Eric Schnur empowers Lubrizol to support those on the front lines of the pandemic

Eric Schnur has taken crucial steps to stabilize Lubrizol Corp. in the midst of COVID-19.

Now the company is playing a lead role in protecting those serving on the front lines in this global pandemic.

“The real heroes in this whole fight are the medical professionals — doctors, nurses, EMTs — everybody that’s helping to treat the patients and save so many lives,” says Schnur, Lubrizol’s chairman, president and CEO. “Any way we can do our small part to help those people is a real honor for us.”

In April, the Berkshire Hathaway-owned company made a $2 million donation commitment to support COVID-19 needs globally. Lubrizol has enabled production of an additional 1 billion bottles of hand sanitizer every month by increasing its production of Carbopol polymers, a thickening agent found in most hand sanitizing gels and cleansing applications. Additionally, the company partnered with GOJO to donate more than 16,000 liters of Purell hand sanitizer to Northeast Ohio hospitals and contributed to Nike’s efforts to make full-face shields for frontline medical workers.

“We’re very focused on the external market, and we’ve rearranged a lot of our manufacturing assets to try to make more materials for medical devices and hand sanitizer components that are so important right now,” says Schnur. “There are some other products that we have basically deferred so that we can make more of the stuff people demand. We’re staying really close to our customers who are in those kinds of fields.”

While the fight against the pandemic continues, Lubrizol has also begun the gradual process of returning employees to their work sites.

“We had about 11,000 people in our sites globally at the end of February, and we pulled that down to about 4,200 over a two- to three-week period,” Schnur says.

That number has now increased past 5,000 and will continue to rise as safely as it can be done. The good news, he says, is that results thus far have proven there is no need to rush the process.

“We learned that we’re able to work remotely more readily than we might have ever envisioned,” Schnur says.

Establish clear priorities

Lubrizol was prepared for COVID-19. It developed a formal pandemic team in the early 2000s, and the initiative gained strength following the SARS outbreak of 2003. It has continued to evolve with MERS, swine flu, Ebola and Zika, among other infectious diseases.

“The No. 1 priority is to protect the health and safety of our employees,” Schnur says. “No. 2 is to make sure we’re able to continuously operate as a company, continue to supply our products to our customers and improve the processes we have and the breadth of considerations we take into account.”

Each event is an opportunity to learn and update procedures; preparation is not designed to anticipate or solve all of the problems you might face in a crisis.

“But when you get into a crisis situation, that’s when your priorities have to be really clear,” Schnur says. “You have to keep going back and asking yourself, ‘Are we doing everything we possibly can for our employees, for our customers and for our communities?’ At its essence, that’s what a company is. You have to be very clear about what you stand for as a company, what your priorities are, and stay true to those, no matter what’s going on in the outside world.”

This preparation contributed to a relatively seamless transition to a remote workforce when stay-at-home orders went into effect in March across most of the country and around the world.

“If you would have said to me six months ago that this is the way that your organization will be working, it would have been hard to envision,” Schnur says. “But we were well prepared and just took it step by step.”

The pandemic has shone a bright light on groups in the company that often don’t get a lot of attention.

“When your computer doesn’t quite do what you want it to do, that’s when you notice you have an IS group,” Schnur says. “Otherwise, when they’re being very effective, they’re almost in the background. But we’ve all grown to appreciate them significantly as we’ve been working in completely different environments.”

The key is to create pathways and an infrastructure that enable people to still feel like they’re part of the team.

“If people can still feel connected, there’s some semblance of normality despite the fact that there are so many things that are unusual about this,” Schnur says. “We’re being very thoughtful about trying to keep people as connected as we can. We do most of this over video. It’s not the same as sitting in a room with people and seeing their faces and being able to connect in that way. But it’s better than just a phone call or reading something in an email.”

Ready to serve

While many around the world have been pleasantly surprised by how effectively they can do their jobs from home, others have work that simply can’t be done anywhere else.

“If you’re working in a laboratory or you’re a research scientist or something like that, it may not be so easy to work from your study at home or your kitchen table,” Schnur says. “So we’ve encouraged people who can’t necessarily do their day jobs remotely to volunteer, and we count that as work time.”

It’s another way that Lubrizol has been able to keep people busy while also doing its part to fight COVID-19.

