ACC’s Cal Dooley discusses what the chemical industry and regulators have learned from Hurricane Harvey

The American Chemistry Council and Texas Chemistry Council on March 5 gathered stakeholders across industry and government to discuss lessons learned from Hurricane Harvey and how to be prepared for the next storm. The daylong forum, at the Houston Area Safety Council headquarters in Pasadena, Texas, included member company CEOs, regulators and other key stakeholders.

SmartBrief spoke March 22 with Cal Dooley, American Chemistry Council President and CEO, about the forum, the lessons learned and how industry can continue to improve its storm preparation, collaboration with regulators and influence needed infrastructure improvements along the Texas Gulf Coast.

The following interview has been edited and condensed.

 

How was Hurricane Harvey different from previous storms that hit the Gulf Coast, and why was it particularly important to bring together stakeholders to discuss the storm's lessons and effects?

Cal Dooley
Dooley (American Chemistry Council)

I think what distinguished Harvey from a lot of other hurricanes in the Gulf Region and [what] the industry has experienced is that it was not a wind event. It really turned out to be a rain event, and a rain event that had a long duration. It was almost unprecedented that you had three days of rain, that resulted in over 50 inches of rain falling in the broader Harris County/Houston region.

A lot of the planning and the hardening of facilities was really focused on making sure they could handle very high hurricane-strength winds, and while there were some strong winds in this one, the facilities held up very well in that respect. But this was an unprecedented amount of rain in that it was at least a 500-year event with the amount of rain that fell. And I think that pointed out another challenge to the industry and some of the facilities. As well as, in the region, it brought to light some of the infrastructure inadequacies and needs that must be addressed to ensure that, if we have a future incident of this nature, we can mitigate any harm to the environment as well as human safety.

A major theme during the forum was the importance of supporting employees in dealing with Harvey. Which stories stood out to you as key takeaways for the industry?

We were fortunate that we had a number of our presidents and CEOs of some of the larger chemical companies in the United States and our ACC members that participated in the event. They, without exception, said that the responsibility for responding to an event of the nature of Hurricane Harvey or any natural disaster lie predominantly with the site manager and the people that are on the ground at the facilities, who really have their hands on the controls and can make the determinations in when a facility might have to be shut down, when employees have to be evacuated. ...

Also, what I think was most striking was the stories about how some of the planning revolved around how they could account for everyone of their employees in the region.

And not only the employees that might be on site, but also the employees and their homes and their communities so that they be aware of the challenges a member of their team might be facing in terms of flooding at their house or other challenges. Almost without exception, every one of the companies cited the efforts that they put in to making sure that they could track their employees and their welfare.

Another interesting story was Covestro, where they set up a drive-through supply center for their employees, where they had the tarps, they had the disinfectants, they had food supplies -- essential needs that they could distribute in a very quick order to their employees at a central site. And then you also had the stories with some of the companies such as Exxon that actually used helicopters to transport supplies into regions that were suffering from shortages of water and food.

You also had other companies that were talking about the organization of their staff into teams that went out to some of their fellow colleagues, employees’ homes that had been flooded and helped them to clean up, rip out the drywall and get them prepared for reconstruction. … Almost without exception, every company that was involved and had employees who were affected made a significant effort to either provide for mobile housing, temporary housing or rented apartments, rented hotel space to provide for their employees who were displaced in the flooding.

Another major topic of conversation throughout the forum was how companies worked with their partners in government -- what examples of this stand out to you?

What I found very encouraging is that we invited the federal agencies -- EPA, Homeland Security, FEMA -- to participate. We also had the state regulatory agencies that were engaged and also local officials that attended and participated. And our objective there was to really try to identify where there might be [opportunities] for greater collaboration or communication or focus, identification of priorities -- where we might learn how we can work even better in the future. I was really pleased that, almost without exception, every representative from the regulatory community was generally positive about the engagement that they had with industry. And I think industry’s response was also very positive about the collaboration with regulatory agencies.

