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1/31/2007
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Rollins, Dell's 'Outstanding Executive,' Is Now Out Of A Job

He's the man who Michael Dell backed to the hilt, but more than a year of subpar performance, market share losses and a complex, expansive federal investigation ultimately were too much to save Kevin Rollins' CEO job at Dell.

He's the man who Michael Dell backed to the hilt, but more than a year of subpar performance, market share losses and a complex, expansive federal investigation ultimately were too much to save Kevin Rollins' job at the helm of Dell.


Slide Show: Highway To Dell

For four of the past five times Dell has reported its quarterly earnings, CEO Rollins had this -- or a variant -- to say to financial analysts:

"We're clearly disappointed with our financial results."

For a company that Wall Street analysts spent years fawning over, and that had worked its way into the Fortune 25, Rollins found himself in the unenviable position of delivering one piece of bad news after another. In the last year alone, Dell fumbled its way through stark declines in customer service, a 4.2 million-unit notebook battery recall, earnings disappointments and two thorny investigations: one by the U.S. Attorney for the Southern District of New York, and another by the Securities and Exchange Commission.

The calls for Rollins' head started coming shortly after Sept. 11 last year, when Dell announced it would not be able to file its mandatory 10-Q reports with the SEC because of the investigations into the Round Rock, Texas, company's accounting practices and finances.

During a Sept. 12 meeting with a hand-picked group of reporters in New York, Rollins and his "boss," company founder and chairman Michael Dell, discussed the computer hardware giant's turnaround strategy. One questioner asked Rollins if, given the performance of his company, he thought he'd be keeping his job. Rollins turned the floor over to Dell.

"I think Kevin Rollins is an outstanding executive," Dell said. "Characterizations of the company's challenges being only of Kevin's doing are inaccurate. Kevin and I run the business together. If you want to blame somebody, you can blame me, too."

Within minutes of Dell's board announcing Rollins had quit and was replaced by the man who had given him a vote of confidence months earlier, Dell had removed Rollins photo and biography from its Web site.

Rollins began his career on a happier track. In 1996, he joined Dell after working as a partner at the consulting firm Bain & Co. Dell had hired Bain to help it develop more strategies for direct sales of computers, and the company credited Rollins with helping devise some of the strategies that eventually thrust it into the No. 1 position in worldwide PC market share.

In 2004, Michael Dell stepped aside as CEO and gave the job to Rollins, who had been senior vice president and president of Dell Americas. Then the company's stumbles began. In mid-2005, a group of vocal, well-read bloggers began attacking Dell's customer service. It was about that time, too, that the SEC began a secret but "informal" inquiry into Dell's finances.

As Rollins leaves the once high-growth company, now No. 2 in worldwide PC market share to Hewlett-Packard, the company is grappling with a potential delisting from the Nasdaq stock exchange and has admitted it doesn't believe it can make a March 14 deadline to file all of its delinquent financial reports with the SEC.

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