Man of action Featured

8:00pm EDT March 26, 2007
Harold Bevis has his own version of how the concept of survival of the fittest applies in the business world: “I don’t believe the big eat the small; I believe the fast eat the slow,” says Bevis, president and CEO of Pliant Corp. “When opportunities arise, you really have to know how to shift gears.”

Mired in red ink and debt when Bevis arrived in 2003, Pliant was in need of an overhaul. The plastic film and packaging manufacturer faced shrinking shareholder value and a restricted ability to invest in the capital equipment that would make it more productive and competitive.

Bevis, a veteran of two prior turnaround efforts elsewhere, has been able to correct Pliant’s most serious problems by cultivating an attitude of decisiveness and a willingness to attack problems as quickly as possible. “I am an amateur motocross racer and in our company we use a lot of racing analogies,” says Bevis. “One of my favorites is, ‘We will not get hit from behind.’ The one mistake that we don’t make is a failure to act. When a decision is required to be made, we make it.” Here’s how Bevis has conquered some of his biggest challenges as he’s guided Pliant away from trouble.

Be proactive
When hurricanes devastated parts of the United States in 2005, Bevis suspected that trouble in the form of higher materials costs could be looming for the company that was already financially shaky.

He and his team sat down with the likely affected creditors and pre-negotiated terms with them in case Pliant had to go into bankruptcy. Pliant also took time to consider some of the counteroffers made by creditors, some of which accomplished the same financial objectives but were ultimately more favorable to the company.

Sure enough, costs skyrocketed and the company had no choice but to declare bankruptcy last year, but with terms agreed to in principle beforehand, the process went faster and smoother than it might have otherwise.

Bevis also worked decisively to make the reorganization a short one. Because neither he nor his other team members had experience in bankruptcy, Bevis tapped a law firm and investment bankers with deep background and expertise in bankruptcies for the reorganization.

Once the bankruptcy commenced, Bevis wasted no time pushing forward to get the reorganization completed, putting together a team called Project Eagle to guide the process. “We had daily meetings,” Bevis says. “I was the client, I was paying the bills, so I said this is the way I’m going to set this thing up. I said, ‘Guys, I’m going to let this last six months. We’re going to work every day, we’re going to have daily meetings, weekends if we need to.’ The lawyer team had to get a little bit bigger to put up with our timelines. I said, ‘The seven of us, we’re just going to hammer this out in six months. I do not want this distracting our company or spooking our customers or affecting our recruiting processes, any of that.’ So I just stayed focused on resolving that and we did.”

To ensure that the company’s operations didn’t lose a step while the bankruptcy was in progress, he beefed up the top operational team at the same time by bringing in two new senior executives and a new division general manager and a vice president of sales that had worked with him on previous turnarounds.

The work paid off — Pliant accomplished its goal of emerging from bankruptcy in six months and managed to wipe out nearly $600 million in debt.

Look where they say not to
Among Bevis’ first moves to improve performance at the company was to boost productivity at its plants. With a shortage of cash and lead time of at least a year to get new, more efficient equipment, Bevis decided to make changes to lower costs rather than wait for more modern, cost- saving machinery. “When I started, I was told that operational efficiencies were optimized at Pliant and had been stared at for many years, so that was probably not a good focus area for me,” says Bevis. “I asked questions and found the reverse to be true. When I first heard what the waste rates were, I was shocked that they were so high.”

Bevis ignored the conventional wisdom existing within Pliant about productivity — that it wasn’t an area where significant gains could be made — and began by asking basic questions to find out where the waste might be, how the plants were measuring it, and which product lines were the top performers and which were the laggards.

Bevis analyzed waste and utilization data for each production line at each plant and ordered an improvement plan for each. Incentive plans were put in place to reward good performance and productivity was measured and reported on a monthly basis.

A large portion of waste comes during production changeovers when one job is swapped out for the next one. With analysis of work methods and operator retraining, Pliant got the average changeover time down from 10 minutes to 1 minute. “In order to do that, I had to put into place a time-management process,” says Bevis. “I had to get our phase-one changes done in 60 seconds and they were around 10 minutes when I got here. But if you do five changes a day on 190 machines, that adds up.”