I do think that there are some opportunities to improve upon some of the infrastructure needs in the region. There’s a range of projects, from the very big projects such as the coastal spine, but there’s also, I think, a need in terms of some of the management of some of the draining basins, that people realize there needs to be more work done on.

There were so many great stories, too, about how some of our companies responded to the needs of some of the local agencies and local governments. To bring in huge pumping systems to help move water, that help prevent even worse flooding in the region. ...

There was a demonstration of the commitment by industry as well as the regulatory community to really work together. Not everything worked as well as it could have, but I think it wasn’t for lack of effort. People are even now, I think, able to look forward to this next hurricane season with even stronger lines of communication and relationships that were built -- or were enhanced, I should say -- through the event that we had in Houston.

Looking ahead to this year's hurricane season, what are some of the top lessons that came out of the forum that you think companies should be considering?

One of the things that came up was that, even while companies had lots of supplies that were positioned, I think they recognized that they were working from past experiences and a traditional hurricane, which has high winds, which comes in and usually leaves within a day or so. It’s usually a day, day-and-a-half event, most often. And what they recognized with Hurricane Harvey was that was a three-day event, and then you had infrastructure [problems], flooding that even resulted in some areas being isolated for much longer than even that three-day period.

I think some of our companies realized they have to pre-position some basic supplies for a longer event than they had available in this instance in order to ensure that their staff onsite, at the facilities, are well-cared for and they have the confidence that they’re going to be well taken care of. What I think was also made clear is that an employee is not going to be able to provide his full focus to his job if he’s concerned about the health and safety of their families. And so making sure that there’s enhanced attention given to how do they ensure communications between families and the company, as well as making sure that the pre-positioning of supplies can be delivered to families facing a unique challenge from flooding or some other type of natural disaster.

The stories about our companies that provided the pumps -- and these are huge pumps that can move a lot of water -- that helped some of our local communities. But there was also talk of some of the companies that provided engineers to get some of the sanitation systems back up and running, and water systems back up and running. The contributions that we made in a couple of locations were so well-appreciated, there might even be some opportunities for us to build upon that in terms of our preparation for events in the future.

It's been a couple of weeks since the forum. What has the response been like from companies and other stakeholders?

What I’m hearing from the members of ACC is … “We gotta do more things like this,” and really be very proactive and try to create constructive forums where we bring a diverse constituency together to really talk about what the industry is committed to, learn what we could be doing better and looking for how we can even work better today. To me, that was our objective going in, and I felt pretty good about how it played out. I felt like we delivered on that.

The forum was notable for bringing together companies, regulators at all levels, and industry groups such as ACC. What do you see as the ideal role for ACC in helping the Texas Gulf Coast chemical industry be ready for future storms?

There’s a couple of roles that we can play. In the short term, our whole Responsible Care program really contributes to a culture [of safety] within our companies. … The role that we can play in helping to continue to build and cultivate very constructive relationships with the regulatory community -- both locally, regionally, state and federal -- is also very important in terms of demonstrating the commitment of the industry to being a good citizen, and a constructive partner with the regulatory agencies.

And then when we look on longer-term, that’s where our relationships with federal and state officials, which is really more focused on a lot of the infrastructure needs. We’re playing a role in trying to be a partner with the Texas Gulf Coast region and trying to build support within the administration and Congress for some infrastructure investments and the coastal spine and other projects that can enhance the ability of that region to manage the impact of natural disasters such as hurricanes.

And those are all important roles that we can play that add value to the community, and to our industry, and to the health and safety of our communities in which we operate.

 

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Industry, government share lessons learned from Hurricane Harvey

The Texas Gulf Coast is a region where regulators and chemical companies are familiar with each other, both because of the sheer number of facilities in the region and because of the important roles each has when it comes to disaster preparation, response and recovery.

A recent event held at Houston Area Safety Council headquarters and organized by the American Chemistry Council and Texas Chemical Council touched on the governmental and company responses to Hurricane Harvey, as well as lessons learned.

