The French connection Featured

8:00pm EDT April 25, 2007

It was the summer of 2000.

Pierre Dufour had recently taken over as president and CEO of American Air Liquide Holdings Inc. and was dealing with a company

that had become unzipped from its parent, Paris-based Air Liquide.

Some business segments can become detached from the parent company over time as they drift away from the focus and the vision

that the parent company laid out for them.

There are technical terms business analysts use to describe a wayward company, but when Dufour faced the situation at American Air

Liquide, the analogy was as basic as fastening a jacket.

“The zipper was open, and I had to figure out how to bring the zipper back up tooth by tooth,” Dufour says. “I did it by creating bridges,

either by benchmarking exercises or by exchanging people or by building bridges at the working level so I could pull the zipper back

shut again.”

The company had drifted to the point that it was becoming a counterproductive segment of its parent company. Sales were lagging, the

value of each sale was dropping, and most alarmingly to Dufour, the lines of communication between North America and Europe were

withering.

Dufour says the key for the Houston-based industrial and medical gas supplier with more than $2 billion in annual revenue was to refocus on innovation and strengthen partnerships with its European counterparts.

To begin that process, Dufour had to get Air Liquide’s U.S.-based and Europe-based engineers to start talking to each other again.

Something in common

When Dufour began his tenure, the U.S. and European wings of Air Liquide were not communicating effectively and they

weren’t even receptive to each other’s ideas.

“We had innovations that were developed in Europe, but because they were developed in Europe, the U.S. team didn’t want to

consider them,” Dufour says. “They said the U.S. market is different.”

Dufour says the first thing any company needs to do when refocusing itself is to create communication channels so ideas are

reaching all areas of the business. The best way to do that is to get your idea people together in the same room.

“For example, we decided to do a large benchmarking exercise on maintenance, and what were the maintenance programs and

protocols,” Dufour says. “We probably had a three- to four-month benchmarking exercise on maintenance. Over the course of

that, the maintenance guys on both sides became buddies, they started to know what the other one was doing, they started to

respect the other guy’s ideas and suddenly the whole thing became a lot more palatable.”

Dufour conducted similar exercises for Air Liquide’s food application group and hydrogen plant managers, bringing one of the

company’s top food application engineers to the United States in an effort to integrate technologies that were being developed

on both sides of the Atlantic.

“For our hydrogen plant managers, we created a forum,” Dufour says. “These guys were put into a network, which was kind of

a virtual forum where they could get together and share their experiences.”

Dufour says that if employees can’t find a common ground when you bring them together, you have to help them search for it.

It’s usually there if you look hard enough.

“What I tried to do is find common areas, whether it’s a common market, a common client, a common operating issue, and create working groups where we are working together and not imposing on one another,” he says.

Managing innovation

If you want your employees to speak the same company language, Dufour says they have to get on the same page with regard to how

ideas are cultivated and processed.

When Dufour set about realigning American Air Liquide with its parent company at the start of the decade, he knew a successful innovation culture would be an integral part of the company’s long-term success. So he began spreading the word about innovation to emphasize its importance.

“It began in 2002 when we celebrated the company’s 100th anniversary,” he says. “We built these big display trailers and we went as a

giant caravan around the country. These caravans had a lot of the innovations we were trying.

“We made a big event of it, celebrating innovation as a concept. Then we pulled together people from the U.S. and Europe. That was

very much the start of us using innovation to bridge the gap.”

Once the pomp and circumstance was over, Dufour says it was time to form a definite plan.

Dufour decided the best way to innovate was to stay close to the end customers. Dufour says innovations that do not address a

specific customer need lack the problem-solving aspect that drives many creative people, and those ideas likely won’t take root

in the company at large. The ideas need to find solutions for specific customer problems and not simply be random concepts that

occur irrespective of what is going on in the outside world.

“You must stay close to your customers,” Dufour says. “You cannot innovate by yourself in an office or lab and just think about

these great ideas all the time. You have to align your mind with a specific client problem. That is the first and probably the most

important part.”

He says you also can’t go too far in the other direction. While a customer-generated innovation process is a necessary structure in many

businesses, clamping down too much on your employees’ freedom to create can also have an adverse effect.

Dufour calls them canned solutions — attempting to fit a customer’s need to a product or service you already provide, even

though the customer might be best served by heading back to the drawing board and coming up with an entirely new solution.

While you probably want efficiency with regard to how your employees deal with customers and with each other, Dufour says

that you can’t let efficiency rule to the point that it overshadows the innovation process, which can be decidedly inefficient at

times.

