Liar, braggart and turnaround genius Al Dunlap reveals his hardheaded business strategies and successes in this entertaining and instructive – if not entirely true – memoir.
The late Albert J. Dunlap ran Lily-Tulip, Scott Paper, Sunbeam and General Electric. Bob Andelman is the author or co-author of 15 books. When Dunlap penned this 1966 memoir with Andelman, he stood tall in investors’ good graces. “Chainsaw Al” might have been a boardroom bully who fired thousands of people, but he could right corporate ships, boost stock prices and deliver profits – or so the myth went.
Yet, shortly after this book of memoir and business advice hit the shelves, Dunlap had a fall from grace and took on another persona: liar and charlatan. Turns out he had filled his resume with falsehoods and cooked the books at Sunbeam, the appliance maker that fired him and went bankrupt. His book says only that he retired; he expresses no remorse. The SEC accused Dunlap of fraud and barred him from publicly traded firms. Among the reports that lambasted his toxicity, Time listed Dunlap among 2010’s “worst bosses.”
Given that, this account has become not only the solid how-to guide Dunlap intended, but also a cautionary commentary on hubris, greed and malfeasance. Reading between the lines may produce a more accurate tale about how Dunlap applied his business savvy than the face value of his stories.
Al Dunlap, unsurprisingly, believes his successes prove that managers are the backbone of any operation. He tells how, in 1994, he became Scott Paper’s first outside CEO in 115 years – after a series of failed restructuring plans led by his predecessors – and saved the company. Dunlap proves unstinting in his praise of his own work as a leader and corporate rescue specialist. There’s fun to be found in Dunlap’s heedlessness. Within that egomania, however, a few jewels of management advice do gleam.
I cannot keep the people who created the debacle I’m expected to fix. That is a mistake made by timid executives.Albert Dunlap
Dunlap advises executives to build an “inner circle”: a group of top performers who are willing to question your judgments and challenge you, but who support your vision.
Dunlap urges you to simplify. He argues that too many objectives clutter what should be a clear process. It’s important to keep your executive staff compact, Dunlap says – big groups never take decisive actions.
When Dunlap took over Crown Zellerbach in the 1980s, he claims the firm was spending $1.35 for every $1 in sales. He slashed costs by $10 million and drastically reduced items in stock.
Cost is always your enemy. You must attack it.Albert Dunlap
With commonsense cost-cutting, Dunlap says, he staunched what had been $10.6 million in annual losses. Here as elsewhere in the book, he presents big ideas and workable managerial concepts, but few suggestions that any executive ever had better ideas than his.
Big Farewells at Lily-Tulip
In the 1980s Kohlberg Kravis Roberts & Co (KKR) invested $180 million in Lily-Tulip and brought in Dunlap. Out went the corporate jet, floundering factories and half of the corporate staff.
The term ‘to Dunlap’ has become a verb in the business lexicon.
Dunlap axed the executive team, looking at the whole group, indicating a couple of people and saying, “You two stay – the rest of you are fired. Goodbye.” Dunlap exults that in two years he brought Lily-Tulip’s stock price from $1.77 to $18.55.
Hardball Strategy at Scott Paper
Dunlap definitely knows a thing or two about firing employees, and he insists that layoffs must start with headquarters staff. At Scott Paper, he cut the workforce 20% by cutting managers by 50% and headquarters staff by 71%. He unloaded the $39 million headquarters and chopped $30 million per year in consulting fees.
Dunlap showcases his hardheaded straightforward tactics when he writes that sensible, achievable strategy is fundamental for success. Pursuing this idea, he explains that he turned Scott’s overseas operations around by imposing discipline. He says he increased the number of locals on staff because they were cheaper and understood their culture and market as American expats could not.
Dunlap arrived at Scott Paper in 1994 and seems proud that he cut 11,200 people in a year. He accomplished this, in part, by working closely with the unions. He discloses that he built credibility by cutting corporate fat before asking unions for labor cost concessions. Scott cut thousands of workers and suffered no strikes or work stoppages. Communication, he asserts, made the difference.
During his tenure at Scott, the company’s value soared from $2.9 billion to $9 billion. Shareholders got $6.5 billion in new value. In that context, Dunlap’s maintains that his compensation of $100 million meant shareholders paid him a paltry 2% of the value he created.
No Nonsense Nicknames
Dunlap relates with relish that he gained the nickname “Chainsaw Al” in Australia. However, he confesses he preferred a different handle: “Rambo in Pinstripes.” He prided himself on going into no-win situations and proving that he could accomplish the impossible.
Despite Dunlap’s tarnished legacy, his memoir remains in print. He added a few new chapters to this updated 2104 version. The perfect ancillary read offers a counterpoint to Chainsaw Al’s nonstop self-aggrandizement: John A. Byrne’s Chainsaw: The Notorious Career of Al Dunlap in the Era of Profit-at-Any Price. Great fun awaits readers who compare the two accounts of Dunlap’s career story by story or firm by firm. This combo offers a rare opportunity to experience how a leader views or promotes himself versus a more objective, and likely more truthful, version of that leader’s actions. Comparing the two will reveal Dunlap as a paragon of shamelessness, if not business acumen.
Dunlap never made a secret of his methods and his descriptions of them are positively joyous. He reveled in action, fast decision-making and being the boss. Though his final act stains his legacy, there is no arguing with Dunlap’s earlier successes, even if his methods seem callous and emblematic of a piratical era. He was a swashbuckler and loved it. Wherever you might stand on the morality of Dunlap’s approach, there’s no denying that he always enjoyed himself. This memoir clearly communicates his joie de vivre.