The daylong event included a morning panel featuring site managers, environmental, health and safety (EHS) officials and other executives from five chemical companies. The afternoon saw panels with federal, state and county officials, including a Coast Guard leader and the Port of Houston commissioner.

Any emergency preparedness or response along the Texas Gulf Coast must take into account land and sea, as well as the various needs of first responders, industrial facilities, residents and anyone working to support those efforts. Company executives in the morning panel discussed the unique nature of Harvey -- its heavy rain and flooding, that it affected many sites simultaneously -- while noting that employees, including contractors, were often personally affected by the storm, too.

While any storm can bring surprises, Nancy Randolph of Dow Chemical noted that planning for hurricanes is a year-round job, while Mike Zamora, ExxonMobil’s Americas director of manufacturing, pointed out that drills regularly occur at a regional and local level, not just when a storm is imminent.

Part of a chemical company’s response involves coordinating with government officials from the local level all the way up. As LyondellBasell site manager Kim Foley noted, planning out scenarios and executing them relies on interaction with local officials, whether they be ports, sheriff’s office, Coast Guard or others.

Much like scenario planning for facilities, good working relationships between companies and local officials don’t start during storms, but much sooner. Recent hurricanes have taught Chad Anderson of Huntsman that “you need to make your plans very, very early when it comes to building relationships and being a key stakeholder at the site. It’s also very good, from what we’ve seen, to test those relationships long before you actually need to use the relationships.”

Peter Greco of LyondellBasell pointed out that, from a technical standpoint, communications and information systems must be robust enough to handle any incident. This was made clear last year, he said, as “Harvey overwhelmed everything.”

A geographically specific challenge for the Texas Gulf Coast region is the sheer number of jurisdictional entities and an uncertainty about who companies need to report to beyond the immediate local jurisdiction, said David Wade of the Harris County Office of Emergency Management. Coordinators like Wade can help companies improve those efforts -- not just during an emergency situation but as an ongoing preparation and planning exercise. Because of the complexities of crisis communications, Wade said, he encourages all facilities, even smaller ones, to utilize local information-sharing systems so that everyone is in the loop.

The afternoon sessions also looked at Harvey from the port’s response, as well as legislators grappling with recovery efforts and planning for future efforts. This included Coast Guard Captain Kevin Oditt describing the challenging situation floodwaters presented to the Houston Ship Channel during Harvey from his perspective.

For the port and the Houston Ship Channel, there’s work to be done still to repair damage and and restore it to pre-storm state, much less prepare for future storms. Texas state Sen. Brandon Creighton called Harvey “the new benchmark” for these types of conversations. Meanwhile, fellow Sen. Larry Taylor called for a coastal barrier, or “spine,” to help protect the region, noting that had Harvey brought a storm surge directly up the channel, the Port of Houston could have been closed for months.

All that work will require commitment and resources, including federal funding, a point raised by both senators as well as discussed by Sen. Ted Cruz, R-Texas. Creighton also emphasized the need to ensure that federal funding formulas properly compensate Texas to help the state prepare for future storms.

When Harvey struck, people were a key part of the chemical industry’s response

Hurricane Harvey was a unique storm that, months later, still has the Gulf Coast chemical industry and other stakeholders discussing the lessons learned. On Monday, this discussion was amplified in Pasadena, Texas, as CEOs, regulators, senators and other stakeholders met in a daylong session.

The event, organized by the American Chemistry Council and Texas Chemical Council, was opened by LyondellBasell CEO Bob Patel, who noted the vast chemical facility presence along the Texas Gulf Coast and the interconnected supply chain that is at risk when storms strike.

If ethylene capacity is knocked offline, for instance, that can affect other industries and cause shortages in products including medical devices, apparel and construction materials.

Numerous speakers on Monday noted that Harvey won’t be the last hurricane, and yet chemical companies will continue to invest along the Texas Gulf Coast because of its proximity to raw materials, infrastructure and shipping routes. At the same time, Patel noted that Harvey was “much larger than anything we would have imagined.”

