Andrew Liveris leads Dow Chemical by finding and developing talent that can achieve both short-term and long-term goals

Andrew Liveris, chairman, president and CEO, The Dow Chemical Co.

Andrew Liveris, chairman, president and CEO, The Dow Chemical Co.

This past November, Andrew Liveris went to the White House for a meeting with the president. That in and of itself is a pretty significant life event, but in Liveris’ case, it was as much about the journey as the destination.

Liveris is the chairman, president and CEO of The Dow Chemical Co. A native of Australia, he’s held numerous positions at Dow over the span of nearly 40 years — roles that have taken him to places such as Hong Kong and Thailand, before eventually moving to Dow’s Midland, Mich., corporate headquarters, where he became CEO in 2004 and chairman in 2006.

As the head of a $57 billion corporate giant, Liveris was among a group of influential CEOs invited to the White House to take part in a meeting on jumpstarting American business with President Barack Obama.

The Australian who came to America by way of Asia now sat in a room with the leader of the free world, among those tasked with helping to chart a course to rebuild key economic drivers as the country — and world — continues to recover from the recession.

“The conversation we had, with a dozen CEOs across various business sectors, it felt like a different meeting than any previous we have had,” says Liveris, who spoke as part of a presentation at the 2012 Ernst & Young Strategic Growth Forum.

“The president has had a lot of things written and said, and he takes it pretty personally when he hears that he doesn’t know business. Frankly, the evidence over the past 3½ years is that he doesn’t work with business and doesn’t know business.

“So in this meeting, he didn’t talk all that much,” Liveris says. “He let us give it to him, and we let him know what it would take to create a growing America again.”

For Liveris, it was an opportunity to step back, reflect on where his company had been over the past few years, and where it was headed —  and what steps he and other influential business leaders would need to take to ensure that their companies, and the whole of American business, would remain strong into the future.

Understand the landscape

By his own admission, Liveris was kind of naïve in his first couple of years as a CEO, particularly when it came to the business community’s relationship with government.

“I thought I would go to Washington, talk about the things that matter to my company, then I would leave and something would happen,” Liveris says. “That clearly did not work.”

After a number of trips to Washington with little progress in developing the business-government relationship to the point that it produced results, Liveris realized that no one on either side truly had a grasp of the game they were playing.

“I remember when I was watching TV and hearing about how American manufacturing had to die, how it had to move overseas because of labor costs,” he says. “That’s when I realized that absolutely no one was getting this.

“No one understood innovation, technology, or how one invents. No one understood the business models of creation, of new wonderful things that help humanity, things that are an American right.

“We have done this for over 200 years and yet we’re saying we should no longer manufacture, and we should just be a service economy,” he says. “If you want to be a service economy, go to the U.K. and see how it worked for them.”

Liveris says Silicon Valley is a hub of innovation, in large part because it is full of big companies who try to maintain a small-company mindset. If you can marry the resources of a major corporation with the flexibility and creativity of a smaller enterprise, you can hit an innovative sweet spot. It’s a position Liveris has tried to assume at Dow.

“Silicon Valley is an intersection of incredible academic institutions and entrepreneurs inventing, innovating and allowing startups,” he says. “That’s what I do. I have $1.7 billion in R&D, and I’m doing that every day. I’m innovating and trying to scale up. That is manufacturing.”

Liveris wants Dow to set a tone for innovation throughout the country. He wants companies, both large and small, to think in terms of innovation and developing ideas.

“This country needs dozens of Silicon Valleys,” he says. “It needs innovation hubs throughout the country. That was recommendation No. 1 from the meeting with the president. The president will give legs to an advanced manufacturing partnership, within which we have identified 11 technologies that America can win on a global basis.

“We have picked the technologies where America can win, not by creating winners and losers among companies, but by designing an innovation hub so the best minds in America can participate, including entrepreneurs, big companies and some government money to stimulate creativity and scale things.”

Invest in human capital

Innovation needs fertile ground. It needs companies that invest in the resources that enable innovation. It needs executives and managers that sustain a culture capable of promoting innovation. You need programs that reward and promote innovative thinking.

