ELLEN KULLMAN, CHMN. & CEO, DUPONT: Parenting is good training to be CEO because we can’t control our children’s actions, right? It helped me understand that just because I said so, wasn’t a reason for them to do anything.
SUSIE GHARIB, NIGHTLY BUSINESS REPORT ANCHOR: Meet Ellen Kullman, CEO and chairman of DuPont (NYSE: DD). In this “Women and Leadership” program, we’ll tell you how this remarkable woman and mother is leading one of the country’s oldest companies.
Good evening, and welcome to this special edition of NIGHTLY BUSINESS REPORT.
Tonight, we are focusing on Ellen Kullman, leader of one of the country’s oldest, and best- known industrial companies: DuPont. DuPont’s story began in 1802, right here on the Brandywine River in Wilmington, Delaware. DuPont made gunpowder back then, and the power came from that water wheel right behind me.
Kullman took over at this storied corporation at the height of the crash and recession in 2009. It is her job to take DuPont, which was once a household name known for innovation, back to the success and profitability that the company enjoyed for decades. Stockholders and industry are watching closely.
How do you think you’re doing?
KULLMAN: You know, I’ve — so, I think we’re doing pretty well. I think that we’ve tackled the problems in the global financial crisis. I think we’ve come through it very strongly. You know, I get all the credit now, right? I’ll get all the blame if it goes the other way as well. So, I understand that part.
GHARIB: The numbers back her up. Kullman increased DuPont’s revenues by 21 percent last year, up to nearly $32 billion. But the DuPont she heads today is not the DuPont of the past.
KULLMAN: DuPont has changed dramatically over the last 20 years. We are heavily into biology, biotechnology, in addition to chemistry and material science. So we’re — we’re a science company, really, an advanced material and agriculture company.
GHARIB: Two or three decades ago, this was the DuPont Americans knew.
UNIDENTIFIED MALE: It is another example of how DuPont helps to bring you an ever increasing supply of better things for better living through chemistry.
GHARIB: DuPont dropped that very famous motto, is chemicals a dirty word at DuPont these days?
KULLMAN: No, you know, chemistry itself is a phenomenal science. And chemistry has done so much for the world and will continue to do so. But it really is marrying chemistry with biology and material science to create much better solutions for the world.
GHARIB: For most of the 20th Century, DuPont scientists used petro- chemicals to invent products that became household names, like Nylon and Teflon.
UNIDENTIFIED FEMALE: DuPont promised a future that was stain-free, wrinkle-free, stick-free, silk-like, wool-like, water repellant, heat retardant, lightweight, and really flexible.
GHARIB: The company now focuses on less glamorous products, products to feed a growing population, reduce dependence on fossil fuels. And protect crops, people, and the environment.
DuPont’s mantra is sustainability. What does that mean?
KULLMAN: It’s really that progression towards more sustainable products, products that last; towards products that have less of an impact on the environment.
GHARIB: So DuPont is green. Is that what you’re saying?
KULLMAN: DuPont is — understands green and is moving to green.
GHARIB: Kullman grew up in DuPont country. She was born and raised in Wilmington. She attended the Tower Hill School. At five feet, nine inches, she played center on the high school basketball team, and was co- captain.
Patty Marshall was her coach.
PATTY MARSHALL, HIGH SCHOOL COACH: Back when she was in high school you could tell there probably was something very special about her. She was very self-assured. And we ran a very competitive program, and she was very competitive. And, I imagine still is, or she wouldn’t be where she is now.
KULLMAN: What I think team sports do is teach you how to be a team with a very diverse group of people. They might be your friends. They might not be your friends. Team (NASDAQ: TISI) sports really teach you how to collaborate across a broad spectrum of personalities or individual talents, and learn how to get the most out of what you have.
And I think that’s a really important skill in business.
KULLMAN: Ellen, as captain, and her co-captain, did a very good job of making sure the team worked as a team. They weren’t out for individual highlights, and they did work well as a team. And I credit her and the co- captain with doing that.
GHARIB: Ellen majored in engineering at Tufts and studied management at Northwestern. There she got an MBA and met her husband, Michael Kullman. After a stint at General Electric (NYSE: GE), both went to work at DuPont. Michael is now the head of global marketing.
