How Lynn Elsenhans buckled down to transform how Sunoco did business Featured

8:00pm EDT March 31, 2010

When the economy went south, Lynn Elsenhans got focused to ensure that her company and team members weren’t distracted by the surrounding maelstrom.

With more than 14,000 employees, a top-line brand name to protect and a publicly traded company to run, Elsenhans, chairman and CEO of Sunoco Inc., had a lot at stake.

“We had to get clear about a competitive cost structure so we could position ourselves well,” she says. “We invested more in our people for leadership development and addressed gaps in our leadership pipeline. We also invested in our brand to position us for the future in our industry, and then looked for ways to turn weaknesses into opportunities. It was a chance to look back and decide what’s really important.”

That’s the core of Elsenhans’ philosophy for how to manage through tough times:  Do those actions that ensure the company stays strong and robust, but give employees hope and an idea of where the business is going.

“There are a lot of things in the industry that gave us concern,” she says. “As a leadership team, we asked ourselves, ‘What are our strengths? How do we turn threats into opportunities?’”

One opportunity was to transform Sunoco into a pull company instead of a push company, bringing consumers to it through its various divisions rather than pushing out its products to them. Explains Elsenhans, “We were looking to raise our brand as a pull point and then use our company to be in transportation and energy markets and meet the demands of those future markets.”

None of this was easy, and Elsenhans says it required increased communication and a lot of explanation about what was happening throughout the organization.

“Visibility is critical, now more than ever,” she says.“Leaders have to be out there. It can’t all be video and e-mail. It’s also being able to answer (employees’) questions transparently. You have to be realistic and not sugarcoat where you’re going.”

Doing those things help a CEO build good will and secure much-needed buy-in from employees.

“By telling employees some idea of the path, it builds on it,” she says. “You get the framework out and let them fill in the picture. That’s how a larger cap company can be entrepreneurial, can get a business back on track and get it growing again.”

It also is important to work with customers that may also behaving trouble. Elsenhans says you can’t just throw them to the wolves.

“You have a contract, which protects your rights. And that’s important,” she says. “But if you can be a bit more flexible and meet a customer’s need during a tough time, you can build a better customer for down the road. Companies that have worked hard to be flexible are going to come out of this better.”

The bottom line is that CEOs managing through tough times need to have the ability to be flexible and adapt. That, Elsenhans says, will make or break your business.

“If you don’t innovate, you’re going to die,” she says. “Even very large companies. If you are not attuned to the disruptive forces in your marketplace and reacting to those through innovation, you’re going to be left behind.”

How to reach: Sunoco Inc., www.sunoco.com