But those factors alone won’t drive an innovative mindset. You need to recruit the talent to innovate.

Even if you don’t budget for R&D the way Dow does, Liveris says innovation-minded talent is a must for any organization that wants to grow and evolve.

“I am a great believer that rigor mortis sets in unless you create a burning platform,” Liveris says. “People get comfortable and complacent quickly, especially the larger you get as an organization. You have to change things.”

When Liveris was named CEO of Dow, he called up a number of successful CEOs who had succeeded in driving large-scale change throughout major enterprises, asking for advice on preventing complacency and enabling innovation.

“One of them gave me this great piece of advice,” he says. “It had to do with the phases of change that cause the human pipeline, the talent pool, to respond and be its very best.

“It’s about the moon shot, the mission. If I can be inspired by the mission, be energized by that, that’s the key. I have to create that dynamic inside the top and middle ranks of the organization, and more importantly, the front line people.”

To Liveris, leaders get elected every day. Each day is an opportunity to create buy-in throughout the organization, an opportunity to inspire employees to follow the path blazed by leadership.

“You lead change,” he says. “You build a team around change. You have to do it with the long vision in mind, but with the idea that the short-term needs have to be met. We all suffer from ADD.

“We have become an ADD society where everything is breaking news, so the dynamic around a company — particularly a public company — can kill the long vision. You have to deliver in both the short-term and the long-term, and if you live those two paradigms, you need a unique type of human talent.”

Liveris calls it “living intersections” — finding and developing talent that can achieve both short-term and long-term goals.

“No longer do we do single-lane highways,” Liveris says. “We’re living intersections all the time. The intersections between the short-term and long-term require a unique type of talent — sometimes we call that change manager a change leader but that’s too high level.”

The managers you bring in to help spur change and formulate a vision for the future while delivering short-term results have another important set of opposite-end factors to master: They must understand the business from a global level, while still grasping the effect of the vision and goals of the organization on individuals working at ground level.

“You do still have to get down to the three-foot level,” Liveris says. “What does it mean to the person on the floor? What does it mean to the R&D leader? What does it mean to the salesperson?”

And no matter what position a given person fills, that person’s talent will only reach its potential if you can tie their individual and department goals to the overall goals of the organization, and then reinforce innovation-centered values that emphasize a willingness to create, experiment and learn from mistakes.

“You can’t box people into something and say, ‘Go invent,’” Liveris says. “You have to give them a chance to fail. You have to let them be a part of the entrepreneurial activity. You need to motivate them to see how their project, their work, can change humanity.”

How to reach: The Dow Chemical Co., (989) 636-1000 or www.dow.com

The Liveris File

Liveris on Dow’s history of success: We’re actually one of nine companies that are still around from the inception of the New York Stock Exchange. There are only eight others who were there since the beginning. We’re not afraid of change. I didn’t get this gray hair easily; it came hard. We have in our DNA the willingness to face reality and take the change and bet the company. To be companies of size, that’s a lot of heavy lifting. I’d like to say we’re in the seventh inning … from a portfolio point of view. We have the technologies. We have the weapons but we’re in the second or third inning from a cultural point of view.

Culture is every person in the company, and Dow has a value proposition at the personal level. As a young chemical engineer, I had a lot of offers, but I chose to leave my great country of Australia to live in this great country, not because I think you’re greater but the company called Dow has a better value proposition to a human being. I was attracted by the people.

Liveris on sustainability: One day Dow Chemical won’t be known as Dow Chemical; it will be known as Dow. Dow sticks to the brand of the diamond (logo). The brand will stand for … our commitment to sustainability, but not sustainability as a noun, sustainable as an adjective. Sustainable business, sustainable profits, sustainable planet are the same things. How you actually marry the intersection between environment, economy, society, business, government, society.

Takeaways

Understand your industry.

Value innovation.

Find and retain great talent.

How Dominic Gallello turned around MSC Software to help the Mars Rover land on the red planet

Dominic Gallello, president and CEO, MSC Software Corp.

Dominic Gallello, president and CEO, MSC Software Corp.

