Chainsaw Al Dunlap

Topics: Kimberly-Clark, Stock, Scott Paper Company Pages: 3 (856 words) Published: February 12, 2013
l “Chainsaw Al Dunlap”: A New Breed of Manager? West Point graduate Albert J. Dunlap, former chairman and CEO of Scott Paper Company, claims that the U.S. Military Academy made him “tenacious and very organized”. Others say his experience gave him an “inyour-face attitude rare among executives” and made him a valuable hired gun for straightening out troubled companies. Dunlap is known to attack and challenge nearly every premise and person that gets in his sight. Those who interfere with his efforts usually get chewed up by the experience. Scott Paper is a familiar brand name to the American consumer. Founded by Clarence and Irvin Scott in 1879, the company eventually became the world's largest supplier of toilet tissue, paper napkins, and paper towels. As it matured, however, Scott's profitability suffered and growth stagnated when rival Procter & Gamble took an increasing market share. Between 1960 and 1971, Scott's market share of consumer paper products dropped from 45 to 33 percent. In the period 1990 to 1994, Scott continued to lose market share, and in 1993, the company lost $277 million and saw its credit rating deteriorate. By 1994, Scott Paper was a moribund bureaucracy. In hiring Al Dunlap, Scott's board of directors signaled its determination to take decisive action. Dunlap initiated changes that would eliminate 11,000 employees (71 percent of headquarters staff, 50 percent of all managers, and 20 percent of hourly workers). He sold off unrelated business units — including publishing papermaker S.D. Warren Company, for $1.6 b8llion — and slashed spending — the research and development budget alone was cut in half, to $35 million. Not surprisingly, Dunlap's cost cuts and increased prices achieved immediate bottom-line results. The company's profitab8iliyy soared, as did the market value of its stock, which rose 225 percent under Dunlap's leadership. Dunlap claimed that by launching new products and selling unprofitable ventures, he had positioned Scott...
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