{audio:0:00:15} Jerome, what does leadership mean to you?

{audio:0:00:20} I like a definition that I read a very long time ago, about leadership, which is the art of creating followship. In order to create followership, you need to create trust. Leadership, like followship, has nothing to do with the level at which you are. I have met some extraordinary blue collars who have created a tremendous leadership and people go to them. They are like a magnet, in the specific areas. People go to them, because they have created followship, because they have generated trust.

{audio:0:01:03} How do you look at generating trust?

{audio:0:01:07} By being honest, by listening, by being objective, by being empathic, by being what you want in the best out of people. This means people that don’t have an agenda and people who want to make the best out of a relationship and out of a given situation. It helps nothing to go and moan about the past. What is important is to take the situation as it is and move it forward. I have witnessed too many people who, over time, when there is an issue, they become defensive and they try to justify what has been done. In fact, it’s useless. It is what it is. As long as you are not going to come forward and explain the situation, as it is, we are wasting time, in terms of addressing the problem.

{audio:0:02:09} How do you foster that humility, as a leader?

{audio:0:02:16} Humility is about accepting that you don’t know everything and that you can either not know or have taken views that are wrong and that you are going to be able to come back and say, maybe there is a better way. There is an issue; you are now an executive or you are now the CEO of a company and you can’t stop yourself from thinking that I must be somebody. I must be really smart. The trap is, you forget what you had to do, in the past, to become an executive. What you had to do in the past, to become an executive or to become the CEO, is to listen, to make compromises, to ask open questions. Also, to engage people, so they tell you what you don’t know.

{audio:0:03:27} The problem with becoming, all of a sudden, the boss, is that there is a tendency to say, well now I’m the boss, I know better. This is really the trap into which you should not fall. Let’s be honest, everybody, to a certain extent, falls into it. We’re all human. I must be good, if I have been appointed a division president, a CTO, a CEO; I really must be good. But you need to really make sure that you have the humility to accept that, because you are at the top, you don’t know it all. The information is down in the fields. There is too much information today, to process, for you to know it all. Therefore, you need to go and ask the questions, so people come up with the information. You have to have listened to other people’s input and your team’s input, and you can take the responsibility for making the difficult decisions.

{audio:0:04:44} What practices or procedures did you have, to ensure that you stayed humble, when you became the CEO?

{audio:0:04:54} That’s a very good question, because you should ask my wife. My wife, when I came back from work, from time to time – and sometimes I was travelling for a week, or something like that – all of a sudden, I come back home and you tend to behave as the boss. Coming back home is really a great time for you to know that, no, you are not the boss. People don’t have to suck it up. You become like you have always been.

{audio:0:05:27} Whereas, in a company, the minute you are the CEO, you are not the same person. People will tend to see you as a semi-God. No matter what, even they don’t see you as a semi-God, they know, especially in large companies, that you are going to be the guy that determines their career. Besides the right ideas that they have, most of the time, they will make sure that they please you. They will be very careful. Look at the political system around the world, you will see that some people rally behind a president or prime minister, just because this is what they are, instead of having courage.

{audio:0:06:19} So to stay humble, you need to, first of all, recognize that. Secondly, you need to remember that you cannot know it all. Therefore, you need to ask questions. I travelled over 200 days a year, in my CEO job at Sealed Air. I was travelling to visit customers, to visit our plants, our labs, our offices around the world. Every time I went to visit a plant, an office, a lab, I organized town halls. In the town halls, I really made sure that we had a dialogue. People want to come and listen to what you have to say and you’re not preaching a mass here. Yes, you are making points which are important to you; yes, you are informing everybody about how the company is doing and what the vision and aspiration is and you reinforce core values. But the most important part, for me, in those town halls – which could be 20, 50, 100, 200, but hopefully not less than 50 to 100, because you lose intimacy and, very quickly, it becomes a monologue – the best part for me was, when I asked them, what would they do if the company was theirs, if they owned the company, owned Sealed Air.

{audio:0:08:09} What you would, systematically, have would be a big blank. I would make sure that I stayed quiet for about 10 to 15 seconds and then I would say, that was a question; please raise your hand and tell me what you would do differently. I don’t know; you know better. You would learn lots of things from that. First, you would have people who would be an outspoken person, who would just come and make a comment. Then you would have others, who just came up with suggestions. If you listen, if you are humble enough not to push back, not to try to justify yourself, not to try to justify management, you can learn a hell of a lot.

