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DuPont: The Enlightened Organization

By Dr. John Kenly Smith, Associate Professor of History at Lehigh University and Co-Author of "Science and Corporate Strategy, DuPont R&D, 1902 to 1980"

"Values" is a word that appears frequently today in corporate annual reports, vision statements and anniversary histories. An organization's values are those principles, ideas and ideals that its members adhere to, often without consciously recognizing that they are doing so. Values are the glue that holds an organization together, in good times and especially in bad ones.

In the course of researching the book Science and Corporate Strategy, I learned about what it meant to be a DuPonter during interviews with more than 50 people who had worked for the company from 1915 through the early 1980s. None of the interviews was dull – these people were intellectually engaging, and many had remarkable stories to tell. What impressed me about them was, first, how intelligent and thoughtful they were and, second, how many of them were "characters." Obviously, no company cookie cutter had turned out scores of identical DuPont gingerbread men and women. The corporate climate at DuPont seems to have encouraged individuality and independent thinking.

I also read through thousands of pages of company memos and reports. I was struck by their clarity and intelligence. Ideas are what historians like to play with, and I found plenty of ideas in DuPont's records. Consistently, DuPont executives asked tough questions and expected well-thought-out answers. The idea that truth is best arrived at by honest and open debate can be traced back to 18th century France, during a time that historians have come to call the Enlightenment. This idea also influenced the worldview of Pierre Samuel du Pont. Perhaps it is not surprising that the firm that his son, Eleuthère Irénée, founded would also reflect this value.

A Family Business

In the 19th century, the DuPont Company, like scores of other family businesses, faced many opportunities and challenges. Because the company made such a dangerous product, the du Pont family

Eleuthère Irénée
du Pont
was under a particular burden to show resolve, courage and compassion in the wake of repeated gunpowder plant disasters. The notion that rational investigation – science – might improve the product and lessen the dangers involved in its manufacture also can be traced back to France, where Eleuthère Irénée du Pont had been influenced by the father of modern chemistry, Antoine Lavoisier.

Lammot du Pont

In the mid-19th century, Lammot du Pont, who had studied chemistry at the University of Pennsylvania, set up a laboratory and began to explore the chemistry of explosives. In 1880 he helped his elders realize that a new explosive, dynamite, would make gunpowder obsolete. Four years later, while trying to tame the dynamite manufacturing process, he was killed by an explosion. He left behind a widow and seven children; three of them, Pierre, Irénée and Lammot, would guide the company during the first four decades of the 20th century. The next generation of this family produced two presidents, Lammot du Pont Copeland and Crawford Greenewalt (Irénée's son-in-law). DuPont often has been lauded as a pioneer in modern professional management, even though its management had a distinctly du Pont family cast until the 1970s. Who is actually doing the managing is not the critical factor, however, as long as decisions are based on the integrity of arguments rather than on pedigree.

Rational Management: Shifting from personal to professional

Walter S. Carpenter

The primary value at DuPont came to be rational management: good ideas rather than personal empires became the key to continued success. For example, Walter S. Carpenter, president from 1940 to 1948, had long served as the company's in-house opposition. He was always questioning the positions of others – had they thought of everything, examined it from different perspectives and maintained a logically consistent argument? Rational management allowed good ideas to get a fair, though often intense, hearing, even if senior managers did not favor them.

Pierre Samuel
du Pont

Sometimes rational managers did come into conflict with managers who relied on personal loyalty and tradition, as in the 1915 showdown between cousins Pierre and Alfred I. du Pont. Educated at Massachusetts Institute of Technology, Pierre came under the influence of professors who believed that the abundant technological progress in the modern world was but one demonstration of the power of the scientific method and that science was the path to truth. Failing to find enough of this spirit in his family company, Pierre went to Cleveland to work with a leading spirit of the Progressive Age, Tom Johnson. Pierre returned to the Brandywine in 1900, joining his cousins, Alfred I. and T. Coleman, to reorganize the family firm and much of the American explosives industry into one modern well-run corporation. Alfred I., however, remained deeply committed to traditional business practices, including hands-on management. Tradition is all right when business conditions

Alfred I. du Pont
are stable and predictable; in dynamic or uncertain times, however, old approaches are at best irrelevant and at worst destructive. To create a modern organization, Pierre wanted to separate the day-to-day running of the firm from the evaluation of the effectiveness of each unit and the strategic thinking about future directions. Thus, he created an Executive Committee to fulfill these latter goals.

