In 2008, Bruce Neil watched 68 percent of his revenue at The Doe Run Co. disappear thanks to a severe drop in the price of lead.
“We needed a very rapid and dramatic response,” says Neil, president and CEO at the natural resource mining company and lead producer. “We knew prices would come back up, but we didn’t know when. We decided this was going to be a long-term thing and a long-term recovery, and we would need a couple of years.”
Neil knew he was facing a tough battle for the future of his business. He also knew he couldn’t fight that battle by himself.
“The reality is, as the CEO, I’m not going to survive alone,” Neil says. “I’m not going to get through this alone. I’m not going to do this alone. I need every manager, every supervisor and every employee to realize that as a company and as individuals, we’re all going to have to make sacrifices.”
Neil did offer one edict to his people that he expected to be followed as decisions were made about Doe Run’s survival plan.
“If there are going to be reductions in the company, they have to be across the board and at all levels,” Neil says. “They cannot be in one area and not another. We’re all in this. The long-term strategy of the company is that we’re going to continue to operate each of these parts of our business, and we had to make sure that we did not end up with one part of our business that was in terrible shape to the advantage of the other. We said, ‘We’re all going to have to make some sacrifices here. We understand we can’t do everything we said we wanted to do in our planning.’”
Neil was confident that if the 1,400-employee company was going to come through this storm in good shape, there would need to be a heavy emphasis on finding solutions collaboratively.
Show you trust people
Neil was adamant that the majority of the key decisions that would be made about the future of Doe Run would be made with a lot of input from people at all levels of the business.
“The guidance was around, ‘This is the situation we’re in, this is our reality, and this is what we need to accomplish,’” Neil says. “So my guidance was around broader strokes. It was not on details. I really relied on people. What is the best plan? I didn’t say, ‘You need to have a lower production plan.’ I said, ‘You need to have a plan that is going to economically enable us to get through the next 24 months if things don’t change. If things get worse, we need to have the assurance that the plan you give us, all the people in the company can deliver on it. There’s no point in having a plan that you think I may want to hear. You’ve got to give me a plan that you will deliver on.’”
Neil and his people needed to find ways to reduce costs. About 85 of the company’s production ends up in lead acid batteries. Many of these batteries are used by the U.S. auto industry, which itself was taking a major hit in the recession.
So that’s where one of the first cutbacks was made. It was a decision that made sense and that’s what Neil wanted.
“What was happening in Detroit was having an immediate impact on the need for our products and our ability to generate revenue to survive,” Neil says. “We made the decision that we were not going to produce one pound of metal more than what the market would bear. So if it fell to whatever level, we were going to match our production plan or business plan to meet that demand and no more.”
Neil wanted his people to understand that he trusted them to make these important decisions. He had no desire to stroll out of his office and issue proclamations about how things were going to be done, nor did he think that was the best way to go.
“I had full confidence in people to come up with the solutions that would be needed,” Neil says. “I just absolutely couldn’t say, ‘You have to do your job this way.’ Everybody knows how to do their job better than I know how to do their job. No matter how much experience you have over the years in different parts of the business, that’s a reality. People who are on the job today can do it better than I ever could. All I can do is give people a vision that this is what we’re going to look like when we’re through this and ask them to achieve their goals and we’ll make it sustainable.”
If people struggled to come up with things to cut, Neil encouraged them to talk to people in other departments who were having more luck.
“People felt they were under a lot of stress because of the understanding that pricing had dropped so rapidly that everything was at risk,” Neil says. “They were aware that we were going to have to make job reductions and that people that they worked with were going to be off for a period of time or be laid off on a permanent basis.
“The guidance that people were given when they were struggling was examples of how people were solving this problem in other areas. Just try to make sure that people weren’t leaving any stone unturned. Everything was on the table. It’s supporting and encouraging and just making sure people understood that what I was saying, it was something I believed in.”
Offer a bit of hope
It probably did little to ease the pain of the people who were laid off, but Neil went ahead with planned pay increases for those who remained with Doe Run.
“We insisted we were going to keep the top quality of the competencies that we needed for the future,” Neil says. “We held onto those. We paid people the annual increase. We decided that these were based on performance and so we paid those. We deferred any kind of incentive payments or incentive programs. We said, ‘In this situation, we can’t afford this.’ But as we went through, we not only retained the key staff, but we actually continued to hire some really top caliber people because if we needed a skill, we hired it. We continued to build the people skills that we had in the company.”
Members of the executive management team did not receive a pay increase. But he felt the message had to be sent to the other employees that the company was not giving up on its future.
