At Trinseo, investing in a culture of hope
At Trinseo, a Dow Chemical Co. spin-off, it was up to chief executive Chris Pappas to build a culture that encouraged innovation from employees who may have felt neglected at Dow.
Ever see a chemistry teacher draw a diagram of a chemical formula?
Maybe the chemical sector should hire teachers to draw a diagram of the ever-consolidating, ever morphing chemical business.
It might help explain the genesis of Trinseo S.A., the Berwyn-based global chemical company that makes plastics, latex binders and synthetic rubber used in consumer electronics, medical devices, packaging, tires, textiles, paper, construction, automobiles and lighting.
It also might explain chief executive Christopher D. Pappas' insistence on forging a new culture for Trinseo, a Dow Chemical Co. spin-off.
In 2009, Dow grouped four separate businesses -- polycarbonate and compounds and blends, paper and carpet latex, synthetic rubber and styrenics -- into one unit, named it Styron, and sold it to Bain Capital Partners, a private equity fund, in July 2010.
In June 2014, Styron changed its name to Trinseo (derived from "intrinsic") and became a publicly-traded company. Meanwhile, there was a lot of churn, with 600 new hires replacing some Dow stalwarts.
Why did that happen?
A lot was natural attrition. And we were setting up a new finance organization, which meant we had to hire a bunch of finance people. We didn't lay anybody off. We went through a process where we had to reconfigure the company and we had a lot of people who left. They didn't like the environment of working for private equity.
Why not?
Working for private equity is different from working for Dow. Accountability's much higher. The demand for intimate knowledge of your business and activity is higher. The freedom to act is also higher usually. Those are the trade offs and not everybody is comfortable with that.
How important were these four businesses to Dow?
Maybe the reason they were sold is that they weren't strategic to Dow, so they naturally had less attention in that environment. Then if you go into our environment, where, not only are they strategic, they are all we are, now, all of a sudden, you're in the spotlight. See the difference?
Maybe they had felt unappreciated.
You were in a back corner, where people didn't pay attention to you. You weren't attracting resources.
How do repair employees' psyches in that situation?
That's an easy lift. You ask, `What are your good ideas about growing the company? How can we make money?' They get a lot of positive attention. What you can do quickly is make an investment. Within six months of the close of our transaction with Bain, we got approval to make a major investment, $140 million, in the rubber business. You actually invest in their ideas.
Could you see the mood lift?
If there's one thing I'm most proud of -- never mind the financial results, which are pretty good on their own -- it's the environment we've created for people to work in. We treat people fairly. I believe in an open, transparent culture.
Any thoughts on how the Trump administration will impact your business?
Tax reform would be constructive. The right amount of regulatory reduction would be helpful. I'm more of a fan of tax reform than regulatory reform. I'm not a fan of isolationism. I'm not a fan of laws that reduce immigration. I'm a product of immigration. My grandparents came to this country from Greece. I also believe immigration is the lifeblood of this country. Without it, we wouldn't be here and without it, we'll have a real problem in the future.
You work in a science-oriented company. Any hints on how to lead such an organization?
Analytics and data are not what cause people to make decisions. It's often the emotion of how they feel about the decision, or about you. That's an important piece of advice for someone with an engineering or science background. Facts are important, but sometimes people have an emotional bias. I'm a very math-oriented person. It took me a while to understand that.