So, an underlying theme of the day’s event was resiliency and recovery, both in terms of facilities and people, as well as finding ways to make preparation even better next time.

Patel’s introduction was followed by a panel discussion moderated by ACC CEO and President Cal Dooley. Patel, Covestro CEO and Chairman Jerry MacCleary, Dow Chemical Chief Operating Officer Jim Fitterling and BASF executive Ken Reid discussed how each of their companies weathered the storm, both in terms of how individual facilities responded and how logistics, communication and other support was conducted at the corporate level.

The importance of people

At almost every point, panelists inevitably returned to a recurring theme: The importance of people, both employees and the community at large.

Throughout the day, panelists and prepared videos told stories of employees who directed charitable efforts, provided temporary housing for employees, made sure employees could check in on families and their homes. These videos also highlighted employees whose homes were damaged and how they were supported by their employers, sometimes to the point of people being given time off to help their co-workers clean out and repair their homes.

Covestro’s MacCleary repeatedly emphasized how important people are -- that you can’t do anything at a plant with smart, talented people who are kept safe. Fitterling followed by noting that the “first order of business is people: making sure they’re safe. Not just safe at work, but what about their homes?” In some cases, a later panel noted, employees are still out of their homes.

BASF’s Reid discussed how he led the response team that took care of people, along with EHS and other issues. Right away, he said, BASF saw the storm would affect many sites and many employees, so they enacted a plan to support those people from across the country, including buying crated materials that employees could later use to fix their damaged homes.

This people support extended to which decisions corporate officials would make versus which site managers would make. As MacCleary noted, site operators are empowered to decide when a storm-affected site needs to shut down. They need to tell him, yes, but they don't need his approval.

Infrastructure and supply lines

Resiliency also has an infrastructure and supply component, whether it's what to do to improve the Houston Ship Channel, keeping supply lines open or making sure facilities can handle a multi-day event, Food and diesel fuel supplies at many sites ran low as the storm dragged on, Patel and other executives said. They also noted the need to look at hardening facilities, and even rethinking aspects of site design for future facilities.

The need for preparation doesn't end after the storm moves on, either: A lunch session noted that small details, like having contracts ready for debris removal, can be an overlooked component of post-storm response but can cause a lot of headaches if not handled efficiently and effectively.

Overall, the mood was optimistic despite the ferocity of Harvey and the knowledge that other storms will hit. Chemical companies will continue to invest in the region, will continue to improve their operations and planning, and all stakeholders expressed enthusiasm about investing in infrastructure, better communications and other improvements.

As LyondellBasell’s Patel said, “What I was most impressed by was the human spirit, and the amount of dedication and ownership of our people to get to the facilities, to help out, when in many, many cases they were personally impacted by the storm. … It’s just remarkable, and it’s why we continue to invest with confidence in the Gulf Coast.”

 

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GlobalChem 2018: Plastics in oceans is a problem everyone wants to solve

Plastics offer a lot of benefits in daily life, but they also enter our oceans in large quantities. What can be done about that problem -- not just in preventing waste but in capitalizing on it?

Presenters at last week’s GlobalChem conference organized by the American Chemistry Council provided a path forward that relies on quick, effective funding, testing and scaling of infrastructure projects through a variety of partners, including government, environmental groups, corporations and industry groups such as ACC.

These groups have ambitious targets in mind. One such goal, noted by Ocean Conservancy’s Emily Woglom, is to sustainably reduce plastic waste entering oceans by 60% by 2025.

The questions presenters looked to answer last week was, “What are we up against? How do we fix it?”

In his opening remarks, Steve Russell, vice president of ACC’s Plastics Division, noted that ACC and its member companies have worked for many years to combat this problem, first with recycling and anti-litter campaigns. But there was a clear need to do more. Eventually, ACC became aware of Ocean Conservancy’s efforts, which had started with beach cleanups but also saw that alone would be insufficient.

