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Exceptional January-June 2012 - The science of success - DuPont’s Ellen Kullman - EY - United States


The science of success: DuPont’s
Ellen Kullman

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"You build US$34b in revenue one customer at a time, one country at a time, one business at a time."

For a business leader, it's the proverbial good news, bad news scenario, only in this case played out mercilessly on the world stage. We want to make you the CEO of our US$30b company — but you'll have to lead it through the worst recession of our lifetime.

That was the reality facing Ellen Kullman when DuPont's board of directors named her CEO in late 2008. She would be only the 19th chief executive in the 209-year history of the Wilmington, Delaware-based company.

After having worked at the science-based products and services company for 22 years in a variety of roles, on the first day of her stewardship Kullman was faced with a seemingly impossible task: steering the company through a time when sales and revenues were crashing as customers retreated into the safety of cash.

But Kullman was prepared. The moment she knew the top job was within her reach, she started strategizing. "I had the beginnings of a plan knocking around in my head and on paper," she recalls.

On 1 January 2009, she took over the reins; she is now also Board Chair.

"I pulled out the paper and started thinking about it again, and then the world financial markets collapsed. Demand collapsed in every country, in every business outside of agriculture, in a three-month period of time, and it was totally unprecedented. We've seen what we thought were some bad recessions, but none of us had ever seen anything like that before.

We literally had to get everybody to stop what they were doing. We'd review a business, determine what was going on, and a week later, it would be different."

In her first few months in the top job, Kullman eliminated about 4,500 jobs and narrowed DuPont's focus to 13 business lines. That was just the start.

"We set to further streamline and simplify the company, and we took out a layer of leadership and got really clear on what success looks like coming out of the recession," says Kullman.

That clear view of the business began immediately after she became CEO.

"We started within days," she says. "If we used to run a monthly review process, it became a weekly process, and if a business was running a weekly process, some months it was a daily process. And you had to have complete transparency because, believe me, the sooner we found out the real situation, the sooner we could make an appropriate decision."

The results were stunning. Once considered a staid corporation, DuPont emerged more streamlined, productive, agile and intimately connected to its customers.

Exceeding Wall Street's expectations

Driving 2010 revenues of US$34b, Kullman has led DuPont to exceed Wall Street's expectations for the past 11 consecutive quarters. Earnings increased by 23% in the third quarter of 2011, beating estimates by US$500m. "We're a large company with 60,000 employees operating in 90 countries," she says. "You build US$34b in revenue one customer at a time, one country at a time, one business at a time."

Kullman attributes DuPont's success to its focus on science and calls it a "market-driven science company."

"We believe the future is in science, so if you continue to innovate, then your ability to be relevant to your customers — and your ability to succeed in the marketplace — is a lot higher than it would be," she says.

"As we came through the global financial crisis, we chose not to reduce research and development." Kullman has fostered an entrepreneurial spirit throughout her tenure at DuPont. When she was head of the successful US$2b titanium dioxide business, she took on the challenge of starting an entirely new venture for DuPont — something that both her DuPont mentor and her husband advised her not to do.

Despite staggering odds against it, that safety-consulting business is now a profitable line for the company. "I think our employees see me as transparent and accountable," says Kullman. "I took a risk in my career and started the safety business. I took on bio-materials when it was in its infancy."

She wants her executives to know she understands risk-taking and that many of those risks have paid off. She sees her CEO role as creating a safe environment for such entrepreneurial behavior to flourish.

Staying close to the market is critical. "I love what I do and that's why I can make it work," she says. "Somewhere along the line, I became phenomenally market-driven. That's what excites me; that's what gives me energy. If you're out there, you'll find out not only what you're doing well, but also what you should be doing better. You need to be engaged and open and willing to listen."

"For my whole career, that has been what gets me up every morning. I'm much happier on days when I'm going off to see customers."

That approach paid off immediately when Kullman took over at DuPont. Encouraging her executives to call on customers personally, she hammered home a favorite question: "What is your right to win?"

"I want to know what is their right to beat their competition in that marketplace," she says. "What makes them different from their competition? Do we have superior science or a superior cost position? Do we have a strong brand that will help them in their marketplace? Do we provide services that are differentiated?"

In Kullman's view, it all boils down to science. She cites a new, lower-cost technology for television screens that allows its customers to achieve the same level of brightness and display quality as other, more costly manufacturing processes. "That's their right to win," she says with pride.

Rolling with the tides

If there is one thing that characterizes global business today, it is constant, unrelenting change. At DuPont, that plays out in unexpected ways. Just five years ago, agriculture, nutrition and health made up 20% of revenues; today, that number is 33%. Agriculture alone is up 41% year on year.

To enable DuPont to respond to those challenges, Kullman has championed what she calls "the Global Collaboratory," in essence a laboratory without walls or boundaries.

"Pace, time to market, and relevance are important, so how do you get that?" she asks rhetorically. "You get it by collaborating, so we'll collaborate with our customers because they have science that makes them operate better, and how our materials play into that science is really important. If our scientists work together, they get it done faster than if we each work alone."

As DuPont scientists see examples of successful collaboration, they talk about it and, more importantly, their customers talk about how important that collaboration was to the process, she says.

What does the future hold?

"One of the biggest things that's going to change in DuPont's future is biology and biotechnology," Kullman predicts.

"Its impact is not only in areas like pharmaceuticals or agriculture, but also on materials, on fuels, on so many future products. I'm living with the success we're having now based on decisions that my predecessors made about where to put research and development dollars, because a lot of this is [on a] long cycle," she adds.

"Now, we're going through a great renewal. The majority of our company is [made up of] baby boomers. We're going to have a lot of turnover in our company in the next five years. So we have a greater chance to create a different culture than we've ever had in our history."

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