Solutions Success Story: How DuPont Built a Services-Led Solutions Business

All of the solutions success stories that we’ve written over the past few months have shown how technology-based companies have become more customer-centric by creating solutions that seamlessly integrate both products and services. It’s important to understand, however, the move to solutions is alive and well in other types of industries, and are applicable for services companies as well.

No one would think of DuPont as a high-tech company, nor would they think of them as providing real solutions through a blended set of services. However, the shifting needs of their customer base had given them the same impetus as high-tech companies to integrate a full array of services into their core business in order to meet their customers’ changing business problems—in other words, provide solutions.

The Importance of Services

DuPont today has 13 Business Groups, including Nutrition & Health, Building Innovations, Protection Technologies, Electronics & Communications, Applied BioSciences, and Performance Coatings. In the late 1990s, they discovered that customers wanted to ensure that they were not just getting high-quality products at a competitive price from DuPont, but they were using them safely. Simply delivering the goods to the customer site was no longer sufficient. Customers now wanted to make sure that the products were handled, stored, and applied in the right way. This provided DuPont with its first “onramp” into the services business.

DuPont had built out a basic suite of safety related services by 1999. In recent years, however, customers approached them for help with different problems, including:

  • Can you help us decide which offerings we should create based upon your products?
  • Can you transfer the skills and capabilities that you’ve built up in your traditional manufacturing business help us with our business issues?
  • How can we use your insights to make our business more successful?

The message was clear: they didn’t want DuPont’s products— they wanted DuPont’s knowledge and experience to make their own businesses more successful. They were looking for DuPont to leverage their insights through decades of being a leader in the chemical and environmental management businesses to help them with their challenges. DuPont’s customers were looking to DuPont to provide a range of professional services that could be tailored to the customers’ individual challenges and problems—they were looking for services-led solutions.

Building a Services Capability

Integrating a services business as a complement to a well-entrenched product business is no easy feat. In planning to expand into the services arena, DuPont had to address a number of key issues, including:

Did it make sense for a company with a history of selling basic commodity chemicals to build out a services and solutions capability? Was it financially attractive? The response—After talking with over 600 customers and getting a better sense of the demand for these new offerings, they concluded that not only was it potentially lucrative financially, but it was in fact imperative that they provide a suite of safety-related offerings in order to ensure high customer satisfaction.
What should they offer? What were they capable of offering? How would these new offerings tie into their product portfolios? The response—DuPont decided that it needed to offer a full range of services in support of its core businesses, from how to implement stronger safety processes to operating clean technologies methods. The services all were aligned with each other as well as the core product sets.
Could DuPont, a classic hierarchical organization, adapt to a services and solutions structure? The response—The company concluded that a more solutions-oriented business model would require a new organization structure. They needed a model that would allow them to access their internal knowledge workers no matter where they were in the organization structure. Their response was to institute “networked clusters” which allowed for a faster and more effective sharing of internal resources.

Key Lesson Learned

Solutions is not a buzzword, it’s way of doing business—from the organizational structure down to the selling processes, DuPont had to change how the staff thought, behaved and operated. There was no magic bullet—they had to re-direct the staff to be more customer-focused instead of just output-focused.

While most of SI’s experience is in helping technology-based companies make the transformation to solutions, there are countless examples of the same transition taking place inside companies in other industries. DuPont has proven that even a very old dog can learn new tricks!

Comments (4)

by
Simjen

You have shared some very interesting points in your article and the future of technology no one knows I think. Will check back soon.

by
Keril Sawyerr

Steve Case said in a recent interview that not all the biggest, most successful companies today are huge tech firms; many of them are service providers like DuPont.

by
Ernesto Contreras

The transformation of firms into a solutions centered company is still at an early stage for most companies. There are not enough facts to completely evaluate and measure the results of moving to a full solutions structure. It is clear by looking at the new operating organizational models that communication, accountabilities and work distribution is going to be a tough task to handle. Network organizations are known to be good laboratories for innovation, teamwork and flexibility, but they also might bring chaos and conflict. It is really interesting to see how companies move from the product centered silos into a more solutions oriented organization while managing the tradeoffs that it will bring. Moving to solutions is definitely a necessity for most companies if they want to keep themselves ahead of the competition and commoditization, and finding the right equilibrium between vertical reports and network structure will take time. It comes as a surprise that at the transformation stage of a company into a solutions provider, internal alignment is one of the very top critical success factors of the process, one that makes or breaks the deal, seeing that big, traditionally successful corporations are doing it must give their smaller competitors a real headache and must make them moving too if they don’t want to become a commoditized and be left behind by this new way of doing business: The solutions model approach.

by
Mohammad Reza Iravani

It’s amazing how the market is demanding for solutions these days. Even they are looking for it in a chemical company. That gives a heads up for other traditional or product-oriented industries which do not think that one day they will be asked by their customers to offer solutions! One of the challenges for Du Pont is if they can develop new services properly to add them to their products. They are well known for their chemical products. If they fail to develop new high quality services, as they package those services with the products and offer them to the market, not only they will be unsuccessful on the transition to solution based company but also it will affect the good reputation of their products. So they should pay a close attention to the development of their new service cause it is a critical point in transformation of the company from a products manufacturer to a solutions provider.