Five dollars a share.
That was the new reality when Michael Barry became chairman, president and CEO of Quaker Chemical Corp. in 2008. The manufacturer of specialty industrial chemicals, which trades on the New York Stock Exchange, had a stock worth $30 a share just several months before.
Then the economy’s bubble burst, and almost as quickly as a lightning strike can fell a tree, Barry was left staring at the shattered remnants of his company’s once-healthy stock.
Five dollars a share. And the end of the free fall was nowhere in sight.
“We went from making money to losing money, almost immediately,” Barry says. “And nobody knew how bad this would get. Nobody had perfect visibility about how long this was going to last.”
With less than a year on the job, Barry was immediately thrust into the crisis of a career.
“We had to take some really dramatic action,” he says. “We pulled together our senior management team, trying to get everyone involved at the senior-management level, helping us to make some of the important decisions we would need to make.”
Barry and his leadership team made the decisions that many leaders made in that time frame: They slashed the global workforce of Quaker Chemical, eliminating between 10 and 20 percent, depending on the region.
They cut the company’s 401(k) program, eliminated all bonuses and tried to spread an even coating of adversity throughout the entire organization.
Along the way, Barry acted as a guiding hand for his reeling team, keeping them as informed as possible, every step of the way.
“We communicated all the steps we had to take and did it continuously,” he says. “Maybe people weren’t happy with the news, but they felt we treated them fairly. They felt we did a good job of keeping them informed.”
Don’t clam up
In a time of crisis, your instinctual reaction might be to perform damage control on your company’s reputation. While you should take steps to salvage your company’s good name, if your methods of reinforcing your company’s reputation extend to sugarcoating, half-truths and other opaque messages, you’ll end up creating more harm than good —particularly if that’s your communication strategy with your own employees.
It’s difficult to swallow your pride and tell your people that you don’t have all the answers, to admit that the future is uncertain, but it’s a necessary step in maintaining long-term trust with your people.
Barry realized that early on and made it a point to maintain a frank, honest and ongoing dialogue with his team. It’s something that has continued throughout Barry’s tenure.
“Making communication a dialogue is, admittedly, something we have struggled with,” Barry says. “What we have done is, during our meetings, myself or my direct reports are talking, and we try to get people engaged and involved with the conversations. We turn it into a town-hall type of meeting. That concept evolved, and then we started bringing together smaller groups of people, including the people who report to my direct reports — so a couple of layers down in the organization.”
The people on that level then bring the messages from those meetings to their own teams, and facilitate dialogue within their area of the company.
“In a smaller group with their manager, your people might feel more comfortable asking questions,” he says. “So we try to give all those managers talking points and answers to frequently asked questions.
“With those kinds of sessions happening all around the globe, we’ll gather the questions people have been asking to see if there are any underlying themes — something everybody is asking, but we’re not doing a good enough job of telling them. But you need to keep that dialogue going, make those meetings a two-way street.”
When enduring hardship, particularly on a global level, culture becomes an increasingly important topic to address as the storm clouds gather. When your business is in survival mode, you might find yourself focused on the financial steps you need to take in order to guarantee your company is still operating at the end of the month or end of the year.
But neglecting to focus on your core values, mission and vision for the future — even if that vision is years away from realization — can have damaging effects to morale, employee confidence and, by extension, your company’s ability to keep its talent pool intact.
“We have spent a lot of time on culture,” Barry says. “We communicate it frequently because it is such a critical aspect of how we operate, how we feel, how we collaborate. You have to consistently reinforce what you are as a company, and we’re a very collaborative company. It’s a key to our business model.
“So during that time period when we were going through the worst of the recession, we talked about it a lot. We even put it on our computer screensavers, highlighting messages that reinforced the core values of the company.”
But messaging on your values and culture is like a booster shot. The real dosage of medicine comes from your actions.