Ocean Conservancy has been working on such cleanup efforts for 30 years, collecting data all along the way. But in the past 10 years has emerged a wealth of knowledge on the situation of plastics waste in oceans, including how much plastic is entering waters, what species are being affected, and an examination of a vast variety of interventions and waste solutions, Woglom said.

Today, most used plastic entering oceans is not in wealthy countries, but in developing economies, especially these five: China, Indonesia, the Philippines, Vietnam and Thailand. In these countries, economic growth is creating increased consumer buying power. However, that means new products are being used and disposed of without the infrastructure for handling, disposing of or recycling waste.

Ocean Conservancy found that, in these areas, some waste was leaching out of landfills or being dumped instead of delivered, Woglom said, but 75% of plastic marine litter was never collected, much less handled.

The other key driver of marine litter that Ocean Conservancy found was that certain types of plastics waste was being recovered -- mainly, plastic that had a higher economic value for recovery. Without that financial incentive, other types of plastics were less likely to be collected.

Collection is not the only considered, as Closed Loop Fund's Robert Kaplan noted. Waste and recycling infrastructure also includes "sorting, processing and end markets. You need entire, essentially, supply chains within a singular wasteshed to function and exist. We believe that the economics can work in those cases when you have infrastructure up-front covered," he said.

How does infrastructure get built -- and quickly?

Woglom said that a goal like cutting plastic waste entering oceans by 60% can’t be done with pilot projects or at the local level. These projects, to scale successfully, need to hit wide geographies, they need to include government, and they need to find ways to bring in industry partners, such as ACC and its members.

So, how does infrastructure get scaled up quickly in countries that don’t have a history of prioritizing waste infrastructure and have the most uncollected waste entering waterways?

It’s not about reinventing the wheel, as Woglom said. “We know how to do waste management.”

Closed Loop Fund is an organization working on this problem through three main units -- one for financing projects related to recycling infrastructure and circular economies, one for venture funding of potentially innovative/disruptive business models and technology, and one for R&D efforts aimed at finding new investment areas.

In Asia, a key area for stemming plastic marine litter, there will be $25 trillion in infrastructure investment needed through 2030, according to Kaplan’s presentation. Various forms of corporate and foundation funding, and new ways of structuring funding, will be critical to meeting this need, Kaplan argued, particularly in recycling and waste infrastructure. Also needed, he said in echoing Woglom’s comments, is a political and societal understanding in these countries of the importance of recycling infrastructure.

Closed Loop Fund looks to spur “catalytic funding” -- what his slides called “small, finite amount of risk-tolerant, concessionary financing” that can leverage and attract corporate and institutional funding.

Another key point, Kaplan said, is that such funding should be “boring” -- as uncontroversial to fund as something like building roads.

To that end, Ocean Conservancy, Closed Loop Food, ACC and other partners in late 2017 agreed to raise $150 million for innovative recycling-infrastructure funding efforts in Southeast Asia.

What else is industry doing?

Keith Christman of ACC emphasized that plastics, on their own, are beneficial in a number of ways, whether in energy and emissions savings, innovations that improve quality of life, and more. But plastics litter harms the environment and those benefits.

Christman also noted that efforts to find solutions to plastic wastes are key, rather than bans of types of plastics. Plastics have environmental benefits both in terms of what they do (citing food packaging for its ability to reduce food waste) and for, as a Trucost report detailed in 2016, being environmentally superior compared with alternatives.

He also discussed further ACC's work with Ocean Conservancy and other groups, as well as various legislative, communication and education campaigns ACC's been involved with. These include supporting a phaseout of microbeads and a United Nations declaration, running advertising and educational campaigns. ACC, its Plastics Division and some member companies belong to such groups as the Trash Free Seas Alliance, the Association of Plastics Recyclers and the Closed Loop Ocean program.

ACC is also encouraging and supporting infrastructure projects to handle additional forms of recycling such as plastic film, non-bottle rigid recycling. Another form of this is chemical recycling, which is less far along but was cited by speakers for its potential.

