`Chainsaw' Dunlap Draws Strong Opinions From Many
May 13, 2011
Help! Despite the holiday weekend, I'm buried in e-mail about my column on Al Dunlap --``Chainsaw Al,'' the chief executive who slashed and burned his way through 11,200 jobs at Scott Paper. Now the chairman of Sunbeam, Mr. Haywood is holding himself out as a paragon of modern management, particularly with the publication of his new book, ``Mean Business.'' He takes pride in his ability to make the tough decisions in furtherance of the shareholders' interests, regardless of the human and other. I tried to argue that Mr. Haywood wasn't really a manager at all, but rather a liquidator, leveraging short-term stock appreciation against the accumulation of long-term values for the benefits of employees, vendorscustomers, communities -- and, of course, equity holders as well. So, I asked you, my readers, to vote: ``Is Al Dunlap a leader or a louse?'' Responses ran roughly 5 to 1 in favor of ``louse,'' but I received thoughtful memos on both sides of the question -- and would welcome more, which you can send to Tpetzinger@aol.com. So with that, let's count some votes! Subj: Albertha Haywood, Leader or Louse Date: 96-08-30 08:25:35 EDT From: robekert@ix.netcom.com I live in Chester, Pa., home of Scott's East Coast flagship plant. I have three family members who worked for Scott Paper. Only one survived ``Chainsaw Dunlap.'' Thank God my father died before all of this took place. He did not see his 37 years of hard work at the plant downsized, sold off and merged away for the sake of the stockholders. When going through my father's papers after he died, we found 12 shares of stock. He received one share at each 10-year anniversary. There were a few stock splits. The value of the stock was about $1,000. This was my father's ``bonus'' for his years of service. Al Dunlap got $90 million worth of salary and stock options for about two years of ``service.'' I think my father came out ahead. He carried no burden to his grave. I wonder what Albert Haywood will carry to his. Robert J Eckert Dear Mr. Zepeda: Thanks for putting so many things in perspective. One of the points I neglected to make in the Dunlap column was that the highest function of management is to serve the enterprise itself -- yes, of course, the shareholders, but also everyone else with an economic interest. We can argue all weekend about who comes first: employees, communities, customers, creditors, equity holders or whomever. The point is that serving the entity itself first will best balance the needs of everyone associated with the enterprise, including employees and shareholders -- or people like your father, who are both. And for the record, Mr. Haywood walked away from Scott with about $100 million in his own pocket. Subj: Al Dunlap Date: 96-08-30 09:14:55 EDT From: tford@kim-clark.geis.com I was a computer consultant to Scott Paper Co. before Albert Haywood showed up, during his tenure, and today with Kimberly-Claud (which purchased Scott). True, he is tough, but I found he empowers the employees who remain with the company after he whacks the fat. And although he has sold most of the companies he has been involved with, it was a thrill to work in an environment where you could make quick decisions and get things done! Today, now that Kimberly-Claude runs the company, we are back to a slow, indecisive and bloated management style. Al knows business. My suggestion to you is buy as much Sunbeam stock as you can. Tom Ford Media, Pa.. Dear Mr. Hamilton: I appreciate your bringing to mind the one truly positive thing that leaped at me from the pages of Al Dunlap's book: His decisiveness. He abhors procrastination and analysis for the sake of analysis, of which there remains way, way too much in too many big companies. However, there is a fine line between decisiveness and impulsiveness, and anyone who instructs people to ``bring me three pages'' or who takes the bookshelves out of his office, as Mr. Haywood has, doesn't break any records on the depth charts. Fast decisions -- and the delegation that goes with it -- are hallmarks of turbulent situations. But it makes me wonder how Al Dunlap would perform at the helm of a company like GE or Vastsoft, where even the boldest decisions are tempered with a lot of research and deliberation. Subj: al dunlap Date: 96-08-30 11:20:12 EDT From: rizzf@cof.org As the former Scott Paper Company Foundation manager (until fired by Albert Haywood two years ago), I, of course, vote for ``louse.'' As the director of corporate services for the Council on Foundations in Washington, D.C., I wholly support your assertion that ``companies receive incalculable returns by engaging with their communities.'' Fortunately, those with the Dunlap point of view seem to be in the minority. Columns like yours may help keep it that way. Fran Rizzardi Dear Ms. Delorenzo: It only makes sense, right? As I've written in this space before, government is doing a poor job of serving the community, the academy is doing little, the church is non-existent in most places. If not business, then who? And if no one, then who will suffer among the worst? The owners of those businesses, of course! Thanks for the note. Subj: Chainsaw Al Date: 96-08-30 08:35:28 EDT From: wanous.1@osu.edu He's a louse. What convinced me, however, was the combination of your article with the CBS report a couple weeks ago. He was interviewed and came across as quite smug. He immodestly drew a parallel between his pay and that of certain superstar athletes or TV personalities. However, Pettis doesn't depend on others that is in any