Growth, Division of labor, and BPR

Almost finished "Direct from Dell," which illustrated the first 15 years of Dell, the Texas based computer manufacturer. The business acumen of the founder, Michael Dell and the timing (aseembling PC was a high margin emerging industry in early 80s) seems to be the top 2 critical factors leading to the growth and success of the company.

Another issue impressed me is how Dell handle the growth of the business. When a business growth from millions to billions and then to tens of billions within a short period of time, the company has to constantly re-structure to meet the growth need. The major theme seems to be the division of functions. For Dell, it first realized the importance of P&L (Profit and Loss Statement), and then how to apply it to different product categories. Then they found a manager who used to manage one product category would soon be outgrown by it. Thus, what they did is whenver the product category became too large, they will separate it into two or more product categories and have additional managers for each new category (it somehow reminds me of how eBay handle product categories). For each product category, P&L would be applied and subsequently, strategic decisions were made based on data collected.

This is very similar to most enteprirse did in 50s and 60s in the US. Presciely because both Dell and those companies in 50s and 60s faced the same seller's market. PC is a new and hot product, the demand will exceed the supply so this method works.

Anyway, though BPR became popular in 90s, Dell seemed not being affected by it, which makes sense for a company that focus on growth.