Optimizing Manufacturing Reengineering with Emotional Intelligence: SAP, LEAN, and People at CIBA Specialty Chemical

By Lorenzo Fariselli and Massimiliano Ghini

Background:

CIBA Specialty Chemical is a leading global chemical company dedicated to producing high-value benefits for its customers’ products. In 2008, the company’s continued operations generated sales of US$5.2 billion and invested more than US$200 million in R&D.

In 2006 a major reorganization program, called Operational Agenda, was launched to improve company profitability.  The program included several initiatives such as implementation of SAP, Lean Manufacturing, a new geographical footprint and a new concept and structure for innovation, marketing and sales.

The CIBA manufacturing plant near Bologna, Italy, which produces a variety highly specialized products in a highly competitive global market, was part of the Operational Agenda initiative.  Senior plant leadership recognized the breadth and the complexity of the change and the need to fully engage people in the process.  They decided to fuse the implementation of structural changes with an Emotional Intelligence (EQ) initiative. The EQ activities were designed to support the managers to understand the reaction of personnel during such impacting changes, to engage the middle managers gaining their commitment and to enlarge the base of the “change agents.”

Implementation:

The implementation of the Emotional Intelligence Initiative followed three phases:

1. Engagement and Planning:

Senior and middle managers participated in strategic workshops resulting in all managers recognizing and appropriately expressing their feelings, building a common “vision” and becoming committed as “change agents.”  Their assignment as change agents provided a focus to mentor employees to “buy in” to the company.

The Organizational Vital Signs (OVS) assessment was initiated to focus on the company’s strengths and weaknesses -- specifically in terms of “people side” areas contributing to talent retention, staff performance and customer service.  

2. Implementation and Development:

A combination of training and “on the job” consulting supported managers to address the issues raised by the OVS survey – in the context of optimizing ongoing change efforts:

• Training sessions were delivered with a focus on individual employee’s response to change.  This safe environment provided a venue to share individual and collective feelings about becoming change agents.
• The managers were encouraged to hold coaching and consultancy discussions on specific issues with key employees.  This process led to a better understanding of critical issues and perceptions of leadership.  
• Outdoor training activities for middle management were implemented; subsequently also shop floor employees had the possibility to participate.  Involvement in these activities augmented the change agent concept throughout the entire company.

"One plus one makes three: that’s the power to add EQ in big organizational change!" -- Luigi Boaretto, Site Manager, CIBA Italy

3. Evaluation and Reinforcement:

The company’s commitment to change is monitored with periodic adjustments, fine tuning when necessary. With the consistent utilization of emotional intelligence encouraging staff towards more intentional communication, change continues to boost site performances.

Effectiveness:

The commitment to EQ assisted the CIBA team to achieve important business goals -- for example, over two years, productivity increased by 18% while simultaneously reducing complaints by 73%.  

Plant leaders attribute the efficacy of the program to combine the potential of the “rational” tools and changes deriving from SAP, Lean Manufacturing, and business re-engineering fused with the emotional intelligence insights and tools.