{audio:0:09:05} Why do you think it’s so hard for CEOs to listen, sometimes?

{audio:0:09:13} Because it’s so much easier to follow your own agenda. Remember, you are the CEO; you must be good. Therefore, you should know better. That’s an issue. There’s a great book, which is probably almost 20 years old. It’s from (Jim) Collins and it’s called, Good to Great. Every time I can, I recommend that book, because it is about humility, sustainability, of performance over time. It is about long-term value creation and it really is about how should behave, over time. You can be a hero for a week, a month, a year; that is not important. The important thing is, to be a hero for the long term.

{audio:0:10:12} There’s one thing which most people lack, in large companies. By the way, the larger the worse it is.  This is about courage. In my mind, what distinguishes a manager from a leader, or an employee from a leader – because, as I told you, there are blue collars who are extraordinary leaders – is the lack of courage. If you have courage, you will think about what you can do better and you will try to convince others that things can be done better and you will carry out your ideas. When somebody in those town halls was suggesting something to me, that person would say, I would do this differently. Then my comment, immediately, would be, so why didn’t you do it? The systematic answer would be, the system would not allow me to do that. Or, because my boss would not allow me to do it.

{audio:0:11:40} I would say, so if you really think that this is a great idea or thing to change, why would your boss that it would not be right? First of all, you need to check that your great idea is definitely a great idea. For this, you need step one, to sell your idea to your peers and to your supervisor. Because if you can’t even sell that great idea to your peers and supervisor, it’s probably not a good idea. But if you can, then go ahead. Then, I disagree with you, when you make the comment that the system would not allow you. That’s not the reason. The reason is that, to carry on with things to change takes courage and will and additional workload. It takes courage, to come up and say, hey, I think we can do better. It takes will to carry on with that idea and sell it to others. Then it takes extra workload, because your boss will probably tell you, hey, by the way, go ahead and do all of this and let’s see if it works. Then the burden is back on your shoulders.

{audio:0:13:09} I would say to them, so you didn’t do it, because you didn’t think the system would not accept it. You didn’t do it, because you didn’t have the courage.

{audio:0:13:22} How did you stay close to the front line at Sealed Air, where you said the information about the business, typically was?

{audio:0:13:32} Sealed Air, when I arrived, was a great company which had, in my mind, lost it. Therefore, the best way to change a company is to engage the employees in that change. To engage your employees in that change, you need to travel a lot and go and tell them. Tell them that we can do better. Listen to them and give them hope that, together, we can do it.

{audio:0:14:08} Step number one, is that you think about what you want to change and you need to draw a picture of who you want to be, as a company, in five and 10 years from now. Then, you’ve got to test it, you’ve got to listen to employees and you have to give them hope that it is possible. For that, you need the face to face contact. You need to touch them – not very popular today, with Covid-19 – but you need to tell them, yes, it is possible; I need you engaged and tell me what bothers you. Tell me what it is that we have to do and, if you believe, let’s just go on and get it done. So you have to travel a lot, in order to learn and to preach. That’s what you have to do when you want to change things.

{audio:0:15:11} You have to go down in the trenches. My email address was completely open to all employees. We had 25,000 employees at Sealed Air and I was in the town halls and I told them, all the time, if they have a question, if they have a comment, if they have an idea, if they want me to think about the question or the idea, I would be open. From time to time, people would just send me a comment, a criticism, constructive or not. Guess what, I would always, I swear, always answer. One day, I was in Canada, at a town hall and an employee said, “By the way, this is not a question, it’s a comment. I’ve been so surprised, Jerome. One day I sent you and email and you answered. You gave me your perspectives on this and that. I was very impressed and I showed it to everybody. I was so amazed.” I looked at the guy, in front of about 30 or 40 people, and I said, “Wow, you worry me because you sent me an email and I answered. Are you telling me that when people send you emails, you don’t answer all the time?” He said, “Oh, I do, I do.” I replied, “So do I.”

{audio:0:17:01} People see you as the CEO, as a semi-God. They don’t see you as a normal person. What is very important is to engage people into that conversation and that connection, which allows you to say things as you see them. By the way, you are human; you are a human being. Then it relates. I used another metaphor. The metaphor I used, very often, was to compare life in a company and life at home. I would say, think about it and you’d be so surprised. So surprised to see that, in a company, you do things because you believe in them and because, sometimes, things have to be done. Just like at home. In a company, there is no democracy; somebody has to decide, at a point in time and it is decided for what is perceived as the good of the company. Just like at home.

