August 26, 2008

News & Opinion: How the Wise Decide: Dermot Dunphy, Part I

By: 800-CEO-READ @ 2:00 PM – Filed under: Leadership & Strategy

It's day two of Aaron and Bryn's, authors of How the Wise Decide, joining us to share the problems, lessons and solutions garnered from their interviews with 21 leaders. Today, they're talking aboutDermony Dunphy, the former CEO of Sealed Air.
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Dermot Dunphy, Part I

Most companies today have vision statements, idealistic slogans intended to guide their management and employees. But it is easy for vision statements to degenerate into mere words on paper, lost in the short-term fog of day-to-day business decisions. A great vision can and should be stated simply, but implementing it won't be easy. We make the case in our book, How the Wise Decide, that you have to maintain the constant discipline to let that vision guide every decision you make, even seemingly innocuous day-to-day tactical choices. The benefit of that discipline is that choices become easier. All you need do is ask if an option furthers the vision. If the answer is no, even with short-term profits at stake, it isn't really an option. Let us show you how one of our wise leaders, Dermot Dunphy, created and implemented a vision that resulted in immense value.
In 1971 Dunphy had sold his packaging company and was thinking about what to do next. Investment bank DLJ asked him to take over a small packaging company that had just lost its CEO, the result of stumbling financial performance. Understand that in 1971 the packaging industry wasn't exactly a hotbed of innovation. Cardboard boxes and wadded paper about sums it up. But the company Dunphy took over was different. Sealed Air was the brainchild of two inventors who a decade earlier had created a textured wallpaper consisting of little air bubbles trapped between layers of plastic. The wallpaper went nowhere, but Sealed Air had changed course and targeted the packaging market with a product called Bubble Wrap.
Dunphy's previous company had been a commodity business that was constantly squeezed between giant raw materials suppliers on the bottom and demanding, powerful customers on the top. Sealed Air was nothing like that. "I decided, when I found Sealed Air, that I kind of woke up in heaven and that focusing on the technological edge, combined with a marketing edge, was the way to control my destiny and control the company's destiny," he says.
Dunphy quickly formulated his vision of what Sealed Air could become: a company selling not a product, but a benefit. "The strategic vision was that we were in the business of protecting our customer's products from damage caused by shock, vibration and abrasion. And the bubble was our core business."