Covestro takes ownership of its new name with a new culture

 

When Covestro LLC was announced as the new name for Bayer MaterialScience — after being spun off from the Bayer Group — it wasn’t met with enthusiasm.

Saying the reception was lukewarm would be being positive, says Jerry MacCleary, president of Covestro in North America.

“We had employees who said, ‘Can we do a do-over again and come up with a new name?’” he says.

While people appreciated the colorful logo’s visual impact, MacCleary says their customers and his colleagues, CEOs in the Pittsburgh community, made fun of it. They asked him how to pronounce it and what it had to do with a chemical company.

Covestro manufactures high-tech polymers for plastics, polyurethane foams, codeines, adhesives and specialty applications. Its materials are found in mattresses, laptops, running shoes, building and refrigeration insulation, automotive headlamps, car seats and more.

Globally based in Germany, the company’s North American headquarters in Pittsburgh oversees about 3,000 employees in 10 locations in the U.S., Mexico and Canada.

Own it; evolve it

MacCleary, who has been with the company for 37 years, was celebrating his 25th wedding anniversary in California when he got the call that Bayer AG had decided to spin off its material science division. It was Sept. 17, 2014.

Bayer had successfully spun off pieces of its business in the past, including LANXESS.

“The next day, I had to stand in front of all the people here on Pittsburgh campus,” he says. “We informed them about the spinoff and the opportunities that we see facing us, and maybe some of the challenges (of what) we thought was a great decision. We didn’t want to lose our history, but we had to look forward and at what was best for us.”

Restructuring the organization into a standalone business made many apprehensive. While the division had gone through various names, it had always been a part of Bayer.

Even after the legal split in January 2015, no one knew what the new name would be. The name Covestro was announced in June and the global carve-out was complete by September.

There was a lot of hype around the reveal of the new name and when people first heard it, it felt anti-climactic, says Alice Sox, manager of external communications. Plus, while Covestro built up its organization and hired 50 or 60 people, she says they had to introduce the new culture, the new identity, and get employees to buy in.

“A lot of anxiety set in and then, of course, the question is how can we be successful on our own without Bayer and a big name and the large company behind it?” MacCleary says.

While some got on board early, many people watched and waited. But MacCleary told all the employees: “It is our name and it’s up to us to make that name what we want it to be, what it means to us.”

He also spent time explaining where the name Covestro came from. A large global branding company pulled pieces of the identity already in place: collaboration (CO), invested (VEST) and strong (STRO). Covestro also included a new set of values: curious, courageous and colorful.

“There was a story,” MacCleary says. “So when I start telling the story to a lot of my customers and others they said, ‘OK. OK. I’m getting it now. I just need to get used to this name.’”

Sox was surprised how in just a few weeks after the Covestro announcement, the employees started to embrace the changes.

“There was almost an underdog sort of enthusiasm for the new company,” she says. “It was like, ‘Hey, that’s our name, that’s who we are and we’re going to own it.’ And they did.”

Make it visible

While a project team transitioned daily operations, the bigger challenge was developing a new culture. After being with the same company for 25-plus years, there was pride and comfort in the Bayer name.

MacCleary says even the senior people wondered if they had the right skill set to lead Covestro into the future. He also received emails and texts from employees asking about the company’s volunteerism and STEM (science, technology, engineering and math) programs.

After various roundtables and town halls where MacCleary and his leadership team listened and learned, Covestro had its first kickoff with big events at all sites.

“About three, four weeks later, all of a sudden, they came back and said, ‘Well Jerry, where is all the excitement and where’s the change?’” he says.

With the same people and campus, it seemed like the same gray, old chemical company. So, MacCleary got with a few colleagues and someone came up with the idea of painting the walls with the new logo colors.

The employees loved it, and the idea spread to all buildings on the Pittsburgh campus and all plant sites.

In addition, MacCleary says they put up their own artwork to showcase the products, people and their families, redid company display cases and remodeled internally to make it brighter and more open.

“We started feeling the change and that’s when we started acting and doing the things that really live up to our new values and our culture,” he says.

Visual changes were the seeds to start impacting people’s attitudes and the culture, MacCleary says.

Advertising at the airport and a lighted lawn sign that people see driving by or flying over the Pittsburgh campus were additional physical changes that impacted the community.

“You can’t force it, you can’t force change,” he says. “You can’t force employees to like working there — you better walk the talk, you better live it.”

While it’s impossible to involve everybody, it’s important to give people a channel to have a voice. MacCleary says he and his team communicated the good and the bad, being as transparent as they could about changes to policies, compensation, benefits, etc.