“Our management style of trying to find a solution instead of a canned product or service has been very useful,” he says.

“Sometimes, it’s not very efficient, but I think it’s a very necessary ingredient for an innovative culture because you’re leveraging the

minds of your people and not just having them work in a lab.”

Dufour says management must take an active role in the day-to-day supervision of the innovation process. A big part of that is the proactive promotion of innovation. If upper management is engaged in the process, he says, those below will quickly pick up on it and will

want to become actively involved.

At Air Liquide, the innovative spark has extended beyond the engineer and scientist ranks to include the company’s marketing arm.

“We’re very coherent about making innovation a central part of what we’re trying to do, and the interesting thing is that the innovation

has taken different forms,” Dufour says. “Of course, technical innovation is the traditional way to think about innovation. But we’ve

become innovative commercially — trying to find new ways to make our offers, new packages, new ways of presenting our offers.”

The final aspect of managing innovation is to incentivize. To build bridges between aspects of your company, Dufour says you must get

your employees interested in what you are interested in. If that is innovation, then reward employees who follow your lead and embrace

innovation.

“We proactively manage innovation,” he says. “We have innovation contests, we have a human resources system where we give people

alternate technical or managerial career paths. We reward people when they file a patent.”

Earlier this year, Dufour presented plaques at Air Liquide’s North American innovation awards ceremony, during which the company

rewards those who came up with the best ideas during the previous year.

“Those are the four things I think are extremely important to innovation,” Dufour says. “To manage it, to make it a very central and

important part of your strategy, to let people roam [creatively] within certain limits and to make sure you are very close to your customers.

“Those four things are essential. If you get three out of four, you’re average. If you get all four, you have a pretty good innovation culture.”

Open communication

As he set about realigning American Air Liquide and re-emphasizing innovation to the entire company, Dufour says communication was critical, and keeping his messages simple was a constant fight.

Dufour says it’s one of the toughest challenges a CEO can face day to day: communicating complex, wide-ranging concepts to many people

in a simple fashion.

“It’s the consistency and constant flow of communication that makes it effective,” he says. “If you look at 20 Air Liquide announcements,

about half of them will talk about something that is not necessarily a blockbuster item, but it is some sort of innovation.”

Dufour works with his corporate communications staff to make sure his communications reach the widest possible audience within the

company. Many times, when the communication centers on innovation, it’s difficult to do because the ideas are generated by engineers or scientists and are awash in professional lingo and industry jargon.

“I don’t know how many times I’ve returned announcements to our communications staff saying it’s too complicated. I need us to say it in

layman’s terms, not for a Ph.D. I want ‘Specialty Gases for Dummies.’ It’s very important because you aren’t trying to impress people by showing how smart you are. You are trying to get them to relate to what you are talking about.”

He says it’s also important to remember that, many times, what is obvious to the innovator or inventor is not so obvious to the rest of the

company.

“I remember we had an announcement about a gas product we had just produced,” Dufour says. “It was very difficult to understand what

this thing did in about four or five lines because the guy who first wrote the announcement wrote it from an inventor’s perspective. He was

explaining how it worked.

“Who cares how it works? People aren’t interested in that. People are interested in what it does. But for the inventor, it’s obvious what it

does. What isn’t obvious is how it works.”

It comes back to making sure your innovators are in touch with your customers and are understanding customers on their level and inventing things they need.

“Does it make the customer more competitive?” Dufour says. “Does it give you a better mousetrap for the market? That’s the key. It’s not

just the words you use in communication. It’s the concision. Being simple is absolutely essential.

“It’s a constant struggle to take a technical innovation and simplify it for the people who haven’t been a part of it. It’s very important but can

be very difficult.”

Dufour’s efforts have helped pull the zipper back up at American Air Liquide. Through a newfound emphasis on communication and innovation, he says the working relationship between Air Liquide’s American and European offices has improved.

“By creating teams across the ocean and creating working groups, we were able to merge the teeth and pull the zipper back up and get more

leverage out of the group in the U.S.,” he says.

In the end, Dufour says it’s about management walking the talk and following its words with consistent actions.

“It doesn’t matter what you say,” he says. “You’re successful as a manager when people see your actions. It’s important not only to say it in

big declarations, but when you take the time to review it, you also take the time to talk to your people. Then the word gets out, and people

see that (innovation) is really important to you.”

HOW TO REACH: American Air Liquide, www.us.airliquide.com