{audio:0:18:29} At a point in time, things have got to be done. All of those things go fine, as long as there is trust and respect. Just like at home.  You can’t tell your children, at home, do this and you do exactly the opposite.

{audio:0:18:53} What was the biggest challenge for you, in moving from being an executive leader, within in Dow, to the CEO of Sealed Air Corporation?

{audio:0:19:05} When I was an executive at Dow, I was part of the executive committee and this was a $50 billion company, with 55,000 employees, very global, and so on. I was a division president at Dow and a member of the executive committee and then I moved, as a CEO, to a publicly traded company. These are two very different jobs. By the way, Sealed Air, publicly traded on the S&P, in New York, was about an $8 billion company, with 25,000 employees. It’s very different to be an executive committee member because, in the end, you run your division and you are part of the decisions that are made at executive level of the company. But you are not the ultimate decision maker. The responsibility lies with the CEO.

{audio:0:20:15} Of course, some very important decisions are delegated down to the CTO, the supply chain VP, and the functional leaders. But in the end, the overall responsibility lies with the CEO. He is the one who is, what I would call, the Chief Culture Officer. He is the one who decides where the bar is. He is the one who decides about accountability. He’s also the one who might decide to have favorites and others. That is a very big issue, which deals with the fact that we are all humans. But how often have you met, in a given company, an executive committee where you see that some members of the executive committee don’t belong; are not at the level. You wonder, how did they get there? In fact, one of the main reasons is that they are very close to the CEO. Therefore, they have not been removed, because they could have been protected. That’s a big issue.

{audio:0:21:44} It’s a big issue, because down there, the organization knows it. Everybody would know it, because everybody is a public person in a company. If that person is a dictator, doesn’t listen, knows it all, plays favorites, shoots from the hip or is never able to make a decision, or never answers his emails – you have people who never answer their emails – then everybody knows it. Therefore, it reflects on the CEO and his or her own credibility, if that person is part of the leadership team. You’ve got to be very careful about those kind of things and you have to stay objective. You have to accept that the bar is set by you, the CEO, Chief Culture Officer, and that you have to demand, you have to be fair, otherwise your own credibility is at stake.

{audio:0:23:03} How did you deal with old friendships, in the business, as you moved to become that boss, the CEO?

{audio:0:23:14} That did not apply to me, because I moved, from Dow Chemical, to Sealed Air, so I was a brought-in CEO. I did not have any friends coming, as I moved up. But it happened to me, as I led a division or a subsidiary or things like this. I was a peer and then, all of a sudden, I became the CEO of Dow AgroSciences, which was a wholly-owned subsidiary of Dow Chemical. The minute you become the boss, everything changes. You don’t realize it. You don’t realize it, because you were friends with your peers. You weren’t friends all of them, but you had very cordial and good relationships with them. I spend 35 years at the Dow Chemical company and, therefore, you make lots of friends. All of a sudden, you become the boss.

{audio:0:24:19} You look at them and say, hey, we’re friends. But all of a sudden, they don’t see you as a friend, anymore. They see you as somebody with whom you had a very good relationship, but you are not their friend, anymore. All of a sudden, you became their boss. Becoming their boss means that they have got to filter what they tell you, and they will, because they know that you will give them the next merit increase and the next bonus. Therefore, they will be more careful in what they say and how they behave, in front you. But you don’t realize that.

{audio:0:25:14} It’s difficult. There is nothing more difficult than accepting the isolation of being CEO. All of a sudden, you become extraordinarily isolated. This is one the things that a friend of mine told me, the day I became CEO of Sealed Air and I was consulting with CEOs of other companies, who I knew well, who were friends. I was asking them to help me prepare for that. One of them told me, prepare yourself for being extraordinarily isolated. You have no friends anymore. You have people who have to respect you and who will, systematically, filter what they tell you and you make your decisions alone. You might ask the others but, in the end, it will always be your decision.

{audio:0:26:20} How do you navigate that unfiltering of information, up from the front line, to direct reports, to yourself?