That transparency — and MacCleary’s long tenure — helped build trust.

Employee ambassadors

Covestro also kept its corporate social responsibility. Not only did it send a strong message of its commitment to the employees and the region, it helped get the new brand out into the community.

Covestro sponsored rooms at the Energy Innovation Center and the Carnegie Science Center, while continuing support at Robert Morris University.

“Those are the kind of things — the three legs that we stood on to define who Covestro was,” MacCleary says. “So you saw the physical change, what we’re doing in the community, and what we stand for in science, research, energy efficiency and sustainability. You start bringing those pieces together and that’s all the actions we were taking to help build this culture.”

If the employees feel connected, valued and engaged, that will show, he says.

It’s an ongoing journey and the leadership team is still learning how to be flexible and empower the employees. MacCleary wants his employees to feel comfortable sharing ideas and asking questions without fear of consequences or judgment.

“An individual, a CEO, cannot do it by himself. They can help lead the charge, help break down barriers and help make sure the right change does happen, but ask your employees,” he says. “They can sure tell you what needs to be done. And if you listen, you make the right change, you’re going to be successful.”

He thought it might be hard to recruit without the Bayer name, but Covestro still gets calls where people say that they’d like to work at the company, after they met the employees who were volunteering, out there carrying the Covestro name.

“We use a saying at Covestro, we say: diversity is our strength, inclusion is our commitment and innovation is our direction. That makes up what we want to be,” he says.

It all starts with the workforce, which still delivered strong business results throughout the transition.

“I tell them all the time at a town hall, ‘Keep doing what you do best; deliver results’ — and they do. No matter what they’re faced with, they voice it; they go back to work,” MacCleary says. “It’s something that I applaud all of them (for). I have so much respect for all the employees here that continued doing that year in, year out for this region.”

Not only has Covestro added social mixers to help employees connect, it was named a best place to work in 2016. While Covestro had never participated in these competitions in the past, an 84 percent response rate from the 750 Pittsburgh employees was encouraging to MacCleary, who welcomed even constructive criticism.

“That’s something that we take some pride in, it gives us a little feedback that we’re making progress,” he says. “Now, of course, we have to sustain that momentum.”

But he believes if the employees are happy, they’ll be ambassadors and continue to build the culture.

“We’re heading in the right direction. We’ve just got to make sure we keep working on this and never get complacent,” MacCleary says.

 

Takeaways:

  • Physical changes can spark mental ones.
  • Engaged employees are the best brand ambassadors.
  • First, listen and be transparent; then trust will come.

 

The MacCleary File:

Name: Jerry MacCleary
Title: President
Company: Covestro LLC

Education: Bachelor’s in accounting, West Virginia University

What was your first job and what did you learn from it? I took on my first job in seventh grade, working as a golf caddy for a local country club. This meant jogging around the course weighed down by two large, heavy golf bags. In that sense, I learned the value of hard work and perseverance. But I really credit that job for helping me to build strong interpersonal skills. When you’re a seventh grader talking to people at a country club, your success is strongly linked to your social intelligence.

What other business leader do you most admire and why? That’s a tough question to answer because there are a number of leaders I admire for different reasons. Close to home, I think of Tom Usher, Tom O’Brien and Jim Rohr — all of whom led major companies through transformative periods while also driving Pittsburgh’s latest renaissance. They were insightful executives who knew how to get things done.

Of course, you can’t talk about Pittsburgh’s influencers without acknowledging the Hillmans and the Rooneys — civic leaders and philanthropists whose legacies will shape this region for years to come. They taught us the importance of giving back … in a quiet, unpretentious way.

You’re on several nonprofit boards. Where do you see the biggest change in this sector? Our region is fortunate to have so many nonprofit organizations. That’s what makes this city so special. The challenge I see today is the pool of financial supporters is dwindling, as some major contributors to these nonprofits prepare for retirement and move away.

We have an opportunity now to engage the next generation in giving back — not only in terms of their time and talent, but also from a financial perspective. Happily, what we’re seeing through our work at the Covestro Institute for Engagement is that the next generation is passionate about finding purpose in the community, and I’m confident the donor base will grow.

What advice would you give yourself, if you went back to the beginning of your career?

I would strive for a greater work/life balance. I was always taught to work hard and give my best. That philosophy has earned me a long and rewarding career, but also a very demanding one. I’ve been fortunate to have a family that was both understanding and encouraging, but there were some important milestones I missed as my kids were growing up — and you don’t ever get that time back.