Make tough choices
In a financial crisis situation, most leaders would just start wildly slashing costs everywhere, but Dutton realized he couldn’t just
cut without reason.
“Really quantify clearly what you need for success,” he says.
“What does a company need to get to as far as the size and level
because, certainly, when you make these cuts, you don’t want to
be doing them over and over.”
To move forward, he decided to examine all the products and
business segments and evaluate their current strength and long-term viability.
“We had to make decisions around what products and what
areas of the company were adding value near term and had the
capability in place to continue to drive toward a leadership position, and those areas that weren’t having an impact and weren’t
positioned to have an impact in the future,” Dutton says. “We were
making cost-cutting decisions left and right.”
Dutton and his team developed a set of product principles to
help them make these decisions. A product had to first have a clear
path to leadership — meaning it could be No. 1 or No. 2 in the market with what it already had or with what they were anticipating
developing. The second test addressed whether the product had
differentiating capabilities and technology from competitors.
Dutton then applied those principles to each product and business segment to see if it was delivering now or if it was positioned to do so in the next two years.
“It was decisions around, ‘Is this business strong enough today?
If it is, can it continue to have that strength?’” he says. “In other
words, is it positioned well in the market, and is it generating value
for us? That first set became keepers.”
The next step was looking at the areas that weren’t positioned
well.
“Do we have the funds and resources to bring it to position, and
if so, will it be a contributing factor in the next two years?” Dutton
says.
If the answer was yes, it stayed, but if it was no, it went.
“It sounds pretty mechanistic, but we’re making decisions, and in
some cases, we’re shutting down some very new and novel technologies that could have been market winners … but the reality was,
at the state the company was in, we felt we wouldn’t have the
resources to deliver those to success.”