One of the first issues the new company leaders had to face was increasing government action against large firms, a practice begun by President Teddy Roosevelt, who became known as the "Trust Buster." DuPont was eventually one of the few trusts actually busted. In 1913, as a result of antitrust prosecution, DuPont split off many of its dynamite and black powder plants to create two new companies, Hercules and Atlas. Ironically, the government allowed DuPont to keep intact its smokeless powder business because the U.S. military wanted to continue its close relationship with DuPont in developing what would soon become the propellant of billions of bullets and millions of shells used in World War I.

The Experimental Station: Betting on innovation

DuPont had persuaded the American military that it was a progressive and scientific firm that could be trusted with safeguarding national security. One critical element in that trust was the company's commitment to a permanent and independent research laboratory. The Experimental Station,

The Experimental Station
established in 1903
established in 1903, was initially located in an old mill near the powder yards but soon moved to new quarters across the river. Research at DuPont was initiated to apply scientific knowledge and methods to improve its technologies. A year before the founding of the Experimental Station, the dynamite division in New Jersey had set up Eastern Laboratory to accomplish a similar mission: to use science to improve explosives and the processes for making them.

In creating these laboratories, DuPont became a pioneer in American industrial research. Only General Electric had made an earlier commitment, establishing a laboratory in 1901. Even at GE, Research Director Willis Whitney had to persuade his senior management that he was not providing an "asylum for indigent chemists." At this time, many hardheaded businessmen considered research a waste of money. In fact, projects often did not go as planned in the early days of DuPont research. When DuPont's attempt to create a continuous process for making black powder encountered obstacle after obstacle, and some, including Alfred I., began to doubt the wisdom of the venture, Pierre maintained a steadfast commitment to research: He wrote, "[W]e should at all times endeavor to have in force some investigations in which the reward of success would be very great, but which may have a correspondingly great cost of development, calling for an extended research of possibly several years and the employment of a considerable force."

Fin Sparre

DuPont's new research arm would soon be called upon to solve the firm's most serious problems. In 1909, the U.S. government considered building its own facilities for making smokeless powder to avoid being totally dependent on DuPont. Worried about its investment in its own plant, DuPont asked its researchers to find other things that could be made from the basic material, nitrocellulose. In the Development Department, which oversaw numerous strategic issues for the company, Fin Sparre outlined an ambitious program of nitrocellulose research. Over the next several decades, Sparre would embody the spirit of DuPont research more than any other employee. He had supreme confidence that whatever technology the company invested in, its researchers would make dramatic improvements, giving DuPont major advantages over its competitors. His philosophy justified the company's first two moves beyond the world of explosives – acquisition of the Fabrikoid and Arlington companies, which made nitrocellulose-based synthetic leather and plastics, respectively. Although both industries were well established and not very innovative, DuPont expected, somewhat unrealistically, that research could re-invigorate them. What the company leaders certainly did not realize at the time was that they had taken a significant step in a new direction, toward becoming a manufacturer of chemicals and materials.

Ironically, DuPont's transformation into a chemical company was fueled by the largest military conflict the world had ever witnessed, World War I. Supplying the Allies with about 40 percent of needed explosives transformed the company into an industrial giant in just four years. Not only were DuPont's physical resources dramatically enlarged, but its organizational capabilities also expanded in several new directions. During the war, DuPont established one of the nation's outstanding engineering organizations, one that the U. S. government would call upon again, during World War II and the Cold War. In 1918, DuPont engineering's first big job for the government was to build a giant smokeless powder plant – producing 1 million pounds per day – at Old Hickory, Tennessee. The job included construction of a city for 20,000 workers. Production at Old Hickory began 75 days ahead of schedule, and the plant was 90 percent complete when the war ended suddenly in November 1918.

At the same time that DuPont engineers were constructing smokeless powder plants, DuPont chemists took on what turned out to be an even more daunting challenge – manufacturing synthetic dyestuffs. Before the war, virtually all the dyes used in America had come from Germany. Consequently, during the war, the dye shortage in the United States was so serious that insufficient dyes were available even to print money. DuPont quickly had to learn all the secrets that the Germans had acquired through 40 years of intensive research. This lesson did not prove to be cheap or easy. But once again, and adhering to Pierre's philosophy – this was one of the largest R&D projects ever undertaken by the company – DuPont management never second-guessed its decision, even as costs escalated to unprecedented levels. Eventually the dyestuffs venture became a success, but a more important result in the long run was the determined and confident organic chemical research organization that matured during the harrowing early days of the enterprise.

