In the mid-1990s, Stephanie Burns was at the eye of one of the biggest litigation storms in US history. As director of women’s health at silicones maker Dow Corning, Burns was in the front line defending the firm against a barrage of criticisms over the alleged link between leaky silicone breast implants and autoimmune diseases including cancer. One of the key spokespeople responsible for presenting the company’s scientific case, she was regularly in the public eye, making frequent appearances on national radio and TV, including the Oprah Winfrey show.
Today, as Dow Corning’s chairman, ceo and president, she acknowledges that the experience has had a big influence on her leadership style, and approach to health and safety. ‘It was the time I grew most in my career,’ she reflects, adding that the most difficult part was communicating her knowledge of the scientific results to the general public. ‘Breast implants were never more than 1% of revenues so in the sense of the overall business it was tiny, but of course it had a very large impact.’
A decade later, ‘the good news’ is that the link between silicone implants and illness has never been scientifically proven, Burns says. More than 30 studies and $40m funding have failed to uncover any measurable risk. The US and Canada have both recently approved silicone implants, while in the UK their use was never suspended. Despite this lack of evidence, however, the bad news was that Dow Corning was eventually landed with a $3.2bn bill in settlement payments that obliged the company to file for chapter 11, a US legislation protecting firms against large volume claims, and which it will still be paying off for the next decade.
Important lessons
In her current role as ceo, Burns says the experience brought two big lessons. ‘First, you must continually innovate in environment, health and science research, as your materials are constantly being used in new applications; and secondly, that investment must be transparent.’ One of the arguments levelled against Dow Corning in the 1990s was that the firm had initially been less than forthcoming with some of its test data, an allegation that Burns believes had more to do with concerns about intellectual property (IP) protection than with a desire to hide information. ‘The history of the company since the day it was created was about IP protection and not to openly share information as we do today. That openness is something I’m now proud of.’
Dow Corning was established in 1943 as a joint venture between Corning Glass Works (now Corning) and Dow Chemical to explore the potential of silicones. Today, the company produces more than 7000 products and services, spanning uses from shampoos to solar panels, employs 9100 people and serves 20 000 customers worldwide. Since taking office in 2004, Burns has overseen the company’s sales grow by 15% – to almost $4bn in 2005 – and profits more than double to $506.5m the same year. Also in 2005, Dow Corning won Frost & Sullivan award for best speciality company, last year winning an award again for best customer service innovation.
Burns herself has similarly garnered many accolades. One of only a handful of women chemical industry ceos, she has twice times been listed on Forbes.com’s list of the world’s most powerful women, was last year recognised for her work in education with the award of the Chemical Education Foundation’s Vanguard award, and was named Michigan Woman executive of the year in 2003.
Last December, she also became the first winner of the SCI’s Mond Award for significant achievement in the field of health & safety.
Burns began her career at Dow Corning in the mid-1980s, originally as a researcher working on water-based and high-temperature elastomers. However, her interest in science started much earlier when, even as a schoolgirl, Burns recalls how she enjoyed dissecting frogs and insects as well as cookery and all things scientific – a flair encouraged by her father, in particular. That in turn led to a PhD in organosilicon chemistry at Iowa State University, followed by a years’ postdoctoral work at the University of Montpellier in France.
Leadership role
The chance to move into a leadership role came five years after joining Dow Corning, when Burns was asked by her supervisor to consider becoming a business leader. It was a tough decision, she recalls. ‘I always thought that being a researcher was the very highest level of profession you could reach, so when my supervisor said this I thought that I must have done something wrong – that I had failed in my research.’
Her attitude changed when Burns met some of the company’s customers. ‘I knew I’d made the right choice when I met them and started seeing our products through their eyes and looking at the industry from a downstream perspective.’
Being a scientist has always been a big advantage, Burns believes. ‘I am only the company’s second scientist ceo, after Shailer L. Bass who stepped down in 1967,’ she says. ‘It means I’m not afraid to get into the science portfolio, to judge the viability of the technology both in terms of its technical and economic impact.’ Having a husband who is also a researcher within the company can also be very helpful, she jokes.
