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.

 

Takeaways

Communicate during a crisis.

Create a dialogue with employees.

Use your wins to generate momentum.

Published in Philadelphia

When Facebook bought Instagram for nearly $1 billion, the social networking site was all but admitting that a smartphone app was poised to decimate its user base. But Facebook knew what all businesses must accept: When it comes to communications, we are in hyper drive.

As quickly as Twitter captured the public’s attention, the next new thing could replace it. Facebook is intent on keeping pace. You should be too.

Businesses must select the apps, sites, social networks and other modes of communication that best reach their client base and then create messages that can pierce through the blizzard of other messages. At no time is this more important than when a crisis hits or an opportunity suddenly emerges.

You need a rapid response team that can instantly craft the right message and get it to everyone who matters.

You must get your message out first. If you don’t, your critics or competition will define you. Every organization needs a rapid response plan that can be launched at a moment’s notice. Here are the basics:

1. Have your communication platforms in place. Facebook is losing some popularity, but it remains an excellent way to connect with people. If you don’t tweet, you should still have a Twitter account to follow trends that relate to your business.

Do you belong to or host Internet chat rooms that pertain to your industry? Do you have an 800 number you can direct people to if you must respond to a sudden crisis? Email is still a valuable way to communicate, so keep your email list updated. Texting allows you to instantly contact your base.

Pinterest, Instagram and Tumblr are hot right now. Decide which options you want to use and assign people to manage them on a daily basis.

2. Use technology to take the public’s pulse. Never assume that you know the public’s reaction to an event. Track their opinions on Twitter, and set Google alerts for keywords that relate to your business or events that will affect it. These free resources can guide you even if you don’t have a large budget.

If you need specific data before responding to a crisis or capitalizing on a news story, consider online surveys or smartphone survey apps. Before you react to a critical situation, make sure you know how your base is feeling about it.

3. Gather your rapid response team and give them three messages. The key to any good communication — and to winning any battle — is consistency. Having one person make a statement and the next person contradict it is the worst possible scenario.

You need to develop three messages that make the same point in different ways. The basic message must be succinct and all members of your team should consistently employ these three messages.

The most effective messages either use a third party to make your point or place the situation in a larger context. When reacting to a crisis, having a loyal client or customer defend you is much more powerful than defending yourself.

As for creating a larger context, choice, fairness and accountability are three concepts that everyone can relate to. You have 15 seconds or less to capture your audience’s attention, so make your point bigger and broader. That’s how to respond in a world that is moving faster every day.

Chris St. Hilaire is founder and CEO of Surveys On The Go, a smartphone market research application.

Published in Los Angeles

Traveling and working abroad often comes with risks, and savvy employers recognize that having employees overseas heightens their corporate liability. By protecting employees against the risks of global travel, employers can manage risks to their business, finances and reputation.

“In today’s litigious society, corporate governance and duty of care are paramount to a company’s crisis management strategy,” says Justin Priestley, executive director for Aon Crisis Management. “Businesses need to react to incidents in a timely and consistent manner, protecting their people, assets, balance sheet and brand reputation.”

Smart Business spoke with Priestley and Kevin J. Pastoor, CPCU, managing director of Aon Risk Solutions, about how to keep your employees safe abroad.

 

How can businesses ensure that they are meeting their duty of care requirements?

There is a lot of complicated case law on this subject, but the issues are simple. There are three things businesses should consider, and by doing so, they will meet their duty of care.

The first step is actively trying to understand what the risks are for your people, and that means doing a formal assessment of risk. If you say you didn’t know about it, that’s not good enough. You could have tried to find out.

The second thing you need to do is come up with appropriate risk management measures that are matched to the risks you think exist. You need to demonstrate that the plan you are coming up with is appropriate for the risks your employees are facing.

Third, organizations should have a plan and discuss it. Talk about appropriate levels of insurance and how employees are going to get to the airport if there is a problem. Broadly speaking, those steps together provide organizations with a much better opportunity to demonstrate that they are meeting duty of care.

How can businesses ensure they are prepared for travel emergencies?

An adviser can match what it delivers to what it thinks are the main pillars of activity. So up front, it would provide information to travelers so they are aware of the risks in a particular area. An adviser can also provide some basic-level training for travelers.

Another thing a consultant can do, if people are traveling to an elevated risk location — somewhere like Mexico or India — is conduct an independent risk assessment of that proposed journey. It can be done quite quickly; it’s not some long, laborious process. It provides the concerned organization with a third-party independent review for a journey before it is booked, which backs them up in their assessment.

What type of training and education should employers provide for traveling employees?

There are two types of training. E-learning allows organizations to show that people have done the training. We also do an elevated risk course, which is instructor-led.

That course tends to be more specific to a particular client. Another option is an elevated risk course, in which the threats and risks are determined for where someone is going, and then travelers are trained to understand them. For instance, if you are in Central America, kidnapping is one of the major risks, and this is how it happens.

