Cover Story
Diamond Jim
Jim Cederna, Calgon Carbon's president and CEO, has a gem of an idea for long-term strategic planning.
By Ray Marano
Smart Business Pittsburgh | November 2001
At the simplest level, Calgon Carbon Corp.'s business revolves around a single ubiquitous element -- carbon.
Calgon Carbon may have built a business on a basic, plentiful substance, but like most large companies --and some not so large -- its business issues are anything but simple.
In early 1999, Jim Cederna, Calgon Carbon's president and CEO, came to a company that had foundered over the previous several years. Its stock price had fallen to a little more than $5 a share, and sales were sluggish.
But instead of issuing directives to slash costs and cut the work force, Cederna set aside six months for senior managers and those who reported to them to come up with a strategic plan for the company. A critical prerequisite for success, says Cederna, was the realization that the information gathered and shared would be accurate.
''Way up on the front of this ... we had sessions on trust and teamwork,'' Cederna says. ''If there's something we don't know, we'll say that we don't know.''
Cederna calls the process the ''two diamond'' approach (see illustration). The first step, to diverge, is to begin gathering as much data as possible to try to get a handle on the problems. Cederna's approach was to send out senior managers and their direct reports -- a total of about 50 people -- to collect data. During the initial collection, no conclusions were formed.
''The real art is in defining the problem,'' says Cederna. ''In the first diamond, there's no discussion about where we're going. It's all about where we are.''
Cederna says he was so bent on getting enough information about the company that the process didn't stop with the first collection.
''I sent them back twice because I didn't think they had enough data,'' says Cederna.
Once armed with all the information they could assemble, the managers began to analyze the data, or ''converge,'' and formed a consensus about where the company stood and what the problems were. Once they arrived at a consensus, they went out, or ''diverged,'' once again, but this time specifically to explore the opportunities and solutions.
After gathering all possible solutions and opportunities, they began to once again ''converge'' to winnow down the options until they formed a consensus on what action to take.
Following what seemed like a long period of time to some at Calgon Carbon, the company was able to quickly put the plan into action. Cederna says most of it was implemented in the first half of 2000.
The results seem to bear out the effectiveness of the process. Calgon Carbon's stock has been steadily gaining and is trading at around $9 a share, and Cederna is confident that 2001, despite a lagging economy and the Sept. 11 terrorist attacks and its effects, will be better than 2000.
Cederna says that involving managers in the process from the beginning made implementing the final strategy much more expedient than if it had been done in a more top-down manner.
''Eighty percent of the work is over if you can get to that point,'' says Cederna. ''Whatever time you lost, you more than make up in implementation.'' How to reach: Calgon Carbon Inc., www.calgoncarbon.com
Ray Marano (rmarano@sbnnet.com) is senior editor of SBN Magazine.