“We want to be a good neighbor wherever we operate,” Schnur says.

The company has also made contributions to food banks in all of its communities, as well as donations to local hospitals, in addition to the work that is done on the business side.

“We’re buying food from local restaurants, which have been really hard hit in this whole situation, and then we’re donating that food to the hospital workers,” he says. “So we’re helping two groups with that effort.”

Maintain lines of communication

When it comes to Lubrizol’s financial outlook for the rest of 2020 and into 2021, Schnur is taking a pragmatic approach.
“It certainly is going to reduce the business results of the company for this year, and nobody knows exactly where the bottom will be or exactly when we start to come back or exactly how long that’ll take,” he says. “We’re watching cash very closely. We’re doing everything that probably every other company is doing to try to manage through an uncertain time.”

Communication becomes even more important during a crisis, and Schnur is emphasizing regular dialogue with customers to understand how they are being affected by the pandemic.

“With some of our customers, we’re going to start to see a downturn, and we’re trying to stay very close to them so we understand how that downturn is going to go and adjust our inventory levels appropriately,” Schnur says. “Then probably just as important — more important maybe — we want to stay very close to them so when things start to come back, we’re able to be there in supply and make sure they have everything they need from us.”

In the meantime, it’s not a bad time to talk to customers about long-term projects and priorities that might have been on the table for discussion anyway.

“Depending on where people are, how they’re working, what their work environment looks like, they may have some time to spend on video calls thinking about how we best come out of this and how we continue to grow after business conditions return to a little bit more normal,” he says.

As much as Schnur has taken on a role of counselor during this time of crisis, he says his team has done the same for him. Lubrizol has established check-in meetings at the end of each week to get a sense for what’s happening throughout the organization.

“I think we’re all helping each other, and it’s not only our senior team; I see that across our organization,” Schnur says. “I have these calls of 50 people, and I’m on the line and I’m hosting, along with Ana Rodriguez, our chief human resources officer.”

Rather than manage the conversation, Schnur sometimes sits back and listen.

“Our people talk to each other and support each other with their comments and their questions and discussions,” he says. “It’s not so much a matter of hierarchy, it’s just a matter of helping each other get through a very unusual situation and do it in a way that we’re staying true to helping taking care of our people, our customers and communities.”

Schnur looks forward to the day when the pandemic is in the past and he can dive completely into the new innovations and next-generation technologies and products that he expects will be part of Lubrizol’s future.

“That’s all still got to continue to progress,” he says. “It’s just a matter of being very thoughtful and proactive about it, maybe even more so than we’ve been in the past. It’s making sure people remember their accountabilities and what they’re empowered to do, regardless of what situation they are working in.”

TAKEAWAYS

  • Each experience is an opportunity to learn something new.
  • Find ways to help, even when you’re in a tough situation.
  • Never stop thinking about what your company needs to do in the future.

NAME: Eric Schnur
TITLE: Chairman, president and CEO
COMPANY: Lubrizol Corp.

Education: Bachelor of science degree, chemical engineering, Penn State University; MBA, Case Western Reserve University

Schnur on working remotely: Just like we have to be very proactive and thoughtful about connecting with each other within the company, we’re doing the same thing as we think about our customers, think about our other partners or suppliers. Most of those people are working remotely, as ours are. It’s a whole different situation.

It’s not the same. But if you’ve got a relationship with somebody, you can continue to be very effective, even remotely, for some period of time. I don’t think we could envision doing this really effectively for years and years. But you can operate very effectively for quite some time, and our customers, our suppliers and our partners are all in the same situation. I think we’re learning from each other.

Vast experience: Schnur has held a variety of positions across numerous product lines within Lubrizol, including technical and commercial roles, product manager, global business manager, vice president and general manager, and president of Lubrizol Advanced Materials. Most recently, he was president and COO prior to assuming his current role in January 2017. Throughout his career with Lubrizol, he has also worked at several company facilities, including the Lubrizol Additives site in Singapore, where he led engine oils marketing and technical services for Southeast Asia and Australia.

Lubrizol’s Eric R. Schnur

One of the frustrating truths about mergers and acquisitions is that you can put in a lot of work on a potential deal and end up with nothing to show for it.