Technology

FINALIST

In 2009, Dominic Gallello was tasked to turn around a company known for expensive and difficult-to-use software. The mismanaged and ailing MSC Software, founded in 1963 to assist with simulations for the space program, had not updated its products in far too long, customer churn rates were high, and there was no spark at the company.

Gallello set out to build and communicate to employees a comprehensive strategy framework that reduced general and administrative expenses from 19 to 11 percent in the first year. He cut $40 million from operating expenses in his first two years. Gallello expanded R&D by 40 percent, brought on more than 40 doctorate-degreed employees through hiring and acquisition, and initiated the development of a next generation computer aided engineering (CAE) system to be brought to market this year.

In less than five years as CEO and president, the company has embraced his vision, and his team is highly motivated to develop the solutions for existing and new customers. At MSC, he leveraged the synergy between the improved morale and the new technology to help customers change the world — which is precisely what the company is doing: The company was instrumental in simulations of the entry descent and landing for the Mars Rover Curiosity mission.

Gallello introduced a culture of “You never stop learning at MSC.” He encouraged managers and individual contributors to pursue professional development and funded their efforts.

He started a high-potential employee program (“Managing your Career”) to build future leaders and a management development program (“Managing by Influence”). Gallello believes that personal success should be celebrated, but must also come with responsibility.

He and his family have personally funded construction of five orphanages in Romania in the past five years and they call more than 100 children their own. Gallello also is funding the development of a farm in Romania for teenagers who cannot find jobs after high school.

How to reach: MSC Software Corp., www.mscsoftware.com

How Zachary Boca and Dan Ushman went from chat room buddies to partners and founded SingleHop

Daniel Ushman, co-founder, SingleHop

Daniel Ushman, co-founder, SingleHop

 

Zachary Boca, co-founder, SingleHop

Zachary Boca, co-founder, SingleHop

Private Equity/Venture Capital Backed

FINALIST

Zachary Boca and Dan Ushman were chat room buddies on AOL at age 13 — little did they know then that they would later collaborate on a cloud computing startup company, SingleHop.

They shared interests at that young age and continued to stay in touch as they worked toward developing their own businesses. Later as partners, they put their heart and soul into the success of SingleHop.

SingleHop is a leading global provider of hosted IT infrastructure and cloud computing. Over the last decade, clients all over the world have been choosing SingleHop for its speedy blend of automation and service.

As a result, both men have seen triple and double digit percentage revenue growth for SingleHop since inception. But maintaining these record-breaking benchmarks is no easy task. They are also cognizant of growing too quickly for their own good and have focused on sustainable growth going forward by expanding their customer base but staying true to their original concept of highly automated cloud computing services.

Hiring the right people for the right teams allows Boca and Ushman to let go of the reins a little when it comes to managing the company. They believe that they have allowed their employees to have a vested interest in the shared success of the company. They both have made an effort of employing highly qualified individuals that keep the hosting process at the forefront of changing technological advancements.

With teams that are a good mix and balance of seasoned professionals who bring insight from other experiences and new talent that has innovative vision and hunger for success, the recipe is bringing positive results.

Boca and Ushman construct a yearly plan for SingleHop, which is built from the bottom up and requires each department to contribute its own ideas for continued growth. This culture allows everyone to contribute to the entrepreneurial efforts and encourages ownership and transparency across all levels of the organization.

How to reach: SingleHop, www.singlehop.com

How Jonathan Ord and DealerSocket are helping automobile dealerships connect with customers

Jonathan Ord, co-founder and CEO, DealerSocket Inc.

Jonathan Ord, co-founder and CEO, DealerSocket Inc.

Technology

FINALIST

The goal of Customer Relationship Management (CRM) software is to be able to manage all customer touch points on one system to improve both the end user and consumer experience — and Jonathan Ord is an expert in it.

Ord had a friend in the automobile industry who expressed frustration with the multiple systems he was using to track one customer at his dealership. Through continued conversations with this friend, Ord went to work creating a CRM for the dealership space. In 2001, Ord co-founded DealerSocket Inc. with the goal of helping auto dealers manage every interaction and touch point with their customers on one platform.

