There really wasn’t a battle plan for what Brett Healy faced in 2009.
Healy is the president and CEO of Webasto Roof Systems Inc., a company that supplies sunroofs and other roof systems to auto manufacturers. Like just about every other auto supplier, Webasto was dealing with automaker bankruptcies, downsizing and reorganization, and the cascading effect it was creating throughout the industry.
“It involved lots of things that you weren’t going to find in a Harvard Business Journal review,” Healy says. “As we rolled into 2010, it was basically a matter of trying to keep people motivated, because people were very unsure about the environment. People needed to remain motivated around the idea that we still had a viable company, keeping them on task and focusing on getting back to normal business volumes.”
Motivation was a key aspect. Healy and his leadership team had to spearhead a period of consolidation in the company’s head count and plant capacity. Between 2008 and 2009, Webasto Roof Systems— the Michigan-based arm of German vehicle component manufacturer Webasto AG — had to remove three plants from production and reduce head count by 200.
If there was any good news, Healy had begun the consolidation ahead of the economic crisis, so he already had a plan in place for reshaping the company’s future. But when the crisis hit, it took Healy’s methodical plan and turned it into a scramble.
“I took this role at the beginning of 2008, before anybody even recognized a serious crisis was coming,” he says. “Just sizing the company, I knew we were heavy in terms of capacity. We had low capacity utilization in some of our plants. One of our consolidations was executed in 2008 in proper order, but as things started to deteriorate in 2009, we took a plan that was going to take about three years and had to accelerate it into about nine months.”
To get his people motivated, Healy had to restore their faith in the present. To keep them motivated, he had to build a better future.
As he started down the road of navigating his company through the darkest days of the recession, Healy had to take the most difficult step first. He had to admit to his people that the financial crisis was unprecedented in its scope, and management was getting an on-the-job education just like the work force.
In company meetings and his president’s round-table forum, which Healy holds monthly, he had to face his people with a combination of confidence and humility. He had to be a leader, but he had to admit that the company was sailing into uncharted waters.
“They were asking questions like, ‘We just had a layoff, is there going to be another layoff? Are there going to be any other plant closings?’” he says. “They saw that two of our customers (GM and Chrysler) went bankrupt and wanted to know what that was going to do to us. Those are three loaded questions.”
When faced with answering big questions about your company’s future, you really only have one recourse. You have to tell the truth, and do it without mincing words.
“We told our colleagues that we’ve never been through this before,” Healy says. “We’re checking with other people to see if anyone has information on how this happens, and based on our own knowledge of the business, we’re going to do A and B. And if that works, that’s fine. But if it doesn’t work, we’re going to try C and D. So you simply show your people what you’re going to do. There are companies that tend to have a culture of secrecy, and I really don’t subscribe to that. When people don’t know what is going on, they have a tendency to use their imaginations, and they can imagine things much worse than they really are. During that whole time, we remained focused on making sure everyone had the facts, and the facts were changing very quickly.”
Healy wasn’t trying to sugarcoat the situation, and he wasn’t trying to force his company to wallow in grim reality. What he wanted to do was give his people an accurate reflection of the challenges the company faced, then immediately get everyone focused on solutions to pull the company back to growth mode.
“All is not perfect,” Healy says. “I wasn’t trying to paint a rosy picture, but if you just keep talking to people, it does work. Whether you’re the janitor or VP of engineering, with us you’re going to hear the same exact presentation of our plans and objectives for the year. We had cards made up that put the corporate focus on one side and on the other side, we had our quality actions that drive success. We talk about this in great detail in our first company meeting of the year, and it will be the lead in our company meetings for the whole year. We’ll talk about how we’re doing compared to our corporate focus for 2011 and how we’re doing against the things we’ve been talking about.”
Form a strategy
In any crisis, you need well-defined strategy for the future, aimed at helping your company’s recovery. At Webasto, Healy used industry forecasts and data to formulate a strategy and give his people goals to pursue, both in the short and long term.
“We’re very data driven, because in the automotive world, there are some very good forecasting services,” Healy says. “We started our planning process by triangulating various forecasting services’ projections of volumes. From there, we already knew the projects we had been awarded, and we had a good idea of the projects we’re going to focus on in the future. That is the beginning of the business planning cycle. There are also some other items that go into that, in terms of buying behaviors, customer shifts in desiring various vehicle options, but basically, we start with a projection of what the volumes are going to look like and hone our strategy around that. It’s a five-year plan, and it goes into hyper-detail for the year that you’re in.”
Healy and his management team project their plan out as far as 20 years, though it’s a broadly defined direction at that point. The plan then comes down to 10 years, which is defined a little more, to five years, which gets into planning specifics and, finally, the well-defined one-year plan.
