The nation’s business leaders are confronting a confusing and stark reality. Few have ever faced such calamitous circumstances. A daunting task lies before them: making sure their corporations survive and positioning their businesses for the opportunities that lie ahead after this storm subsides. Every action and decision matters. Urgency, speed and flexibility become imperatives. . . . This is a time for leaders to lead. They must face immense and ambiguous problems head-on and demonstrate to others a way forward, despite the fog. They must get down to serious work. Forget about wishful thinking and cheerleading. They have to dig into the details of their businesses and the external environment.

They must seek contributions from other people, but they cannot pass the buck when it comes to making hard decisions. Leaders must own these decisions, being sensitive and compassionate toward the human beings affected by them. The best decisions will reflect the need to survive in the short term while coming out better in the long term. Times of upheaval provide tremendous opportunities for companies with smart leaders to act faster and better and to gain ground against their competition.

What exactly is this “new reality?” Only a few months ago, leaders were managing their businesses for revenue growth and fatter profits. Then, the global financial system spun out of control and credit dried up. Virtually no corporation, no matter how strong, has been left untouched. All have been hugely affected by the lack of liquidity or flow of cash as the credit spigot got shut off. Even a AAA-rated company such as AIG had to be taken over by the U.S. Government. . .. In early fall 2008, when DuPont Chairman and Chief Executive Officer Charles O. Holliday Jr. saw that an economic downturn was coming, he immediately put that reality on the table. He pulled together his top team of people to pool their thinking about how serious and long the downturn might be—and how it would affect DuPont’s business. Unmistakable signs suggested that a severe downturn was indeed setting in. For example, bookings at the hotel DuPont owns in Wilmington, Del., serving mostly business customers, had fallen sharply.

DuPont was fundamentally strong, but Holliday wanted to ensure that the company stayed ahead of the situation. Cash had to be protected, and the company would have to reduce its costs quickly, ahead of a sharp revenue decline. No one likes to close production facilities, but Holliday did not sidestep the issues of shifting production and perhaps shuttering some facilities. Those sensitive issues had to be explored. Meanwhile, the CEO tirelessly drove the message about the need to reduce costs and conserve cash throughout the company. Some actions were taken immediately. The company released many of its outside contractors, in some cases shifting work to employees whose work was slowing. Even as leaders planned their courses of action, Holliday questioned the pace. Conscientious leaders were promising to make changes two or three months out. Holliday realized that many of those actions had to take place right then and pushed execution into high gear.

Holliday rose to the challenge before him, as did many leaders throughout DuPont. He didn’t stay in his office or wash his hands of the challenge by delegating. He faced it head-on and drove execution throughout the company. His own confidence in grappling with the uncertain and difficult circumstances became contagious.

FOR DISCUSSION

 What are the strengths of DuPont’s approach to managing change?