In order to put his vision and plan into motion, Ord, who is also CEO, took out a mortgage on his home and started DealerSocket in his garage. Initially his customers felt the software didn’t interface well with the sales force on the floor. Thus, he offered to work without pay at a dealership for a year to gain a better understanding of his customers’ needs.

Ord aspired to help the automotive industry and make all customers fans of DealerSocket and its products. In the first year of business, 15 clients were signed, and in the second year, the number grew to 38. Today, DealerSocket serves more than 3,000 dealers in the U.S., Canada and Australia, and supports 100,000 active users.

Even during the near collapse of the automotive industry from 2006 to 2008, Ord continued to improve his products so that dealers could survive and carry on. As a result of its persistence, DealerSocket now has 20 percent U.S. market penetration and is striving for more.

The vision and plan for DealerSocket is to continue to be the No. 1 CRM for auto dealerships through customizing CRM for large dealer groups, expanding into other countries, and developing or acquiring products that make sense for the company’s software suite.

How to reach: DealerSocket Inc., www.dealersocket.com

How a team of entrepreneurs launched a Peerless Network

John Barnicle, president and CEO, Peerless Network, Inc.

John Barnicle, president and CEO, Peerless Network, Inc.

 

Doug Lee, CFO, Peerless Network, Inc.

Doug Lee, CFO, Peerless Network, Inc.

 

Richard Knight, EVP sales/marketing, Peerless Network, Inc.

Richard Knight, EVP sales/marketing, Peerless Network, Inc.

 

Scott Kell, EVP operations, Peerless Network, Inc.

Scott Kell, EVP operations, Peerless Network, Inc.

 

Jim Brewer, VP voice operations, Peerless Network, Inc.

Jim Brewer, VP voice operations, Peerless Network, Inc.

 

Tony Hiller, VP engineering, Peerless Network, Inc.

Tony Hiller, VP engineering, Peerless Network, Inc.

Emerging Entrepreneur

FINALIST

There were six would-be entrepreneurs incubating at a company called Focal Communications; after each left the business on his own accord, they came together in 2008 to build a venture that they felt had no peer.

The result was Peerless Network, Inc., one of the largest interconnection networks in the country. Through Peerless, wireless carriers, local exchange carriers and cable companies can connect with each other

Under the leadership of John Barnicle, the entrepreneurs created a culture that is acutely focused on providing excellent customer service. Barnicle has a great deal of respect for the team and has established a culture designed to achieve results which are fair and rational.

The entrepreneurs have built a team of committed individuals. Peerless has experienced very low turnover in its workforce. In building the team, the entrepreneurs focused on recruiting individuals they have experience with. They have provided many of their employees with stock options, which has contributed to their success in attracting and retaining talent.

Each of the entrepreneurs has responsibility for a particular function, including finance, sales and marketing, operations, voice operations and engineering. Due in a large part to a focus on excellent customer service, personal attention and technological innovation, the company has never lost a single customer.

Peerless’ approach to winning and keeping business is somewhat unusual in the telecommunications space. Company leaders believe that the personal relationships they have cultivated are key to Peerless’ initial and continued success.

In building its business, Peerless has been able to leverage the historic relationships of each of the entrepreneurs to establish a trust with prospective customers. This trust, along with the reputation the individuals have within the telecommunications industry, has ultimately attracted customers to Peerless.

While the entrepreneurs’ relationships with customers have helped to win and keep business, Peerless’ ability to provide superior services has been the real key to the company’s success.

How to reach: Peerless Network, Inc., www.peerlessnetwork.com

How Anand Nallathambi led CoreLogic through a separation from First American Corp.

Anand Nallathambi, CEO, CoreLogic Inc.

Anand Nallathambi, CEO, CoreLogic Inc.

Financial Services

WINNER

A large part of Anand Nallathambi’s career has been working for subsidiaries of insurance company First American Corp. He has held several executive and CEO positions over the years, and in 2010 he was appointed CEO of CoreLogic Inc. He guided the company through its separation from First American Corp. to become publicly traded.

Since the separation, Nallathambi has developed a world-class executive team and repositioned the company to be the leading provider of data services and solutions in its markets. Following the separation of CoreLogic from FAC, Nallathambi developed a bold strategy for transforming the company into a higher-growth, higher-margin leader.

