XXXXX
Executive Interview Summary
April 7, 1993
XXXXX / Gemini Executive Interview Summary
Agenda
• Logic
• Chemical Industry Perspective
• XXXXX, Inc. Objectives
• Perceived Strengths and Opportunities
• Emerging Themes and Initial Impressions
• April 21-22 Joint Working Session
• Next Steps
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XXXXX / Gemini Executive Interview Summary
Logic
Mission: XXXXX Inc.
Critical Success Factors
April 21-22 Preparation Tasks
• Provide high value products and
services in the fields of chemistry
and life sciences
• Clearly defined and communicated
business objectives and strategies
¦
¦
• Grow and succeed by building
profitable businesses that satisfy
the evolving needs of our
customers, challenge our
employees, and establish us as a
recognized and respected market
leader
• Achieve step change customer
service quality and business
performance improvements
through rapid transformation of
our Information Systems
• Translation of business needs into
I/S priorities and objectives
Positioning Interviews
Executive Interviews
• Surveys
• On-going understanding of
customer needs and expectations
• Business and functional
strategy alignment probes
• Clear understanding of
management information
requirements and elimination of
non-value added reporting
• Financial decomposition and
analysis
• Key processes streamlined and reengineered prior to I/S investment
• Key business process flows
• Rapid and cost effective upgrade of
I/S infrastructure and capability:
skills, organization, processes
• Business Case prioritization
3/23/2016 12:37
• Information Systems
assessment
• External view
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Industry Context
XXXXX / Gemini Executive Interview Summary
Major Issues That Will Shape the Chemical Industry over
the Next Decade
• Environmental pressures
• Low operating profits requiring new levels of efficiency
• Emergence of worldwide competitors
• Technological changes
• Need to restructure at the corporate and business levels
• Misalignment between customer needs, operations, and channels
• Unreliable customer/product profitability information
3/23/2016 12:37
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XXXXX / Gemini Executive Interview Summary
Competitors Response to the Issues
• The top four Chemical firms have laid off in excess of 20,000 employees
• U.S. Chemical Industry profits have declined significantly since 1989
– Lower capacity utilization drained profits
• Globalization, integration and partnering with suppliers is improving quality
and reducing cost
• Numerous Chemical firms have refocused on core businesses and deemphasized other businesses
• The Chemical industry has become a true global market place:
– Overseas capacity limits export opportunities and threaten to increase low-cost imports
– Latin America and Asia will account for most of new plant construction
• Companies are integrating customers and distributors as a natural
extension of their supply chain and value chain
• Technology is being employed to add speed and responsiveness to service
customers
3/23/2016 12:37
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XXXXX / Gemini Executive Interview Summary
Many Chemical Companies are Struggling with a
Proliferation of Initiatives
Globalization
Value-Based
Management
Becoming
market-focused
New product
Introduction
Strategic Intent
and Core
Competencies
Reliable product,
customer profitability
information
Safety /
Environmental
Cost-cutting /
Rightsizing
Quality /
Continuous
Improvements
Reengineering
Customer
service / Customer
satisfaction
How do we prioritize and allocate our strategic resources?
3/23/2016 12:37
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XXXXX / Gemini Executive Interview Summary
The Chemical Industry Still Lags Other Industries in
Focusing on Customer Needs
“Best-in-Class” Practices
Typical Chemical Company Focus
• Internally driven
• Customer- and competitordriven
• Emphasizing product features
• Emphasizing customer benefits
• “Pounds out the door at lowest
price”
• Incremental profitability
• “All things to all people”
• Matching benefits to customer
needs
• Vertical integration across the
value chain
• Strategic partnerships and joint
ventures
A key challenge: How to de-commoditize the offering and not sell based on price alone.
3/23/2016 12:37
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XXXXX / Gemini Executive Interview Summary
We are Witnessing the Death of the Sustainable Competitive
Advantage, and the Emergence of the “Nimbleness Advantage”
• The name of the game used to be “making the right call” in terms of
strategy organization design, cost structure, technology investment, or
process design
• The assumption was that you could sustain the advantage you had created,
therefore allowing you to protect the position you had gained
– Evidenced in terms such as sustainable competitive advantage, defendable, barrier,
harvesting, cash cow
• There is increasing evidence that no competitive advantage is ever
sustainable anymore, except for short periods of time:
– We have witnessed the crumbling of scale, experience, technology, distribution, raw
materials as sources of competitive barriers
• Our hypothesis is that the ability to reinvent yourself faster than your
competitor is what will drive success in the 90s (“nimbleness advantage”)
• The ability to move fast is therefore as important as the direction of each
movement
Creating growth through perpetual transformation is, we think, what business is now about.
