More than 200 students, faculty and business leaders joined James C. Mullen, CEO of DPx Holdings, the parent company of Patheon, in Nelson Hall Wednesday evening to discuss the strategy and leadership that turned his company around.
Mullen became CEO of Patheon, a Durham-based pharmaceutical manufacturer, in 2011 when the company was on the verge of going out of business.
“They had no customer, growth or financial strategy, and they were burning through money,” Mullen said. “They had maybe 24 months of cash left.”
After taking the position of CEO, Mullen used the first few months to learn the business and then gathered company leaders from around the world to show them how badly the business was doing at the time.
“We were adding new people while gross profit was negative, and so my punch line to the group was ‘You guys are flawlessly executing a going-out-of-business strategy,’” Mullen said. “We were just not in touch with the customers or what we were doing.”
In one of his first steps to turn the company around, Mullen replaced some of the top-paid employees. The company also had 10 sites that operated nearly independently at the time, some even competing against each other on the same bids.
“We didn’t have the talent to run this business,” Mullen said. “We had to replace within 24 months over a quarter of the top 200 positions within the company. No factory has the same general manager in 2014 as it did in 2011.”
Improving customer relations was another big move Mullen had to make. Late delivery was the biggest customer complaint. Mullen addressed the problem by emphasizing the product needed to be perfect the first time since quality was the main reason for delays.
Mullen also spoke about acquiring small companies that helped Patheon move in the direction they needed it to go.
“I started talking about acquiring things,” Mullen said. “I talked about adding technology or adding businesses in the value chain. They thought I was completely mad.”
Ultimately, Mullen’s strategy worked, and the company started to get back up.
“Revenues went up dramatically, there was the acquisitions that helped and almost every one of these sites had improved,” Mullen said.
The presentation was followed by a Q&A session between students and Mullen. One student asked Mullen how he was able to get up to CEO.
“You are all trained something when you come out of college,” Mullen said. “There is no school for CEO. It’s really about positioning yourself where you gain maximum experience.”
Mullen said he took many jobs that he didn’t know how to do at first. The experience ultimately helped Mullen get his first CEO position.
“In my first CEO job, the last guy left, and they were desperate and hired me. My advice for people is get as much experience as you can, be open to opportunities, know your tolerance for risk,” Mullen said. “I wasn’t afraid to lead, and I wasn’t afraid to fail.”
Trevor Warren, a junior in accounting, said he enjoyed the discussion and gained valuable knowledge about leading a business.
“It was interesting to hear the CEO talk about how he came into a ‘flawlessly failing’ company and turned it around into a profitable corporation,” Warren said. “I liked speaking with him afterwards and seeing how his leadership skills advanced his company, and it gave insight to me on how I could become a future leader.”
Anya Reid, executive director of Development & External Relations at Poole College of Management, said she found the event to be inspiring.
“What I liked about it was that there was a real message,” Reid said. “The company was in dire straits when he took over. He is clearly not afraid of a challenge. The story of the turnaround is quite incredible.”
At the reception after the main event, Mullen discussed how Patheon also works with NC State to train executives.
“We are working with the faculty who are doing training and education within the company,” Mullen said. “They have created some training programs for us. They have traveled around the world helping do training for us for executives in the company.”