“The truth is, I did not know how it was going to work out,” Neil says. “That’s for sure. Having been through the rough edges before, I wanted it to work out in a way that would enable us to have the hopes and dreams of who we wanted to be in the future and retain that. My sense was it was a question of telling people there was no certainty here. We’re in a tough position. But on the other hand, we’re in a good position. I would talk about our strengths and that we’re going to do this together. To some extent it was team building. For people to believe in the team and be part of the team, they have to believe in the goal.”
Neil did not sugarcoat the future and was upfront about the challenges Doe Run would face. But he wanted people to have a reason to believe that if they worked hard, there was a good chance things would improve.
“You have to have the credibility that if you say this will happen and you don’t know if it will happen, you have to say, ‘This may not happen and these are the problems,’” Neil says. “‘But I believe if we do this together and we share this, we can accomplish it.’ You have to believe that. I don’t believe you can tell people something that you don’t believe in.”
Prepare for the future
Cutbacks weren’t the only thing Neil wanted help with as he led Doe Run through the recession. He wanted people engaged in steps that could help the company be more prepared to thrive when the economy began to improve again.
There was one piece of criteria offered at the beginning of this particular process.
“If it’s not going to completely pay for itself within the next year or 10 months, we’re not going to do this year,” Neil says. “It had to be a very quick return if we’re going to spend capital on it. We felt we needed capital to pay our operating costs.”
These projects would also need to be pulled off without any outside help or consultants as that would be an additional expense.
So the plan was to bring people in from all levels of the organization to present their ideas on how to help the business generate more revenue.
“We set up a structured prioritizing process where we involved not the executives, but we involved senior leaders in the company and we involved people representing all areas,” Neil says. “We had people present their projects to each other and present to a larger group.”
Some projects got a lot of support, while others did not get as much.
“What is the result of that?” Neil says. “People are more focused on the business returns for a project or an investment they want to make in their area because they have been through this process where if it didn’t meet a very tight business standard compared to someone else, than that other project would go ahead and not theirs. There was a better understanding on that and the planning process is stronger than it was before.”
It’s also a good lesson to people about the barriers that may frustrate them when it comes to getting things done in a business.
“When you make change, there are going to be barriers, whether it’s the culture of the company or people saying, ‘We never did it that way,’ or people don’t want to give up something,” Neil says.
If you’re soliciting input for this type of participation and you don’t feel like you’re getting much of a response, you may not be as empowering and collaborative as you think you are.
“If you don’t communicate the vision and you don’t talk to people regularly about how you are doing and what you need to do, then when you tell them something, it’s going to be as if it’s coming out of the blue,” Neil says. “People want to be listened to. They want to have their ideas listened to. They want you to hear their ideas. People are all interested in a dialogue on what you’re doing and what their company is doing. I don’t think it matters where you are in the company. You have an interest in that, you need to promote that.”
As 2009 ended and 2010 dawned, Doe Run began to see demand increase again. Profit sharing and 401(k) matches came back into play and the company found several new options to begin growing again.
“You have to be direct and honest and say, ‘We may not get out of this when we want,” Neil says. “We may not all be here when this is through. But we believe in our products, we believe in our ability to do this and all we have to do is work together and we’ll deliver it.’”
How to reach: The Doe Run Co., (314) 453-7100 or www.doerun.com
The Neil File
Born: Tofino, British Columbia, Canada. At the time it was outside an Air Force base on Vancouver Island. My dad was in the Royal Canadian Air Force and I was born right at the end of World War II.
Education: Queen’s University, Kingston, Ontario. I took metallurgical engineering.
What was your very first job?
It was a retail store. There had been a heavy rainfall and the basement of this store was flooded. My first job was to clean and take apart as much of the old electronics that existed in those days. My job was to take out the tubes in the flooded television sets and test which ones could work and could be sold and which ones couldn’t. Once that was cleaned, I ended up working for the owner of the store.
Who has been the biggest influence in your life?
I would say the person that always gave me the best advice and best support was my father. I didn’t ever have a driving desire to be the CEO of a company. I’ve been fortunate to be given the opportunity. I’ve been fortunate to work with so many good, quality people.
What is the best advice anyone ever gave you?
When you graduate with an engineering degree, you believe that you’re going to be doing engineering, measuring, building and improving. There is some of that. But the reality today is what you and your business accomplish is accomplished through many people. So how you relate to people, how you talk to people, how you work with people is the most important part. And the best advice that I’ve been given is trust yourself, be open with your people and trust your judgment.