 

SmartBrief and ACC publish a daily newsletter on the chemical industry. View the latest issue and sign up for free.

ACC’s Dooley reiterates committment to TSCA implementation

The ongoing implementation of Toxic Substances Control Act reform is an opportunity for the chemical industry to continue its “strong and constructive” relationship with the Environmental Protection Agency and other stakeholders while ensuring that a scientifically sound, risk-based approach is the backbone of chemical regulation, said Cal Dooley at the American Chemistry Council’s GlobalChem event in Washington, D.C., on Thursday.

The importance of transparent regulatory processes based on sound science and risk-based assessments were common themes Thursday, with speakers including Dooley, ACC’s CEO and president; Michael Honeycutt, chairman of EPA’s Scientific Advisory Board; and Jeff Morris, head of EPA’s Office of Pollution Prevention and Toxics, highlighting these areas during their morning presentations.

American Chemistry Council
American Chemistry Council

Dooley opened by noting the bipartisan nature of TSCA reform, as Democrats and Republicans, industry and nongovernmental organizations all came together to make it happen. However, the past couple of years have seen an increasingly polarized political environment, which he said not only would make such legislation as TSCA reform difficult today but has also led to unfair criticism of TSCA implementation, EPA’s Scientific Advisory Board and ACC.

Despite this, he said, ACC has insisted "on taking an intellectually consistent, science-based approach to the implementation of TSCA. We are not deviating in any way in terms of what we committed to do when we committed to working with members of Congress on both sides of the aisle."

To that end, he said, ACC is, as it has been, “totally committed to a strong and constructive relationship” with EPA, which includes the relationship with Administrator Scott Pruitt.

In meetings with Pruitt and staffers, “he fully understands the problem and challenge he’s dealing with, he tries to define what is the outcome and decision that EPA needs to make, and he tasks his staff to go to work and make those decision findings certain,” Dooley said.

This is particularly important, Dooley said, with the tight and numerous timelines that the TSCA law demands of EPA.

As for criticisms of changes at EPA’s Scientific Advisory Board during the Trump administration, Dooley acknowledged that personnel changes have occurred but argued against such changes being a bad thing. A wider range of members means a diversity of expertise and experiences, including those of industry experts, and will contribute over time to “better scientific outcomes,” Dooley said.

SAB Chairman Honeycutt touched on this point during his later presentation, noting that he counted 24 of the 44 SAB members as academia, with only five from industry.

“Our industry and, I think, all constituents really benefit when we have a credible approach to ensuring that we’re implementing the best available science and making determinations on how we can best protect our environment, as well as consumer safety, but do so in a manner which is balanced and appropriate,” Dooley said while praising Honeycutt’s selection as SAB chair.

What’s next?

Dooley mentioned that ACC members are noting the need to improve how TSCA’s Section 5 operates, to implement it in a way “that does not stifle innovation in our sector,” while expressing confidence in Pruitt and his staff’s commitment and hard work.

But Dooley encouraged the audience to look beyond EPA and TSCA. “There is an opportunity, with strong leadership in the administration, to ensure that we are developing the gold standard in scientific risk assessments,” Dooley said. “That is, expand it not just to EPA, but to FDA, to Department of Labor -- with their occupational exposures -- to ensuring that we are using the best available and scientific protocols and methodologies and some of the new emerging technologies” to make decisions based on sound science.

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For distributors, the time to transform is now

Distributors for years now have been aware that their industry is evolving rapidly -- new technologies, the rise of e-commerce, the need to attract younger talent, the changing needs of the customer, the threats from competitors old and new.

This week’s NAW 2018 Executive Summit featured speakers and panels that addressed all of these issues under the theme of "Transform Or Be Left Behind."

Some looked back to look forward, as with Jim Tompkins, who explored several years worth of NAW Executive Summit themes, the leading customer themes of the past several years, and how data collection has been overtaken by a need to harness and capitalize on data.

