How a company used internal communication to drive its survival strategy

The global financial recession affected corporations in every country. Global corporations have been hit by the economic downturn everywhere.

To survive and pave the way for future success, corporations tightened their belts and try to change strategy in order to ride out the pressures. DuPont is one of those corporations.

The company was really hit in September 2008 when the financial system in the United States came close to collapse. Sales in some DuPont units fell by up to 50%.

DuPont is one of the most venerable companies in the world, with a proud 200-year history, and 60,000 employees in 70 countries.

CEO Ellen Kullman knew she had to move quickly to maintain the company’s financial stability during the crisis while changing course to preserve the company’s marketing position in the future.

The company identified three trends that would remain strong in the future and that would benefit from the company’s research and development program – increasing agricultural productivity, reducing dependence on fossil fuels and protecting lives.

Kullman adhered to four leadership principles to guide the company through the tough times: (1) focus on what you can control (2) change the business model, (3) communication is key, and (4) maintain pride in the company’s mission.

1. Focus on what you can control

The first principle was to focus on what you can control, especially cash flow, and promoting the company’s innovations to new markets.

2. Change the company’s business model

The second principle was to change the company’s business model – from the traditional “invent, build, make and sell” mode to a customer service model.

3. Communication is key

This led to the third change principle: communication is key. Communication was at the core of the corporation’s successful strategy for change. Kullman says the right things. “I’m a firm believer that there is a direct correlation between growth and the success of our communication” – having an aligned team that understands clearly what the goals and trade-offs are.

She made her leadership team front up to employees about the need to change, especially in areas that had been forced to make layoffs.

There is a risk that business leaders will grow tired of repeating the same message. “We think they’ve heard it and we move on to another message, but all we’ve done is confuse them. It takes 15 or 16 engagements for employees to understand that this is what needs to be done and this is where the company needs to go,” said Kullman.

“Economic uncertainty has made the task more difficult, but I think maintaining that communication – the strength and alignment around it – is more critical in today’s environment.”

4. Maintain pride in the company’s mission

Kullman’s fourth leadership principle is to maintain pride in the company’s mission. She found the number one question from employees was about whether the company would stick with its mission. “It’s really critical that we maintain the focus on the mission and keep reminding people of it. People have a lot of pride in the mission and they want to understand that the mission is not about to change, even though the world around it has changed tremendously.”

The interesting thing is that communication is at the centre of all four of these leadership principles. None of the four would be effective without being driven by good communication. This case is a good reminder that leadership is communication.

Source: Knowledge@Wharton newsletter: http://knowledge.wharton.upenn.edu.

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