Randall Dearth knows that people are what make a business successful. That’s why his employees were the first priority on his list when Lanxess Corp. spun off from Bayer Corp. in 2003. Deciding to focus more on life sciences and high-performance materials, Bayer divested most of their chemical operations and some of their material science operations. Lanxess Corp. formed in 2004 as a new, independent entity of Bayer, which meant change had to occur.
“The first thing we had to deal with, and I had to especially deal with here in the U.S., was our people,” says Dearth, president and CEO of Lanxess Corp. “We had a lot of people that were very nervous about leaving Bayer. They didn’t want to go to this new company. So a lot of that was, ‘How do we deal with the people issues, how do we deal with making sure they feel comfortable in this new company but also make sure they had a future?’”
Dearth knew it would take a strong effort and a lot of communication to assure employees that Lanxess, a specialty chemicals company, was going to come out of this situation better than ever and that each employee would play a big part.
Communicate to employees
Having to start fresh with a new location, building and a new company direction, it was important for Dearth to make employees feel welcome.
“I came in with a very strong belief that we needed to set up policies for our employees so they can truly be a part of this new company,” Dearth says. “Our facility here in Pittsburgh went into a brand-new building where the walls were up but nothing else. We worked with our employees in designing the building and asked them what it is they wanted. They wanted a fitness center; they got a fitness center. I wanted to hear from each and every employee. We did a lot of communication, town-hall meetings and round-table meetings to really hear what their concerns were and to make it clear that as a new company, we had a future and we had a lot going for us in terms of our products and our positioning.”
Lanxess Corp. employs nearly 14,500 people globally, with about 1,000 employees here in the U.S. As Lanxess was finding its feet in the first few months, Dearth focused a lot of his time on communicating the company’s goals, vision and direction.
“Originally, we did a tremendous amount of town-hall meetings,” Dearth says. “Every month for the first year, we would get together in a town-hall forum and allow for questioning, talk about our vision, talk about our businesses and educate people about our challenges.”
Many companies discuss their goals, direction and successes in a town-hall forum or at a hotel meeting, but Dearth knew that those meetings alone wouldn’t be enough to communicate what he wanted the company to become.
“We did that not only in town-hall meetings, but then I took them to small groups of 10 to 20 employees where I would specifically ask them their concerns, their issues and what we could do differently,” he says.
In order to give employees an easy and constant way to remember company goals and vision, Dearth created what they call Formula X — a simple guide to help employees stay focused and maintain four basic principles: Seek solutions, not problems; keep it simple; take ownership; think new, and act fast.
“Formula X was how we wanted to run our businesses and how we want our employees to act,” Dearth says. “We’ve got to be quick. I expect from our employees great ideas. I challenge them in small round tables and I ask them what ideas they have that would make things even better, and we try to live these things through.”
As Lanxess started to come together and grow as a company, Dearth says that having a vision and communicating that vision constantly were the keys to making the company successful.
“You need to set a vision,” Dearth says. “Employees look at leadership to say where are we going? Is this really where I want to be? It is imperative that the CEO very clearly sets out, ‘This is the direction, these are the goals we are looking for, and this is what it’s going to look like once we get there,’ and they have to make that clear. Secondly, a good CEO needs to allow his employees the entrepreneurial freedom to do things on their own. Allow them to make mistakes but to also make themselves better. A CEO should encourage entrepreneurial spirit. Also explain cost-effectiveness. As a smaller chemical company, we didn’t have the big, deep pockets of a big multinational company like Bayer, so we had to instill in our employees how we spend our money, what we invest in and how we invested. You have to give a financial sense of the company to your employees.”