What Asbestos Taught Me About Managing Risk

Author: Sells, Bill
Source: Harvard Business School Publishing
Year: 2004
Company Name: Manville Corp.
Number of pages: 9

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Abstract:

As a manager and executive with Johns-Manville, Bill Sells witnessed one of the greatest management blunders of the twentieth century. This blunder was denial, and in the end it took thousands of lives, destroyed an industry, and wiped out as much as 98% of stockholder equity. From today's perspective, it hardly matters what and when Manville knew about asbestos. Modern liability standards seem to hold that the company should have known. When the author was promoted to head Manville's fiberglass division, with asbestos virtually banned, fiberglass had become its chief source of revenue. When fiberglass too came under suspicion as a health hazard, the author used the lessons he had learned in asbestos to implement a policy of product stewardship; intensive workplace monitoring; full disclosure; assiduous communication with customers, workers, regulators, and the media; and an active scientific research program. Studies now indicate that fiberglass is safe. Sales and profits indicate that product stewardship is a source of competitive advantage.