Customer Service: EMC Corp.

Recognized For: Customer Service
Home Base: Hopkinton, Massachusetts
Year Founded: 1979

Mike Ruettgers was apologizing again -- and wondering why the hell he had joined EMC Corp. in the first place. It was 1988, soon after Ruettgers had signed on as executive vice president of operations and customer service. The company's products were failing left and right -- and EMC itself was on the verge of bankruptcy. The biggest crisis involved a batch of faulty disk drives that EMC had shipped to customers. Ruettgers had joined the company as a high-tech troubleshooter, an expert in straightening out these sorts of kinks. But this kink threatened to put the company out of business.

Life and work turned into a blur as he crisscrossed the country, meeting with customers in a desperate bid to contain the damage to EMC's reputation. He became a kind of executive punching bag, absorbing as much anger as he could in an hour-long meeting and then moving on to the next one. It was a punishing, humiliating routine. When he wasn't listening to tirades about EMC's products, he was apologizing for the problems associated with those products and promising to make amends.

Now, as he sat in another windowless office in Salt Lake City (or was it Denver?), he felt himself descending into a new and special hell. The man on the other side of the desk, a manufacturing executive about the same age as Ruettgers, had broken down in tears because he was going to lose his job as a result of EMC's failures. His company's business had come to a screeching halt because no one could get to the crucial information stored on EMC's data-storage systems. Big, expensive computers -- and all of the myriad operations that relied on them -- had been sitting idle since the refrigerator-sized EMC machines, where the data was kept, had seized up. It was as if the heart of the company had stopped beating.

When Ruettgers resumed his bleak rounds, he arrived at a bold comeback strategy. To make customers whole again, he insisted that they be given a choice: receive a new EMC storage system, or take one made by archrival IBM -- but paid for by EMC. So many customers opted for IBM that during one quarter in 1989, at the height of the fiasco, most of the storage systems shipped by EMC were actually made by its biggest competitor.

Inside EMC, some people wondered what the hell was going on. But customers recognized EMC's extraordinary commitment to stick by them, and once Ruettgers had installed rigorous quality controls, many of them bought from EMC again. "What that proved to me, to all of us, was that when a customer believes in you, and you go to great lengths to preserve that relationship, they'll stick with you almost no matter what," says Ruettgers, who is now 58. "It opened our eyes to the power of customer service."

EMC still hasn't blinked. Thanks in large part to how he handled that make-or-break crisis, Ruettgers was named CEO in 1992. And the company's reputation for fanatical devotion to service has been at the heart of its torrid growth and prosperity ever since. Back in 1988, when Ruettgers joined EMC, the company had 910 employees, annual sales of $123 million, and a net loss of $7.8 million. Today, EMC has more than 23,000 employees, an annual revenue of $8.9 billion, and a stock-market value of roughly $70 billion. It has earned a spot, along with Cisco Systems, Sun Microsystems, and Oracle, as one of the "four horsemen of the Internet." Lately, like all technology companies, that has meant EMC has been hit hard by the economic downturn. Its stock (about $32 per share when this article went to press) is down from an all-time high of nearly $105 per share. But compare that with the split-adjusted price of 33 cents per share, which is what it traded for when Ruettgers became chief executive.

EMC has done a lot of things right on its way to the top. The company is filled with superb technologists who are prepared to obsolete products in their prime and to churn out new ones with clockwork regularity. A do-or-die sales culture pushes top-line growth even in tough times. But it is impossible to understand EMC's 10-year rise without appreciating its commitment to customer service. The company boasts that its customer-retention rate is an astonishing 99%. When Forrester Research surveyed 50 big companies about their various technology suppliers, "EMC came out looking like God," says Carl Howe, a director of research at Forrester. "It had the best customer-service reviews we have ever seen, in any industry."

Consider how EMC responded in the winter of 1999, when a bank in Wisconsin suddenly lost access to its data-storage facility. In quick succession, the screens in the bank's computer center started flashing "data unavailable" -- a message that might as well have read "closed for business." Within minutes, customer-service engineers at EMC headquarters had retrieved, remotely, the logs of EMC's storage systems at the bank and had started combing through them. But the cause of the problem didn't jump out -- the way it often had.