Dell’s Shift

Dell’s shifts in market focus (products, services, markets, channels), acquisitions, legal structure (public vs private), and internal realignments over time provide an excellent example of how the Nadler and Tushman model’s notion of congruency can be used to help us understand and analyze organizations, the resultant outcomes produced, and what needs to change in order to achieve the desired outcomes. At the time of the writing of this book, it is too early to tell if Dell’s most recent initiatives will yield desired results.

Nadler and Tushman’s model enables a change agent to think systematically about the organization. It serves as a checklist to ensure practitioners consider the critical components that must be matched with the strategy and environmental demands. Since the system is dynamic, the environment, the people, the competition, and other factors change over time, and part of that change is due to how the components interact with each other. Second, the fit between organizational components is critical. Dell’s products, organization, systems, and culture had become misaligned with the emerging environment in and around the 2010–2013 period. Finally, organizations with good fit are more effective than those with poor fit because they will be able to more efficiently and effectively transform inputs into outputs. The moves that Michael Dell made improved the fit and led to a modest turnaround in sales and margins in the short term, but subsequent competitive challenges caused him to recognize that much more is needed— hence the move to take the company private so that needed changes could be made away from the glare of stock market pressures for short-term results.

Like any living entity, an organization survives by acting and reacting effectively to its external environment. Unless it adjusts with appropriate changes to its approach and, when needed, its strategy, it reduces its capacity to thrive. When one part of the organization is changed, then other parts also need to adapt to maintain the congruence that leads to effectiveness. Whether Dell and his team have made enough savvy changes for the long term will be demonstrated by the company’s future performance. Critical to this will be Dell’s ability to innovate and change in the face of shifts in its environment.