Early Emphasis on Employee Safety

Safety in the workplace, a long-standing hallmark of the DuPont Company, emerged during the trials of World War I. Being an explosives manufacturer had historically made DuPont more safety conscious than most other manufacturers. Especially significant progress in reducing accidents had been made in the years just prior to the war. However, the influx of tens of thousands of untrained workers into the munitions industry during the war created the potential for disasters. Explosions did occur in several American plants, killing hundreds. During the war DuPont made safety an essential and permanent part of engineering and employee relations. After the war, the new company president, Irénée du Pont, intensified the company's safety consciousness and began to award individual prizes for long accident-free performance. Irénée became a major spokesman for the growing safety movement in America generally. By the 1930s, it was established company policy that safety is just as much a part of industry as any other operating feature (quality and quantity of finished products, efficiency, methods, etc.).

Growing Pains: Managing diversity and success

With its wartime earnings, DuPont planned to move into a broad array of chemistry-based industries; however, the choices for acquisitions turned out to be quite limited. During World War I, the only major diversification other than dyestuffs had been the paint business. After the war, and especially during the severe economic recession of 1920, managing the company's now diverse product lines proved to be difficult, if not impossible. As rational managers, the Executive Committee could not merely attribute the losses to bad economic conditions; they had to do something to improve performance. Analysis of the problems proved to be difficult because responsibility for each product line was spread throughout the separate functional departments, such as manufacturing and sales. Led by Pierre, DuPont management decided to create semi-autonomous operating departments, each with its own production, sales and research organizations. Each department's general manager

William Hale Charch
creator of cellophane
would be held accountable to the Executive Committee for the department's performance. DuPont was a pioneer in this type of business organization, which was soon copied by companies around the world.

This new structure had another effect that was perhaps more important for the future development of the firm: it allowed DuPont to continue the process of diversification by adding on departments. By 1930, the company had added six new industrial departments originating from acquisitions of companies or technology. Some of the new products – rayon and cellophane, for example – capitalized on the growth of other sectors of the economy – apparel and packaging, respectively. DuPont did a remarkable job of showing users how cellophane could increase sales of everything from men's shirts to doughnuts while informing consumers, through advertising, why they should purchase goods wrapped in cellophane. DuPont's promotion of this new product was so successful that cellophane became an icon of American popular culture. It appeared in New Yorker cartoons, and songwriter Cole Porter penned the lyric, "You're the top, you're cellophane."

DuPont would become a key contributor to the growing American consumer affluence in subsequent decades. The slogan "Better Things for Better Living Through Chemistry," adopted in 1935, became the motto for an entire era.

Radical Departure: A renewed commitment to research 

The growth industry of the 1920s was automobiles, and DuPont benefited from it in two ways. The company had purchased about one-quarter of General Motors stock in 1918. DuPont also sold numerous

products that were used in automobiles, such as upholstery fabrics, gasoline additives, plastics and finishes. Research in this last area led unexpectedly to a major breakthrough – Duco lacquers. The new finish removed a costly bottleneck in the otherwise efficient mass production of cars. It also made durable color finishes possible. The Duco discovery certainly strengthened DuPont's growing conviction that research was close to the heart of the entire enterprise.

Capitalizing on this good will, the director of the central research organization, Charles M.A. Stine, asked the Executive Committee in 1926 to fund what he called a "radical departure" into university-style fundamental research. His rationale was that in many important areas of chemical technology, a fundamental understanding of the underlying principles was missing. DuPont knew how things worked but not why they worked. Stine was certain that once the whys were known, this new information would make for better products and processes. Universities generally did not have the funds or expertise to investigate many of the fields that were relevant to DuPont. At this time only a few corporations, notably General Electric and AT&T, were engaged in fundamental research. After the Executive Committee agreed to support Stine's program generously, he began to recruit chemists and chemical engineers. Two of his new hires achieved far more than even the optimistic Stine expected.

The first, chemical engineer Alan Colburn, teamed with veteran Thomas Chilton to make major contributions to the developing discipline of chemical engineering. Before World War II, DuPont and a handful of universities created modern chemical engineering. After leaving DuPont for health reasons in 1938, Colburn oversaw the building of a highly regarded chemical engineering program at

Wallace H. Carothers demonstrates neoprene, the first synthetic rubber
the University of Delaware. The strength of American chemical engineering is considered one of the key factors making the U.S. chemical and petrochemical industries world leaders.

