Challenging - It is very difficult to be successful in the highly customer-driven market of custom manufacturing and synthesis. The key success factors are completely different to those in other product-oriented markets. There are strategic elements and tools needed to maximize executive team performance.

Success is based on long-term, one-to-one relationships, and if you lose the contract for such a custom made product you cannot sell it to another client. This explains why this industry has high capital intensity. In comparison to many other businesses, it is a very complex business that needs people who have experience in various areas like production, marketing and process development. A real key differentiator is your ability to demonstrate a sound understanding of your customer's individual needs. This is what makes the job so challenging and interesting at all times because there is no "one size fits all" solution possible.

The Creation Of Saltigo

Saltigo is a young company with a long-lasting history and a very long track record with various players in the crop protection market. In 2004 it was decided to split up the Fine Chemicals Business of Bayer Chemicals together with various other businesses of Bayer Chemicals and Bayer Polymers in order to create the new company Lanxess. The company established itself as the partner for all customers with regard to fine chemicals and custom manufacturing. Early on a team of young and experienced managers decided to set up a premium company mainly for custom manufacturing for all innovative industries in order to further strengthen its new position. Hence in 2006, Lanxess spun off its entire fine chemical business to its wholly owned subsidiary Saltigo, which was launched as a premium brand in global custom manufacturing markets.
The services offered by Saltigo are versatile and support the customers at a broad range of key issues during a product's life cycle, so that the customers can concentrate on their core competencies.

What was Learnt from the Transition?

For a start, the combination of the strength of a large conglomerate with the attitude and behavior of an entrepreneurial company provide the ideal pre-conditions for a leading company.
To create an entrepreneurial spirit, it is important to establish customer focus in all parts of the organization, to have people who understand the specific needs of each customer, and to blend these together to provide economically viable solutions instead of the masterpiece solution for each contributing part of the matrix. One of the key advantages of smaller, entrepreneurial companies is their ability to quickly adapt to changes in the market conditions.
To achieve the critical success factors you need to align your organization to the market's needs. The entire organizational structure must be market-driven and not internally focused. Classical marketing theories do not work out. Specific markets and specific segments have specific needs and key success factors. What has been true for Aventis and Life Science Industries is also true for custom manufacturing.

Team Building

In order to be successful you need a team that brings together a range of skills and a willingness to work together for the agreed goal. You need team players who are experienced people from each part of the organization who have broad experience in the specific market, and who are both good communicators and good motivators.
Very helpful for the team is a mix of young and experienced people with a different horizon of experience, such as different company cultures or inter-cultural experiences. Most of all, you need a complete and strong customer focus in the team, with the willingness to share experience, understanding and thinking to create and deliver economically viable solutions for the benefit of the customer. They must be open for changes and their main objective must be to create new solutions and build up new business.
Most importantly, you need to align your team. This takes time and commitment. During this team building period, you must consistently demonstrate the need for customer orientation. When you have created your team, develop your strategy together with them. This helps all team members to commit themselves to the goal and together develop the strategy for reaching the goal. The team you select must identify with your company at the end of the day.
Furthermore, let them exchange their experiences and let them figure out the needs and necessities and the borderlines of each department. Bring them together frequently with customers at various levels so that they can really figure out what is important to deliver and let them broaden their horizon by visits to suppliers too.

Communication Is Key

To achieve maximum success you need to communicate regularly and transparently on all targets and developments, to delegate as many activities as possible and learn to trust your team and the decisions they make. In this way, they will understand what you want and the way you think.
You need long-term assignments of people so that they can see the success or failure of their collective decisions over a longer period and do not look only for short-term achievements for their own career. Setting long-term goals and rewarding them for short-term achievements along the way keeps them motivated at all times.
Performance metrics have to be adapted to the needs of this market. You need long-term objectives to be defined within a program, which also rewards short-term achievements. These objectives must be a combination of financial targets that reflect a company's profitability and also customer value. A set of various financial targets which have an impact on your net cash flow is very helpful in order to maximize all aspects of your profitability. It is very important in this respect that the personal objectives of your entire team are interlinked so as to avoid any silo-mentality. Additionally, it is necessary to establish a "lessons learned mentality". Transparent communication of goals and achievements are very important tools in order to reach the overall goal of continuous improvement.
To have a good executive team is one thing but you need also to bring the entire company behind you. Therefore, it is important to keep your staff informed of your plans, the progress you have made and this is especially true in challenging times when major changes have to be made. People trust in you only as long as you keep your promise.
The trust of your customers is critical. Inform them upfront of planned changes and keep them regularly informed about the progress you have achieved and what you want to achieve in addition in order to continue to meet, and ideally to exceed their expectations.
Remember, presentation is one thing, but your track record will always show if you talk the talk and walk the walk.

Conclusion And Outlook

If you have a clear strategy which is communicated regularly, a focus on customer's needs, on continuous improvements, a sense for economically viable solutions, a great team for a long period of time, continued good track record and steady enlargement of partnerships with customers in various industries, you will be on the right track to become a successful company led by an executive team that continually seeks ways to maximize its performance.