New chapter, similar story: that’s how you might describe CEO John Stanik’s first year leading Ampco-Pittsburgh Corp.
Those similarities are what drew him to the company in the first place.
Stanik served as CEO of Calgon Carbon for nearly a decade, improving a company that was losing money, but had a great series of products.
“The process that we utilized at Calgon Carbon was very effective. It was a proven process, one that I thought could be successful at Ampco,” he says. “I felt that I could make positive change here and that was important to me.”
Stanik retired from Calgon Carbon because of his ailing wife’s health. But after she died, he was looking to start a new chapter and Ampco was the right opportunity.
In today’s down market, it’s been challenging to turn around the $250 million manufacturer with its 1,650 employees and two divisions: forged and cast engineered products, known as Union Electric Steel; and air and liquid processing.
Ampco began a diversification strategy before Stanik came on. Like many others, the company is seeking to structure itself through acquisition or strategic choice in order to be less affected by the cycles of the metals industry.
Unfortunately, the strategy was in the oil and gas business. The business segment had been growing exponentially — $4 million to $14 million to $24 million — but by the middle of May 2015, the market died.
“We had a very effective strategy there, but once again, the market that we choose hit a downturn,” he says.
Despite the market challenges, Stanik is pleased with what the company has accomplished and he’s cautiously optimistic about the future.
“We are really at a point today where we are so much better,” he says. “We have so much more capability that we could offer, if only there was business to be had.”
Here’s how Stanik has helped better position Ampco for today and tomorrow.
Although Ampco and Calgon Carbon faced similar challenges, the situation at Ampco was different. Stanik says he was an outsider, rather than someone who grew up in the company. He didn’t know the operational details and hadn’t had most of the people report to him at one point or another.
“I was dependent on the quality of people here, the amount of experience and knowledge they had about the business,” Stanik says. “I was bringing, so to speak, a series of tools to try and help them create a different future for the company.”
He started with a deep analysis of where the company had been and what was causing the deterioration in results.
You have to get that analysis done first. Get the horse in front of the cart, Stanik says, and understand where your problems are.
“It’s one thing to say that the market is damaging the company, and certainly that was true,” he says. “But it’s another thing to determine whether the company can be made profitable in the downturn. And that was my objective — to establish a company that was profitable in a new normal, and that new normal was in a downturn situation.”
If the market recovered, it would be easy to right the ship. Any company with capacity could grow and flourish in that situation.
Once you understand the situation, Stanik says you want to set a vision for improvement through strategic planning. But you can’t take shortcuts.
You can bring in consultants to structure and organize the process, but there’s only one group that can do the work — your employees.
“They are the ones who understand the business. They are the ones who understand the market,” Stanik says.
The plan has to include well-developed action plans, so it doesn’t become a dust collector. Those action plans must have someone assigned to it, a deadline for completion and a numeric objective result.
“That’s not that hard to do,” he says. “And you can have, like in our case, 100 action plans spread out across the company, and if you keep it alive and you keep it flexible, you’ll get it done. And the results, if you’ve done a good job in the strategic planning part, will come.”
At Ampco, they wanted a strategic plan that could make the business profitable in an organic way. Stanik says that took six or seven months to develop.
The company’s leadership also sought to remove costs that didn’t deteriorate the basic capability of the company, which is referred to as picking or harvesting the low-hanging fruit.
“There wasn’t much that was low hanging, but there was some,” he says. “And we were able to create a series of action plans that could result in a lower cost structure and yet maintain almost the same capability.”
Instituting change with ease
When you’re turning around a business, it demands speed and pace, and change management takes a certain kind of leadership.
Stanik says it starts with being detail oriented. You need the ability to get into the forest amongst the trees, instead of just looking down.
“An organization can become frustrated. It can become tired. It can need a break. It needs to win, which means there have to be celebrations for small victories. And then those small victories have to build into bigger victories,” he says.
It requires flexibility, which means having a plan A, B, C, etc., because things never turn out exactly the way you predicted.
Another key is caring about your people. While the CEO has ideas, it’s the people, who execute those desires, Stanik says.
When the change management starts to get off track, he says, it’s because your people don’t understand where the company is going and how the success will manifest.
Stanik — who enjoys instituting change because he likes helping people identify situations that could be improved — believes a CEO needs to stay in touch and have a deep affection for his or her employees, which is then communicated and believed.
“If the CEO isn’t in the forest, and isn’t in the battle or in the trenches with the people, it becomes, I think, a hollow and unbelievable exercise,” he says.
An ability to care for your people and show it also helps instill a strong culture.
“If a team culture can be established — one of collaboration, one of communication — then a corporation can move together as one, much more quickly than a fractionated organization or a siloed organization that doesn’t communicate and doesn’t cooperate,” Stanik says. “That’s a top down thing that starts with the CEO and the executive team.”
Stanik says the culture at Calgon Carbon when he was leading it and Ampco are exactly the same, which supports his theory that culture starts at the top.
Once people understand what’s going on and get on the same page for what needs to be accomplished, he says they can deal with the problems and find innovative solutions.
For example, he has been amazed at how enthusiastic the employees of Ampco have been to make changes. The labor union also willingly worked with the company to create a forward-looking agreement.
Stanik believes that cultures can be altered and integrated quickly, because in the end everybody wants to do a good job and win.
The definition of winning is to have a long-standing, profitable, growing company, Stanik says. Winning is keeping your job and getting on a career development path.
“Everybody wants that, and if you can show people a path how to get there, you won’t find very many people who don’t want to work with you,” he says. “But you have to get the people convinced that you want that for them.”
Yes, public companies need to have stock price increases and happy shareholders, but it all comes back to the employees, Stanik says. You have to care about them and their future. If you do, then you can change any culture.
“That’s my opinion,” he says. “It’s only worked twice. Well, I shouldn’t assume it worked the second time yet, but I think it will.”
- There are no shortcuts to strategic planning.
- Manage by keeping your employees as the focus.
- A clear, cohesive strategy makes change go down easier.
The Stanik File:
Name: John Stanik
Company: Ampco-Pittsburgh Corp.
Born: Harwick, Pennsylvania
Education: Bachelor’s degree in chemical engineering, Carnegie Mellon University
What was your first job and what did you learn from it? I was a stock boy at a little general store when I was 12 years old and I earned 80 cents an hour. I learned that if you worked hard, did your job and were nice to customers that you would be regarded highly and be valued, no matter how small your job was.
What’s the best business advice you’ve ever received? Always leave things better than you found them. My dad told me that.
If you weren’t a CEO, is there another job that you’d like to try? I wanted to be a teacher.
What happened to that plan? In high school chemistry, math and the sciences really drew my interest, and as I applied to college, I applied to the technical schools within colleges. Being accepted at CMU and having my education essentially paid for in scholarships, I choose that career path.
The engineering curriculum is really flexible. It could get me to virtually anything — sales, manufacturing, management.
As I started to go through that program I learned that an engineer is possibly one of the best problem solvers. The training for becoming an engineer teaches you to be able to solve problems, and I really liked that part.
Do you still use your engineering training today? Yes. It’s very important to being a leader — to be able to cut to the essential information, analyze it and come up with solutions and then, of course, the discipline to follow through and make sure that they happen.