Emotional Intelligence at Ciba - BASF?

When browsing recently, we came across an article on how Ciba used 'Emotional Intelligence' to accelerate its 'change programme'.  Like many chemical companies, Ciba implemented a survival strategy which essentially was geared to slashing costs across the entire organisation.  So how do you do this with the least amount of pain?  Call in the consultants, I guess, and introduce a 'new term', emotional intelligence (EI).

There are many definitions of EI and the original development of the understanding of what it means and its importance in communication and inter-personal relationships is not questioned.  The definition given in Wikipedia is quite detailed, but to steal a few lines: 

Emotional Intelligence (EI), often measured as an Emotional Intelligence Quotient (EQ), is a term that describes the ability, capacity, skill or (in the case of the trait EI model) a self-perceived ability, to identify, assess, and manage the emotions of one's self, of others, and of groups^[1].

What does all of this EI stuff mean?  It was tempting to write an essay and point out where big companies fail in recognising that the company is made up of people who are intelligent, have different abilities (real and perceived) and are able to perceive, understand and use emotion (positively and in a manipulative way) - we will avoid the essay, but conclude that if you harness the combined assets of the individuals you have a great company!  It simply distils into the following:

1. Understand
2. Communicate
3. Listen  
4. Involve
5. Decide

Sure, in these tough times, decisions have to be made but making them in the board room and then asking middle management to implement them may not be the best soultion, unless you don't give a damn about the individuals that make up the company.  The Alan Sugar approach popularised in the TV show, 'Apprentice', seems to lack any Emotional Intelligence and portrays a very old fashioned way to run a company.  If large companies (and SMEs) are to survive in the future, particularly in the developed world, a change of approach is needed - more of this 'Emotional Intelligence'.  In our experience, one advantage that SMEs have is that they are more emotionally intelligent.

The article which started this blog off concerned an approach used by Ciba, a Swiss company with a relatively multi-national outlook.  Ciba has now been acquired by BASF, a giant German company with a reputation for having an autocratic style of managememt (Do it!).  Does BASF have emotional intelligence?  Let us know.

Clariant ditch the past and prepare for the future - paper chemicals to be slplit off as a stand-alone unit

With its lack of strategic direction and slow decision-making, Clariant has found itself in a position where it needs now to make some decisive moves.  The complexity of its paper, textile and leather division (TLP) and their non-transparent interrelationships have made it hard for Clariant to off-load any of these businesses as a separate entity.  That said, it is hard to see how anyone would want to pay much for these heavily European-based (Germany and Switzerland) businesses - the share price has continued to free-fall, reflecting the value of Clariant.

In one of the changes, described in management speak as, 'enabling each business to be managed as a stand alone unit, providing the operational and strategic flexibility required to improve profitability',  Clariant is continuing the process of trying to separate the textile, paper and leather businesses from each other in the hope that any of them would be more attractive to a potential buyer.  Too little, too late is the view of many in the industry.

Simultaneously, Hariolf Kottmann, the CEO of Clariant, has retired- off Peter Brandenberg, who was seen as a temporary, Swiss establishment head of the TLP Division as the slow process of deciding on future options for change were made.  Brandenberg spent 38 years at Clariant!

In Brandenberg's place, Kottmann has unsurprisingly brought in an ex-Hoechst colleague, Mathias Lutgendorf as head of the TLP Division and a member of Clariant's executive committee. He will lead the continuing process of separating the paper, textile and leather businesses from each other.

Interestingly, Lutgendorf moves to Clariant from the private equity owned DyStar, a textile dyes and chemical producer, so there could be some thoughts of consolidation on the horizon.

Clariant 'streamline' their board of management - time for change and decisions?

Clariant announced that it has 'streamlined' its board of management.  Watch this space? Will Clariant managment actually do something effective to save the ailing company or is this another piece of expensive window dressing?

Do we have the best people managing our paper chemicals businesses - paper chemicals or pickles?

Much has been written by the management gurus on what it takes to be a good leader of a business, but recently there was a study in which the top 32 business executives of the FTSE 100 companies were asked to list the essential qualities of a good senior manager. Three were highlighted:

• Experience of senior management
• Five years in the post
• Experience of the sector in question

How do the leaders of our paper chemical businesses stack up? There were times when a certain management school tried to convince their students that if you could run a pickle factory you could run any other business! There are certainly some paper chemical businesses headed by 'pickle-factory-manager-types', others at least score something in the three criteria listed above, but what is of most concern is the last criteria - experience of the sector in question.

There are some paper chemical companies which have repeatedly brought in new people who have zero experience of the business as if a fresh, ignorant start, would somehow improve things. In good times things trundle along, but when we hit periods such as now, when experience of the paper chemicals business is essential, they start to waver.

How does your company stack up? Paper chemicals or pickles?