Dell President’s Advice to CEOs: ‘Get Social’

Social media isn’t just for startups anymore. Fortune 500 companies need to join the movement, and quickly, or risk being left behind for good. That was the message not just from market analysts, entrepreneurs and venture capitalists at the Techonomy Conference, but from big companies themselves.

“Most large companies are vulnerable to small, emerging businesses,” said Steve Felice, president of computer-maker Dell, on a panel about technological tranformations in businesses. Companies “have to deal with it or you’ll find yourself dealing with a whole new set of competitors,” he said.

Felice was joined on stage by John Donovan, senior executive vice president at AT&T, and Sandra Kurtzig, the chief executive of Kenandy, a startup that delivers cloud-based software for resource planning. The three-day conference in Tucson, Arizona, featured at least five sessions on the use of social networking technology within businesses, as well as discussions on the emergence of cloud computing, mobility and big data.

Felice has seen firsthand the problem big companies face when they move slowly. Dell, founded in 1984, was a Wall Street darling in the 1990s thanks to its rapid expansion in the personal computer market. Sales growth slowed last decade before contracting in recent years as consumers shifted to smartphones and tablets manufactured by others. Felice said the company has diversified and now has $20 billion in sales from products such as storage and servers. Still, the stock has lost more than three-quarters of its value since the end of 2004. His biggest advice to CEOs today: “Get social.” That means using Salesforce.com’s Chatter tool and LinkedIn to listen to what employees and customers are saying.

In an earlier session called “The Transforming Social Enterprise,” Jive Software CEO Tony Zingale said the primary reason people leave their jobs is because they don’t feel connected to the mission of the company. That may come as a surprise to employers who try to keep workers happy with Christmas bonuses.

Kurtzig said corporate executives are starting to get the importance of better communication and adopting emerging technologies, but they’re not sure how to do it. She’s working with 15 Fortune 100 companies now, which are strapped with legacy software from Oracle and SAP, among others. Bringing in new programs is risky for information chiefs and CEOs. The benefit, Kurtzig said, is that many companies haven’t upgraded their systems in a decade because they cut spending during the recession. So now their legacy software is outdated and the cheapest, most efficient options include cloud and social.

“This is first time there’s been a total paradigm shift in the last 20 years,” she said. ”Every piece of software has to be rewritten.”

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