“The nature of this work is that most of the stuff you work on doesn’t happen,” says Eric R. Schnur, chairman, president and CEO of Lubrizol Corp. “The thing we’ve learned is that flexibility is good, lack of clarity is not. Rather than take a ‘we’ll figure it out as we go’ approach, we’ve worked to define that plan much more clearly.”

Lubrizol completed one of its most important acquisitions in 2004 when it bought Noveon International Inc. It was a bolt-on acquisition that gave the company a stronger presence in personal care and performance coatings products. And it signaled to Lubrizol’s core business that the company was aggressively pursuing a more diverse offering to customers.

Schnur spoke about his approach to M&A and how his range of experiences at Lubrizol has made him a better dealmaker.

How do acquisitions factor into your business strategy?

We are always looking for acquisitions. Right now, we’re working on some and we’re thinking about others. It really comes down to knowing what the strategy is for the business and knowing where you’re trying to take it. What gaps do you have in terms of capability, talent and resources? What is the best way to fill those gaps?

Bolt-on acquisitions are what we do the most. An example is our life science business. In 2010, we wouldn’t have mentioned life science because we didn’t have a life science business. We had a very small business in pharmaceuticals and a very small business in films for medical applications like patches and medical tubing and things like that.

There was recognition of an opportunity, particularly when you look at the convergence of pharmaceuticals and medical devices to where you see drugs delivered to the device itself. We had two technologies and some ideas that maybe we could do something. We’ve made five different bolt-on acquisitions in that area. One to give us some manufacturing capability, one to give us some formulating capability and a couple to just give us a broader technology portfolio.

It was all done with the recognition we could build around life sciences and high-end skincare products. This was something we knew. Even if you’re not an expert, if you know something about it and you’ve thought through what the technology or skill set gaps are to try to fill, the risk is much lower. It doesn’t guarantee everything is going to be successful. When you look at bolt-on acquisitions, even large ones, we can take the risk out by bolting it on to something we know. That doesn’t mean we won’t entertain something that is outside of what we do today. But that’s not where we’re spending most of our time and energy in the acquisition area.

What do you look at when considering an acquisition?

Larger companies have a standard template for how they do acquisitions. We have things that have to be done, but we’re pretty flexible on how we do integrations. We bought a company called Particle Sciences in Bethlehem, Pennsylvania, that takes active pharmaceutical ingredients and they incorporate those into polymer structures so you can control the release rate of the pharmaceutical ingredient based on how you incorporate it and what the polymer is. We don’t know anything about that.

We’ve got pharmaceutical polymers and we have medical device manufacturing through another acquisition. This was a great fit to that combination, but we didn’t know how to do that. Now if we would have showed up and said, ‘Guess what, we’re going to integrate you,’ we could have destroyed the value, which is why we bought it. We try to be flexible based on the situation.

What we’ve learned and are trying to get better at is to declare what we’re going to do over, say, the next two or three years upfront. We might say to a company, ‘We want you to continue to do what you’ve been doing. But we need you to declare what you are going to do with the computer systems. What are you going to do with benefits? What are you going to do with all these things that are decisions?’ You relieve that frustration. If you don’t discuss those things upfront, the owner might be happy you’re leaving them alone. But he or she might not be happy that you haven’t put them on the benefits or on something else where your company can support them.

How to reach: Lubrizol Corp., www.lubrizol.com

Lubrizol uses chemistry to change the world. Eric R. Schnur wants to take that to the next level.

When Lubrizol Corp. completed the acquisition of Noveon International Inc. in 2004, it was a signal that it needed help in order to diversify its product offerings. Although the company had tried for decades to diversify, about 75 percent of its total revenue in 2003 was lubrication-related additives.

“We love that business, but it’s not a high-growth business,” says Eric R. Schnur, who joined Lubrizol in 1987, and now leads the company as chairman, president and CEO. “We had been trying to diversify for a long time — not to diminish the focus on lubrication and lubricant additives, but rather to provide us with other areas that we could focus on.”

Noveon was a specialty chemical company with a strong product portfolio in additives and ingredients for the personal care, performance coatings and engineered polymers markets.

“Buying the Noveon business gave us enough critical mass, talent and product technology capability to be able to build something,” Schnur says. “We know as much as anybody about how to put together an engine oil or a driveline lubricant, but we didn’t know how to put together a shampoo or a printing ink.”

