Change actually didn’t shock the system at ICI Paints.
The company, probably best known for its Glidden paints, had been through several changes in recent years. First, Erik Bouts came in as the new CEO in late 2007. Shortly after that, AkzoNobel bought ICI and created a new entity, AkzoNobel Paints LLC. For most people in the company, the changes were just the most recent ones in a long line of changing leadership and direction.
“If you go back 10, 20 years, I think there has been many changes here in leadership, in strategy, in direction, in what to do, what not to do, so I found an organization that was very skeptical of leadership in general — ‘This will pass by also. OK, new guy’s coming in, new owners, we have seen it, we have heard it, and we just keep doing what we always have been doing,’” Bouts says. “I think that was a big challenge we had in leadership to go through that attitude, and it’s a big organization, so it’s not the two-minute egg, as we say. It requires a lot of energy from everybody to get the ship sailing in the right direction.”
With several thousand U.S. employees who bring in a significant portion of the $1.35 billion in revenue generated by the North American decorative paints division of AkzoNobel, it would certainly be a challenge to get people on the ship, but it was far more complex than just getting people to trust a new direction.
“First of all, you have to understand what the strategy of the new owners is,” he says. “Yes, we run the Glidden business here in the United States, but at the same time, you’re part of a global company now, with global goals, global objectives and having to deliver the expectations of the shareholders, and that takes awhile to carve out all of those new objectives. It’s more than just putting two companies together one and one — you have to create synergies, and you have to set new goals for that combined company.”
But there was still another element to that challenge — at least within the country.
“The paint market has been in a strong decline since its peak in 2006, 2007,” Bouts says. “The market has come down about 30 percent, and Glidden was not the stronger player in the U.S. market. Especially for the smaller-tier players in this market, being faced with such a market decline, such an economic crisis, it puts an additional challenge on the company.”
With three big challenges facing him, Bouts knew that to get through the acquisition successfully, he needed to know where he was going, he needed to create a plan to get there, and he needed to effectively communicate during the various stages of the changes.