The four key elements of this strategy included refocusing CoreLogic on its core operations, transforming the organization from a fragmented and distributed model to one integrated team, reshaping the cost structure and reducing costs, and reinvesting in products, services, technology and people.

As part of his plan to overhaul CoreLogic, positioning the company to lead in the markets it serves, Nallathambi reorganized the company into three core segments to further drive focus and accountability. The operating segments were Data and Analytics, Mortgage Origination Services, and Asset Management and Processing Solutions.

Over the course of 2011 and 2012, CoreLogic exited five non-core businesses and sold or exited numerous smaller units. Although these units collectively generated significant revenue, their business models lacked significant data, intellectual property and scalable returns to support Nallathambi’s long-term strategy.

To drive margin expansion and create funds to reinvest in the business, Nallathambi launched Project 30 — CoreLogic’s enterprise-wide productivity improvement program — to significantly reduce technology and corporate shared services costs. Through 2012, Project 30 has delivered $82 million in total savings.

Many of the company’s recent accomplishments are due to Nallathambi’s ability to build confidence in CoreLogic employees, clients and investors. He made difficult decisions to dramatically improve productivity and operational execution.

How to reach: CoreLogic Inc., www.corelogic.com

How Dinesh Ravishanker is living his dream and driving CallFire to ever greater heights

Dinesh Ravishanker, CEO and co-founder, CallFire

Dinesh Ravishanker, CEO and co-founder, CallFire

Technology

FINALIST

Dinesh Ravishanker and a team of graduates from the University of California, Irvine, did not have a lot of money in 2004 when they set out to launch what has become a game-changing business in CallFire.

But they had a passion for innovation and the energy to build a company that would transform the way the business world communicates. The result is a company that has grown its customer base to more than 100,000, with 15,000 new users coming aboard in 2012 — without a dime of venture capital.

CallFire simplifies telephony, making sophisticated and expensive carrier-class telecom capabilities available through affordable and easy-to-use graphical user interface and application programming interface platforms. Any business, from start-up to large enterprise, can reach its customers on any device using text message or voice.

Ravishanker, CallFire’s co-founder and CEO, is committed to building a company that will have staying power and be able to evolve as the fast-paced world of technology moves forward. In order to do that, he knows he’ll need employees who have a diverse skill set and a willingness to tackle new challenges as they come up.

CallFire has a number of health initiatives in place including nutritious food alternatives on-site and the promotion of athletic activities. Ravishanker also encourages employees to continue learning and attend seminars to gain new skills that can help them be more productive in their work.

He wants to build a brand that people associate with a strong work ethic and a spirit of customer service. But Ravishanker also wants the brand to stand for love of community and compassion for those who haven’t experienced as much success in life.

During a vacation, Ravishanker traveled to Nicaragua where he worked with a group of speech pathologists to help children overcome their speech problems. He also helped renovate two orphanages. This spirit to help is what he encourages in his people as they seek their own path to give back.

How to reach: CallFire, www.callfire.com

How Demian Sellfors expects employees to both work and play hard at Media Temple

Demian Sellfors, CEO, Media Temple

Demian Sellfors, CEO, Media Temple

Technology

FINALIST

Demian Sellfors has always been ahead of his time. That aspect led the self-taught IT professional and graphic design artist to branch off from an established special effects studio and begin his own web-hosting company in the humble confines of his apartment.

He focused on offering the best in both quality and customer service, and the public took notice. Soon, Sellfors’ company was acquired by one of his customers, Media Temple, which recognized his ability to lead and appointed him CEO 12 years ago. The company grew as Sellfors took a hands-on approach working directly with employees to coach, mentor and nurture the skills within each.

If you ask Sellfors his greatest contribution to the company’s success, he would dismiss his role as an innovator and instead point to his ability to inspire greatness in others.

One of the challenges he faced was determining how to position his company among its competitors, many of which were caught in a downward spiraling price war. It prompted Sellfors to follow a new strategy — Why not offer the best quality for the highest price?

Media Temple maintained its product positioning with great success, boasting the industry’s lowest churn rate of 1.3 percent compared to the industry average of 3 to 7 percent.