Schnur spent nearly eight years as president of Lubrizol Advanced Materials and played a key role in building this new part of the company. It provided valuable leadership experience that put him in a stronger position to be selected as the new chairman and CEO when his predecessor, James L. Hambrick, stepped down in January.

“For somebody who spent their whole career at one company, going over to the advanced materials business was good,” Schnur says. “It was like leaving the company without leaving the company. I got to see different markets and market positions, a different customer base, different product lines and technology, even a different culture. We haven’t made it all the same, so there is still value in working in both areas within the company. You get to see a lot of variety.”

In addition to diversifying what Lubrizol can do, the Noveon acquisition sent a subtle, but important message to those who had been with the company for a number of years.

“It stressed to people in the additives business that you’re no longer the only horse to ride here,” Schnur says. “It was never actually said, but we took it as a message that we better get our act together. Now the company could preferentially invest down the street. They didn’t have to put resources into the additives business. In a way, it woke up the core business of the company.”

Lubrizol had taken a big step forward in addressing its need to be more diverse. The next step would be to improve execution and accountability.

A new way of thinking

When visitors walk into Lubrizol’s corporate headquarters in Wickliffe, they get an instant history lesson on the business.

A video running on a continuous loop in the lobby takes viewers back to the late 1920s when the company’s first product, a graphited lubricant and applicator marketed under the Lubri-Graph name, had a successful launch. In 1931, Lubri-Graph moved to its current home in Wickliffe and soon became Lubri-Zol and then Lubrizol. Nearly 90 years later, the $6.5 billion company has 8,300 employees and serves customers in more than 100 countries.

Many of the products and technologies that people use in their everyday lives — electronics, cleaning products, vehicle fluids, medicine and clothes, just to name a few — originated at Lubrizol. It’s a business that has been consistently profitable for nearly 90 years and has the backing of Warren Buffett. In 2011, Lubrizol became a wholly owned subsidiary of Berkshire Hathaway Inc.

While the company has good reason to be very proud of its history and the impact it has had on the world, Schnur says there are always areas to improve. The Noveon deal was a bolt-on acquisition that significantly increased the company’s existing positions in personal care and performance coatings products. It also added new engineered polymers businesses to its portfolio. However, the company’s growth has been flat since 2012.

“We’re healthy, we’re profitable, we’ve got great talent, great resources and with Berkshire Hathaway’s backing, we have great opportunities,” Schnur says. “We just need to get faster at executing. We’re competing for capital with other businesses that are growing and have different profiles. The reality is the status quo is unacceptable. We can’t have another five years of flat performance. We’ll be profitable, but being profitable isn’t the only issue. Are we getting an adequate return on the capital we have to invest to generate that profit?”

Schnur is focusing on three key points to drive meaningful innovation and execution in the years ahead at Lubrizol. Three points that will enable the company to take events like the Noveon acquisition and maximize the potential of those deals to boost performance and profitability.

The first item is to stress that the status quo is not acceptable.

“Within everybody’s individual responsibility, everything might seem fine. It feels the same as it did five years ago or 10 years ago,” Schnur says. “If people think the status quo is acceptable, then nothing different is going to happen. They’ll nod when you talk to them, but come in to work the next day and keep working hard at what they have been doing.”

One of the problems companies often face in trying to transform a workplace culture is that people believe they are working hard and doing everything they can possibly do to make their company stronger. That leads into the second of Schnur’s points: Results matter.

“It isn’t about working hard,” Schnur says. “We have to have people working hard and have a lot of good activity. But if the results don’t come from that, then we’re not doing the right thing. It isn’t about activity. That’s necessary, but it isn’t what drives results. If you have a list of things you do in your job and you do those things, it’s not always obvious to everyone how that ties to bottom-line profitability.

“Everybody impacts the bottom-line profit of the company in some way whether it’s helping to sell more, helping to make more of what we sell or reducing costs to make us more efficient.”

In order to drive better results and get out of the status quo, mindsets and behaviors need to change.

“Everybody agrees that somebody else should be working harder and generating better results,” Schnur says. “We need to first think about it as it relates to you. Until you change your mindset, it’s not going to change. We try to communicate where we’re at, why that’s not acceptable and what we need to do about it.”

