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Closing the gap Featured

7:00pm EDT February 28, 2007

Lance Mitchell could see the enthusiasm employees brought to their work at Alcoa Closure Systems International even before he took the reins as president in February 2006.

“There was no question it was a serious business environment, but this was an environment where people were excited about what they were doing and enthusiastic and had a sense of humor about themselves,” says Mitchell, who previously worked for one of the company’s suppliers. “There was an environment that inspired open communication and honesty.”

But strong spirit and cooperation were only part of what would be needed as the company looked to continue broadening its reach outside of North America. It also needed to align its focus and strategy.

“What became very clear to me is that we did not have a shared vision and a shared strategy that we were trying to align to and focus on achieving,” Mitchell says. “We had a lot of people doing a lot of good work and spending a lot of energy on things that were important to them but were not necessarily aligned to the near-term or longer-term goals of our organization. We had to really focus on getting people aligned quickly and using a vision and strategy as a way to achieve that.”

Alcoa CSI is a leading supplier of plastic and aluminum closures and packaging equipment to the food and beverage industry worldwide. It is part of Alcoa Inc.’s packaging and consumer group, which had revenue of $3.2 billion in 2005.

The company’s place in the closure industry is a source of pride for its 3,300 employees. Whether it’s a bottle of pop, a jug of orange juice or a quart of motor oil, odds are that Alcoa CSI put a cap on the container. The company has 27 locations in 22 countries.

Broadening that global presence requires a strategy that aligns the company’s goals and objectives and is developed with the help of the entire organization.

Engage your team
Formulating a strategy to help achieve these kinds of goals is a team game and not something that a couple of senior managers can sit together in a room and do in one day. Rather, it should be viewed as an ongoing evolutionary process.

“It’s learn by doing,” Mitchell says. “You go out and try some things. You find out the realities of the marketplace and your competition, and you adjust. What that really requires is a lot of people engaged in the initial direction setting.”

Mitchell got the ball rolling on the new strategy by asking questions of employees at multiple levels of the organization. The dialogue provided Mitchell with insight on the different experiences and different outlooks that his employees bring to the table.

“I had a similar dialogue with our key customers,” Mitchell says. “I spent a lot of time listening. The greatest challenge was really getting to find what some of the key issues were that needed to be dealt with quickly, both internally and with our customers, and learning about some of the opportunities and issues that we had.”

The company spent three months developing what Mitchell refers to as a strategic compass to help set the direction of the strategy.

“We looked at our current knowledge base that we had in the organization, did the market research with some customer analysis and surveys and, as a team, developed our strategic compass,” Mitchell says. “I call it a strategic compass because our belief was that we, as a team, were going to set a direction.”

In addition to spearheading the implementation of a new strategy, it is up to the company leader to ensure that the organization is ready for change by creating a climate of adaptability.

“It means ensuring that you have created an organization that is adaptable for change,” Mitchell says. “It’s being able to articulate for the organization what the consequences of not changing are and being able to show it is worth the risk to make the change.

“It becomes the leader’s responsibility to remove the obstacles to adaptability and determine whether or not they are systemic. You’ve got to identify the stress points in the organization and manage that stress and pressure.”

The leader must also come up with a way to ensure that employees are getting the same message once the strategy is drafted.

“We create an organization of about 50 people that deeply understand the strategic direction — disciples, if you will — that go out and are able to be ambassadors of that strategy throughout the organization,” Mitchell says.

Ideally, these ambassadors lead small groups of no more than 30 people in open dialogues that focus on the basics of the strategy. Discussion is invited, feedback is welcomed, and suggestions and recommendations are brought back to the senior leadership team for consideration as the strategy begins to evolve toward its final form.

Be consistent
The key to this process is that every employee gets a consistent message about the direction of the new strategy. If the future is mapped out in a clear and succinct way, then everyone in the company, from top to bottom, should be able to describe the organization’s goals and have a sense of where their leaders are taking them.