Of all the numerous meetings she attends, Burns says the most exciting is the once-monthly meeting of the company’s Growth Council. A gathering of senior company executives and scientific staff, the meeting aims to generate ideas for the firm’s so-called incubation portfolio of research over the next five to 10 years, and to ensure these are aligned to market needs. Ideas emerging have included, for example, various renewables and eco-innovation projects, some of which are already generating revenues for the firm, Burns notes.
‘Eco-innovation is a big area for future growth, especially new hybrid organic–inorganic materials combined with silicon.’ In the next five to 10 years, Burns predicts such materials could account for 30-40% of the company’s sales, with traditional polymers falling from the current 80% to 60-70% of sales.
Solar power is another area in which the firm is banking on doing well. In December 2005, Dow Corning announced that Hemlock Semiconductor – its joint venture with Japanese firms Shin-Etsu Handotai and Mitsubishi Materials – had broken ground on a $400m-$500m expansion of its silicon manufacturing facility at its Hemlock, Michigan headquarters.
‘Solar will be important for many years, not only the solar photovoltaic material but also the related encapsulants and adhesives, etc [which also require silicones],’ Burns says. Solar power currently accounts for 10% of all renewable energy consumption and the industry is expected to grow 30-40% annually over the next 10 years, according to Dow Corning figures.
Over in the personal care sector, a more recent alliance with Genencor is also beginning to bear fruit. Together the two firms are looking at silicone–natural product conjugates often made by using enzymes, and which offer what the company claims are unique combinations of properties that make them attractive for a range of applications, including in the personal care sector where they could potentially help deliver vitamins to the skin.
The unique properties of silicones make for a vast number of possible applications, Burns notes, adding that she is ‘constantly amazed’ by the number of new innovations appearing from the company’s research labs. In the past two years, Dow Corning has already realised Burns’ goal – stated at the outset of her tenure as ceo – of achieving 20% of sales from products less than five years old.
Geographical expansion has been the other big priority during Burns’ leadership. Dow Corning now has operating bases in nearly 20 countries, with plans announced late last year for a new ‘world-class’ manufacturing facility for siloxanes – the building blocks for finished silicones – in China. Consumption of silicones
in China is just 20% of that in developed countries, so the region holds big potential for future expansion, Burns says.
‘Traditionally the first products demanded are the ones that help build infrastructure – construction, roads, electrical power supply etc. China is unique in that people are interested not only in infrastructure, but very, very quickly we are also seeing demand for added value products, such as personal care items, advanced finishes, advanced electronics etc.’
Alongside manufacturing, Dow Corning is also planning to expand product development capabilities in the region, Burns notes. The firm already has one development centre in China, which has doubled in size in the past 18 months, and is ‘now looking at China and India to set up [further] centres within the next year,’ she elaborates.
Top priority
Health and safety remains a top priority for all Dow Corning’s operations, wherever they are based. In Europe, Dow Corning is ‘way ahead of other companies in terms of being prepared for [the planned new chemicals regulations] REACH,’ Burns says, adding that over the past 15 years the company has spent $40m on ‘the most comprehensive research programme on functional siloxanes ever in the industry’. Burns claims this work – involving toxicology, clinical tests, product stewardship, exposure and risk assessments – will be ‘a framework for health & safety studies on chemicals,’ especially important in the run up to REACH.
‘In the past we [the industry] have been too secretive, but now we have to learn to share our best practices across the industry and across the globe… We need to reach across to developing countries and areas where our industry has employees, in places such as India and China, and apply the same standards.’
So could a situation such as occurred over breast implants ever happen again? Burns refuses to rule it out altogether. ‘Litigation in the US is a real worry for most companies. You see it a lot in pharmaceuticals, but also, for example, there was the case of the hot coffee spilled at McDonald’s… You never know what could be around the corner; and we also can’t rule out the possibility that you can have good scientific data yet still not prevail in the courtroom.’
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