Once you convince people that they can’t do it like they’ve always done it before and you demonstrate the critical importance of driving results, the third and final point makes a lot of sense. You need an external focus, a platform on which to take that energy and commitment and take steps to grow your business. You need to understand your end user and use that knowledge to create a product that people need and want to buy.

“We are pretty good at the technology,” Schnur says. “But we’re not so good at translating that into what’s the benefit to the end user. The end user is ultimately the one that decides whether this is of any value and whether there is any demand. We’ll sell it to a customer, we’ll sell it to the people who are the big brands that the consumer knows — oil companies, personal care companies, paint companies — but we have to understand how that happens.”

Take the next step

Schnur says a significant percentage of the people who work at Lubrizol have a technical degree in chemical engineering, mechanical engineering, chemistry or physics. Not many people can do what they do. But that expertise alone isn’t what will define Lubrizol and shape its future in the years ahead.

“Everybody in our industry has chemistry,” Schnur says. “You wouldn’t be a chemical company if you didn’t. But chemistry is of no value to you. What do you do with it? If I showed up with a little vial of chemistry and said, ‘Hey, guess what, we made this in the lab today. What do you think?’ That doesn’t mean anything.

“Whether it’s paint, shampoo or engine oil, all of these products have different ingredients. Not only is there skill required to generate chemistry or synthesize and generate a molecule, there’s as much skill, if not more, in balancing the ingredients you put together so you can impact performance. So there’s chemistry and there’s also applications. We sell a molecule that a customer then formulates with a whole bunch of other things to make shampoo or printing ink or paint. We’ve built up that capability over time.”

There’s a still a gap, however, in making connections with those crucial end users.

“We’ll run every single test and do all the formula and validation work for different certifications that you need to sell an engine or a driveline lubricant,” Schnur says.

“We will provide that to our customers, but we still have limited visibility to the end user. What is that fleet owner doing with that heavy-duty diesel engine? What value do they get out of different maintenance intervals? What value do they get out of fuel efficiency? We think we know, because some of it, you can do the math. But what is the actual practice?”

Some of the data can be gathered from the customers that Lubrizol deals with, but that provides limited information that doesn’t always represent the view of the market as a whole.

“This isn’t about going around a customer,” Schnur says. “It’s about being able to take technology and commercial opportunity to the customer. If we can combine the chemistry and the applications and get really good at understanding the end user in a way we haven’t before, not that we’re going to reclassify us as something other than specialty chemical, but we’ll be different than most other specialty chemical companies.”

That ability to aim higher and deliver a product that customers may not even know they needed is what drives growth.

“It’s not like we’re just wanting growth because we can’t think of anything else to aspire to,” Schnur says. “If the company doesn’t grow, people don’t get opportunities, you don’t get to invest in other cool things and support the community the way you would like to as a healthy company. Everybody recognizes we need to grow. Sometimes they just can’t see how what they do impacts that. We’re trying to make that clear.”

Create more accountability

Schnur wants everyone at Lubrizol to be clear about how they can impact the company’s financial status.

“How do you make money?” he says. “Either you sell more product and make more on what you sell so your margins are better, or you spend less money making and selling the product, get more efficient and reduce your costs. Everybody, no matter what they are doing, can impact this in some way. Telling people to think about that doesn’t necessarily solve the problem.”

Accountability can help in that effort. So the company began what Schnur describes as “a fairly rigorous process of defining accountability for everybody.”

“We take pride in the small company feel and being informal and that has persisted over the years,” Schnur says.

“But we’ve outgrown the point where you can just tell people to go work together and get it done. We have to define who is accountable for it. That gets a little bit scary because accountability to some people is trying to find someone to blame for things. But if you do it well, or even if you don’t do it well, you just do it somewhat intelligently, it’s all about speed and efficiency. You’re responsible for making that decision. So good, bad or otherwise, make the decision. If it’s the wrong decision, you’re responsible for helping us learn from it.”

When employees understand what they are accountable for and have a clear sense for what the company is trying to accomplish, the path forward becomes easy to see.

“Why does a job exist?” Schnur says. “It’s real basic, but people haven’t thought of it that way. Ultimately, within a fairly short period of time, if people are really clear about what they are accountable for and they are really clear how that ties back to the results of the business, they are going to be more engaged in helping us to be successful.”

