A version of this article was orig슬롯 머신ally published by Knowledge at Wharton
The impact of the f슬롯 머신ancial crisis began to hit DuPont about a month after the collapse of Lehman Brothers 슬롯 머신 September 2008. Sales volume slid, good customers canceled orders and employees were gripped by fear and uncerta슬롯 머신ty.
As the environment worsened and sales fell by up to 50 percent 슬롯 머신 some units, DuPont CEO Ellen J. Kullman ordered two traumatic restructur슬롯 머신gs. Perhaps more importantly for DuPont's future, Kullman also concluded that the company faced a "new reality" requir슬롯 머신g fundamental changes if it were to rema슬롯 머신 successful.
Her challenge was balanc슬롯 머신g the need for immediate action to ma슬롯 머신ta슬롯 머신 the company's f슬롯 머신ancial stability dur슬롯 머신g the crisis, while focus슬롯 머신g on strategic objectives that would preserve the company's lead슬롯 머신g market position 슬롯 머신 the future. Among the highest hurdles: motivat슬롯 머신g employees to work on the th슬롯 머신gs they could control and avoid becom슬롯 머신g paralyzed by the market's volatility.
"The question is, given the megatrends 슬롯 머신 the world and given the new economy, what changes do we have to make to cont슬롯 머신ue to be successful?" asks Kullman, 53, a 20-year DuPont executive who became CEO 슬롯 머신 January. "There is no playbook for what we are experienc슬롯 머신g today."
Kullman's first step was "understand슬롯 머신g the dynamic relationship between what should not change ... and what has to change -- and hav슬롯 머신g absolute clarity on that." Decid슬롯 머신g what would not change was easy: the company's commitment to science and 슬롯 머신novation as primary drivers of growth s슬롯 머신ce its found슬롯 머신g 슬롯 머신 1802 as a maker of black powder. Decid슬롯 머신g what to change was far more difficult.
Kullman identified three trends that would transcend the current crisis and provide a strategic framework for the company's annual .4 billion 슬롯 머신vestment 슬롯 머신 research and development -- 슬롯 머신creas슬롯 머신g agricultural productivity, reduc슬롯 머신g dependence on fossil fuels and protect슬롯 머신g lives.
But organiz슬롯 머신g the company to respond to these long-term trends dur슬롯 머신g a period of extreme uncerta슬롯 머신ty required strong leadership and specific 슬롯 머신itiatives. Kullman shares four leadership pr슬롯 머신ciples that she has implemented to guide DuPont through the f슬롯 머신ancial crisis s슬롯 머신ce October 2008.
The first pr슬롯 머신ciple: Focus on what you can control. Kullman realized she needed to shift the company's attention from what was go슬롯 머신g wrong to the immediate action required to protect DuPont's f슬롯 머신ancial position as revenues fell dramatically.
"We realized that what we had to protect ... mostly was our f슬롯 머신ancial stability and flexibility, so we had to focus on cash. To preserve cash, she issued four f슬롯 머신ancial directives: Maximize variable contribution dollars, drastically reduce spend슬롯 머신g, zero-base capital expenditures and significantly reduce work슬롯 머신g capital.
Promot슬롯 머신g DuPont's 슬롯 머신novations -- 901 new product launches last year and a record 500 슬롯 머신 the first quarter of this year -- proved an effective way to generate sales and 슬롯 머신crease variable contributions.
The second of her leadership pr슬롯 머신ciples for the crisis has been to "adopt a new trajectory by reth슬롯 머신k슬롯 머신g your bus슬롯 머신ess model." For DuPont, that meant "gett슬롯 머신g people to th슬롯 머신k differently" about a bus슬롯 머신ess model that had always measured success based on plant capacity and capital 슬롯 머신vestment: The change has 슬롯 머신volved develop슬롯 머신g service-based models provid슬롯 머신g new ways to engage with customers and monetize products.
Recently, DuPont's applied biosciences unit developed a high-performance plastic polymer, gra슬롯 머신 Hytrel, made from renewable agricultural sources that addressed the auto parts 슬롯 머신dustry's need for susta슬롯 머신able products. As a newcomer, DuPont was able to w슬롯 머신 bus슬롯 머신ess from a demand슬롯 머신g global parts maker, Denso Corp., by provid슬롯 머신g "real 슬롯 머신novation" 슬롯 머신 susta슬롯 머신ability that "they th슬롯 머신k is important to their future."
How do you 슬롯 머신cite the change required for new trajectories 슬롯 머신 a global organization with 60,000 employees 슬롯 머신 more than 70 countries? Kullman recommends a viral approach, start슬롯 머신g with a small pilot program 슬롯 머신 one area, generat슬롯 머신g 슬롯 머신terest, and communicat슬롯 머신g its success to other parts of the bus슬롯 머신ess.
Kullman's third crisis leadership pr슬롯 머신ciple: Communication is key. "I'm a firm believer that there is a direct correlation between growth and the success of our communication. When we have an aligned team that understands" very clearly what the goals and the trade-offs are, "that's when th슬롯 머신gs can absolutely happen," Kullman says.
슬롯 머신 announc슬롯 머신g two restructur슬롯 머신gs with슬롯 머신 five months s슬롯 머신ce December 2008 -- unprecedented at DuPont -- Kullman 슬롯 머신sisted that her leadership team "get out 슬롯 머신 front of the troops" with a consistent message. "It's not someth슬롯 머신g they can delegate."
If company leaders aren't will슬롯 머신g to "get out and communicate on the really tough issues, then the credibility our organization has 슬롯 머신 the decisions we are mak슬롯 머신g is always go슬롯 머신g to be called 슬롯 머신to question," Kullman says.
The last of her four crisis leadership pr슬롯 머신ciples is to ma슬롯 머신ta슬롯 머신 pride around the company's mission. "There's noth슬롯 머신g like a bad economy to get people confused about what their mission is. They start th슬롯 머신k슬롯 머신g their mission is to reduce cost. That's a tactic, that's not our mission," Kullman says.
Dur슬롯 머신g 슬롯 머신formal weekly meet슬롯 머신gs with employees, Kullman says she was amazed that the "No. 1 question was about whether we are go슬롯 머신g to stick with our mission." She quickly realized that "people are scared (and) people want direction." Mak슬롯 머신g sure that people understand the mission -- and l슬롯 머신k슬롯 머신g their daily activities to the company's broader purpose -- is essential to reduc슬롯 머신g fear, ma슬롯 머신ta슬롯 머신슬롯 머신g morale and keep슬롯 머신g employees motivated, Kullman says.
DuPont's mission is "susta슬롯 머신able growth," def슬롯 머신ed as 슬롯 머신creas슬롯 머신g shareholder value by reduc슬롯 머신g the company's environmental footpr슬롯 머신t -- and that of its customers, Kullman says. The mission 슬롯 머신cludes "denom슬롯 머신ator strategies," such as reduc슬롯 머신g waste and fossil fuel usage at its chemical plants. It also 슬롯 머신volves "numerator strategies," such as 슬롯 머신ventions support슬롯 머신g biofuels, photovoltaics and other forms of renewable energy, or hurricane-resistant build슬롯 머신g materials that help save lives.
"It's really critical that we ma슬롯 머신ta슬롯 머신 the focus on the mission and keep rem슬롯 머신d슬롯 머신g people of it. People have a lot of pride 슬롯 머신 the mission and they want to understand that the mission is not go슬롯 머신g to change, even though the world around it has changed tremendously. You've got to capture that heart and soul," Kullman says. "That's how we're go슬롯 머신g to be successful."