{audio:0:26:30} Everyone has their own tactics. Because I travelled a lot, because I was doing all of those town halls, I would notice a few people who have a spark, who would be challenging, who would have interesting ideas and I would speak to them. I would bypass the hierarchy. Your direct reports don’t necessarily like that. Some have no problem with that; some are very nervous about it. Those who are nervous, are the ones who like to concentrate the power in their hands and give you a full menu. Those who have no problem with that, are people who are relaxed that their opinion is the consensus, the common sense and a well-thought out idea or strategy.

{audio:0:27:37} But that was my way of doing it. I would just go and probe down, in the field. I would test ideas, with people, one, two, three levels below. They are the ones who know.

{audio:0:28:00} Jerome, let’s take a step back. You joined Sealed Air, as CEO. What did you focus on? What was the strategy, for the business, as you became CEO?

{audio:0:28:15} Everything has a context. Sealed Air is, was, a great packaging company. You would go and ask people in the packaging industry and they would tell you, Sealed Air is a great company. That would be one image of the company. Then I would look at the financial results and I would see that EBITDA percentage of Sealed Air, nine years out of 10, it went down, before I arrived. It was a 20% EBITDA company in 2001 and when I arrived, it was a 12.5% EBITDA company.

{audio:0:29:00} I would say, this doesn’t compute. A company which is the bubble wrap company. Sealed Air invented bubble wrap and, therefore, became the world leader in protective packaging; every package which protects a product, in a box. It can be bubble wrap, it can be foams, it can be all kinds of protective packaging. World leader, by far. Then the other division, the larger one, would be the food packaging division. In the food industry, the tradename Cryovac would be extraordinarily well known. So an iconic company.

{audio:0:29:50} My predecessor had also acquired a company, which became the third division of Sealed Air, a year before I arrived. This was an industrial cleaning company, called Diversey. When I arrived, it was 11 months after that acquisition and the stock had dropped from $26 to $12 or $13, in that 11 months, because the street and many investors had considered that Diversey was an ill-conceived acquisition. You had lots of people, internally, being like the rabbit in front of the headlights of a car, at night. Very scared of how this had happened and this great company is really not doing well. Remember what I told you, nine years out of 10, it had diminishing returns.

{audio:0:30:57} So when I arrived, I spent a few months, looking at the overall situation and then I had the vision that this could be, again, a great company. I wondered whether this was a specialty company, which lost it, because its product had commoditized or whether it was a company which, in fact, had to do a few specific things, but had, essentially, a morale problem. In fact, in life, nothing is binary. The easy answers don’t exist. It was not one or the other, but it was a combination of both. But it was a company which had extraordinary leadership positions, in the two traditional divisions that it had.

{audio:0:32:03} The mission, for Diversey, was let’s fix that division, that new acquisition and then later on, in a few years from now, we will decide whether it belongs to Sealed Air or whether there should be a better owner for that division. In that case, we will sell it. For the other two, it would be, let’s understand and accept that we are the undisputed leader of protective packaging, in the world, and the undisputed leader of protein packing, in the world and let’s have the courage of that leadership.

{audio:0:32:54} Having the courage of that leadership means that the leader needs to lead the industry. The leader needing to lead the industry means that you need to lead in price and you need to lead in innovation. Your customers expect innovation, from the leader, first. If they don’t find it from the leader, they will have to find it somewhere else. But price is the main obsession of the salesman, not of the buyer. When you really dissect – and there have been some very interesting studies done about this – when you dissect the purchasing criteria of the purchasing department, you will see that price comes as number 10, 12 or 13, out of a list of over 20 criteria. Number one is the long-term innovation capabilities of the company. Then the reliability, the supply chain abilities, the technical service, etc. Then comes price, at a point in time. By the way, number 17 or 18 in study that I read, some years back and I think it was from Accenture, you have payment terms.

{audio:0:34:40} When you ask the salesman, he’s going to tell you it’s all about price. On a day to day basis, the purchaser will make the salesman believe that it’s about price, but it’s not. Remember that a purchaser will never get fired, because he purchased something slightly too expensive. But he will get fired if his order does not come on time and if his plant shuts down, because the product is not delivered. Supply chain and reliability and quality – and he will get fired if he, systematically, buys cheap stuff, which doesn’t work and which doesn’t do the job. He will get fired for that. Not because he purchased 2% too expensive.

