Kevin Rollins: His name's not Dell, but he's the straight man in tech's world-beating odd couple

Stephen Pritchard meets the devout Mormon with an eye for detail and a fiddler's elbow, who's as reserved as his eponymous chairman is ebullient
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The Independent Online

Kevin Rollins has an even more difficult job. The tall, wiry teetotaller took over as chief executive of the US computer giant Dell last year. His predecessor just happened to be the group's charismatic founder, Michael Dell, who, in addition to being the face of the company, remains as chairman.

Rollins, though, has more claim than most to have created the company as it stands today. He previously served as chief operating officer during a time when Dell went from being a relatively unknown mail-order PC operation, selling mostly off the pages of computer magazines, to an industry leader with a market value of over $80bn (£45bn).

He joined Dell in 1996, from the management consultancy Bain & Company. Prior to that he had worked as a consultant with Michael Dell, helping him map out a growth path for the then struggling business. Over the years, the two have formed a close partnership. They share adjacent offices at the company's Texas headquarters, but in many ways they are quite different personalities. While Dell comes across as outgoing and immediately approachable, Rollins is more reserved. A Mormon and regular churchgoer, he nonetheless played in a rock band as a teenager in Utah and still cites music, as well as motorcycle and motor racing, among his interests. He is said to warm up once you get to know him, playing fiddle and making up witty songs about rivals at company events. But then you learn that Rollins believes in taking afternoon naps so that he can work longer, and gets his secretary to schedule time for him to spend with his children.

While Michael Dell is the salesman, and responsible for the company's future strategy, Rollins has been cast as the operations expert, with in-depth knowledge of manufacturing and logistical processes. True to form, the quiet Rollins becomes animated when talk turns to the detail of the business. In a modest meeting room at the company's UK offices in Bracknell, Berkshire - with barely enough space for three chairs and a table - he talks with passion about Dell's manufacturing prowess and its plans for new factories.

To the outsider, this subject might sound dull, but for Rollins it goes to the heart of the business. The build-to-order, direct-sales model is a product of Rollins's thinking as much as of Michael Dell's, and was instrumental in turning the loss-making company around in the late 1990s.

Dell's manufacturing base, he argues, combines with direct sales to bring enormous efficiencies. It has no dealers to pay and keeps no inventory of finished goods. It doesn't even store components, shipping deliveries instead straight to the factory. And, far from moving the company away from manufacturing, as some of his rivals have, Rollins wants to expand further. A plant under development in Salem, North Carolina, is expected to contribute $8bn to $10bn in sales volumes in its first year, while new Dell factories are planned for China and mainland Europe.

Many others outsource their manufacturing, but Rollins dismisses any suggestion that building factories makes Dell less flexible. "We think it is better economics putting plants close to the customer," he says. Each new plant aims to be more efficient than the last, and staff visit other sites to hone their techniques.

Dell's scale also lets it negotiate good terms, both financially and logistically, from its suppliers. "We have close communications with our suppliers," argues Rollins. "That allows us to be first into the market with products and technologies. When flights were cancelled after 9/11, we were asked whether that would affect us, as we had no inventory. But we were the only company that did not use 9/11 to explain missing its market numbers."

Rollins's determination to bolster Dell's production capacity suggests that he remains optimistic about the opportunities for growth. The company came in for criticism on Wall Street recently for missing revenue targets in its second quarter, albeit by a small margin. Rollins attributed falling turnover to Dell's lower overall selling prices, especially for consumer computers, but also pointed to record sales - it shipped 9.1 million computers - and a 28 per cent increase in profits, to $1.02bn.

Sales to consumers, however, make up only around 15 per cent of the business, the rest coming mainly from small and mid-sized companies, and from government contracts. That means that, unlike some of his peers, Rollins does not expect a large upswing in demand next year when Microsoft releases the latest version of its Windows operating system, known as Vista. "Most corporations take a new operating system and test it," he says. "They will then gradually ramp up its deployment."

Dell's growth plans, particularly into Europe and Asia, will more than make up for this, he believes. Nor is he fazed by the accusation often levelled at the company that it does not innovate, citing its considerable spend on R&D. That is not to say that Dell does not lag behind rivals in this area - it does - but Rollins argues that higher R&D spend rarely delivers benefits either to customers or shareholders.

"The issue is not that we don't spend, but how efficiently our competitors spend," he says. "Their R&D is, to a great extent, wasted. If spending a lot more on R&D is the right thing to do, shouldn't their profits and growth be higher?"

As well as from geographical expansion, growth will come from computer-related equipment other than PCs and notebooks - such as office printers and storage systems for servers. And newer ventures for Dell, for example flat-panel televisions, will make a contribution. "We will see 50 per cent of growth from outside the core PC business," Rollins asserts.

But he sees no reason to depart from Michael Dell's belief that the company should enter new markets only when it can drive down costs. This enables it to undercut rivals, he argues, without compromising on quality. As he puts it: "It's about how you add more value to the customer, more than how you fatten your profit margin. If you concentrate on value, you stay ahead of the cost curve. We don't intend to be outdone on cost.

"That philosophy won't change, as long as Michael and I are around."

And given that Rollins is only 52, and Michael Dell, the man he replaced as chief executive, is 12 years younger, it's a good bet that the company's founding philosophy will be holy writ for some time yet.

BIOGRAPHY

Born: 15 November 1952.

Education: BA and MBA from Brigham Young University, Utah.

Career (1984): joins management consultants Bain & Company, eventually becoming a partner.

1993: consultant to Dell at Bain & Co

1996: joins Dell as senior vice-president, corporate strategy, before being appointed head of Dell Americas.

2001: president and chief operating officer.

2004: chief executive.

Other positions: sits on the US President's Advisory Committee for Trade Policy and Negotiation, and on the board of Catalyst, a non-profit-making organisation working for the advancement of women in the workplace.

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