Risk Factor

TAKEAWAY: RISK FACTOR

AUDIENCE MEMBER:
Sir, you mentioned earlier the risk profile is higher in the thinking of CEOs and they have to be worrying about risk out there. At the same time, you mentioned DuPont's innovative. You have an entrepreneurial spirit among your employees. Those two forces seem to be—would pull most people in opposite directions. So how do you reconcile those? How do you manage those organizationally at DuPont?

BREEN:
Yeah. Well, we talk very openly about it. Now, I haven't been at DuPont, I don't think, long enough for it to be as ingrained this way, but what's going to cannibalize your business? So it goes back to that risk—what could happen to you? And if something's going to cannibalize your business, you might as well be the one to cannibalize your own business.

So when I ran General Instrument—let me give you that example—we were the world leader in set-top boxes, but that was analog technology, and we were pumping them out by the millions every month. It was just a great business. And there was a lot more to GI, by the way, than set-top boxes, but it was just so overwhelming—the numbers. And the world was going digital. So there's the conflict right there. At that time, that was our biggest risk. It was one, two, and three. We talked to the board every board meeting about it, and we flooded all our R&D over to that. We made so many drastic changes, because the board got it, and we ended up being the winner in the digital war and ended up with 70% of the market. But we cannibalized ourselves. And if you weren't open and honest about the problem, you would have never been the one to fix it.

By the way, pre-me at Motorola—Motorola's problem, to give you the other, is they had the best analog phones in the world. You all had the flip phone from Motorola, the TAC and all that. We had almost 50% of the global market in handsets. And they didn't rush to digital because it was going to cannibalize them, and Nokia ended up with 50% of the market. Now today Apple has overtaken Nokia because of the next—basically a software computing device.

So you got to be brutal and open about those things, because you might as well fix—if it's going somewhere, you're not going to stop it. Why not jump on it and try to be that person?