“If you don’t live the culture, people will figure that out pretty quickly,” Barry says. “If you have people in the organization who don’t live the culture and you don’t take steps to correct that, it becomes a problem. A large piece of this is the ability of you and your leadership team to walk the talk.”
Add to the momentum
Though some of them were unpleasant to endure, the initial steps that Barry and his leadership team took in late 2008 and early 2009 helped Quaker Chemical to not only weather the worst of the recession but to quickly emerge from its down cycle in an aggressive growth mode.
Within six months, the company had started to grow again. After employing a workforce of about 1,300 in mid-2008 and dropping below 1,200 after the rounds of cutbacks, Quaker Chemical now employs about 1,600. Net sales for 2011 topped $683 million, an increase of more than $139 million from 2010.
Whether your recovery takes six months or six years, you need to show your people the progress that the company is making. Victories and milestones, however small, can help increase employee confidence. During the recession, you played not to lose. The victories your company gets on the rebound can change that mentality. You want to play to win.
“I think people saw our progress mainly through our performance,” Barry says. “We’re a public company, so they saw right away that we went from losing money to breaking even and that we did it in the span of a quarter.
“Then after breaking even, we started making money, and in each subsequent quarter, we started making more money. That was the biggest encouragement we could have given them, because it gave everyone in the company evidence that we were doing the right things and taking the right steps. People started to feel more secure in their positions.”
As you begin to see daylight, you can use opportunity to take stock of where your company is and what your growth strategy should be as you move forward. Throughout 2010, as Quaker Chemical began to add momentum to its rebound, Barry and his team continually analyzed the company’s strategic position and where it needed to be in order to continue to prosper in the future.
“We used it as a period of time to step back and look at our whole business strategically,” Barry says. “We did a very large strategic planning exercise. We evaluated the markets we are in, as well as adjacent markets we should think about entering, all with an eye toward taking our business to a different level.
“It was a process that involved a number of our associates, certainly on our senior management team but also a good number of people from our middle management. It allowed them to have an impact on how we were going to move the company forward.”
It comes back to the atmosphere of collaboration that Barry tries to perpetuate. Collaboration is a major component of engagement, which is a major component in companywide momentum and long-term success. It’s also an effective way to spread best practices throughout your company’s footprint.
“That is a key aspect of our company that we used to help us as we moved forward,” Barry says. “We have people all over the world, in every industrialized country, and we are working very collaboratively to help each other out. That is critical for your success.
“If we have a person in China who is having an issue with one of our steel customers, that person can rely on others within the company. They can tell another person through various company avenues that they’ve been having an issue with a customer.
“You want to develop a nonpolitical culture, where you are focused on doing the right thing and doing the ethical thing, where you’re not consumed with who gets the credit and who gets the blame.”
How to reach: Quaker Chemical Corp.,
(610) 832-4000 or www.quakerchem.com
The Barry File
Name: Michael Barry
Title: Chairman, president and CEO
Company: Quaker Chemical Corp.
Education: B.S. in chemical engineering, Drexel University; M.B.A., Wharton School of the University of Pennsylvania
What is the best business lesson you’ve learned?
You need to get buy-in whenever you are making a significant change in a company — whether in strategy, direction or anything else. You need to get buy-in from senior management and any other key people who are influential in the organization. There are two reasons for that. One, you need to get your best thinkers involved in any major change. Two, you need to get buy-in from the people who will make the change happen and instill the change in the organization.
What traits or skills are essential for a leader?
You need to be able to listen. You need to be able to make a decision and stick with it. You need to create a vision and a strategic direction for the organization. Part of that is establishing appropriate goals and holding people accountable to that, and creating the right culture for what you’re trying to achieve. You also need to be able to get the right people in the right places, and let them do their jobs, because it’s not about you, it’s about the people in the organization.
What is your definition of success?
It’s achieving your goals, be they business or life goals. Establishing a goal, and then achieving it, is success to me.
Communicate during a crisis.
Create a dialogue with employees.
Use your wins to generate momentum.