Douglas has two master's degrees (MPA & MBA) and a PhD in Higher Education Administration.
Business Case Study: Communication at Dell
Table of Contents
ShowBefore we talk about how well Dell has become at strategic communication, let's discuss what strategic communication means, and why it is important. Strategic communication is the process whereby important, strategic, and operational information is passed on to organizational constituents through a number of different mediums, and feedback is then returned.
If you go into work on Monday morning and walk over to fill your coffee mug and hear your colleague Janice talking about how she heard that the department you both work in - accounts receivable - is going to be outsourced to a collection firm, and then Andy, also from your office, comes over and says that's wrong - he heard it was accounts payable that was going to be outsourced to the company's bank - that is definitely not strategic communication. Those issues are strategic, and the employees working in those offices are important constituents, but allowing rumors to pass is not how an organization focused on strategic communication would operate.
Instead, strategic communication - in the cases mentioned above - would include meetings with upper-level managers announcing to employees, customers, and investors, their operational plans. They may tell them all at once through a press release, or they may tell employees first, so they don't feel betrayed when customers and investors find out. But, whatever the process is, if it is strategic, it is calculated and done for a reason.
As of 2022, Dell had more than 133,000 employees worldwide and about $101.2 billion in sales for 2021. But in 1984, it was a small startup based in the garage of Michael Dell. Strategic communication for a company based in a garage and employing a few friends is a far cry from the public company Dell became, valued at $30.81 billion market cap in November of 2022. But because Dell knew that communication was important (not just that communication was present, but that it was deliberate, customized to the audience and purpose, and appropriately delivered), Dell made effective strategic communication an important part of the corporate culture.
In his own words, Dell describes the importance of communication like this: 'Communications are an important part of what you have to offer to customers and shareholders; but, communications has to be in the center to be optimally effective.'
This strategy has continued in spite of the company's growth and change over the years. A former CEO of Dell, Kevin Rollins, viewed strategic communication as an integral part of making sure employees, customers, the media, and Wall Street analysts all understood Dell's strategy, but that the strategy was communicated to them in a way that was meaningful to them. Analysts want to hear about increasing sales or profit. Customers want to hear about improved products and good support. Employees want to know their jobs are safe and that they are doing a good job.
A simple statement like 'Dell continues to grow in sales, customer retention, and employee satisfaction' may send that message to all of those constituencies, but is it really presented strategically and deliberately? Kevin Rollins and current leadership would say no. To use communication as a competitive advantage, it needs to do more than just provide information - it needs to encourage and inspire confidence in people.
Rollins described it this way: 'You have to modify messages based on constituency. Which element of the overall strategy do you want to discuss with each constituent? The communication function breaks strategy into pieces and sells the right pieces to the right audience.'
The Dell case study is a great example of upper-level management realizing the important role communication can play in managing expectations and working effectively with different constituents. They do this by realizing that not all communication is the same, and that the message and audience need to be considered in the context of the strategic management process. When they are, communication becomes more meaningful and useful, and that actually increases the value of the products and services being provided by the company.
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