So your husband Mike is working here. I mean, how weird is it to have your husband a subordinate?
KULLMAN: Well, so he and I have worked in the same companies for the last 25 years. So we’ve always been used to, you know, working in the same industry. We’re both marketing types and engineers.
GHARIB: But you’re the CEO.
KULLMAN: That’s true. That is true. Well, I guess maybe because it has been 22 years we’ve both been working for the company that it just hasn’t created any of those issues.
GHARIB: The couple have three children: a daughter in college, and twin boys, heading into their senior year in high school.
Just about every working woman watching this interview struggles to find a balance between their career and their family. And you’ve been talking about your — raising your three kids. How did you do it?
KULLMAN: Well, I didn’t. Balance was never my goal, right? I think just surviving might have been for part of it.
KULLMAN: But I’ve had very supportive bosses, you know, throughout my career. I’ve had — I have a very supportive husband. You know, he and I truly do, you know, share the parenting. I mean, we have this rule, both of us can’t be out of town at the same time.
GHARIB: You were quoted recently as saying that parenting has been good training to be CEO. What did you mean by that?
KULLMAN: Parenting is good training to be CEO because we can’t control our children’s actions, right? We can…
KULLMAN: We can counsel them. We can reprimand them. We can motivate them. But at the end of the day you’re taking this child and trying to instill, you know, values into them and things like that. And I think it helped me become more patient. It helped me understand that just because I said so wasn’t a reason for them to do anything.
I had to learn that listening side in order to really be successful. And I think having three kids really helped me with that.
GHARIB: Well, tell us a little more about that.
KULLMAN: You know, when you manage a household, three kids, all the stuff, you’ve got to focus on the important stuff. And not the little stuff. And I think that’s very, very true in business.
GHARIB: Jack Markell and his family were next-door neighbors to Michael and Ellen Kullman for 10 years. Now he’s the governor of Delaware.
GOV. JACK MARKELL (D), DELAWARE: She’s absolutely somebody who’s willing to roll up her sleeves and, you know, get her hands dirty, so to speak. When our families would eat together, she and I would always end up doing the dishes. It was a job that had to be done. She’s very, very hands on. She’s a great mother.
GHARIB: As governor, Markell knows that DuPont is one of the state’s biggest employers and taxpayers. He thinks the company is in good hands.
MARKELL: Ellen is amongst the most straightforward business people I’ve ever met. She tells it like it is. She’s analytical. She figures out the problem. She figures out how to make it work, and then she executes.
GHARIB: Executing some of those important decisions happens right here, in the DuPont boardroom. As CEO and chairman, Kullman is the first woman ever to lead the company.
KULLMAN: So, here’s the boardroom. Now it’s a daunting room to present in, if you can imagine.
GHARIB: Very impressive boardroom.
KULLMAN: Look at that. Wow.
GHARIB: Where do you…
KULLMAN: Look at the size of the table.
GHARIB: Where do you sit?
KULLMAN: I sit down here.
GHARIB: At the head of the table?
KULLMAN: At the head of the table. I guess I pay the bills.
GHARIB: When you had your first board meeting, and you were running it as CEO, and you’re sitting at the head of table, what did it feel like?
KULLMAN: A little scary. You know?
KULLMAN: I was, like, wow, OK, here we are. But, you know, it was interesting from that standpoint..
GHARIB: All right. So here you’re in this room with all of these portraits of former CEOs of DuPont. Do you ever feel intimidated, like they’re peering over you?
KULLMAN: Of course. You always think they’re looking over your shoulder, making sure, are we investing in the right science? Are we focused in the right areas so that were really relevant to our customers and to society for decades?
GHARIB: Kullman took over at DuPont as the world headed into the worst economic downturn since the Great Depression.
KULLMAN: Our volumes were plummeting around the world. The only business that held up through the entire crisis was agriculture. Agriculture didn’t have a global financial crisis. But we had the plant sites that were idling. We did not know how long it would be. We had no view.
The supply chains couldn’t help us, because they were in free-fall as well. And so we had to determine how we were going to restructure the company. And so that’s very difficult, because you don’t take those things lightly. These are.
GHARIB: So what was your first official act that you had to make the decision, it was your call?
KULLMAN: To lay off thousands of people.