Bevis put in place measurements and incentive compensation plans to reward the top-performing plants. He gave plant managers more authority over production schedules.

“I told this group that the only empowerment that you don’t have is the empowerment that you won’t take because I am giving you 100-percent authority to optimize our collective actions to achieve the improvements that we have set for ourselves,” Bevis says.

He says if plant managers aren’t empowered, they are too easily influenced to accept rush orders and change the production schedule, increasing costly changeovers and thereby sacrificing the best use of the time that machines are available for manufacturing product. In four years, Pliant has nearly halved its net waste. In 2006, a couple of its plants were near zero net waste and they have plans to be negative net waste by using the waste of other companies’ plants. “Net waste is a pure earnings hit — you just write it off,” Bevis says. “We are now actually buying the waste of some competitors and reusing it because we know how to and they don’t.”

Remove obstacles
“Our major initiatives are the real deal on driving the company — product development, material development, process development programs,” says Bevis.

Bevis says he does whatever is required to clear the obstacles so that his team can move major projects quickly along their designated timelines. “The way that I do that is make sure we have clear leadership, that the leaders of these projects don’t have 20 things with their names attached to them, that they have the team that they need,” Bevis says. “They’ve had help thinking through their timelines, they don’t have any stumbling blocks in front of them and if they do, they’re empowered to either remove them themselves or to run them up the flagpole quickly.”

And those timelines, says Bevis, are all but carved in stone.

“Basically, I make it very clear that no one in the company has the authority to derail that timeline and I’m very clear with those initiatives that no one, including me, can disrupt their timelines,” says Bevis. “If I do it, it’s an accident and make me aware of it. We have a focused set of initiatives that we do, less than 10, and we try to do them faster than anyone in the industry.”

Bevis squanders little time when it comes to changing out personnel. As hard as it can be, he says, purging the poor performers and those who don’t fit the team has a positive effect on the organization. A key part of improving plant production, for instance, was removing those who weren’t able or willing to go along with the program. “I look at what did people do, why did they do it, and I force myself to deal with the bottom,” Bevis says. “You get rid of some people and it’s amazing. The people will come out of the woodwork and say, ‘Man, I’m glad you did that, that person was such a loser and thank goodness that someone’s paying attention.’ I’ve learned that enough that I’m very focused on — the buzzword is top-grading — but I’m always assessing the talent and dealing with it.”

Make decisions
Bevis keeps the decision-making machine fueled with frequent meetings and a commitment to quick action.

“I have weekly staff meetings with my top 10 guys,” says Bevis. “We talk about what happened last week and what’s happening this week, any decisions we need to make. It is not very cosmic but it helps us all stay tight as we go through the week.”

Once a month Bevis assembles what he calls a leadership team meeting, which includes the top 10 executives and 30 managers from the next level. “We meet for a full day face-to-face, we talk about how the month went, what the quarter looks like, year to date, year to go, what the year is rolling up to versus our commitments,” says Bevis. “We try to make five decisions in our weekly meetings and we try to make five decisions at our monthly meeting. It’s actually very hard to make five decisions but we just have to stay focused on being prepared and being decisive.”

Bevis keeps those large meetings focused by forcing everyone to be concise.

“To keep a large group focused, each leader must be prepared in advance with concise summaries with no more than three or four key points for the month,” says Bevis. “There is no time for elaborate storytelling. Every talk must be an elevator speech. You have to be able to answer your questions in the same time that it takes to get from a top floor to the lobby in a fast elevator — about 15 seconds. If people are rambling, I just cut them off. It is not mean. It is just time management and a way for people to learn to focus and not waste everyone’s time.”

Bevis’ commitment to quick decision-making is making a difference at Pliant.

The company posted just over $1 billion in sales in 2005 and even though it endured a bankruptcy in 2006, its revenue results showed improvement.

Sales in the first half of 2006 were a record $587 million, a 12 percent increase over the first half of 2005.

“We were a sleepy laggard in our industry and the fourth quarter isn’t in yet, but in the first three quarters of ’06 against the publicly available benchmarks ... we’re the fastest growing company in the industry,” says Bevis.

HOW TO REACH: Pliant Corp., www.pliantcorp.com