3/23/2016 12:37
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Executive Interviews
Feedback
XXXXX / Gemini Executive Interview Summary
Met with Key Executives in North America
•
Bausch, Jim
•
Jongeward, Chuck
•
Palmer, George
•
Blackford, Don
•
Kennedy, Dick
•
Perry, Barry
•
Boehner, Dick
•
Kirk, Tom
•
Raymond, Maurice
•
Briggs, Bob
•
Knox, James
•
Rosenblatt, Raul
•
Busson, Jacques
•
Kranz, Bernie
•
Shomo, Rudy
•
Cherva, Aldena
•
Lee, Ray
•
Stanford, Eric
•
Dille, Tom
•
Leech, Jeffery
•
Tevebaugh, Dick
•
Eckert, Dave
•
Machin, Bob
•
Tomaso, Dennis
•
Farran, Bill
•
Martinet, Jean-Pierre
•
Valla, Pierre
•
Foster, Bob
•
McNichol, John
•
Wheeler, Brian
•
Galuskin, Myron
•
Neff, Peter
•
Wichtrich, John
•
Gugino, Tim
•
Nelson, Bill
•
Ziemann, Ted
•
Haddock, John
•
Nichols, John
•
Zirakparvar, M. Esmail
•
O’Hea, Paul
3/23/2016 12:37
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XXXXX / Gemini Executive Interview Summary
External Factors You Believe will have the Greatest Impact
on XXXXX’s Performance Over the Next 5 Years
• Changing Customer Needs and Priorities
• Environmental and Regulatory Issues
• Increased Competitiveness
• Foreign Markets and Trade Agreements
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XXXXX / Gemini Executive Interview Summary
What You Think It Takes To Be “Best In Class”
• Understanding Customer Needs and Being Responsive to those needs
• A Cohesive Organization (Teamwork)
• Technology and New Product Leadership
• Having the Flexibility to Respond to Market
• Capitalizing on Synergies and Common Elements within your Organization
• Ability to Clearly Define and implement Business and Supporting Functional
Strategies
• Being able to quickly and successfully Consolidate and Assimilate
Acquisitions
• Managing in a Multi-Cultural Global Matrix Organization and Environment
3/23/2016 12:37
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XXXXX / Gemini Executive Interview Summary
Business Goals Reflect Divisional Uniquenesses
• XXX
• Agricultural Chemicals
– $5B in sales by year 2000
– 15% / 15% / 15%
– Scale - move above 10% market
share
– Reduce manufacturing costs
– Develop new and more profitable
products
– Expand into new and mid-size
markets - Corn & Soybean
– Asset optimization
- Operating income on sales / ROI /
growth in earning per share
– Successful consolidation of
Corporate and Divisions into a total
XXXXX, Inc culture
– Become a total quality company
– Each business / division in top 10%
of their industry
• Basic Chemicals
• Specialty Chemicals
– Increase return on capital by 4%
– Reduce costs 2-3% per year through
work practices redesign using systems
– Become a truly Global Organization
– Industry leadership through high
quality, low cost products
– Expand North America offerings
– Operating in a total quality culture in
3-4 years
3/23/2016 12:37
– Grow U.S. sales to $2B by year 2000
– Grow primarily through leveraging
technological breadth
– Upgrade quality of product mix
through technology
– Expand business portfolio through
selective acquisition
– Bring value to customers
(responsiveness, superior technology)
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Perceived
Strengths & Opportunities
XXXXX / Gemini Executive Interview Summary
Perceived Strengths
• Being part of a Global Company
• Capability and breadth of Technology
• Understanding of regulatory environment
• Building a common culture - TQM
• Proximity to customer - decentralized
• People
3/23/2016 12:37
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XXXXX / Gemini Executive Interview Summary
Processes that Focus on Customers and Products are
Most Important to Growth and Profitability
“Please rate the importance of these processes relative to their impact to Revenue
Growth and/or Profitability:”
Importance
Generate, develop and maintain
customer relationships
Fulfill customer orders
Optimize use of assets and resources
Develop new products and manage
product lifecycles
Understand and manage product
profitability
Manage performance v. strategic
direction and operating plan
Use IS to support the business
Dealing proactively with environmental
concerns
Communicate across businesses and
divisions
Identify and realize synergies and
economies of scale between
Balance product supply cycle
Integration of acquired businesses
Develop and coordinate company-wide
procurement strategies
0
1
2
3
4
5
6
7
8
9
10
n=39
3/23/2016 12:37
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XXXXX / Gemini Executive Interview Summary
Overall, We See Ourselves Falling Short of Competition in
All Areas
“Please tell us how well your organization performs relative to your main
competitors:”
Importance
Effectiveness
Generate, develop and maintain
customer relationships
Fulfill customer orders
Optimize use of assets and resources
Develop new products and manage
product lifecycles
Understand and manage product
profitability
Manage performance v. strategic
direction and operating plan
Best
in
Class
Use IS to support the business
Dealing proactively with environmental
concerns
Communicate across businesses and
divisions
Identify and realize synergies and