{audio:0:35:36} How did you communicate to your employees? You took over in 2013 and you want to regain the strength of Sealed Air, take it back to its roots, being the leader. What do you communicate to 25,000 employees?

{audio:0:35:53} You communicate externally and you communicate internally. Externally, you take a strong stance and say, to investors, we are the leader, we will act as the leader. Our prices are too low, we have to increase our margins. For that, we will raise our prices, because we are not in the business of absorbing cost increases, because it is not all about price; it is about our innovation abilities and capabilities. We will boost innovation, but we will increase our prices. Externally, this is a very strong message.

{audio:0:36:35} Internally, you pump the people up and you say, this is over. You need to pull your shoulders back. We are better than what we have done and we are the world leader in two of our divisions. We need to exercise that leadership. Then you go and tell the people what you expect from them, after having clearly understood, which is what took me about two to three months, the SWOT analysis. What are our real key strengths, our weaknesses, our opportunities and our threats? We announced price increases and our worst enemies were our salespeople. They lived in a prior culture where they did not believe that we could raise prices. In fact, they were giving lots of things away. If you give something away, it doesn’t have value.

{audio:0:37:47} Charge this and you will see whether your customer still wants it or not. When you maintain equipment, you can’t make the maintenance free. I used metaphors all the time. My understanding is, that when we supply equipment, it has one or two years warranty, then if a customer has an issue with spare parts, with something which is broken, we would go, charging the spare part cost, but not the labor? Is that correct? People would say, yes; that’s what we do. Next time that my boiler, at home, breaks, I will call Sealed Air. You guys come and fix it for me. When I call a plumber, he charges me for the trip to come to my home, he charges me for the spare part and he charges me for the labor. Why don’t we do this to our customers? The only answer they can find, sometimes, in companies, when you identify an issue is, but we’ve always done it like that.

{audio:0:39:17} This is not a good answer. Customers will take what is free, but they are not going to give you any respect for that. If you say, we have to come a few hundred miles, we’re going to spend six hours fixing this, doing the trial, they say, of course, I know it costs you money.

{audio:0:39:48} How do you deal with that sales culture that is so cost focused? They want to drive volume; they don’t mind giving good deals to their customers. How do you ensure that that doesn’t get out of hand?

{audio:0:40:05} It was out of hand. Under the previous administration, it was forbidden to lose an order and, therefore, there was no marketing department. I said, we need to have a creative tension between sales and marketing. Give me the definition of success, for a salesman. Very simple. Book the order. That is the definition of success, for a salesman. Give me the definition of failure, for a salesman. Lose the order. So if you accept these definitions of success and failure for a salesman, you know that he is not going to be fighting for a better price, unless a pricing increase is imposed. Therefore, you need a creative tension between marketing and sales.

{audio:0:41:06} I came from business schools where, for an industrial company, marketing was about the four Ps – product, price, place, promotion. In industrial companies, there is no promotion and there is no place. So what’s left? Product, price. Price, product. You need to have somebody in charge of the price and you need to have somebody who’s preserving the margins. It is not the job of the salesman. Therefore, you need that tension. Somebody else needs to take the responsibility of saying, it’s okay to lose the order. This is what we created. At a point in time, because this culture was so sales oriented, that I imposed price increase and I said, don’t worry, guys, it’s on me. If you lose the business, it’s okay. We need to stop the margin bleeding. We have raw materials coming up. We need price increases; it’s okay.

{audio:0:42:28} Guess what? We imposed that and, of course, some of our customers pushed back, because when they pushed back in the past, it worked. Then it stuck and the market got to know that we were serious. Guess what? The competitors said, finally, the leader is raising prices. When you have 5% market share, you can’t be the price leader. When you have 30% market share, it’s not that you can’t, it’s that you have to be the price leader. The poor guy down there is going to be punished, if he has 5% market share. He’s going to say, the big guys are not asking me for a price increase; you are. Out.

{audio:0:43:20} He’s waiting for you to raise the prices, the little guy.

{audio:0:43:24} That’s the responsibility of the leader. Prices. But you have to make another promise. You say, I’m going to have to restore my margins, but I am also committed to continue my leadership and bring you revolutionary solutions, which make you win, Mr. Customer.

{audio:0:43:48} You also took responsibility of that. You made the sales people feel comfortable in, it’s okay to lose the order; it’s on me?

