Days after naming an electronics manufacturing executive to a new corporate position, Dell Chief Executive Officer Michael Dell has continued a shakeup of his struggling company by hiring another outsider for his leadership team.
Dell announced Friday that Ron Garriques, an executive vice president at Motorola and president of its Mobile Devices Division, will be the new president of Dell's global consumer division, beginning this week.
Change has come fast at Dell since Michael Dell announced on Jan. 31 that he would resume his position as CEO of the PC retailer he founded, replacing his successor Kevin Rollins after two stormy years. On Wednesday, Dell said it would hire Michael Cannon away from his position as president and CEO of electronics maker Solectron, making him the head of Dell's new global operations group.
Rollins resigned after the company posted a series of steadily dropping profit reports, lost its number-one position in the PC vendor market to rival Hewlett-Packard and recalled millions of notebook batteries after some had burst into flames. During Rollins' tenure, Dell was also embroiled in an accounting investigation by the U.S. Securities and Exchange Commission, was on the verge of having its stock de-listed by the NASDAQ and was hit with a lawsuit by disgruntled investors who allege that Dell inflated its profits by taking secret payments from Intel.
Motorola issued its own statement Friday saying that Garriques' resignation was effective immediately. He has been replaced by interim co-heads Ray Roman, senior vice president for global sales, and Terry Vega, senior vice president for global devices.
Garriques will now lead a new organization designed to cover all consumer products, including desktops, notebooks, software and peripherals, as well as product design and sales.
Like the global operations group, this is a new executive position at Dell, created to help the company improve its focus on developing countries. Michael Dell chose him for the job in large part because he had lead Motorola's PCS (personal communications services) division for Europe, the Middle East and Africa, as well as the company's US$28 billion handset division.
"As the number of people online doubles from one to two billion over the next several years, the majority of new consumers will be located in fast-growing and emerging markets," Michael Dell said in a statement Friday. "We are asking Ron to create a new global consumer organization that will set new standards for innovative product design, leadership in providing the best customer experience, and flexibility in how we build and distribute products and services."
Also on Friday, Dell introduced two forums for collecting customer input: he asked Dell PC users to visit an online community called Dell IdeaStorm and a YouTube-type video-sharing site called StudioDell.
Dell set the pace for his planned changes on Feb. 2 in a memo he sent to employees, pledging to remain as CEO for several years, trim the number of managers reporting directly to him and eliminate bonuses. His strategy for a Dell rebound is to focus on small and medium business sales, enterprise servers and storage, shorter design cycles for new products and increased sales in emerging markets.
Analysts say that strategy could work, but only if Dell continues to act decisively, setting a plan to reach emerging markets, boosting PC quality and renewing his focus on Dell's main enterprise customers after a series of experiments with consumer devices like printers and cameras.
"The biggest problem Dell has is that they've lost momentum," said Jack Gold, principal analyst with J.Gold Associates. "They were the momentum king, but now when people measure their performance, they talk about HP. They've also lost quality -- I know many people who used to swear by Dell and now they swear at them."
"So what he's got to do -- which he's doing -- is to go in there and kick some butt. He has to say 'Here are the principles I founded this company on, and we've gotten away from them,'" Gold said.