As a global leader in the specialty chemicals and performance materials industry, Cabot has decades upon decades of experience in driving new product development through the world’s most innovative industries. Collaborating closely with customers, Cabot produces products that solve customer challenges and can improve product performance.
Ivan Skerl, Vice President and Chief Digital & Information Officer at Cabot, shares with us the imperativeness of organizational change management and how digitization can help increase resiliency and propel innovation, or as he calls it, “the art of the possible.”
Cabot, Fueled by Innovation
For Cabot, innovation is its differentiator and has long since been baked into its core as a foundational element of everything it does. It is what makes Cabot, Cabot. It’s a generations-long cultural mindset of nurture and championing innovation at every level of the organization. From new product development through its research and development sector to the manufacturing floor by way of industry 4.0. Of course, through its digitization strategy in which they look to improve processes, Cabot remains unrelentingly driven to find new things to make and better ways to make them.
“If you look at the digital part of it, since we are operating all across the globe, we have the capabilities and the access to resources to be more innovative, more entrepreneurial in our approach to a problem. We can experiment, test, and pilot in one particular area, and then take those learnings and apply them across our network of plants or global business processes, or maybe even from one functional area into a different functional area. And yet we are careful to maintain a balance of innovating in a structured way, but not so structured that it creates blockages, as any creative person knows, the creative juices must be allowed to flow. It’s in Cabot’s DNA,” says Skerl.
Cabot Renew, Optimising Without Bias
Rejecting the solutions-based approach, Cabot Renew, as they refer to it, aims to optimize without bias. As Skerl explains, “We are looking for ways to change, ways to optimize and become more effective, more efficient, more automated in our business operations. The way we are doing this is multifold. As part of our renewal efforts, we have a transformation management office that takes a global look across Cabot, across all geographies, and all functions, segments, and business units to identify opportunities for improvement. Some of those may have digital components, and some of them may be structural or policy, or processes driven.
“Many do, however, have a digital component, and that benefits us in two ways. One is from digitization and improving the maturity and capability on the digital side. And the other is by driving the actual improvement on the business process side. So we are looking at it from the perspective of ‘the art of the possible,’ which is re-imagining how a particular function or a particular end to end process, or particular geography should operate, looking for best practices approach, and then asking ourselves, why would that not work for us?”
“If we had one main driving principle as we are approaching these different initiatives to digitize and to renew our company, it is not biased towards technology or a system, but it's starting from the viewpoint of looking at the business process and driving for the best possible outcome. The technology discussion somewhat becomes a secondary one. Although we are doing this in the context of the technology discussion and inspiring this conversation, we are ending up with a result that first and foremost is improving the business.”
Targeting Tail Spend with Fairmarkit
When it came to improving spend management, that meant targeting tail spend with Fairmarkit. Skerl shares with us how they got there. “At Cabot, with the focus on renewing our ways of working and accelerating the adoption of digital tools and driving business value, we have targeted tail spend specifically as a transformation opportunity within our procurement business processes.
“We started with an agile focused pilot in the North American region, and we partnered with Fairmarkit to drive and accelerate deployment of their solution to bring visibility and tail spend management for maintenance, repair, and operations, the MRO category, and deliver significant savings in this space. In just the span of a couple of months, the ability to analyze our spend and provide transparency has been eye-opening for Cabot. I think one thing that really differentiated us in our partnership with Fairmarkit was the level of collaboration and trust. Fairmarkit has been a trusted advisor to us throughout the process. They have challenged us and pushed us to innovate and improve further. And at the end of the day, they have delivered on our vision of the art of the possible.”
Advanced Analytics, the Path to Resiliency
Skerl walks us through how advanced analytics can make for a more resilient organization. “Digitization creates access to data, access to the information within that data creates insights, and that's how we create transparency, in the context of supply chain disruptions, but it also applies to really every aspect of our operation. We need to first have the data. Then we need to understand that data. And then, out of data, we need to be able to act. So that's where we are focusing, on bringing that transparency that level of real-time or near real-time access to the information about different aspects of our organization.
“So that’s our aspiration for what we are calling Advanced Analytics 2.0, bringing the ability to understand and react in near real-time to what is going on in the environment and to different kinds of events. And providing the transparency in our operating performance metrics or other parameters, and then creating the opportunities to be more accurate, to be more precise than generate the additional growth.”
Change Management, the Key to Success
“Change management is one of the key factors to making any initiative successful. If change management is not being addressed, that's probably a guarantee for a failure of initiatives. As a company, we recognized early on the need to focus on change management, took a Transformation Management Office (TMO) approach, and applied those practices and tools across several initiatives of all sizes, but tempered to the appropriate size and scope. But in the grand scheme of things, every transformation, be it digital or not digital, in the end, it's touching people.
“People must understand what is being asked of them so they can do their job day in and day out. And if we are saying we need to change what they are to do, then there needs to be a process for that. So, to me, change management isn’t the typical IT change management, but organizational change management, which enables the users to operate in the new environment and then going through the process of figuring out how we can bring about this change. Some of the changes may be fundamental, and some may require a number of different approaches to how we work and bring new roles that perhaps we didn't have.”
“We are definitely shifting and changing our strategy so that we are less focused on the tactical and transactional activities and more focused on unlocking value and then investing that value in much more strategic and value-driven activities. All those changes have to be partnered with the change management process, where this is understood and explained and properly enabled throughout the organization. Without proper organizational change management, you’re setting yourself up for failure.”
Raising the Digital Literacy
The broader concept of a company’s digital literacy isn’t often spoken to. Skerl, however, is the exception, realizing its imperativeness and long-term impacts. “Digital literacy or digital fluency would be the topics that are front and center of our minds because if you're looking at the future of the company, you need to look at it from multiple perspectives, and it is not just about technology. Digital literacy is not about the idea of a digital organization. It is about Cabot at large. To put it in perspective, if we are talking about bringing new capabilities, new capabilities that exist today, and new capabilities that will exist in the future, those capabilities are heavily digitally enabled. And in order to bring them into our business environment, we need to have on the business side, as well as on the support side, the ability to understand and leverage those solutions.
“If you are taking, for example, a modern approach where you are used to operating off of smartphones and off of tablets, and next-generation computing solution and then we need to take that into more traditional environments, like the manufacturing floor, then we need to tie the two worlds together.
“Then, if we look at the next generation as they make their way into the marketplace, we need to be able to attract them. They're going to be expecting in their work-life, what they have been experiencing in their private life, their entire lives. And the people that are now coming out of schools have been used to the digital world essentially from when they were born. So that kind of level of expectation needs to be matched by the work environment. Otherwise, there will be a challenge in being able to attract and retain top talent.
“So we are looking at it from multiple perspectives, including what can be done to bring some of that Amazon-like, user-friendly experience from home into your workspace, because why should stepping into the office mean things are more complicated and cumbersome? That’s not necessary anymore, and we can address that through digital solutions. We have to bring what makes companies run, which is people, along that digital journey.
“Last, but not least, is the ability to manage change because any one of the digitizing efforts carries a large change management exercise around it in terms of enabling employees, and also our partners and suppliers, where again, digital plays a key role.”