The DuPont Headquarters, Wilmington, Delaware

What Would You Do?
DuPont Headquarters, Wilmington, Delaware
The DuPont company got its start when Eleuthère
Irénée du Pont de Nemours fled France’s revolution to
come to America, where, in 1802, he built a mill on the
Brandywine River in Wilmington, Delaware, to produce
blasting powder used in guns and artillery. In 1902, E.I.
du Pont’s great-grandson, Pierre S. du Pont, along with
two cousins, bought out other family members and
began transforming DuPont into the world’s leading
chemical company. In its second century, DuPont Corporation would go on to develop Freon for refrigerators
and air conditioners; nylon, which is used in everything
from women’s hose to car tires; Lucite, a ubiquitous
clear plastic used in baths, furniture, car lights, and
phone screens; Teflon, famous for its nonstick properties in cookware and coatings; Dacron, a wash-andwear, wrinkle-free polyester; Lycra, the stretchy, clingy
fabric used in active wear and swimwear; Nome, a
fire-resistant fiber used by firefighters, race car drivers,
and to reduce heat in motors and electrical equipment;
Corona, a high-end countertop used in homes and
offices; and Kevlar, the “bulletproof” material used in
body armor worn by police and soldiers, in helmets,
and for vehicle protection.
You became DuPont’s CEO right as “the world
fell apart” at the height of the world financial crisis.
Fortunately, you had early warning from sharply declining sales in DuPont’s titanium dioxide division, which
makes white pigment used in paints, sunscreen, and
food coloring. Sales trends there can be counted on to
indicate what will happen next in the general economy,
so you and your leadership team began working with
the heads of all of DuPont’s divisions to make contingency plans in case sales dropped by 5 percent, 10
percent, 20 percent, or more. Many DuPont managers thought you were crazy, until the downturn hit. It
was difficult, but with plans to cut 6,500 employees
at the ready, you were prepared when sales dropped
by 20 percent at the end of the year. But when that
wasn’t enough, salaried and professional employees
were asked to voluntarily take unpaid time off and
an additional 2,000 jobs were eliminated. In all, these
moves reduced expenses by a billion dollars a year. But
one place you refused to cut was DuPont’s research
budget, which remained at $1.4 billion per year.
One of the ways in which the Board of Directors
measures company performance is by comparing
DuPont’s total stock returns to 19 peer companies. Over
the last quarter century, DuPont has regularly ended
up in the bottom third of the list. This makes clear
that you have one overriding goal: to restore DuPont’s
prestige, performance, and competitiveness. The question, of course, is how? Before deciding, there are some
big questions to consider. First, given sustained weak
performance over the last quarter century, do you need
to step back and consider DuPont’s purpose and reason
for being in business? After transitioning from blasting
powder to chemicals, DuPont’s slogan became, “Better
things for better living … through chemistry.” Is it time,
again, to reconsider what DuPont is all about? Or, instead of an intense focus on DuPont’s purpose, would it
make more sense to make lots of plans and lots of bets
so that “a thousand flowers can bloom?” In other words,
would it be better to keep options open by making
small, simultaneous investments in many alternative
plans? Then, when one or a few of these plans emerge
as likely winners, you invest even more in these plans
while discontinuing or reducing investment in the others. Finally, planning is a double-edged sword. If done
right, it brings about tremendous increases in individual and organizational performance. But if done wrong,
it can have just the opposite effect and harm individual
and organizational performance. With that in mind,
what kind of goals should you set for the company?
Should you focus on finances, product development,
or people? And should you have an overriding goal or
separate goals for different parts of the company?
If you were the CEO at DuPont, what would you do?
Sources: C. Loomis & D. Burke, “Can Ellen Kullman make DuPont Great Again?” Fortune, 3 May 2010,
156–163; M. Reisch, “Leading DuPont: After a Difficult First Year as CEO, Ellen Kullman Sets the Stage
for Growth,” Chemical & Engineering News, 12 April 2010, 10–13.
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