{audio:0:43:56} Exactly right. By the way, you have no pricing authority. Somebody is going to tell you the price, you are going to feed back the response, as to what you hear from the market, what’s going on etc. But then somebody – marketing – will tell you whether they are ready for a concession, or not.

{audio:0:44:26} So the pricing authority was clearly set at senior management, but would marketing deal with that then?

{audio:0:44:34} Yes, marketing. That would be the day to day job of a product manager or global product manager or a product line manager. That’s their job. Their job is to look at the raw material cost, to look at the positioning of the product, to look at the competition and, say, we have this film, at 30 gauge, which has these properties. Then the sales guy would tell you, yes, but competition X, Y or Z is at this price. Then marketing’s job is to say, for what product exactly? For a 29-gauge product. This is not the same. We are selling you a 32-gauge product, etc. Marketing is here to give ammunition to the sales guy, so he fights. But he is the guy who needs to take the marching orders.

{audio:0:45:32} We had past dues, like no tomorrow. We had about 22% of our receivables, which were past due. Then you say, how come? Because if you don’t have discipline in the functional responsibilities, you know, because of the definition I gave you, book the order, versus lose the business, he might give terms. If a customer was past due, he might say, that’s okay, I understand. We had over 20% of past dues, in our business. Unacceptable. By the way, the purchaser will play with a guy and he will know that, with this company, he can be past due and that with this company, he is going to be shut down if he is past due. Because the organization, the supplier will just issue a stop order. He will always play with the same guys.

{audio:0:46:50} It’s funny, because one day, we issued a letter to all of our customers saying that we have terms, we have to negotiate terms, but once we have negotiated terms, they have to be respected. One day, I was travelling to Mexico and the sales manager says, “Oh my God. We have a customer who really reacted very poorly to this letter.” What’s the issue? Is that guy, systematically, past due? No, no; it’s very, very rare. So what’s the issue? He really is taking exception to the fact that he will have to pay an admin fee and interest, if he’s past due. I said, I’m here; let’s go and visit the customer.

{audio:0:47:45} We went to visit the customer, who was a very good, large customer. I said, I hear you have issues with the letter. He said, I don’t think it was well-written and I don’t think that we should pay interest if we are past due and so on. I said, are you past due with us and the guy says, “No, I take pride in not having past dues with you or anybody.” I said, give me that letter. I tore it up and said, this doesn’t apply to you. He looks at me and says, but look at what you wrote. I said, it’s a general letter that says we have a contract between you and us. The contract is that you expect me to deliver product, on spec, on time. We expect you to pay, on time. If you tell me or if any customer tells me, I take a real exception to you imposing me to pay you on time, because sometimes I can be two weeks late and big deal, I’m going to tell that customer, not a problem, sir. Absolutely not a problem, provided you accept that when ask for the product on April 15th, I can deliver within two weeks. Then the guy said, absolutely not. Why do you do this? Is it because your plant needs it at a given time? Yes. So it’s not acceptable for me to deliver, at a point time, between April 15th or April 30th, just like it is not acceptable to me that you pay, at a point in time, between July 1st and July 15th. We have a contract. You respect your part and I will respect my part.

{audio:0:50:04} Those kind of things are obvious. Business is an art; it’s not a science. The problem is that there are some good artists and some bad artists. It’s common sense.

{audio:0:50:21} You mentioned how the CEO role is the chief culture officer. How do you think about culture?

{audio:0:50:34} Culture is the religion of a company, which means that you believe in a few things. There are things which are allowed and things which are not allowed. There are things that you can do and things that you cannot do. Therefore, what you need to have are very clear core values. This is what is going to guide the culture. You have core values, you have leadership behaviors and, of course, you have a vision and you have a mission, to frame all of this. But core values are extremely important.

{audio:0:51:13} When I arrived at Sealed Air, we rewrote the core values. There is a core value about ethics, that every day you are committed to what is right. Right, not only legally, but right, ethically and morally. We had a core value about empowerment and I loved that one because it was saying that we are empowered to do what it takes, to deliver what we promise. This is a quote. That was core value number two. We are empowered to do what it takes, to deliver what we promise. No excuses. We promised, I, as an individual, we, as a team promise to do something. We are all completely interdependent with each other. If I don’t do my part, the team cannot do its part. If the team cannot do its part, the company cannot achieve the expected results. This was taking it back to a no-excuse religion, or culture, where we are empowered to do what it takes, to deliver what we promise.

