Maybe it’s because he lost his right arm when he was 6 years old on a farm in Nebraska. Or maybe he’s naturally inclined toward problem solving. Whatever the case, John Foley has always been good at overcoming challenges. Now as CEO as KMCO, it’s a knack he’s used to help the stay buoyant in stormy waters.
This week at Informex, a chemical-industry event hosted by UBM alongside CPhI North America, Foley shared some of the lessons he’s learned from his experience along, with his approach to transforming a company and unlocking its value.
Foley got his start at Monsanto. But after a few years, he realized the company was too well run for his liking. Yup, you read that right: Things were going too smoothly. Instead, Foley wanted to be challenged.
He enrolled in the general management program at Harvard Business School and has been applying the principles he’s learned about cultivating change in a company ever since.
After spending his career in various management positions, Foley jumped on board at KMCO, a specialty chemical manufacturing and contract processing services provider. The company looked stable at first, but Foley quickly realized it was on the verge of hitting a crisis.
A drop in energy prices had caused prices for glycol, one of the company’s chief products, to plummet as well. It was time for a dramatic shakeup. To start the process, Foley implemented a three-step plan.
First, assess the situation. Foley said he listened to anyone but not everyone at KMCO and followed the money.
“You need to be curious and make the diagnosis quickly. The financial results do not lie,” Foley said in his keynote address.
Next, set the direction for the company. Foley suggests creating a simple, actionable mission plan. At KMCO, the company developed the goal of doubling the size of its production capacity by tapping into the value of the company’s existing assets. This meant that KMCO made a slew of efficiency upgrades both in its plant and office.
“We didn’t have to build a new kitchen. We just needed better wiring for the stove,” Foley said.
In the plant, KMCO upgraded its utilities so everything would run more efficiently at a higher capacity. On the back end, Foley steered the company from working with handwritten notes and spreadsheets to finally implementing its ERP system.
Finally, implement the plan. Foley admits that when he started at KMCO, he wasn’t terribly popular among the staff.
“The resistance to change is fierce...but I like the puzzle of figuring out how to move an organization without breaking it,” Foley says.
Foley has pushed ahead with all stages of the plan, while clearly communicating how success is would be measured and emphasizing that “people matter.”
So far, Foley says KMCO has cut $13 million in fixed costs. But he says the company’s transformational phase is far from over.
For the road ahead, Foley says that KMCO is focused on securing the “baseline business.” This includes employee retention, customer satisfaction, and ensuring cost controls and modest growth. And the No. 1 priority is enhancing safety and regulatory compliance by strengthening management systems.
“It’s not finished,” Foley says. “The results so far are very encouraging. Sales growth has resumed. Cost is under control. But we’re nowhere near our potential.”
His bottom-line message? Simple changes can have a huge impact.
