Rebuilding an American icon was no easy task, but Polaroid's CEO took time to listen and in doing so helped the company find its way back.

When Gary DiCamillo became the chairman and chief executive officer of Polaroid Corporation in October 1995, he knew full well what he was getting into. Before taking the job, he had done a lot of due diligence. And it quickly became clear that Polaroid, despite being one of the top brand names in the world, despite a history of past genius and great inventions, was a company that had lost its way.

"I looked at this one for a long time," DiCamillo said, "because I wasn't sure that I wanted to do it. But then I realized that if I wanted to be a CEO, the number one guy, I would have to take the plunge."

DiCamillo also knew that he had a track record that could be a big plus in his new job. While working at Culligan U.S.A., a division of Beatrice Corporation, he was responsible for bringing that company back to life. Moving on to Black & Decker, he helped engineer several turnarounds for their flagging product line. So reviving a company that was floundering was not a new experience for DiCamillo.

He also knew that joining a new company presented a unique opportunity for corporate listening. "I took advantage of the fact that I had a one-month overlap with the previous CEO to do some listening. In one month, I did 200 interviews inside and outside the company, talking to employees, analysts and shareholders. I actually interviewed the media, which was a very interesting experience. While I was listening carefully to everyone, I was listening especially to employees, going four or five layers down into the company."

DiCamillo used a series of very simple, very open-ended questions to solicit what was right and what was wrong with the company. What are the strengths and weaknesses? What should the priorities be? He was always probing to get people to open up, but always taking the time to listen.

What DiCamillo found was, in his words, "pretty alarming." He had inherited a company that was dying for leadership, that had a strategy that was not working, and a company with a basic core business that was being neglected. "It was a company that had lost its way, not only strategically, but culturally," he said.DiCamillo did not waste any time starting the turnaround. Within three weeks after becoming CEO, he announced a major restructuring and began to turn the company back to its core business.

"It was painful medicine for the people at Polaroid," DiCamillo said, "but it was generally applauded throughout the company because they knew we had to do something."

One of his first moves was to sell off the medical imaging film business that they had been trying to develop (at a cost of nearly $1 billion dollars) but which was losing almost $200 million a year. "We didn't understand the medical imaging market at all," DiCamillo said. "So even though it was brilliant technology, we thought it could be leveraged better by someone who knew the market and had the right business system to address that marketplace."

During the restructuring phase, Polaroid stock hit a 25-year high. But employee morale went south. "Employees did not like the fact that their culture was being wrenched. Or that the lifetime employment guarantee had been broken. It became a real challenge for our corporate communications people," DiCamillo admitted.

But the company was moving ahead, he said, and people were more optimistic about the future. But then in 1997, two things happened that almost derailed the efforts to rebuild Polaroid. First was the collapse of the Russian economy. The Russian market represented almost 40 percent of the company's profits and in the space of two quarters the profits from that market had shrunk to zero. The second challenge came with the sudden focus on the digital age and the impact it was having on the whole area of imaging.

"So the company had to rise again from the dead." DiCamillo said, "and a very difficult second round of restructuring was begun. I also launched another round of listening, listening round No. 2, which was probably the most enlightening round of listening that I did."

While on business in Japan, DiCamillo discovered there was a rebirth of instant photography taking place there. Polaroid's Japanese unit was using a small instant camera to address the children and teenage market and achieving great success, so much so that they sold out the entire year's production in just one city. "If we hadn't been in Osaka listening to the users and dealers," DiCamillo said, "we might never have found out what was happening."

Taking the idea back to the U.S., DiCamillo persuaded his skeptical marketing people who were focused on the 50-plus market, to add instant cameras for youth to the U.S. product line. Today about 60 percent of Polaroid's pocket instant cameras sells to people under 21. DiCamillo made another "listening" decision regarding the digital arena. While Polaroid engineers were focused on making and selling digital cameras, DiCamillo talked to consumers and saw there were 28 digital camera companies led by the likes of Sony and Panasonic. He made the decision not to make digital cameras -- "The vote was 6 to 1; I was 1," he said. Instead, Polaroid out-sourced all the components and had them assembled overseas. "We would develop the supply chain," he said, "and brand them and sell them in the United States."

But again, DiCamillo didn't follow the usual distribution path. Digital cameras were typically sold in electronic shops and photo stores. Polaroid opted for mass markets. "We're going to sell them in Wal-mart, K-Mart and Target," DiCamillo said, "and eventually in drugstores."

The bottom line for these two "revival strategies," as he calls them, was one of the best years in many years, "a turnaround year." Sales were up 7.2 percent in 1999, 20 percent in the fourth quarter alone. The company had a record year for instant cameras with film sales following right behind. The digital strategy was also starting to pay some dividends.

They're still a work-in-progress, DiCamillo cautioned, "but we've had six straight quarters of meeting or exceeding expectations, both top and bottom line. We've got a very robust core business now, and we're selling many more instant cameras led by our little pocket camera."

DiCamillo admits that "the journey back for Polaroid was a lot tougher than I thought it would be." But he is quick to credit corporate listening for making the journey possible. "It has been a key component of my tenure, and I've learned a lot from it."

DiCamillo concluded by giving his "rules of thumb" for listening.

Ask questions that ask, not tell, he said. Ask open-ended questions and then shut up. Allow plenty of time for people to tell you what they want to say.

Be an active listener. "In a corporate setting, people may be afraid you're not listening. A good CEO will get people to open up."

Use technology, e-mail, voice mail, all kinds of data-gathering to build your communication network. "But develop a feel for what you're hearing, a feel for when a situation is going to blow up or blow over, a feel for when you need to take action."

Finally, avoid people who tell you only what they think you want to hear. That's a problem in a corporate setting. "Tell me what I need to know. Be straight with me."

The Polaroid journey, DiCamillo said, is all about listening, but "it doesn't just come in spurts the way I described the story this morning. You have to do continuous listening. You have to do intensive deep-down listening...And I think there is an opportunity for this group to make an even bigger impact with your CEO or your clients by using active listening skills and being the listener at times for your company."