In nine short years at DuPont, Stine's other find, chemist Wallace H. Carothers, created a giant legacy for the company and the larger scientific community. Stine encouraged Carothers to study the chemistry of large molecules, or polymers, which were the subject of considerable scientific controversy in Europe but of very little actual research anywhere. These kinds of molecules were of interest to DuPont because many of its major products – cellophane, rayon and Duco, for example – were made from a natural polymer, cellulose. Instead of studying cellulose itself to determine its structure, Carothers proposed the novel idea of building synthetic polymers that would be of known composition and structure. He soon had worked out methods for assembling polymers, and his laboratory associates began to make them. Through this research program, Carothers was able to prove beyond any doubt that large molecules were just long-chain versions of ordinary organic compounds. Carothers's elegant publications on this research established order where chaos had prevailed and showed chemists all over the world how to make and evaluate polymers. Not surprisingly, polymer science and technology flourished in the 1930s. Among the many important discoveries made during that decade, two came out of Carothers's group – neoprene (1930) and nylon (1934). Neoprene was the first synthetic rubber to be chemically analogous to natural rubber, and nylon was the first synthetic fiber that was truly silk-like. Importantly, both of these materials were in some ways superior to the natural ones. In spite of these two exciting and important scientific breakthroughs, the pathway to successful commercial products contained many obstacles. In developing neoprene and nylon, DuPont had to use all of its chemistry, engineering and marketing expertise. These projects became textbook examples of how to innovate with new materials.

World War II: Rise of plastics 

The lessons that DuPont had learned from those projects took on national importance during World War II, when the U.S. government requested that plastics be used wherever possible in place of materials such as metal and leather. In many technologies, such as those used in airplanes and radar, plastics were indispensable. DuPont's remarkable polymer Teflon®, discovered in 1938, found uses in radar and the Manhattan Project.

Because of DuPont's reputation as perhaps the outstanding chemical engineering organization in the country, General Leslie Groves asked the company to take on the design, construction and operation of a massive plant to produce plutonium. This newly discovered element existed in only microscopic quantities. Crawford Greenewalt, who played a critical role in this project, later remarked that most chemical plants were 100 times bigger than pilot plants; in this case the scale-up factor was 1 billion. In addition to the plant itself, DuPont had to construct a city at the remote Hanford, Washington, site in the desert southeast of Seattle. The collective work of hundreds of DuPont engineers became part of world history on July 17, 1945, when a plutonium device successfully detonated in the New Mexico desert. Three weeks later, the dropping of two atomic bombs on Japanese cities brought an abrupt end to the most destructive war in human history. DuPont exited the nuclear materials business immediately after the war. However, with the onset of the Cold War and at the request of President Truman, DuPont agreed to build and run a new nuclear materials facility in South Carolina.

Better Living: The consumer products revolution 

In the decades after the war, DuPont and the other U.S. chemical companies were celebrated as the country's most dynamic industry, which was raising the American standard of living to new heights. Dozens of innovative polymers materials contributed in many ways to better living. DuPont spearheaded the synthetic fiber revolution with nylon, Dacron® polyester and Orlon acrylic fibers. Practicality and convenience became key selling points for clothing of all types. Synthetic fibers, combined with automatic washing machines and detergents, greatly lightened the burden of the most strenuous and tedious of household tasks – laundry. As numerous surveys over decades documented, the one task that women dreaded most was ironing. Wash-and-wear, wrinkle-resistant clothing found an enthusiastic audience among postwar consumers. Wool is a great fiber, but it is difficult to clean and moths eat it. Dacron® polyester and Orlon acrylic fibers provided the attractiveness of wool without its drawbacks. They could be produced in lightweight fabrics that could be worn year round.

In addition to fibers, a wide variety of plastics found literally thousands of uses in the 1950s. DuPont either invented or contributed to virtually every family of plastics. Tupperware®, that icon of life in the 1950s, was invented by Earl Tupper, an independent inventor who first encountered polyethylene while working for DuPont. Tupperware bowls were modern in design (they were displayed in art museums), attractive, affordable and efficient. Adding to the considerable prestige that plastics enjoyed was the fact that they were a product of science, which was generally believed to be the driving force behind technological innovation.

DuPont shared and was in part responsible for America's enthusiasm for science. Basic science had become a more important part of DuPont's research programs in the postwar years. It was an accepted belief within the company that the Carothers phenomena could be repeated many times: exploring new areas of science would lead to "new nylons." The opportunities present in science were regarded as so great that DuPont could risk giving away some valuable information in scientific publications. In the 1930s, Carothers's papers had led others to major discoveries. By publishing the results of its research, DuPont demonstrated the importance it placed on being a contributing member of the international scientific community. Within the company, DuPont created senior scientist positions in recognition of excellence in research, giving individuals the freedom to pursue their own interests. One such chemist, Charlie Pedersen, was awarded a Nobel Prize for his discovery of crown ethers, complex organic molecules with three-dimensional shapes.