{audio:0:52:37} I am empowered to do what it takes, to deliver what the team promised, if the team is failing. I will not use excuses for not delivering. That was a very important point, in our core values. The last one, which is very important, was about innovation. It was saying that we are surprising our customers, with revolutionary solutions, which make them win. These are innovations, which make them win. The idea there was, if our customers win, we are going to be able to charge something, because they win. If they win, we will win, with them.

{audio:0:53:43} Culture is about the values and it’s the religion. The issue is, when an organization lets the culture be loose. What I demanded from our people and what I was applying, often was, are we sticking to our core values? Are we doing innovation for our customers and are they winning out of it, so they have a reason to adopt this innovation? Are we empowering our people and are we demanding a no-excuse attitude? Are we imposing collaboration? Then you could ask, in meetings, is this consistent with our core value number two? Or is this, again, excuses for not delivering? You can question those things. In town halls, you can remind people and say, by the way, can anybody here recite core value number two? Very often, you would have a blank. Then you say, guys, we wrote those core values for us to respect them. If we can’t remember them, then it’s just like the 10 Commandments in the Catholic church if you can’t say, you shalt not steal and you don’t know that it’s wrong. You have to know the core values and you have to abide by the core values. This is our religion; this is our culture. Then, with time and persistence, you get it done.

{audio:0:55:35} How would you compare the culture at Dow, versus Sealed Air?

{audio:0:55:41} It’s difficult to compare a $50 or $60 billion company, with an $8 billion company. The great advantage of smaller sized companies, what I would call medium-sized – I would call medium-sized, a $5 to $10 billion company – is that you can be very agile. The issue of very large corporations is bureaucracy and this idea that the system prevails. Because it gives the excuses to everybody, to act as civil servant. Dow was clearly not a civil servant type of company. But you have, by definition, more bureaucracy than in a smaller, medium-sized company.

{audio:0:56:48} When you think about it, what is the ideal company? The ideal company is the one which has the agility and the individual employees’ ownership of a start-up, and the finances of a multi-national, very large company. This is the ideal. But by definition, employees and leaders of a start-up, will breathe, everyday, the growth, the winning aspect of a start-up. How can you make sure that every employee, when the employee comes and badges at the door of the very large multi-national, how can he feel that if he is tempted, should I badge this morning and what if I don’t come? Am I making a real difference, or am I just a number?

{audio:0:57:54} This is how you can engage employees. You need to really tell them why it is so important that they are unconsciously obsessed with making their company win. Why is it important that they do that and why they have a very key role? Unless you explain to them that they are part of something grand, they are part of a great project and unless they are conscious of all of this, they’re just not going buy your story.

{audio:0:58:37} Looking back, you mentioned how business is an art and there are good artists and bad artists. What have you learnt that makes a really good business artist?

{audio:0:58:57} In most companies, it is not your IQ which is going to make a huge difference. If you are a pharmaceutical company, you have a whole organization, thousands and thousands of people, who are dependent on the R&D department. If the R&D department discovers a blockbuster, this company is going to do wonderfully well. In most companies, you don’t have to have an IQ of 160, for the company to be successful. It is about creativity, for some; it is about resilience, for others. It is about persistence, it’s about will, it’s about processes. It is the blend of the creativity and the processes and the will and the persistence and all of this, within a given culture, which makes a company successful, or not.

{audio:1:00:08} It’s not about IQ. It is about EQ and will. Therefore, you have to engage employees that what they are doing is important, because each of us is bringing a brick for that wall and we are building a wall and we are going to be the best at doing what we do. You have companies in which the culture is to win. At school and at home, it’s just like in a company. You go and ask C students or D students, whether they love what they’re doing in their course and they’re going to tell you, oh, no, no. It’s hard; it’s terrible. How come, when you ask A students, you will see a big smile and they will always tell you, it’s so fun; I just love this math exercise. And, by the way, in my free time, I want to do this and do that. Do they love math or do they love winning?

{audio:1:01:38} In fact, it’s always the same. In a company, it’s exactly like at school. You have companies which love winning and you have some others who are a bit cumbersome. They are cumbersome because everything is hard, because they don’t see the light at the end of the tunnel. They struggle, because they don’t have a culture of winning and they don’t have this will that says, we are going to be the best at what we do. Through our innovation, through our market leverage, through this and through that, we are going to win, over the competition. You have companies which excel at this and they are always the same. It’s not permanent, because some companies lose it, over time. This is what I call formidable competitors.

