During the 2000s, in one of the largest commodity booms in history, Rio
Tinto allowed itself to be swept up along with other mining companies in
the mad rush for growth. Although the smart allocation of capital had
traditionally been a strength at the 140-year-old company, Rio Tinto
suffered multibillion-dollar write-downs of two of its boom-time
acquisitions, and in 2012 it reported a net loss for the first time in
25 years. Early in 2013 the board of directors called on Walsh to take
over as CEO. He knew that to succeed in such a turbulent environment, he
would need to reconnect Rio Tinto with its core balance-sheet
discipline and put it back on a path of measured, sustainable growth. He
and the CFO decided to focus on three initiatives: tighten up
investment decisions, allowing only the best projects to proceed; run
the entire organization for cash; and drive efficiency throughout the
company by cutting costs, exiting businesses, and rationalizing the
workforce. But they also chose to pull best practices from other
industries and fully harness the efficiency gains from new technology.
[ABSTRACT FROM AUTHOR]