“The one-year plan is set in stone,” Healy says. “But as much as I say it’s set in stone, you still need the ability to move and adjust. It’s just that when you move and adjust, make sure your modifications are still within some guideline of business practice, so you don’t blow your brains out on any of your particular metrics.”
In a crisis mode, when dramatic change is often necessary, it can be difficult to decide where to remain steadfast in your leadership approach and where to change. Though you might be tempted to say you need to remain steadfast on matters of culture and mission, Healy says your budget is another good place to remain rock steady. Any plans you make will need funding to become reality.
“We’re sticklers for cost management and cost control,” he says. “But things change. Literally, by Jan. 2, something has already changed. You have to adapt to it but stay within the guidelines of your business plan. A great example would be capital budgets. We have not exceeded the capital budget plan since I’ve been running the company. To me, it’s pretty simple. It’s like a household budget. You only have so much money to spend, and if something changes in the environment, you have to reprioritize your expenditures. The new widget machine we desperately needed becomes a third priority because something with the ability to generate more growth and EBIT for the company has taken priority.”
When planning your company’s next set of moves, it’s OK to take a little bit of time, ponder the various scenarios and gather input — as long as the pause for research and introspection results in definitive action. Healy took decisive action to plan and communicate with his people. Without that action, his company’s confidence in him would have waned, and he could have become a less effective leader.
“What I have learned is that there is such a thing as acting too fast and moving too fast,” Healy says. “When I took this role, I always told myself that the most important thing is to be decisive. I still feel that is the most important thing, but I have learned over the past three years that it is OK to take a day to ponder something. I don’t think it’s OK to ponder for weeks and months, because people still expect you to act. A company is like the economy. It functions well when there is confidence. Confidence comes from people looking to the management team and feeling that these people know what they’re doing, are agile and decisive, and are looking out for them and the interest of the company.”
Creativity is another key to crisis management. At Webasto, Healy tried to get everyone thinking about new ways to do things. He wanted everyone in the company to get into a problem-solving frame of mind. He wanted people who were willing to constructively challenge policies and processes. In one case, a responsive work force saved Healy a significant amount of money.
“We had quoted a project where a new mechanism was going to be required that was a pretty expensive investment,” he says. “The original review from our engineering department said it has to be new because eventually existing systems won’t work. But some of our colleagues outside of engineering challenged that paradigm and asked the test department to run a part with this existing mechanism on it. The test ultimately validated it and ultimately found out that the paradigms the engineering department had were not really accurate in that regard. It saved the company about half a million dollars and it used carryover standard parts.
“In that scenario, nobody did anything wrong. Engineering did what they were supposed to do. They followed the standards that had been set. But we had some people who embraced the idea of creativity, and we really try to promote that kind of thing.”
To promote it, you need to ask for it, keep asking for it and applaud it when you see it.
“We’ve got a long way to go to continue promoting creativity, but it starts from my level with a culture where that sort of thing is applauded when we see it. Whether it’s large or small, it needs to be recognized as a behavior that is appreciated in the company.”
It’s an approach that helped Webasto Roof Systems rebound to $380 million in 2010 revenue, up from $250 million in 2009.
“You always have to go back to what is important,” Healy says. “Go back to the basics when things get a little weird or a little cloudy. Just go back to the basic premises of the business and the values you are trying to promote. It’s really not that complicated. I think a lot of managers make it more complicated than it has to be.”
How to reach: Webasto Roof Systems Inc., (248) 997-5100 or www.webasto.us
The Healy file
Born: Evansville, Ind.
Education: Business degree, Michigan State University; executive management training at the Fuqua School of Business, Duke University
First job: I’ve been working since age 12, when I worked on a horse farm, taking care of the property.
What is the best business lesson you’ve learned?
I’ve worked for five or six managers in my career who were very influential in my creation as a CEO. I wouldn’t say all five were positive. I’ve learned as much from the negative traits of my managers as I have from the positive traits. I’ve learned not to take yourself too seriously and open yourself to criticism. If people are telling you something, it’s probably true, and you have to adjust the dials on your approach.
What traits or skills are essential for a business leader?
No. 1, common sense. No. 2, a sense of humor. No. 3, a keen interest in the company and the people who work there. No. 4, the ability to look at things through others’ eyes. And No. 5, an interest in a balanced approach to short, mid- and long-term objectives.
What is your definition of success?
The feeling that I enjoy what I do, that I made a significant contribution, which allows me the rewards to live outside my business life as to what I need. For a family, it’s the same thing. Balance and a priority to raise my kids the right way, teaching behaviors and expectations, and a partner in my wife aligned on the same channel of expectations.