The Space Race 

In the 1960s, DuPont's talents once again became crucial to the achievement of national goals. America's faith in its scientific and technological prowess was severely shaken on October 4, 1957, when the Soviet Union launched the first satellite, Sputnik, into Earth orbit. This event galvanized America into a new commitment to rocketry, satellites and space exploration. Less than four years later, President Kennedy declared that the United States would land a man on the moon before 1970. As America entered the Space Age, it was clear that new materials would be required. During the 1960s, DuPont commercialized nearly 20 new high-technology polymers, many with unprecedented properties. Some of these polymers could be made only by solution polymerization processes that had been discovered in the Pioneering Research Laboratory of the Textile Fibers Department. Among the products were Lycra® premium stretch fiber, Delrin® acetal resin, Nomex® brand fiber, Tyvek® brand protective material and Kevlar® brand fiber. When Neil Armstrong set foot on the moon in July 1969, he was wearing a space suit containing 25 layers, 23 of which were made of DuPont materials.

Into the Modern Era: The 'Green Revolution' and environmental impact 

The space program was in part intended to persuade the inhabitants of newly emerging Asian and African nations of the overall superiority of the American system. A major problem confronting the developing world was rapid population growth. Unless agricultural output could keep pace, widespread hunger and famine would occur. In 1942 and 1943, famine in the Bengal region of India had claimed 3.5 million lives. Projects to improve agricultural production were initiated during World War II by the Rockefeller Foundation. Research involved creating new high-yield varieties of rice and wheat that, when combined with irrigation and the use of pesticides, led to spectacular increases in food production. By 1974, as a result of this "Green Revolution," India was the home of nearly 1 billion adequately fed people. DuPont contributed to the Green Revolution with its development of many effective herbicides and fungicides that also made the company a world leader in the sale of agricultural chemicals.

While the Green Revolution raised the standard of living for people in developing countries, expanding agricultural and industrial productivity was enhancing affluence at home. In the prosperous 1960s, Americans increasingly began to value living in a clean and healthy environment. The by-products of modern life – urban sewage, automobile exhaust and industrial waste – created unpleasant and unhealthy conditions in many areas. New concerns were raised by biologist Rachel Carson, who pointed out that massive spraying of persistent pesticides poisoned not only target insects but also many other species, including humans. By this time, DuPont had three decades of experience combating chemical toxicity and pollution. In the mid-1930s, the company had established Haskell Laboratory to determine the toxicity of chemicals and had begun to pay systematic attention to pollution from company plants. In 1938, at the insistence of President Lammot du Pont, the Executive Committee passed a resolution stating that pollution was a subject of "major importance and one that should receive continuous study of the same type as applied to work safety and fire protection." After World War II, DuPont commissioned ecological studies of potential and existing plant sites. Company spending on pollution control doubled between 1952 and 1957, to $5 million per year.

In the 1960s, growing public concern about pollution led university researchers to tackle environmental subjects. This research soon produced some troubling findings: the amount of lead in the environment was constantly rising, and chlorofluorocarbons might be destroying ozone in the upper layers of the atmosphere. While researchers in the oil companies figured out how to make high-octane unleaded gasoline, chemists at DuPont developed refrigerants that would not deplete ozone. Even though environmental research must contend with considerable uncertainty in its conclusions because of the complexity of the Earth's biosphere, DuPont has often accepted the consensus of environmental scientists. The company's commitment to science and rational decision-making is perhaps best tested when the conclusions reached by such processes are contrary to its own immediate interests.

200 Years of Progress 

By the 1980s, it was clear that the chemical industry had matured. Instead of growing at its historic rate of two times the growth rate of the gross national product, the industry now was growing only in direct proportion to GNP. Accordingly, opportunities to create major new products diminished. DuPont might have accepted this fate by ruthlessly cutting costs to become the lowest-cost producer of commodities. Certainly, the company's engineers were capable of this task. Doing so, however, would have meant abandoning another long-held core value – the development of new knowledge that could be translated into innovative products and services. Over the past two decades, the company has explored many different approaches that would allow it to maintain its knowledge and research-based strategies. Although the process is by no means complete, DuPont remains a vital organization in an industry in which many of the venerable company names have disappeared. Not many organizations survive, let alone thrive, for 200 years. DuPonters should be proud to have reached that milestone. However, the future will require the same or, in today's competitive global market, a greater commitment to the enlightened values that have guided previous generations.

 

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