Originally published in NOVA Now, a newsletter for employees and retirees of NOVA Chemicals Corporation.
According to Rebecca Liebert, member of the Styrenics Acquisition Integration Team, the company is ahead of schedule, reporting greater-than-anticipated synergies each month. "But a lot of work still needs to be done to meet projections for 1999-2000," she says. "So far, we're ahead of our 1999 projections, but we don't know what will happen in 2000-2001.
"Synergies will be harder to meet later. Right now, it's relatively easy. You take two big companies that do the same thing, and a lot of the initial synergies are met simply by eliminating duplication. It's more of a challenge later on."
But meeting a $40 million goal for synergies takes planning, cooperation, and commitment. How are they doing it?
"The greatest synergies have been realized in operations and purchasing," says Liebert. About 35 per cent of the target projection will be met by reducing the duplication in plant operations. Another 35 per cent will be achieved through purchasing, as the integrated company has a buying power that two separate companies lacked.
Staff reduction will account for a much smaller part of the synergies. "Management has stated that 125 styrenics positions will be eliminated globally," she says. "That accounts for less than 15 per cent of our target."
Other factors, although realizing synergies, have less bottom-line significance, but have had a sizeable impact on the company. Product and plant optimization is one. As separate companies, NOVA and Huntsman had a large number of duplicate products that have now been eliminated, allowing each part of the operation to do what it does best.
New NOVA employees have been quick to embrace responsible care. "We realized how important responsible care was to NOVA and to the future of our operation," says Liebert. "It was vital to implement it as quickly as possible."
A strong communications network at both the corporate and styrenics levels has resulted in people knowing what was happening and getting the information they need when they need it. And seamless customer service has successfully prevented loss of customer confidence and loyalty. Liebert reports that the acquisition has resulted in no loss of customers, and no major loss of material.
"Perhaps the greatest advantage to being part of NOVA," concludes Liebert, "is that our new organization will be more efficient and effective than ever before. That's the key to our future success."
Integrating Two Industry Leaders
Now, just 90 days into the integration, months of anticipation have been replaced by the challenges and victories of bringing people, products, and processes together. Greg Wilkinson, Director of Communications at NOVA's Beaver Valley site and a member of the transition team says the openness and enthusiastic collaboration of "old" and "new" NOVA employees have made the process far smoother than he had expected.
"The lines of communication have been wide open," he says, "both inside the organization and with our customers. Our Customer Service and Marketing & Sales departments have done a phenomenal job of making the transition seamless for customers. On the inside, our technology group has come up with ideas galore to help integration through e-mail, FAQ's, and Intranet.
"At the same time, one of our top priorities is safety. As a responsible care company, we've worked especially hard to resolve a few safety issues that arose during the early part of integration. No matter what else is going on, we won't compromise when it comes to safety."
David Androkites, Maintenance & Reliability Leader at Joliet, credits strong communications between NOVA sites and the formation of the product optimization team for a relatively smooth transition.
"We have so many other plants to consult with now," he said, "we're never at a loss. We feel part of an operation that values what we do. We're part of making NOVA a leader in styrenics. That's really gratifying."
Numerous visits to Joliet from Wes Lucas, President of NOVA's Styrenics Business, were also a key factor in dispelling uncertainty and making employees feel more secure.
"NOVA really opened up to us," said Androkites. "Wes took the time to talk to people one-on-one, and to answer their questions and concerns. He's very genuine, and left us feeling that NOVA's a company that keeps its promises."
NOVA Cultivates Grassroots
The Chemical Manufacturers Association-the largest and most influential trade association representing our industry-has identified factors that will have industry-wide impact over the coming years. They strongly encourage members to take a proactive role in shaping the regulations and legislation that affect our economic well being.
NOVA is responding by launching grassroots programs in the United States that will involve employees in developing a strong, politically active network that acts as a liaison between our industry and lawmakers. According to Gerry Finn, Vice President of Government Relations, a number of public policy issues at any given moment can affect NOVA's competitiveness. "NOVA's goal is to engage with industry partners and legislators to ensure that these policies aren't damaging to our company," he says.