Meanwhile, Jonathan Byrnes of the Massachusetts Institute of Technology and Profit Isle stressed to attendees that the future is now -- there is no waiting to act if distributors want to survive, much less find “islands of profit in a sea of red ink.”

What do all of these things have in common besides addressing issues near and dear to distribution leaders? A sense of urgency, and a sense that the old normal is no more.

As Byrnes said, 2018 is a make-or-break year. “If you act quickly and decisively” in your business transformation efforts, he said, there are great gains to be had.

On the other hand, “if you don’t act decisively this year, you’re cooked.”

Highest service or lowest cost

This rapid change means traditional distributors shouldn’t look at direct attacks from competitors, Byrnes said. Rather, it’s about competitors seeking to do things distributors can’t. Whether that’s manufacturers selling direct, or third-party logistics providers taking on new roles, or the melding of B2B and B2C. Buyers and channels are not what they used to be; warehouse management is becoming a commodity; and even old measures of profit aren’t as reliable as they once were.

What can distributors do? Well, Byrnes says, they can be high-service or low-cost companies. They can’t do both, and if they aren’t the best at one of them, they’ll be passed by. And, to do so, they’ll need to be clear on what their “islands of profit” are today and what opportunities exist to carve out new islands.

Grit, insights and the types of change

Clearly, many companies are going to have to make drastic changes to get to where Byrnes says they should be.

That is where Tompkins came in. He reiterated the need to “take control of your future” in two ways: one, understanding what today’s customers need, and, two, understanding that “transformation” is just one type of change in response to one set of conditions.

His presentation explored past focuses on customers and led attendees to the six key needs of customers, including classics such as cost and convenience but also newer concepts such as collaboration and the variety of channels today.

After that, Tompkins moved on to discuss the importance of understanding how to respond to threats. Continuous improvement is a well-known concept that is effective when a company is successful and plugging along. However, he said, it’s the wrong response when faced with a disruption in product or service. It’s then that “transformation” is needed.

But even transformation can be misused. Let’s say the next disruption is in your business model. Using transformation to roll out a new service or product is ineffective against this type of attack, Tompkins said. Instead, you must adopt “reinvention,” just as a caterpillar metamorphosizes into a butterfly.

How does one meet these customer needs and outflank disruptors? At a high level, you do so with what Tompkins called “rich insights” from the data you have, and you also need a strong dose of grit, or what he defined in part as “passion and perseverance for long-term goals.”

Echoing Byrnes' warning on the urgency of change, Tompkins warned distributors that the pace of innovation isn’t going to slow down. “Today is the slowest day of the rest of your life,” he said.

Today is a period of difficult challenges and choices for distributors. But Byrnes and Tompkins didn’t say these challenges couldn’t be overcome. They came to offer a blueprint for thinking and acting decisively, and to warn that the dangers of not acting are far greater than the risks of taking action.

 

James daSilva is the longtime editor of SmartBrief's leadership newsletter and blog content, as well as newsletters for distributors, manufacturers and other professions. Before SmartBrief, he was a copy desk chief at a small daily New York newspaper. Contact him @SBLeaders, @James_daSilva or by email.

Lessons in public speaking from Dot Foods

This week, I witnessed a great example of how a potentially perfunctory speech can become something enlightening, entertaining and even energizing.

I attended Wednesday's session of the National Association of Wholesaler-Distributors' 2018 Executive Summit in Washington, D.C. Just after lunch, Dot Foods Executive Chairman John Tracy, who was also 2017 chairman of the NAW Board of Directors, started his chairman’s address.

Now, I’ve been to this event a few times, and the chairman’s address is important to the setting and it’s delivered well. But at many conferences, such a speech could easily fall into the obligatory category -- filling time before the keynote or the celebrity speakers get on stage.

How do you avoid that? Well, one way is to start with a good icebreaker, tell your story, and offer hope -- and some fundamental principles -- for how others could become as successful as you and your company. Here’s how Tracy did that.