economies of scale between
Balance product supply cycle
Integration of acquired businesses
Develop and coordinate company-wide
procurement strategies
0
1
2
3
4
5
6
7
8
9
10
n=39
3/23/2016 12:37
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XXXXX / Gemini Executive Interview Summary
I/S Support Perceived Ineffective by All Three Divisions
“How effective has I.S. been to date in supporting your organization and in helping to
achieve major goals and objectives”
Very 10
Effective
9
8
7
6
5
4
3
2
1
Not
Effective
0
Ov erall
Agricultural Products
3/23/2016 12:37
Basic Chemicals
Specialty Chemicals
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XXXXX / Gemini Executive Interview Summary
What They Said About How I.S. Could Better Support
Them…
• “Give us systems which help us compete”
• “Provide timely and accurate information”
• “Understand our needs, help us decide what we need to have, and then
deliver it”
• “Help us eliminate low value added activities”
• “Implement sales force automation, EDI and plant scheduling systems”
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XXXXX / Gemini Executive Interview Summary
What They Said About What Users Could Do to Increase
the Effectiveness of I.S.…
• “Provide clear business direction and priorities”
• “Understand the processes that add value to their businesses”
• “Define what information is important for running their businesses”
• “Articulate their needs and their customers’ needs better”
• “Make I/S a part of the business team”
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XXXXX / Gemini Executive Interview Summary
Top Barriers to Improved Performance
“Which issues represent most significant barriers to improved performance”
62%
Teamwork, Cooperati on
54%
Informati on S ystems
Skil ls and T rai ning
46%
Deci sion Making Processes
44%
Cul ture
44%
41%
Rol es & Responsi bil ities
Resource Al location / Util izati on
31%
Busi ness Strategies
31%
Responsi veness to Customers
31%
Leadershi p
28%
Busi ness Practi ces & Processes
28%
26%
Products
Organizati on S tructure
21%
Incentive Systems
13%
0%
20%
40%
3/23/2016 12:37
60%
80%
100%
N 3
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XXXXX / Gemini Executive Interview Summary
What They Said About Teamwork, Cooperation
• “Lack of coordination getting in the way of doing it right the first time, on
time”
• “Let’s worry more about the results versus who has the power - sector division - XXX”
• “Got a hodge podge - value in pulling this group into a unit or team”
• “Because of company’s evolution, there are barriers to teamwork.
Divisional structure inhibits cooperation”
• “Teamwork has never been fostered - there has never been an approach to
developing teamwork”
• “We micro manage based on each unit or department striving to attain their
own objectives independent of others and overall business performance”
• “Customer - plants - I/S; critical link, if not correct, nothing happens”
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XXXXX / Gemini Executive Interview Summary
What They Said About Information Systems
• “We have an abundance of systems, but they don’t communicate customer order data in the AS/400, inventory data on another, forecast
spreadsheet resides on a PC.”
• “Lack of resource capabilities and skills at this point in time”
• “View of past methods versus change, yields ineffective and inefficient
direction for I/S and inability to build required systems”
• “Clearly the vehicle to allow us to profit from organization / structure,
teamwork and division capabilities”
• “Do not have the information for effective and timely decisions”
• “I need basic factual information to run my business… and right now for
example, I have to call my suppliers to find out how much business I am
doing with them”
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XXXXX / Gemini Executive Interview Summary
What They Said About Skills and Training
• “Training is a major gap”
• “Woefully inadequate skills in I/S across the board”
• “Don’t invest sufficiently in our people; we work them, but don’t provide
training to advance”
• “Can’t achieve critical goals without investing in people”
• “Inadequate training in the sales and marketing area has resulted in missed
sales and lost customers”
• “Need additional training to shift the focus to customer service”
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XXXXX / Gemini Executive Interview Summary
74% Believe that Step Change is Possible
Possible Performance Improvement Cumulative – Overall
10 0%
100%
90 %
Step Change
74 %
80%
60%
45 %
40%
29 %
20%
0%
10%
20%
30%
40%
50+ %
N= 31
3/23/2016 12:37
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XXXXX / Gemini Executive Interview Summary
Performance was Defined as:
• Step change in customer focus
• Improvement in profitability
• Increase in product line and market share
• Positive return on all of the acquisitions
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XXXXX / Gemini Executive Interview Summary
94% Believe That the Climate is Right for Change Now
“Is this the right time to start working on some of the opportunities you described?”
