A Philly kid struttin' his stuff at Dell

Posted: February 13, 2013

He's the son of a Mummer, a Northeast Philly kid who made it big in high-tech management. Stephen J. Felice's career parallels the rapid innovations that have built, wrecked and reinvented some of America's biggest businesses since the 1980s while changing the way we talk to one another.

A veteran of the Philadelphia-based Bell Atlantic Corp. enterprise group that created Verizon, Felice is now the $10 million-a-year president and chief commercial officer of Dell Inc., which is struggling to remake itself from a big-but-aging computer supplier into a "global IT solutions provider." To speed the change, founder Michael Dell announced a proposed $24 billion buyout of the Austin-based company last week, partly financed by Microsoft.

Felice, intense and boyish at 55, has come a long way from the rowhouse on Glenview Street in Philadelphia's Mayfair section where he grew up, attending St. Matthew's School, rooting for the Wilt Chamberlain-Chet Walker 76ers and the Flyers, and braving New Year's crowds to watch his musician father march with the Hegeman String Band.

His dad's day job with Hammond USA, the organ maker, took the family to Chicago for Felice's high school years. He earned his business degree from the University of Iowa in 1979, then worked a couple years at Shell Oil in Houston.

But Felice, married to his college sweetheart, Katie, came back to Philadelphia in 1984. Raymond Smith, boss of Bell Atlantic, created by the government-ordered breakup of the phone monopoly AT&T, was setting up a group to move into mobile communications and information technology, and manager James H. Dickerson Jr. put Felice to work running the numbers on bright-idea takeover candidates.

"We started Bell Atlantic Mobile Systems, which is now Verizon, and Sorbus, the computer-services company that became DecisionOne," Felice recalled earlier this month, during a break in a program for young entrepreneurs he was helping to run at the Comcast Center.

Buying companies every month or two, Felice loved the pace. He moved his growing family to Chester County; he polished his golf game at the Merion and Chester Valley links.

He got especially excited about a plan to double Sorbus' size in a single acquisition.

"I came back to Philadelphia to pitch this deal to Ray Smith and his board," Felice said. "He approved, with a condition: If I wanted this company so much, I had to run it."

In a talk with one of his Bell Atlantic mentors, Lawrence T. Babbio Jr. (later Verizon's chief operating officer), Felice confessed his fear of moving off the corporate ladder: "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 company?"

Jump, Babbio urged. "You have an opportunity. Take the chance. How many chances do you get in your life?"

Soon, Felice, who had never made a sales call, found himself bossing 6,000 engineers and salespeople. He had to learn sales, and quickly. He supposed he had the stuff.

"I'd been doing mergers and acquisitions," Felice reasoned. "I was Mr. Aggressor."

But his first sales call was a disaster. As he bragged about what Sorbus could do, the customer kicked him out of his office.

He turned to salesman Joseph Giordano for help - to Giordano's surprise. Their relationship had begun wrapped in tension, when Felice blocked Giordano from selling to a client that Felice's deal group was prospecting. Giordano had objected, loudly. When Felice was promoted to run the company, Giordano assumed he would be forced out.

But instead of firing Giordano, there was Felice asking his help. What Giordano taught him, Felice never forgot: "Selling is all about understanding what your customer's needs are. It's not about pushing what you have. It's about learning what they want."

"Steve not only got it, he got it at lightning speed," recalled Giordano, now a principal at Penn Valley Group, a business-consulting firm in Devon.

They went back and re-sold the customer on a service-delivery plan, then sold it again to Conrail, DuPont, Sungard, and other big clients. "Best boss I ever had," Giordano said of Felice.

Spun off by Bell Atlantic and renamed DecisionOne, the group's new owner - buyout firm Welsh, Carson, Anderson & Stowe, led by hands-on Thomas E. McInerney - showed how private investors could fuel rapid growth. But when the owners cashed out, DecisionOne was left with big debts, and only modest revenues.

Looking to "grow things," Felice applied for a job with a customer, Dell computers, whose founder, Michael Dell, "had literally started this thing in his dorm room, and that was still the culture of the company," even as sales topped $20 billion.

Joining Dell in 1999, Felice was put in charge of the Asia region, running factories and distribution in China, India and Singapore, then was made a top manager at corporate headquarters in Austin.

The family moved together. One Felice child graduated from the Singapore American School; the two others from St. Michael's Catholic School in Austin. Daughter Lauren is now a student at Stanford University; Jeana, trained as a teacher, is married to an Air Force flight instructor. Son Mark died from cancer at 17; the family endowed the Mark Felice Childhood Cancer Fund in his memory.

The first generation of Dell executives became multi-millionaires as the company's value surged along with Microsoft's and Cisco's in the dot-com boom. Felice missed the big gains; as PC and laptop sales slowed, and Dell's stock price lost more than three-quarters of its boom-era value, the company, according to Felice, "had to reinvent itself," adding data-storage and consulting services, counting giants such as Amazon and Google as both clients and competitors.

Dell has speeded its move into business services by buying small, fast-growing specialty firms such as Rick Nucci's Boomi, a Berwyn firm that connects corporate clients to systems based on third-party, or cloud, servers.

"It was a stealth-mode thing with Dell," Nucci said.

After Boomi started developing services for Dell customers, Nucci started getting calls from Felice's strategy team about hooking up.

Felice visited Berwyn and spent four hours there, Nucci said, which sent a "very comfortable" message to his staff "from this guy who heads sales and acquisitions at a $60 billion enterprise." Since the purchase, staff and revenues have more than doubled at what is now called Dell Boomi.

The corporate ladder that helped Felice rise may not be what it used to be. That's part of why he was in Philadelphia recently, reaching out to ambitious students and company founders - Dell's customers and his own tech successors.

Fear, he said, has taught smart students a useful lesson: "The desire to take risks is better than it was."

Contact Joseph N. DiStefano at 215-854-5194, JoeD@phillynews.com, @PhillyJoeD.

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