GHARIB: Kullman ordered 4,500 layoffs, almost 8 percent of DuPont’s staff. And she imposed furloughs without pay. The last time DuPont was forced to take such actions was in the 1930s.
KULLMAN: At the beginning, I thought it was the worst possible timing, how could this happen, right? But in retrospect, it was really helpful. People at that time were looking for direction. What do you we need to do to survive? What do we need to do to come out of it stronger?
GHARIB: How did it feel, taking over at that time?
KULLMAN: You know, it’s humbling. I mean, you’ve done so many things in a career that has spanned 30 years. And then you’re in a situation that you’ve never experienced before in your life.
GHARIB: For guidance, Kullman dug up out-of-print history books about DuPont.
KULLMAN: It taught me a lot about transitions, and how difficult they were, about you really have to face reality, because the world changes.
GHARIB: Did you turn to anyone outside of DuPont for advice, now that you were a new CEO?
KULLMAN: I reached out to women I know that lead small companies and large companies. I reached out to a couple of men I know. And just to listen.
GHARIB: Wall Street analyst Hassan Ahmed likes the way she handled the crisis.
HASSAN AHMED, ANALYST, ALEMBIC GLOBAL ADVISORS: One thing that DuPont did very well, and Ellen Kullman in particular, the current CEO of DuPont, that she narrowed the focus and defined where DuPont is going very well.
GHARIB: That focus helped Kullman recognize the need to leave the research budget untouched during the recession. DuPont filed more new patents during that period than at any time in its history.
KULLMAN: Two hundred and eight years is a long time. So we’ve been through a lot of recessions before. And what I found was a company that, even in its darkest days, turned to science to really figure out how to make it successful again. And that’s why we decided to not cut our research and development budgets.
GHARIB: That decision paid off.
AHMED: Literally almost every quarter since she became CEO, not only has she beaten consensus or analyst estimates, but she has consistently also raised her full-year earnings guidance as well. So, certainly full marks on that front.
GHARIB: Kullman also gets high marks from investors and analysts for DuPont’s performance. In 2010, the company was one of the best-performing stocks in the Dow Jones Industrial Average.
KULLMAN: Sales were up 21 percent and earnings per-share were up 62 percent.
GHARIB: There is this perception that women do not make strong leaders in big companies. You know, and there’s this glass ceiling. Why do you think that is?
KULLMAN: You know, I don’t know, because that wasn’t my experience. But, I mean, yes, certainly there were barriers along the way. And certainly, I mean, having three kids, you know, I could’ve chosen a different route. But I love what I do. And I love the company. I found great acceptance by, you know, the men that preceded me, and I’ve — I just think that you have to have — if it’s your passion, you know, then you’ve got a shot at it.
GHARIB: Ilene Lang, head of a group that monitors the status of women in business, says that’s not the way it usually works. She says that’s why only 12 women head Fortune 500 companies.
ILENE LANG, PRESIDENT, CATALYST: I say to people, close your eyes, and picture a business leader. And most people picture a man. They don’t picture a woman. So it is hard for a woman to break into that top leadership when people expect that she’s not good at it, even when performance proves that to be different.
GHARIB: And, Lang says, women are more often directed away from the executive suite.
LANG: Women are more easily expected and assumed to be good at support roles. And men are considered to be better or more suited to leadership roles.
GHARIB: Connie Bond Stuart is a regional president of PNC Bank (NYSE: PNC) in Wilmington. She sees it differently.
CONNIE BOND STUART, REGIONAL PRESIDENT, PNC BANK: When you reach the top levels, like Ellen Kullman has, it’s based on performance. You have to have the skills to really be a strong leader, to gain people’s respect and trust, to inspire them to follow you. She has done a great job of that.
GHARIB: You’re one of a very exclusive club, only a dozen or so women are CEOs on the Fortune 500. And certainly, there are many who are qualified to hold that post. Why aren’t there more women as CEOs?
KULLMAN: I think that’s a great question and one that I don’t have a good answer for. I just see so many really accomplished people out there, and very bright heads of their fields. And I, you know, am one that believes that we’ll continue to see more and more women stepping into those roles.
GHARIB: What does your appointment as CEO and chairman of the board say about DuPont? What does it say about you, Ellen Kullman?