{audio:1:02:43} My definition of a formidable competitor, is a company which, in a given field, does everything better than anybody else, in the same industry. It can be a division or it can be a company. If I ask you to give me an example of a company that does everything better than anybody else and, therefore, reaps the financial rewards of all of this, you’re probably going to say Apple. I would say, sure. Basically, you don’t want to compete with Apple. If you do, it’s because you are Korean and, therefore, a masochist. Or because you are Chinese and you want to mass produce. But it’s Apple that gets the financial rewards, because Apple does not only sell phones, they sell everything around the phone. They sell iTunes, they sell things and they collect fees from this and that. They’re not done when they have sold you the phone.

{audio:1:04:02} They also sell status, with the phone. I have an iPhone, not a Samsung.

{audio:1:04:06} Exactly. They’ve built the brand and they hook you. If you have an iPad and an iPhone, you’re on drugs. You can’t move to Samsung or to Huawei or whoever else. So they don’t talk to each other anymore. This is the definition of a formidable competitor. They do everything better than anybody else.

{audio:1:04:31} I can tell you, in the pharmaceutical industries, in the nineties, Merck was one of those. Then they lost it, at a point in time. Then in the agricultural industry, Monsanto was one of those, in the nineties and 2000s. You did not want to compete with Monsanto. I was competing with Monsanto. When I was the CEO of Dow AgroSciences, we had an industry association and I knew the CEO of Monsanto, very well. He was called Hugh Grant and I said, “Hugh, you really are a formidable competitor and I want to thank you.” He asked what a formidable competitor was. I said, “You, basically, do everything better than all of us.” He smiled, losing his humility. I told him, when we compete with Monsanto, we have two choices. Either we quit and we do something else, or you force us to be better. Thank you, for forcing us to be better.

{audio:1:05:50} What did they do so well?

{audio:1:05:52} They had really leveraged genetically-modified seeds, so transgenic technology for seeds and things like this. It was, originally, an acquisition of a start-up company. But then they really leveraged this technology, by buying lots of seed companies and, by combining the two, they were really a formidable competitor. They displaced the traditional agricultural chemical companies and the traditional seed companies. They disrupted the industry, significantly, but they forced the industry to be better.

{audio:1:06:35} In doing that, lots of competitors have disappeared. I said to him, thank you for making us better.

{audio:1:06:45} Jerome, is there anything else that you would suggest to young leaders today, to focus on, as they look to progress in their career?

{audio:1:06:54} If there is one thing that I would say to a young manager, who wants to grow and who is committed, it is, be courageous. That’s the only thing. Being courageous means, think and when you see the opportunity for getting things done better, sell your idea to others and go ahead and volunteer. If you have a negative environment around you, you might get frustrated, or you might get fired. But if you are courageous and if you get fired, don’t doubt.

{audio:1:07:50} I told Sealed Air, very often, to all our employees, don’t worry. If you don’t like it here, don’t be a masochist. Go somewhere else. Have the confidence that you can find a better paid job, somewhere else, because there are lots of opportunities. If you are good and have courage, I would hate to see you go. But in fact, what you’re finding out is that very few people have courage. They think that courage must be mitigated by being politically correct and by following the system. I’m not telling you to be a rebel. I’m telling you to be courageous and positively sell your ideas to others and don’t shut up when you have a real issue with what is being done.

{audio:1:08:57} Positively suggest alternatives. Because there are too few courageous people in large companies, you will be seen as a very valuable asset. Everybody will see that you are different. This is why you have very few leaders and you have so many managers.

{audio:1:09:29} Jerome, I think that’s a good place to end. It’s been great, thanks.

Leading Sealed Air's Transformation

The importance of trust and humility as a leader

Responsibilities and lonelineness as a CEO

How courage sets leaders apart from managers and how to cultivate courage

Sealed Air's transformation and how to structure industrial companies to control price

Leading Sealed Air's Transformation

Former Chief Executive Officer at Sealed Air Corporation

inpractise.com/articles/sealed-air-transformation

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Jerome Peribere

Former Chief Executive Officer at Sealed Air Corporation

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Leading Sealed Air's Transformation(April 3, 2020)

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