver for customers, and the more we can win together."