KULLMAN: Any company needs a certain, you know, leader at a certain time, and it changes over time. And certainly the board and Chad Holiday, my predecessor, picked me for the qualities I have. And I think tenacity is one of them.
GHARIB: So, I mean, looking here at DuPont, how is it that you broke through that glass ceiling?
KULLMAN: First of all, I guess I never really viewed it as a glass ceiling. You know, I just focused on my job. I think having the history with the company, 22 years. I think having a science background, being an engineer. I think having proved myself in a series of business roles, very different kind of business roles from each other. So I was a known entity to them. They understood who I was, how I thought, and really what my drivers were. And I think that was a help.
GHARIB: Was there a point, do you remember that you said to yourself, I’m going to make a run to be CEO?
KULLMAN: About the middle part of the last decade, I thought it was a possibility. I thought I had a chance. None of this is a shoo-in. There’s no such thing as that it’s your job. It’s not. This company is too important. This company, it has too much of an impact — potential impact on the world that the board really has to look across a wide swath of talent and people to make sure they’re picking the best person to lead it in the next decade. And so I figured I’d give it my best shot and see what happens.
GHARIB: Turned out OK.
GHARIB: Kullman runs DuPont from a very understated office, particularly for someone who heads a multi-billion dollar global corporation.
You’ve been described as the non-imperial CEO, does that sound about right?
KULLMAN: Well, yes, I mean, I’m a very down-to-earth person. I just — you know, I’m thrilled to have the role I am. I love my job. I love the people of DuPont. And, you know, yes, I have a sharp edge, and, you know, I have high standards, and all those things like that.
But I think that, you know, if you want people to come with you, you’ve got to treat them with respect.
Hey, everyone, good morning!
GROUP: Good morning.
GHARIB: That’s one reason why Kullman meets regularly with lower- level, younger employees who don’t often get a chance to sit around a table with the boss.
KULLMAN: I’ll talk for a couple of minutes about how the company is doing, and then it’s all yours. You can ask me any question you want. So, hi, I’m Ellen Kullman, I’m chair and CEO of DuPont. And I’ve been in my job for two-and-a-half years now.
UNIDENTIFIED FEMALE: What keeps you up at night? Really personal.
KULLMAN: Yes, well, you know, everything. So.
KULLMAN: You know, the worry list is long, you know. If it’s not the kids, or, you know, family, or the economy, or, you know, there’s plenty to worry about in the world, right? And the question is, how prepared are you for dealing with it?
GHARIB: One of her biggest worries is DuPont’s place in the 21st Century: a theme that comes up regularly at weekly meetings with her top executives.
KULLMAN: Today, I think we want to focus on the productivity and — side of the directives.
NICHOLAS FANANDAKIS, CHIEF FINANCIAL OFFICER, DUPONT: I’ll touch upon all three pieces, the innovation side, the differentiation side, and the productivity piece. So on the innovation side, we’re off to a really great start to the year. In the first quarter, we had double-digit sales growth in all regions and in all segments. So we’re off to a great start.
GHARIB: The need for food to feed a growing world population is where Kullman thinks DuPont can do the most good and make the biggest profits.
KULLMAN: Today we’re going to focus on just one market. So it’s a way just to make sure we know what’s going on out there. And so I guess today, Jim, you’re up, in the agriculture market.
JAMES BOREL, EXECUTIVE VICE PRESIDENT, DUPONT: That’s right. Thanks, Ellen. We’re continuing to see tremendous long-term growth potential in the agriculture and nutrition segment. You know, we delivered 10 percent growth in 2010 and we’re continuing to invest heavily in research and building out our market presence, around the world.
GHARIB: DuPont scientists are modifying genes in seeds to feed a growing world population. The result is higher yielding crops that can survive droughts and other conditions. Nearly a third of DuPont’s revenue comes from the sale of seeds and other agricultural products.
Kullman also says finding cleaner energy sources and protecting the environment are other priorities for DuPont.
Let’s talk a little bit about solar panels. They’ve been around forever. And now DuPont is focusing on them.
KULLMAN: We had over $1 billion in revenue last year from materials that go into solar cells. We don’t make the cells themselves. We make all the materials for them — or many of them.
GHARIB: So, you’re big on reducing the carbon footprint on the planet. And what is DuPont doing to reduce its own fuel consumption?