A clear company strategy also serves as a useful tool that can be referenced when considering new hires to gauge whether a candidate is right for your company.

“Anybody that we’re interviewing, or anybody that is currently part of the company has got to have the shared values of our company,” Mitchell says. “That’s how you gain alignment from the outside, even before you develop the vision and strategy for your business unit. It all starts with the foundation of values.”

Companies that have a history of success rely on employees who have tenure with the organization and have developed and grown their skill levels. Finding new employees comes down to strong recruiting programs that begin at the college level. “That means having a good recruiting process that is clear about the capabilities of the individuals we are looking to find, and then recruiting in a pure sense of the word,” says Mitchell. “It’s both about selling as well as listening to what the individual’s capabilities are. We critically evaluate prospective talent. We do that with an open eye that we’re attracting talent from within the organization, as well as from selective companies from within the industry.”

A defined company strategy provides a way for employees to measure their own performance against the goals that the organization has laid out for them. “It only takes one person at one level to not take that to the next level, and it can stop hundreds of people from being connected to their own individual goals and objectives in the business strategy,” Mitchell says. “When I am walking around a plant floor, I will ask an individual what their individual goals and objectives are and how they are being measured.”

The idea that company goals are only important for senior managers and administrators does not fly at a successful business.

“What gets measured gets managed,” Mitchell says. “We set specific goals for how often our management team is sitting in front of customers. It’s a given and an expectation that our commercial team is doing that on a daily basis. They have their own metrics for how often and how much of their time they are spending in front of a customer.”

“It all begins and ends with customers. Too often, we can get very focused on internal processes and internal challenges with the understood belief that we’re really doing something to help our customers. We sometimes lose sight of the fact that they are the only ones that send us checks. They are the only ones that are really providing the continuing operation of the business. We need to spend more and more time out-front speaking directly with them to ensure we’re connected. “All functions of our organization need to be out in front of customers, whether they are in the manufacturing discipline or the R&D discipline. There is nothing that can replace the value of direct interaction with the customers in face-to-face communication.”

Risk is OK
If a strategy is clear about expectations and people understand what is expected of them, opportunities to thrive will abound and individuals will be empowered to be more entrepreneurial in their work.

It also lets people know that it’s OK to take a risk because failure is not the end of the world. This requires creating an environment where it’s OK to take a risk. “If you are swinging for the fences and you strike out, sometimes that’s OK,” Mitchell says. “If you repeat that and you make the same mistake twice, that’s not OK. We’ve got to make sure individuals are learning from their mistakes.”

A leader is only as good as the employees he or she has gathered to do the work.

“My role is to make sure that we are attracting and developing talent, that we are really clear about what the priorities are and that we’ve got the capabilities to be able to achieve and drive execution of those priorities,” Mitchell says.

“Everybody has got unique skill sets. Everybody has got unique capabilities. How do you ensure that they are using those skills and capabilities most effectively, and what are you doing to further develop those skills so that they can grow and be able to contribute to solving the next problem and the next challenge?”

One way to ensure that this is happening is to have a good performance review process that includes feedback among multiple levels in the company. This process should also provide a performance update for the head of the company. “An NFL coach gets rated on wins and losses,” Mitchell says. “The president of a business unit gets rated appropriately on whether or not the business is improving year over year and achieving plan or not. Did you achieve your plan? Did you improve the results for your shareholders and did you hit your numbers? That’s fair.”

As for Alcoa CSI, while it is still in the early stages of executing its new strategic direction, the efforts are already bearing fruit. Mitchell says core markets are showing growth, and sales revenue was strong for the fourth quarter of 2006. In addition, team leaders and plants have developed action plans for 2007 that are directly connected to the company’s strategic plan to broaden its global presence.

“At least in this business, and I think in most businesses, a global perspective is becoming an essential capability in an organization to be successful,” Mitchell says. “Having a knowledge of how to do business in other cultures with other business dynamics is essential for achieving our growth goals.”

HOW TO REACH: Alcoa Closure Systems International, www.alcoa.com/csi