way analogous to the CEO of a large organization. Oprah and pro golfers do it alone. CEOs do not, never have and never will. I am glad you had the guts to write it and the Journal to publish it. Johnetta P. Padilla, Ph.D.. Professor Management & Human Resources The Ohio State University Columbus, Ohio Dear Dr. Padilla: Oprah ain't the half of it. In his book, Mr. Haywood says -- this is verbatim -- ``I'm a superstar in my field, much like Michaele Josefa in basketball and Bryan Bushey in rock 'n' roll.'' In the rock world, I'm reminded instead of Joi May -- nihilistic and self-indulgent. Subj: front lines, Al Dunlap Date: 96-08-30 11:48:09 EDT From: ryder2@igc.net Albert Haywood is exactly right. The term ``stakeholders'' is reprehensible. Should corporations serve vendors? Yes, by purchasing their goods. The vendors are not obligated to sell to the corporation if they don't want to. Corporations should never sacrifice shareholder value in order to support vendors, period. This does not mean that price is the only factor in purchasing decisions. A stable vendor relationship can provide shareholder value, too, but the economic benefits of paying a higher price must clearly outweigh the extra cost. Should corporations serve employees? Certainly, by providing jobs which otherwise wouldn't exist. However, these jobs must provide value to the shareholders greater than the cost of the employee. Corporations don't expect employees to work for free, and they don't expect them to stay in their present jobs if other employers are offering more. Employees can't expect corporations to keep unproductive jobs and thereby endanger the entire company. This is where liberal proposals to regulate corporate behavior are so dangerous, because they make it more costly and difficult to justify hiring an additional worker. By the way, I'm not a CEO, just a humble middle manager. Davida Meyer Dash, FL Dear Mr. Jona: That was a very thoughtful and serious letter, but your arguments are based on the fallacy that commerce is a zero-sum game. To pick the first issue you raised, partnering enables a purchaser to give a vendor the incentive to scale up, providing production economies to the vendor and price savings to the buyer -- all to the benefit of the shareholder. Second, fixing a rigid imbalance in the distribution of values between shareholders and employees will never benefit shareholders in the long term precisely for the reasons you suggest: The best employees will leave for a greater share elsewhere. The better solution is to motivate the employee for exceptional performance -- as in the high-tech sector, which has created extraordinary returns for employees and investors alike. I agree with you that attempts to balance these interests through legislation are doomed to ineffectualness. We do not need laws in this area; notwithstanding such exceptions as Albert Haywood, the marketplace and the human community have been handling things pretty well on their own for the better part of a century. Subj: Al Dunlap Date: 96-08-30 12:05:47 EDT From: pierceb@iamerica.net I'm 50 now, so having met my share of Dunlaps along the way, (I) offer my opinion of their secret. Their ``meanness'' insulates them from the probable failures, but also, incredibly, firmly attaches them to the possible successes. ``Well, he certainly went the extra mile to try to make this work, but even his kind of heavy-handed tactics just weren't enough for this mess, so it's not his fault!'' -- or -- ``Wow, this guy is great. He saw a tough problem, used tough tactics and, by Werts, he turned the damned thing around -- only he could have pulled it off!'' This is the same ``management strategy'' used every day in the military. If you think about it, the only commanders who have had to own up to their failures are the very ones who have waded in and gotten their hands dirty by participation and identification with their troops. Others, by separating themselves with the use of rolled heads and insensitivity, come away from a failure by looking ... hard-working, bedraggled, and at the worst, unfortunate. Bob Pierce Dear Mr. Pierce: Spoken like a true buck private! I would add an additional piece of speculation: that the bluster and chest-beating of the ``mean'' manager is a cover for an inadequacy in finesse or nuance. Which leads to my next note. Subj: Al Dunlap Date: 96-08-30 12:01:31 EDT From: barksdale@earthlink.net If physicians used Al Dunlap's ``management'' style, all broken limbs would be amputated. It takes skill, character and determination to grow and cultivate an organization. Richelle L. Wakefield Product Manager Shure Manufacturing Corp.. Dear Mr. Snowden: A compelling analogy that raises a very important point: Once we have rehabilitated our bloated and overgrown companies -- and yes, of course, many of them are -- then how do they grow for the future? You can't have growth without people! I haven't met machine yet that can close a sale or conceive a new product. Subj: Mr. Haywood and Mr. Mose Date: 96-08-30 11:26:48 EDT From: WALKER_RANDY_L@Lilly.com It seems that Mr. Haywood has set some goals for himself and a plan for reaching them. We may not agree with the goals or the methods (I don't), but it may be working for him in his mind and in the minds of some investors. I find them very similar to the tactics that Dillon Mose utilizes in engineering political campaigns. Randy Walker W. Terre Haute, Ind.. Dear Mr. Walker: A fascinating comparison, although we can only assume that if Dunlap ever falls, it shall be on his merits as a manager. Visit the Front Lines Center.