In order to build a strong grassroots network, NOVA has entered into a legal agreement whereby the company provides the name, home address and zip code of each U.S. employee to a third-party consultant. The consultant will match each employee with his or her congressional district and representative. All information will be entered into a database that is handed over to NOVA. The consultant will not keep the database, nor can it be sold. The same consultant may be retained later to help mobilize employees in political action. It is also up to each employee to decide whether to engage in grassroots activities or not.
Grassroots activities are known to be an effective way to make politicians aware of the issues that surround our industry. Personal communication, whether through letter writing campaigns to senators and representatives, letters to the editor, or meetings with officials, are among the best grassroots strategies. For employees who choose to participate, information, as well as draft letters and suggestions for how to become involved will be posted on NOVA's website.
"One of the major challenges of setting up a grassroots program is simply getting employees involved," says Finn. "People may lack the interest to take an active role in shaping public and industry policy, or they may feel they don't have time or sufficient information. Or they may count on others to get involved, believing their single voice won't make a difference.
"It's important to remember that the economic health and well-being of the company affects everyone. A unified presence in the policy-making process is an excellent way of ensuring economic strength for NOVA and for our entire industry. If we can get employees working with their local politicians on NOVA's behalf, we can all look forward to even greater success in the future."
Something To Say? Here's Your Chance
In the U.S., companies face tough restrictions on financial contributions to political campaigns. As a result, the Political Action Committee (PAC) was born to allow employees of companies to pool their voluntary contributions to candidates, and as a vehicle to give workers an opportunity to participate in shaping legislation and public policy that impact their company. Legislators hear from those directly affected by their decisions, and employees get access to policy makers across the political spectrum.
NOVA has recently set up a company-wide Committee for Political Action and Engagement (CPAE) that will be sensitive to needs and interests across the company. According to George Walczak, Manager, Government Industry Relations in Pittsburgh, the CPAE will be open to employees who share a common interest in policy issues that affect NOVA.
"One of the best ways people can get involved in pending issues is by participating in a grassroots campaign," he says. "Writing letters to local representatives can be very effective. So is meeting with them and asking them questions to get a feel for how their views line up with NOVA's corporate policies and objectives."
To help employees implementgrassroots campaigns, the CPAE consists of a number of elements dedicated to helping us influence public policy. For example, NOVA employees can access a matrix of public policy issues important to our company. The matrix includes issue descriptions, desired outcomes, and strategies toward achieving favorable results. Employees can become involved in contacting politicians to advise them of NOVA's position on critical issues. The CPAE also provides opportunities for employees to meet with legislators and participate in Q&A sessions revolving around issues that affect us, and provides opportunities in the U.S. to contribute funds to the PAC for the purpose of demonstrating our financial support to politicians who represent our interests. The CPAE also gives employees the chance to be involved in political campaigns.
Community Relations Specialist Karen Barness agrees. "Contact with legislators from employees can have a huge impact on shaping public policy," she says. "That's true not only on issues of importance to the company, but on things that affect employees in their everyday lives as well. The key is having good information."
Toward that goal, NOVA has set up an internal website where employees can get accurate, timely information about important issues state by state.
"It's crucial to give CPAE members access to the best information available on issues that matter to them," says Barness. "Often, issues differ from site to site. Individual state laws and cultural differences between states all affect the issues each site faces."
Barness stresses that each site leader will also have reliable information available to employees interested in taking an active role in their CPAE. Each site will organize events that bring members and legislators together. At the Beaver Valley site, congressional candidates are already being invited to speak to their group. All candidates will be invited, and employees are being encouraged to come and ask questions.
"When you get an opportunity to have a hand in shaping laws and policies," says Barness, "that's a wonderful system. And the more people we have who are aware of the issues that impact NOVA and who are comfortable talking to politicians about them, the better off we will all be."