94 %
100%
80%
60%
40%
20%
6%
0%
No
Yes
N=
3/23/2016 12:37
36
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XXXXX / Gemini Executive Interview Summary
Climate is Right Because:
• Need to do this, need to do it now and do it right
• We are at a critical junction
• Long Overdue
• Cannot afford to wait
• The weaknesses have been identified and we are currently spending an
incredible amount of money treating the symptoms not the cause
• Need to take action to survive
3/23/2016 12:37
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XXXXX / Gemini Executive Interview Summary
Outcomes of a Successful Project
• “A report that tells me how much I am making by product and by customer”
• “Feeling that the money we spend on I/S is well spent”
• “A degree of standardization”
• “Our customers tell us how easy it is to do business with us”
• “I would not spend most of my time dealing with customer related crises”
3/23/2016 12:37
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XXXXX / Gemini Executive Interview Summary
We Need to Change the Way We Do Business
“Please select the adjectives which best describe your corporate culture:”
Short-term
Result s-driven
F inance-driven
React ive
Bureaucrat ic
T ask-oriented
Suspicious
Caut ious
Stat us-conscious
Vacillating
F lexible
Close-minded
Rigid
Individualistic
Sensit ive
Direct ive
Open-minded
Part icipat ive
T eam -orient ed
People-oriented
F ailure-driven
Insensit ive
Sociable
Decisive
Risk-t aking
T echnically-orient ed
Entrepreneurial
T rusting
Pro-act ive
Long-t erm
0%
10%
20%
30%
40%
50%
3/23/2016 12:37
60%
70%
80%
90%
100%
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XXXXX / Gemini Executive Interview Summary
If You were Riding on the Elevator with Peter Neff, What One Thing
would You Tell Him to do to Improve North American Operations
• “Take a strong leadership position”
• “Force greater teamwork and remove barriers among Divisions, Sectors and
XXX”
• “Create the vision… what and where do we want to be by when”
• “Give us the I/S we need”
• “Take ownership of the reengineering process”
• “Define the role of XXX”
• “Increase I/S and Business Alignment”
3/23/2016 12:37
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Emerging Themes
and Initial Impressions
XXXXX / Gemini Executive Interview Summary
Common Themes
• “We know I/S is broken… don’t need a lot of analysis to prove it”
• It’s a broader issues than just I/S
• Leadership
• Lack a robust pipeline of new products
• Matrix
• Diversity and commonality
3/23/2016 12:37
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XXXXX / Gemini Executive Interview Summary
Gemini’s Initial Impressions
• The 15% / 15% / 15% objectives are seen to be beyond reach…
• All businesses appear to have step level improvement opportunities… I/S
must become an enabler… it is not one today
• An I/S Revolution is required now to support the Businesses in a timeframe
relevant for achieving Vision / 2000
• TQM is beginning to create a common culture and enthusiasm for change
3/23/2016 12:37
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XXXXX / Gemini Executive Interview Summary
Areas to Focus on:
• How to dramatically improve customer service quality
• How to mobilize and channel resources towards achieving Vision / 2000
• How to have timely, accurate, relevant information to grow your business
profitably
• How to quickly develop needed I/S capability
• How to discover how much the potential is worth
3/23/2016 12:37
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April 21 & 22
- Expectations
- Strawmodel Agenda
XXXXX / Gemini Executive Interview Summary
What You Told Us About April 21 - 22
Objectives
• Set Expectations for the meeting up front
• Understand and agree on current status (Snapshot As-Is)
• Educate members of the Executive Committee on where we are
• Determine how Gemini can add value
• Define Vision / Scope
• Gain an External View - how XXXXX compares with industry
• Find out what are our competitors doing
• Agreement on how to analyze this issue
• Define Decision Criteria
3/23/2016 12:37
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XXXXX / Gemini Executive Interview Summary
What You Told Us About April 21 - 22
Objectives
• Set Expectations for the meeting up front
• Understand and agree on current status (Snapshot As-Is)
- Where are we now – “Gap”
- Where are we going – “Gap”
- How will we get there
• Educate members of the Executive Committee on where we are
- Need to figure out where we are
• Determine how Gemini can add value
- Other work efforts
- Added value
• Define Vision / Scope
- What could be (3-5 years)
- 1993 Action plans
• Gain an External View - how XXXXX compares with industry
• Find out what are our competitors doing
- Benchmarking
- Shareholder value
• Agreement on how to analyze this issue
- How do we want to use I/S
• Define Decision Criteria
- Areas providing greatest return
- Earliest Pay Back
- Etc.