KULLMAN: Well, as you see right here, we’re at one of our research laboratories here in Wilmington, Delaware. And we have solar here. In Hawaii, where solar is absolutely at grid parity, on of our pioneer seed- research centers is 80 percent powered by solar.
Over the last two decades, we have reduced our energy consumption by about 8 percent, and saved the company $5 billion, through not only things like solar, but individual programs at plant sites to reduce our energy it takes to create a pound of material.
GHARIB: So, Ellen, are you using any of these solar panels at home?
KULLMAN: I do. We have an installation of solar on the back of our garage. We put it in about three years ago. I figured if we’re going to be a big material supplier, I wanted to understand what it was like to be a customer to the solar industry.
GHARIB: And what are you saving?
KULLMAN: You know, it’s about 6 percent. But with high-school age boys, I’m not sure I’m saving much because I’m always turning the lights off around the house.
GHARIB: Another big focus is what Kullman calls the protection division. A key product is Kevlar, which is used in everything from tires to bullet-proof vests. In this lab, they’re testing new ways to use Kevlar in tires. When this metal rod slams into the tire, it causes the same kind of stress as hitting a pothole.
MARK LAMONTIA, MECHANICAL ENGINEER, DUPONT: So we put this tattoo, of all things, on the tire. It’s a tattoo with a bunch of dots. And the high-speed video camera tracks every one of those dots. And the distances between the dots changes, that’s the strain, and so we can see if the tire will fail by developing it in this machine.
GHARIB: Kevlar has many uses, but it starts out as a fiber, a unique one.
LAMONTIA: So this is Kevlar. It’s a reinforcing fiber. It’s one of the strongest fibers in the world. Kevlar is five times stronger than steel.
GHARIB: That strength is put to use in helmets for soldiers in Afghanistan. But Kevlar also works closer to home in places where tornadoes can send debris crashing into houses at more than 100 miles per hour. And when Kevlar-filled panels are used to make a safe-room in a house, this is what happens.
All the research at DuPont has one point, and that’s the bottom line. It’s a legacy Kullman would like to leave with DuPont. She delivers that message everywhere she goes, even as she spoke to graduates at Lehigh University.
KULLMAN: We’ve seen pretty much everything that two centuries of a turbulent world history can throw at a company. We’re still here because we learned to be resilient. We learned how to use science to innovate, and we learned how to transform ourselves in an ever-changing world.
GHARIB: When the chapter on Ellen Kullman is written in the DuPont history books, what do you want those to say about you?
KULLMAN: Market-driven science.
GHARIB: And that’s important because?
KULLMAN: It’s important because for our science to be relevant, for us to be successful, our science has to be relevant to our customers. That science has to be driven from the market side. That’s why that’s important.
GHARIB: As a reminder of the company’s rich past, Kullman rescued this painting from DuPont’s archives and hung it in her office. It shows an important meeting held by the company’s founder, E.I. DuPont, back in 1802.
KULLMAN: This is E.I. DuPont. And this is Thomas Jefferson. Now, that’s Dearborn, who was secretary of war. And that’s Paul Revere, who brokered the meeting, because Jefferson and DuPont were negotiating the price of black powder as the first commercial sale of DuPont to the U.S. government.
GHARIB: Kullman’s predecessors might never have imagined the things coming out of DuPont’s labs these days. Still, the company’s storied history puts extra pressure on its 19th CEO.
KULLMAN: Well, you certainly don’t want to screw it up, do you?
KULLMAN: We had a nice long, you know, history there. You go into towns and you hear the stories about DuPont and what we did in the ’30s, the ’40s, the ’50s, and you really are quite proud of what the company has accomplished. And so that is a lot to live up to.
GHARIB: From that first sale in Delaware to one of the Dow 30 here on Wall Street, DuPont has come a long way. Now Ellen Kullman is leading the company in a period of global economic problems and ever-changing technology. She plans to take DuPont in a new direction, by applying an old lesson that has seen company through tough times in the past: rely on science to innovate and to transform itself, once again.
If she succeeds, Kullman might just give DuPont the momentum it has been missing for years. So far stockholders think she’s off to a good start.
That’s it for this special edition of NIGHTLY BUSINESS REPORT. I’m Susie Gharib. Thanks for watching.