Behind the scenes
The hectic behind the scenes activity which has taken place at Akzo Nobel during the last 12 months of transformation has largely gone unnoticed by the outside world.
But the sheer scale of the collective effort should not be ignored, because it has been crucial in helping the company to successfully negotiate one of the most frenzied periods of activity in its long history.
In order to give an insight into how the transformation of the company has required a huge contribution from all areas of the organization, key members of the corporate staff explain how solid daily operation and careful management have helped to ensure Akzo Nobel’s ongoing success.
1. Ton Geurts
Director of sourcing
“For Akzo Nobel Sourcing, 2007 was a busy year in terms of putting the right governance, structure and systems of the new purchasing set-up in place.
Our role is to support, in the most effective way, the needs of the businesses, to work with them proactively and to contribute in the best way we can to their bottom line.
We have a governance model where we have a Procurement Council made up of Purchasing Directors representing all business units, plus the Management Team from Sourcing. Together we act as the co-owners of the total spend of Akzo Nobel.
As well as finalizing work streams, fine-tuning the organizational set-up and putting the appropriate processes in place, we have also standardized the savings conventions and established a business intelligence workforce. It is a truly global operation and we are making sure that the sourcing function is embedded in
the business, because it is business.”
2. Paul Grimmelikhuizen
Director of Internal Audit
“Akzo Nobel puts a strong emphasis on internal control. It is our responsibility to assess the effectiveness of these internal controls throughout the company. There is one global audit team which works to the same procedures and methods and uses the same tools at every site. There is often a misunderstanding about internal audit. Our responsibility is not to audit the financial statements. We review processes and the external auditor audits the financial statements. So we audit the pipelines and the audit firm audits the outcome.
We now get more quality from our audits and can add more value to the businesses by reviewing their processes. We have also created a business unit auditor function, which allows us to gain a better understanding of what’s happening throughout the company. It means we can focus our audits and take more of a risk-based approach.”
3. Heiko Hutmacher
Senior Vice-President of Human Resources
“Driving the progress of the company’s Talent Factory initiative is one of the main focuses within Human Resources. In essence, we are striving to create one Akzo Nobel culture, and the Talent Factory is a crucial part of that.
An essential element of this drive for continuous employee improvement is the Performance & Development Dialog appraisal process, which is now being used by all employees in Akzo Nobel. It’s a perfect example of how the company is making one culture a reality by taking one best practice program and introducing it on a global basis. What’s important now is that we deliver to the businesses, and the employees, and move to the next level by putting in place further tools and processes worldwide.
A key task in this context is to offer people the opportunity to work in other areas of the company as another way to stimulate
a high performance culture within Akzo Nobel, with a clear focus on talent development and leadership.”
4. Jo Lennartz
Director of Technology
“The appointment of a Director of Technology during 2007 was a clear signal that Akzo Nobel regards technology as being vital to the success of the company.
Essentially, Technology is the key function which drives competitive advantage and we now have the opportunity to strengthen our focus and tap into the enormous talent pool that we have working for us in this field.
Now that the structure is in place, with the central Technology functions reporting to one responsible manager, we have a perfect foundation on which to build. We want to create more opportunities for people to learn from each other, and facilitate cross-fertilization and better synergies. We are also working to build a stronger external network, with universities and other knowledge institutes for example. By working more closely together we can get even more value out of the capabilities that exist throughout the company.”
5. John McLaren
Director of Corporate Communications
“It’s been an incredible year for the company and as Corporate Communications we have focused a lot of attention on explaining Akzo Nobel’s strategic direction to all our stakeholders. It’s essential that everyone, both internally and externally, has a clear grasp of what we’re doing, why we’re doing it and how we’re doing it. As a department we operate on several levels – including internal communications, media relations, corporate branding, digital media, and events – but the same basic rules of clear, effective messaging remain constant. Quality is another pre-requisite, but this stamp of excellence is something which applies to all areas of the organization.