3/23/2016 12:37
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XXXXX / Gemini Executive Interview Summary
What You Told Us About April 21 - 22
Outcomes
• Common understanding of where we are
• Clear direction - define where we want to go - specific goals
• Should come out with at least a common vision not necessarily a plan
• Agreement on what we have to do to get there
• A unifying message on the need to change behavior
• Show that each division and business unit needs to use some of the same
analytics
• Recognition of the diversity and uniqueness of each business and its customers
• Realization that there are common elements among divisions and we can learn
from each other
• Next Steps - Assignments
• Specific tasks and action items
• Define the way we could run the businesses from a corporate perspective
• A Plan to effectively spend money to upgrade systems
3/23/2016 12:37
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XXXXX / Gemini Executive Interview Summary
What You Told Us About April 21 - 22
Outcomes
• Common understanding of where we are
- XXX
- Divisions
• Clear direction - define where we want to go - specific goals
• Should come out with at least a common vision not necessarily a plan
• Agreement on what we have to do to get there
- Structured Path Forward
- Identify some Best Practices
• A unifying message on the need to change behavior
- Change the way we do business
- Drive toward a unified culture
• Show that each division and business unit needs to use some of the same
analytics
-
Financial Reporting
Customer Information
Part numbers
I/S Base
• Recognition of the diversity and uniqueness of each business and its customers
• Realization that there are common elements among divisions and we can learn
from each other
• Next Steps - Assignments
3/23/2016 12:37
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XXXXX / Gemini Executive Interview Summary
What You Told Us About April 21- 22
Outcomes
• Specific tasks and action items
- Assigned responsibilities
- Check points
• Define the way we could run the businesses from a corporate perspective
- Leadership
- Added Value
• A Plan to effectively spend money to upgrade systems
3/23/2016 12:37
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XXXXX / Gemini Executive Interview Summary
What You Told Us About April 21 - 22
Thoughts & Concerns
• Centralization vs. De-centralization
- Concepts
- Variations within these concepts
• This effort has to be business driven or it will fail
• TQM is too slow and will take forever
• We are over managed and underlead
• Do we have a viable I/S base
• Recognize that there has to be unique sub system to serve customers
• How do I best spend my money
• Capitalize on opportunities that span business groups and corp.
• Everyone will know where we are headed
• We have to get focused
• There is not a unique technical solution
• This is more that an I/S issue
• This has to be more than a top down driven activity
3/23/2016 12:37
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XXXXX / Gemini Executive Interview Summary
Strawmodel Agenda for April 21 - 22 Work Session
• Set Expectations, Objectives and Ground Rules
• Level Set the Playing Field - “As-Is”
• Vision / Scope
• Define the “Gap”
• Determine Analysis and Decision Making Criteria
• Identify Major Challenges to Close the Gap
• Establishing a XXXXX and Gemini Partnership
• Lay Out Path Forward
• Where and How to Start
• Close
3/23/2016 12:37
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XXXXX / Gemini Executive Interview Summary
Strawmodel Agenda for April 21 - 22 Work Session
• Set Expectations, Objectives and Ground Rules
• Level Set the Playing Field - “As-Is”
–
–
–
–
Where we are now
How we got here
Do we have a solid base on which to build
Understanding / consensus
• Vision / Scope
– What could be (3-5 years)
– External view
– What competitors are doing
• Define the “Gap”
– What are common elements
• Determine Analysis and Decision Making Criteria
–
–
–
–
Key elements of evaluation process
Rationale in reaching consensus
Weighting factors
Ground rules
3/23/2016 12:37
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XXXXX / Gemini Executive Interview Summary
Strawmodel Agenda for April 21 - 22 Work Session (cont)
• Identify Major Challenges to Close the Gap
– Prioritize
– How to overcome
• Establishing a XXXXX and Gemini Partnership
– Examples of similar efforts
– Added value
• Lay Out Path Forward
–
–
–
–
–
Objectives
Action Plans - Next Steps
Major mile stones
Roles & Responsibilities
Measurement and Tracking
• Where and How to Start
• Close
3/23/2016 12:37
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