Then a consultant can offer advice on situational awareness. Many people understand what to look for and how to notice if something suspicious is happening. There is some really basic advice on risk mitigation strategies, like not wearing your Rolex watch if you’re traveling in more interesting parts of the world.

It’s important to focus on sensible, pragmatic advice that businesspeople need to understand.

 

What innovative services can help business travelers?

Mobile technology enables a traveler to see a country’s risk information on the go. Putting that information in people’s pockets is actually quite useful.

It doesn’t produce 20 pages of data on each country. It’s short, concise and condensed. Most people don’t want to read for 30 minutes to understand an issue. They want to read it in two minutes.

Second, there is a nice travel management system for risk managers or corporate security that enables them to know at the push of a button where their people are on a day-to-day basis and what the risk exposure is for those people.

Aon WorldAware, our online country information service, grades risks by looking at what is going on in that country, the capability of the terrorist organizations and their modus operandi. It gives ratings of 1 through 5, on a daily, weekly, or monthly basis, and they can print a report showing how many people they have in low-risk countries, or Level 4 or 5 countries, how many incidents they have had and where those incidents occurred.

It is an independent assessment. A partner has people constantly reviewing every country. There are 10 factors, including terrorism, civil disobedience, kidnap and ransom, street crime. All 10 factors for every country are assessed and scored 1 through 5.

Countries rated 1 through 3 are appropriate for routine business travel. For countries 4 and 5, you have to consider the risks a bit more. To put that into context, Level 5 countries like Iraq, Somalia, or Afghanistan have extreme risks.

The system monitors what happens in the world on a daily basis, and the countries are updated as the risk profile changes.

 

Justin Priestley is executive director for Aon Crisis Management. Reach him at 44 (0)20 7882 0478 or justin.priestley@aon.co.uk. Kevin J. Pastoor, CPCU, is managing director of Aon Risk Solutions. Reach him at (248) 936-5346 or kevin.pastoor@aon.com.

Insights Risk Management is brought to you by Aon Risk Solutions

Published in Detroit

Traveling and working abroad often comes with risks, and savvy employers recognize that having employees overseas heightens their corporate liability. By protecting employees against the risks of global travel, employers can manage risks to their business, finances and reputation.

“In today’s litigious society, corporate governance and duty of care are paramount to a company’s crisis management strategy,” says Justin Priestley, executive director for Aon Crisis Management. “Businesses need to react to incidents in a timely and consistent manner, protecting their people, assets, balance sheet and brand reputation.”

Smart Business spoke with Priestley and David Drier, an international producer at Aon Risk Solutions, about how to keep your employees safe abroad.

How can businesses ensure that they are meeting their duty of care requirements?

There is a lot of complicated case law on this subject, but the issues are simple. There are three things businesses should consider, and by doing so, they will meet their duty of care.

The first step is actively trying to understand what the risks are for your people, and that means doing a formal assessment of risk. If you say you didn’t know about it, that’s not good enough. You could have tried to find out.

The second thing you need to do is come up with appropriate risk management measures that are matched to the risks you think exist. You need to demonstrate that the plan you are coming up with is appropriate for the risks your employees are facing.

Third, organizations should have a plan and discuss it. Talk about appropriate levels of insurance and how employees are going to get to the airport if there is a problem. Broadly speaking, those steps together provide organizations with a much better opportunity to demonstrate that they are meeting duty of care.

How can businesses ensure they are prepared for travel emergencies?

An adviser can match what it delivers to what it thinks are the main pillars of activity. So up front, it would provide information to travelers so they are aware of the risks in a particular area. An adviser can also provide some basic-level training for travelers.

Another thing a consultant can do, if people are traveling to an elevated risk location — somewhere like Mexico or India — is conduct an independent risk assessment of that proposed journey. It can be done quite quickly; it’s not some long, laborious process. It provides the concerned organization with a third-party independent review for a journey before it is booked, which backs them up in their assessment.

What type of training and education should employers provide for traveling employees?

There are two types of training. E-learning allows organizations to show that people have done the training. We also do an elevated risk course, which is instructor-led.

That course tends to be more specific to a particular client. Another option is an elevated risk course, in which the threats and risks are determined for where someone is going, and then travelers are trained to understand them. For instance, if you are in Central America, kidnapping is one of the major risks, and this is how it happens.

Then a consultant can offer advice on situational awareness. Many people understand what to look for and how to notice if something suspicious is happening. There is some really basic advice on risk mitigation strategies, like not wearing your Rolex watch if you’re traveling in more interesting parts of the world.

It’s important to focus on sensible, pragmatic advice that businesspeople need to understand.

What innovative services can help business travelers?

Mobile technology enables a traveler to see a country’s risk information on the go. Putting that information in people’s pockets is actually quite useful.

