A Tough CEO

Sep 23, 1996

There’s a good article in the September 9, 1996, edition of The Wall Street Journal, entitled “How to Survive When I Take the Reins.” It’s in the “Manager’s Journal” section and was written by Albert J. Dunlap, the new CEO for Sunbeam Corporation. Dunlap previously served as CEO of Scott Paper Company, a firm the business media credits him with turning around almost single-handedly. Dunlap claims that every company he inherits has too many people, and he goes on to tell readers how to survive under one of his regimes. Some of his thinking could benefit leaders and employees working in struggling A/E or environmental firms. Here’s some of what Dunlap had to say: “Hiding under your desk won’t work; you must stand up and speak your piece.” I agree, and so would most CEOs of growing, profitable A/E or environmental firms. He clearly has no sympathy for someone who wants to lay low. He says the last thing you want if you are working in a company that is being “Dunlapped” is to be invisible. He wants to know what people think needs to happen to turn things around. He likes aggressive people with ideas. He likes to be challenged. “I sat in my first meeting (at Sunbeam) listening to business managers talk about the company as if it were the best thing since sliced bread, when in fact it was toast. Last quarter, earnings at Sunbeam were down 46%. Belligerent and arrogant, these managers were wasting my time: blaming each other, evading responsibility, trying to defend an indefensible performance.” Dunlap, like all the best leaders of firms in our business or any other business, doesn’t like excuses. He hates when people try to cover their butts. He wants managers who can admit they have a problem, that what they’ve been doing clearly isn’t working. Acknowledgment of the current state of affairs always precedes confronting the situation, whether it’s an alcohol problem someone has or a performance problem a firm is experiencing. “In ‘Dunlapping’ a corporation, there’s no such thing as a six-month study of situations and personnel. I move fast, because I don’t have the luxury of taking a long time. I quickly assess who in management contributed to the deterioration of the company and who tried to do good but was buried by bureaucracy and office politics.” Speed is essential to any turnaround. The first order of business for any failing company is to get expenses down below income. If you can’t do that in the short term, you won’t be around long enough to turn things around in the long term. “Do I only hire people who tell me what I want to hear, people with whom I can play tennis? Hell no. Those are the kind of people I’m usually replacing. Sure, it’s nice if I like someone, but it’s more important that I feel like I’m going to respect him.” It’s easy for many employees to get the idea that a strong leader wants to surround him- or herself with “yes” people, but rarely is that what the strong leader really wants. Most important is to have someone working for you that you can count on to get the job done so you don’t have to worry about it: rarely is that person is a “yes” person. “Yes” people want you to tell them what to do every step of the way, and are paralyzed unless they know that you approve. “I’m also looking for the superstars of tomorrow.” Dunlap talks about a CFO at Scott who was excluded from executive committee meetings. His solution was to get rid of the executive committee and keep the CFO, who went on to become the CFO of Campbell Soup. The best CEOs always think about who their best up-and-comers are. They have to identify, reward, support, and test these people so they can move them up. Too often, we promote people based on seniority, instead of looking for who really has the potential to grow into the job, regardless of age, experience, or tenure. Dunlap makes a lot of sense. Perhaps it’s time we started looking more outside of the A/E/P and environmental business for common-sense management philosophy. There’s a lot to be learned about business from guys like Dunlap, even if we don’t always like what he has to say, or the way he says it. We don’t have to like him— only respect him. Originally published 9/23/1996

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