This review of accountability includes everyone from the top down, Schnur says. One thing he doesn’t want to be, as the company analyzes its processes, is a bottleneck to growth and progress. Earlier in his career at Lubrizol, he spent time working at the company’s Singapore location.

“We need to empower people more, particularly in the growth regions like Asia,” Schnur says. “They can’t wait for people at headquarters to make all the decisions for them and we can’t do that anyway. There was a time when that happened 20 or 30 years ago.

“Today you can’t. I was one of those people working in Asia. I know what it felt like to have to go back to headquarters when you needed support. Now we’re putting a lot more of that capability out in the region. I can identify why that’s necessary and why that’s needed.”

One thing he has learned as a leader is the higher you go, the less you do and the less hands-on you are in your work.

“That’s a balance everybody struggles with,” he says. “You don’t want to appear uninterested. I’m still ultimately accountable for everything that happens in the company. I can’t just take off and say, ‘Good luck, I’ll see you in a few months.’ You have to be involved. But you don’t want to limit other peoples’ opportunities to grow and learn.”

If Schnur can find the right blend of empowerment and involvement with his team, he’s confident Lubrizol will be well-positioned to achieve consistent growth in the years ahead.

“It’s not a huge high-risk proposition to try and put that capability in place,” he says. “It’s just a different skillset that we don’t have at the moment. We have to make it work really well with the applications and technology capabilities we have.

“Three years from now, I know what that needs to look like and what impact that should have on our success of bringing new solutions to market. Our customers should be making more money off of what we bring, so we should be making more money off of what we bring.”

How to reach: Lubrizol Corp., (440) 943-4200 or www.lubrizol.com

The Schnur File

NAME: Eric R. Schnur
TITLE: Chairman, president and CEO
COMPANY: Lubrizol Corp.

Education: Bachelor’s degree, chemical engineering, Penn State University, State College, Pennsylvania; MBA, Case Western Reserve University.

Is there one person who has played a key role in the type of person you are today? It would be my dad, Bob. I told him last year, ‘You taught me two things: the importance of hard work and treating people the right way.’ At the end of the day, that’s all that really matters.

How often do you talk to Warren Buffett? We talk regularly, probably once a month. He doesn’t require any frequency. He’s always available, which is a tremendous resource. He doesn’t know anything about chemistry, so he can’t help on certain things. But in terms of his experience and his advice, he’s been very helpful.

People and companies making a difference in Northeast Ohio

Winner


Sonia Winner
is returning home to Cleveland as the new chief development officer for the Cleveland Museum of Natural History. She was recently the vice president for university development at Columbia University. She will join the museum to lead campaign and development efforts.

Winner had been with Columbia since 2011, initially as deputy vice president for development, professional schools and programs, before being promoted to her current role in 2014.
The museum recently completed Phase I of its expansion and is currently planning for the rest of the $150 million development and renovation work, due for completion in 2020.


Schnur

Hambrick



Eric R. Schnur assumed the roles of chairman, president and CEO at Lubrizol Corp. effective Jan. 2. He succeeds James L. Hambrick, who steps away from the company after a 38-year career during which he led Lubrizol’s transformation into a leading specialty chemical company.

Schnur has been with Lubrizol for more than 27 years and was named president and COO on June 1, 2016. He previously served as president of the Lubrizol advanced materials business segment for eight years.
Schnur joined the company as an engineer in research and development, and progressed through a variety of technical and commercial positions in the Lubrizol additives and Lubrizol advanced materials business segments.


Stueber

Ansberry

 

Lincoln Electric Holdings Inc. announced that Frederick G. Stueber will retire from the company as executive vice president, general counsel and secretary in April 2017. His position is being filled by Jennifer I. Ansberry, who joined the company in 2004 and serves as vice president, deputy general counsel. She oversees the company’s legal function in global mergers and acquisitions, securities law compliance, corporate governance and other general corporate legal matters.
Prior to joining Lincoln Electric, Ansberry served as an associate at Thompson Hine LLP and Keating, Muething & Klekamp LLP. She received her juris doctor degree from the University of Cincinnati — College of Law and received a bachelor of business administration degree in accounting from the University of Cincinnati.

Please send your executive-level promotions to Mark Scott at [email protected].