It doesn’t produce 20 pages of data on each country. It’s short, concise and condensed. Most people don’t want to read for 30 minutes to understand an issue. They want to read it in two minutes.

Second, there is a nice travel management system for risk managers or corporate security that enables them to know at the push of a button where their people are on a day-to-day basis and what the risk exposure is for those people.

Aon WorldAware, our online country information service, grades risks by looking at what is going on in that country, the capability of the terrorist organizations and their modus operandi. It gives ratings of 1 through 5, on a daily, weekly, or monthly basis, and they can print a report showing how many people they have in low-risk countries, or Level 4 or 5 countries, how many incidents they have had and where those incidents occurred.

It is an independent assessment. A partner has people constantly reviewing every country. There are 10 factors, including terrorism, civil disobedience, kidnap and ransom, street crime. All 10 factors for every country are assessed and scored 1 through 5.

Countries rated 1 through 3 are appropriate for routine business travel. For countries 4 and 5, you have to consider the risks a bit more. To put that into context, Level 5 countries like Iraq, Somalia, or Afghanistan have extreme risks.

The system monitors what happens in the world on a daily basis, and the countries are updated as the risk profile changes.

Justin Priestley is executive director for Aon Crisis Management. Reach him at 44 (0)20 7882 0478 or justin.priestley@aon.co.uk. David T. drier is an international producer at Aon Risk Solutions. Reach him at (314) 719-3892  or david.drier@aon.com.

Insights Risk Management is brought to you by Aon Risk Solutions

Published in St. Louis

Nothing tests a business owner’s leadership skills more than a crisis. How one reacts when confronted with an urgent situation is a strong indication of his or her effectiveness as a leader. There are several qualities every leader must possess to successfully weather a crisis, whether that person is the CEO of a Fortune 500 company or the owner of a small, family-owned business.

You need to be able to think and act rationally when confronted with a stressful situation and assess a crisis from every angle to see how it will impact your business both legally and financially, and influence your company’s reputation.

Smart Business spoke to Matt Marchbanks and Donna Mittendorf of Comerica Bank about what you can do when your company faces a crisis.

What is the first thing I should do?

Marchbanks: First and foremost, remain calm. By keeping a cool head, a leader will be able to step back and rationally assess the situation and create a calm environment so everyone can focus on the problem at hand. Being calm doesn’t mean you should downplay the seriousness of the crisis. It’s common to underestimate or deny that a crisis is happening, or to blame others. It can be more damaging to your business to deny a problem than it is to overreact to one.

What should I focus on when faced with a crisis?

Mittendorf: As a leader it is important, especially during a crisis, to listen. You need to know what people are saying, both internally and externally, about the issue at hand. Ask your employees for their takes on the situation and listen to what your customers, your business partners and media are saying, too. Listening to all of these different groups will help you determine the right course of action.

How should I handle the media?

Marchbanks: First and foremost, think through what you want to say. Think about the key messages you want to get across and who your spokesperson will be. Throughout the whole situation, remember to be honest and don’t mislead or lie to the media. Put yourself in the position of various audiences like your customers, employees and the community you serve. Always think, ‘If I were them, what would I expect to hear from the company?’

How should I prepare my employees?

Mittendorf: Make sure your employees know how to answer certain questions when they come up. This is particularly important in small businesses where every employee is a possible contact. It’s important to prepare employees with what to say and what not to say during a crisis, or if they should direct any inquiries to a selected spokesperson.

Should I reach out to my customers?

Marchbanks: Yes. You don’t have to go into specifics about the situation and what you are doing about it, but you should let your customers know that you are addressing the problem and taking steps to ensure it does not happen again. Customers like to be reassured and don’t want to do business with companies they don’t trust.

How can I retain my integrity during a crisis?

Mittendorf: Once you have properly assessed a problem, it’s important to be decisive so you can resolve it in a timely fashion. Whatever decisions you must make, don’t compromise your values. Integrity is a quality a leader needs at all times, and it is particularly tested during a crisis. Also remember to identify the cornerstone values and principles you want your business to be associated with no matter what befalls it, and convey those beliefs whenever you can.

MATT MARCHBANKS and DONNA MITTENDORF are senior vice presidents for Comerica’s Texas Business Banking Division. Comerica Bank is the commercial banking subsidiary of Comerica Incorporated (NYSE: CMA), the largest U.S. banking company headquartered in Texas, and strategically aligned by three business segments: The Business Bank, The Retail Bank, and Wealth & Institutional Management. Comerica focuses on relationships, and helping people and businesses be successful. In addition to Dallas, Houston and Austin, Texas, Comerica Bank locations can be found in Arizona, California, Florida and Michigan, with select businesses operating in several other states, as well as in Canada and Mexico. To receive e-mail alerts of breaking Comerica news, go to www.comerica.com/newsalerts.

Published in Dallas