How Dell Computer's Philly-born president learned to sell: Updates
Mayfair native Stephen Felice talks about the origins of Verizon - and the people who helped him up the corporate ladder, including a salesman who taught him to listen.
How Dell Computer's Philly-born president learned to sell: Updates
[Updated 2/4/13, with comments from Dell Boomi boss Rick Nucci and ex-Felice colleague Joe Giordano] Philadelphia native Stephen Felice is President and Chief Commercial Officer of Dell Computer, the Austin-based company that's trying to turn itself from the giant of the aging personal-computer business into a "business solutions" maker.
I sat down with Felice at Comcast Center today [1/30/13] as he was helping Dell run a "Think Tank on Entrepreneurs and Small Business," part of Dell's outreach to small and midsized businesses, which account for a quarter of Dell sales.
Felice talked about some of the people who showed him the road from St. Matthew's Parish in Mayfair to a top job at one of the biggest U.S. tech firms:
The dealmaker: "I joined Bell Atlantic back in the 1980s when they were first diversifying from being a telephone company. To do this they started Bell Atlantic Enterprises, under lead executive Jim Dickerson, who was figuring out where the industry was headed. We bought six or eight companies that first year. We started Bell Atlantic Mobile Systems, which is now Verizon. And Sorbus, the computer services company that became Decision One.
"I became enamored of computer services, and I asked to get into that one. So Dickerson made me treasurer. My job was to figure out, how do we fund these things, how do we track them, and how do we get rid of them if we're not working.
The chairman: "At Sorbus I was pushing for one big deal, to buy Control Data's service business, it was almost as big as we were. So I came back to Philadelphia to pitch this deal to Ray Smith, Bell Atlantic's Chairman, and his board. He approved, with a condition: If I wanted this company so much, I had to run it.
"I told them, 'I'm a finance person, a merger person. I never ran field operations.' So they put me in charge of field operations. Here I am, managing 6,000 field engineers, sales people, and I never yet made a sales call. So I had to learn to make sales calls."
The salesman: "My first sales call, I got thrown out by the customer. I didn't know what I was doing. So I turned to Joe Giordano, one of the guys who reported to me, who went in there with me, and I asked him, looking serious, 'Why did you do that to me? You have to teach me.' And then I smiled. So he did -- he showed me what to do.
"Now, you know, I'd been doing mergers and acquisitions. I was Mr. Aggressor. He taught me to listen.
"Selling is all about understanding what your customer's neeeds are. It's not about pushing what you have. It's about learning what they want."
The relationship started tense. "I met Steve when he was a deal maker in the computer services group at Bell Atlantic and I was a [commissioned] sales manager," Giordano, now a principal at Devon-based business consultant Penn Valley Group, told me later. On their first meeting, Felice told Giordano to lay off a customer while he, Felice, "was working a separate deal with them." Giordano "was very vocal" about his displeasure. So when Felice was named his group's boss a few months later, "I felt like 'Dead Man Walking,'" Giordano recalled.
But to his surprise, instead of firing him, Felice asked for Giordano's advice -- and promoted him. After Felice's disastrous attempt at a sales call, "Steve not only got it, he got it at lightning speed." Together they re-sold the customer on a service-delivery plan, and went on to sell to Conrail, DuPont, Sungard and other big clients. "He was the best boss I ever had," Giordano concluded.
The operations guy: Larry Babbio, a top operating executive at Bell Atlantic, "was a mentor of mine," says Felice. "When they asked me to be the president of Sorbus, I told him, 'I built a career here at Bell Atlantic, I'm still pretty young, I'm not yet 40, why do I want to leave for this smaller comapniy?' And he said, 'You have an opportunity. Take the chance. How many chances do you get in your life? You're not burning any bridges.' It was probably one of the best decisions I ever made." Babbio went on to be chief operating officer at Verizon.
The venture capitalist: Sorbus was backed by a private equity firm, New York-based Welsh Carson, whose lead partner, Tom McInerney, "really cared about the business. They came along (and became Sorbus' dominant owner) with a company we bought. They supported us, one hundred percent." But then Welsh Carson decided to cash in, and sold Sorbus in a leveraged buyout. Given the relatively small size and large debt of the refinanced company, Felice left, in search of a place he could "grow things."
The founder: So Felice applied to fast-growing Dell Computer, whose founder, Michael Dell, "had literally started this thing in his dorm room, and that was still the culture of the company. This company was experiencing phenomenal growth. They were a $20 billion (yearly sales) company and they grew 40 percent the year I joined them." Among other assignments, he was put in charge of the Asia region, running factories and distribution in China, India, Singapore.
But as PC and laptop sales slowed, Dell "had to reinvent itself. We're becoming a technology solutions company. We power most of the cloud -- Amazon, Google, Microsoft Bing, Salesforce.com, they all use our servers." At the same time, Dell's data storage business competes with Amazon and Google: "That's life in technology -- coop-etition."
More founders: "I was happy to do the Boomi deal (Dell acquired Berwyn-based cloud computer application specialist Boomi in 2010) because that company was here, in Philadelphia, where I'm from. I was proud we have that entrepreneurship." Boomi had two founders: "Bob Moul left," to start Philadelphia's Artisan Mobile, "because he's an entrepreneur, and wants to keep doing his own thing. Rick Nucci, who built Boomi's product, is now thriving at Dell. He's thrilled that we typically double the size of the engineering forces at the companies we buy. They have interesting intellectual property. We want them to keep designing it."
Nucci's version: "It was a stealth-mode thing with Dell. We were working on providing a suite of Dell-curated applications and services. After a time we heard from [Felice's] strategy team. They gave signals 'we might want to do more than date you.'
"Then Steve came to Berwyn and spent four hours here in our office. Just imagine, the advocacy and engagement we felt, coming from this guy who heads sales and acquisitions at a $60 billion enterprise. It made my team feel very comfortable. It made Dell's intentions clear," as did a subsequent meeting with founder Michael Dell. A year and two months later, with Dell agents selling Boomi applications, the company's staff and sales have more than doubled.
The next generation: "Seventy-five percent of small businesses say they are not planning on increasing staff this year. That's not the way it's supposed to be. That's why kids are nervous. They don't see what opportunities are going to be out there for them.
"But I also see tons of creativity. The level of maturity of kids in college today is amazing. When I was at the Univeristy of Iowa I went to class and played tennis. These kids are doing that, plus student government, philanthropic work, jobs, philanthropic activities. I think these kids are very impressive. The desire to take risks is better than it was. Kids are more willing to build plans. They are now more willing to think long term."