In the workplace, Sellfors is all about success, but he wants the pursuit of that success to be filled with fun and personal fulfillment. There is yoga and CrossFit at lunch and a catered meal every other Friday.

Children and pets are welcome at the office, and there’s even a nap area employees can use to re-energize.

Sellfors wants his employees to be at the top of their game, and if they need to take a little time off to recharge, they can do it. Each employee gets a paid, one-month sabbatical every three years. It all adds up to the last of the company’s five core values, which is simply, “Enjoy the Journey.”

How to reach: Media Temple, www.mediatemple.net

How Joseph Renton overcame startup woes and soared with the eagles with SSE

Joseph Renton, founder and chairman, Systems & Software Enterprise

Joseph Renton, founder and chairman, Systems & Software Enterprise

Technology

WINNER

Although he was able to surround himself with talented professionals, Joseph Renton seemed to experience every possible problem when starting up a company in 1995. He had launched Systems & Software Enterprises (SSE) and utilized the technology consulting business to fund the development of new hardware products.

There was a lack of available capital, an ever-changing technology market and an aviation industry with tremendous barriers to entry for his in-flight entertainment efforts. But through it all, he never once accepted any venture capital money.

He was determined to see his vision through on his own terms. He knew he had to stay ahead of the innovation curve and that bringing in outside ownership would slow the process of finding creative solutions.

Undeterred, Renton used his relationships with bankers and clients to secure funding and even took out another mortgage on his house to see his company through its most difficult times. He knew that he had built a product that was superior to the competition and was willing to take necessary risks to prove that.

Renton focused on providing his team with interesting projects and establishing an entrepreneurial climate within the company, and he has found that the effort goes much further toward creating employee satisfaction than salary alone.

In 2001 his firm began marketing its first in-flight entertainment systems to major airlines. Soon after that release, 9/11 occurred, effectively bringing the avionics industry to a standstill. Rather than abandoning his vision during these slow times, Renton reinvested in development so his firm would be better positioned than its competition once everything returned to normal.

SSE rebounded stronger than ever, and after a decade of providing successful hardware systems, SSE was acquired by Zodiac in December 2012. However, as a true entrepreneur who is never satisfied, he used the time off to gain clarity and to prepare ways to create value in his next opportunity.

How to reach: System & Software Enterprises, www.imsco-us.com

 

How Daniel Adamany designed a four-step strategy to push AHEAD forward

Daniel Adamany, president and CEO, AHEAD, LLC

Daniel Adamany, president and CEO, AHEAD, LLC

Technology

FINALIST

When Daniel Adamany founded the technology solution value-added reseller AHEAD, LLC in 2007, he knew he had to have a competitive advantage over the competition.

One major strategy was to remain vigilant in identifying the customer’s industry-specific technology needs. To do so, Adamany, CEO of the company, put into effect the Think, Look, Plan, Move strategy — for customers and employees alike.

AHEAD wants its employees to think about their position in the company, look ahead at where they might want to move in the company, plan a strategy to achieve that goal, then move forward and execute that strategy. This philosophy has helped the unique culture at AHEAD to attract and retain highly talented individuals, including former employees of competitors.

For customers, the strategy urges them to think about what their technology needs will be, to look ahead to the future of their industry and future needs, develop a clear vision and plan of action to meet the needs identified in the first two steps, then move ahead and execute the plan in order to succeed.

This framework has been very successful for both AHEAD and its customers, which praise the company for its innovative, and applicable and reliable services.

Adamany continuously looks to improve AHEAD’s offerings and its ability to sell those offerings. In the ever-changing technology environment, AHEAD maintains its competitive advantage by offering package solutions to customers and remaining up to date on technology.

The company’s highly talented workforce is constantly researching new technology solutions developed by other companies as well as investigating the feasibility of developing its own products.

Adamany has been able to attract and retain talented individuals when he started AHEAD by using his own capital to pay employees until the company was profitable enough to handle payroll. It is actions like these that show Adamany’s ambition, passion and dedication.

How to reach: AHEAD, LLC, www.thinkahead.com