Dell just announced a massive change in direction that may leave a mark as meaningful as when Ford shifted the market from individual coach-builders to mass production. It’s not exactly the same situation, but it is a shift in manufacturing and business model that makes a huge statement about social needs for individuality. It is also not just Dell involved in this shift, but they show up as a symbol for the change taking place.
People are always looking to make individual statements about who they are and why they are unique. Before Ford, people would define themselves by their profession or work. In the factory-worker economy, people began to view their jobs as more mundane and ordinary and would define themselves based on what they bought – clothes, watches and cars – than on what they built. We are still living in an age where we are defined by what we buy, but that is starting to change. Your iTune playlist, MySpace/Facebook page or YouTube videos may say more about you to others than the computer you use to download music, chat, work on your social networking page, or post your videos. In other words, the content is what is driving individuality, more than the hard products.
There are still people who define themselves based on the hard technology that they buy. However, that has very little to do with the laptop or desktop they have. Now it is all about your cell phone or mobile device. And the only customization done there is around cases, skins, and other snap-on accessories, not selecting the component parts. This is the part that is difficult for Dell’s original business model.
The Apple AirBook is pushing things even further where potentially we will see a time when there is very little value of component parts in a computing device and all of the differential processing power and storage will be centralized in the network. Again, this plays against Dell’s past strengths.
Dell spent 20 years or more building a business that lets people personalize their hardware. Select their own mix of technology elements to make up their unique desktop or laptop solution. But two things are happening today. The manufacturing capabilities, cost curves of the component parts,and technology lifecycles have changed to the point that build-on-demand has lost its edge from a cost perspective. And, people are happy with more of a stock configuration on their computer and are looking to be individuals by their choice of mobile device and their content.
Mike Cannon, head of Dell’s global operations, is quoted as saying, “To some degree it’s human nature to fall in love with your own model a bit,” he said. “When for 20-plus years you’re used to doing things a particular way, even the best and brightest are tempted to say, “let me take it this one more increment.'” He announced a bold move to take Dell away from it’s traditional competencies of build-to-order and move towards more standard configurations and into outsourcing some of the manufacturing. The goal he stated was to match the demands of customers in emerging markets where build-to-order is less of a desire and to cut costs.
Standardizing PCs and laptops and cutting costs is only half of the answer for Dell. There is another perspective that Dell needs to consider. Michael Dell grew a fantastic company that served the need that people have to be treated like individuals. That was the secret sauce for Dell. Despite the move away from wanting build-to-order PCs and laptops, people all around the world still want to show up as individuals. Serving the new new ways people want to show their individualism will put Dell back up on top. That may mean content-oriented services, a focus on accessories for “dressing up” stock products, and content creation tools for videos and managing an online persona.
The shift to the next phase in individualism has already started. We used to define ourselves based on what we built or did. We have been and are now in a phase where it has been about what we buy. Perhaps the next phase is starting to form now and it will be about content and what we create in the digital world. Either way, marketing and strategy professionals need to take this announcement from Dell seriously and think about what it means, because people will always gravitate towards those things that help them announce to the world who they are as individuals. That’s what tomorrow’s successful brands and companies will need to figure out.