Getting started

Right after lunch is a tricky time to be a speaker. Maybe everyone is feeling good, or maybe people are starting to get sleepy. Lunch can be a good break, a chance to catch up, but maybe people have so much fun talking to each other that they aren’t ready to listen to you.

Either way, if you come out there with just dry numbers and facts, you’re in trouble. Tracy didn’t do that. He was humble, downplaying his contributions and emphasizing the family. And before that, he joked about how he consulted NAW President Dirk Van Dongen about what to say.

“I said, ‘Dirk, what do you want me to talk about in my speech?’ And he said, ‘It’s real easy. For the first five minutes, tell them everything you know.’” [pause for laughter] “I didn’t know how to take that.”

Tracy went on to add that “I know you’re counting on getting a lot of email done in the next 25 minutes," again getting chuckles from the crowd.

These comments and others in the first few minutes lightened the mood ahead of serious discussion, brought in the reason he was there, mentioned the people he serves in his roles at NAW and Dot Foods, and showed self-deprecation.

Telling a story

Did you know Dot Foods was founded by Robert Tracy and Dorothy Tracy, and named after Dorothy? Or that they had 12 children, nearly all of whom spent more than a decade working in the business? Or that those 12 have had 46 children, with the family ownership and participation carrying over into a third generation without the strife or disinterest that sinks so many family-owned enterprises?

Surely, some in attendance knew the Dot Foods story. But if you didn’t, or even if you had some awareness, John brought all of us into the know, sharing why Dot Foods matters to him, why it’s truly a family business, and how the company was able to grow from an ingredient supplier to “the nation’s first and largest food redistributor” with more than 4,000 distributor customers.

How we did it and how you can, too

It seems easy -- start a family business, grow, have kids and get them involved, and on you go. But look even a little closer, there are clear obstacles. Family members in family businesses can disagree -- a lot. Some will want to spend more time in the business, and some will eventually feel it’s time to go. Others are more interested in the financial benefits, including dividends and liquidity.

Succession planning can be a nightmare -- if it’s addressed at all. Data suggest fewer than one in three family businesses survive into a second generation, as Dot Foods had to transition to in the 1980s. Only 12% make it into the third generation, which is where Dot is headed today.

“The only thing I can promise you that occurs, especially when you have this many family members in the business, is there’s lots of disagreement.” ~ John Tracy

Dot Foods has not dodged any of these challenges, as Tracy made clear. But rather than be divided, the family united on principles that were greater than business.

The family had to ask, “What’s the most important thing to us?” Tracy said. As he noted on a slide, these are the three priorities, in order:

  1. Sustainable family unit
  2. Sustainable family business
  3. Family members working in the business

The company also sought out outside expertise. How did many-generation family businesses do it? There were some commonalities that Dot Foods has adopted, Tracy said:

  • Outside board of directors
  • Family council
  • Ownership planning and estate planning
  • Fairness in paying dividends and finding liquidity, either for those who wanted to exit or those who wanted to keep their interest.
  • Annual family meeting.

Your family business won’t be the same as Dot, and the challenges may come at different times and in different ways. But what those principles can offer is “a playbook” for the tough times, Tracy said.

Finally, he closed with mistakes Dot Foods had made. The company is obviously successful, and sharing these errors or omissions didn’t take away from that. Instead, it brought Tracy and the audience together. Even if you haven’t faced the same issues or handled them well, he said, you might come away with something to ponder.

What to take away

In less than 30 minutes, Tracy was able to re-energize the room, entertain and inform, and offer takeaways without making the speech all about himself.

You might not be involved in a family business or in distribution. And there is no shortage of tips for public speaking. But, if you find yourself in a prominent position, speaking to a captive audience, consider how you can get your message across and share your success while still being humble and helpful.

 

James daSilva is the longtime editor of SmartBrief's leadership newsletter and blog content, as well as newsletters for distributors, manufacturers and other professions. Before SmartBrief, he was a copy desk chief at a small daily New York newspaper. Contact him @SBLeaders, @James_daSilva or by email.

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