In some ways, 2007 could be looked upon as a year of preparation, as well as transformation. The divestment of Organon BioSciences, the acquisition of ICI, the relocation of the company’s headquarters, they all helped to shape what lies ahead as Akzo Nobel continues to focus and transform. Our challenge will be to fully explain that change, and effectively communicate the company’s strategic vision.”
6. Keith Nichols
Senior Vice-President of Finance
“The scale of change taking place throughout the company obviously dominated the department’s activities during 2007, although there was also a lot happening in terms of business as usual. An opportunity such as this – to strategically change a large quoted company like Akzo Nobel – comes along perhaps once in a lifetime and although it’s been challenging, everything has gone relatively smoothly.
Within each of the separate areas, Tax, Treasury, Investor Relations, and Insurance, there were also specific matters to attend to. Tax had certain issues involving the disentanglement of Organon BioSciences for example, while Treasury has been going through its own evolution in terms of process reviews. The focus on creating one Akzo Nobel also saw Insurance work more closely with other functional areas such as Sourcing, a combination which brought some purchasing power to our insurance renewal arrangements for 2008.
Now we’re looking to introduce more standardization and transparency in order to deliver operational efficiencies, demonstrate value added, and meet the challenges ahead.“
7. Martin Potter
Director of Corporate Control
“We continued to make changes during 2007 in order to create one, focused Control and Accounting team. We no longer use different styles and frameworks for each of the business areas. Instead, we have a well aligned organization, with one method of working, set up to emphasize particular skills.
This team works in four areas – external reporting, which supports the CFO; the corporate accounting team, which manages the consolidation and handles all the internal reporting; internal control, which facilitates a proper “in control” environment; and economic affairs, which supports the decision support and information needs of the Board of Management and Corporate Staff.
The result has been a continued improvement in the quality of governance and control and further standardization of the process in accounting and reporting inside the company. More improvements are also planned for 2008.
Another important development was the company’s decision to delist from NASDAQ and the deregistration from the SEC. The absence of a U.S. listing means that we can now develop our “in control” framework to be more efficient, yet effective, and emphasize our perspectives on strong business management.”
8. PIET SCHALKWIJK
Director Special Projects and Director Intellectual Property
“From my perspective the year’s major milestone occurred in August when the company announced its intended acquisition of ICI. From that moment on, in anticipation of completion of the deal, we began preparing for the integration so that we would hit the ground running when the transaction was finalized.
As integration leader, I can clearly see that the process was – and continues to be – focused on creating one company and one team, with the new company being founded on the best of both Akzo Nobel and ICI. Because the integration is not only about getting bigger. It’s also about getting better.
As deals go this has been rather complex and various aspects, such as the on sale to Henkel, will only be completed during the course of 2008. But we focused early on defining the integration approach, setting the synergy targets and providing clarity about the future leadership of the combined organization, in particular the proposed composition of the new Board of Management and its direct reports, which are all crucial steps at the beginning of an integration process. Proper communication with all employees worldwide has also been paramount.
During the same month that we announced the ICI acquisition, we also moved our global headquarters in the Netherlands from Arnhem to Amsterdam. This proved to be another challenging and rewarding project which also reflected the creation of the new Akzo Nobel.”
9. Jan Karel van der Staay
General Counsel
“There are two critical aspects to the legal function at Akzo Nobel. We have to serve the businesses – via their own dedicated legal managers – in the ordinary course of business. Needless to say, we also have to safeguard the legal integrity of the company, in close cooperation with our colleagues at other corporate departments. This interaction is important because all the corporate staff departments must continue to cooperate in order to maintain a coherent vision for the company. Together we have to adopt a joint, consistent, sustainable approach to ensure that our company is fit for the future.
As a department, essentially we have to deal with external laws and internal rules and principles. However, at the end of the day, it all comes down to individual business behavior. It’s about transparency, integrity, accountability, and taking responsibility. Promoting and monitoring a culture committed to compliance. But all geared towards serving the business interests in the context of the interests of the group as a whole.”
10. Bill Stubbins
Director of Information Management
“Unifying Akzo Nobel from an IT perspective has been an ongoing project for a number of years now. In terms of cost and efficiency, the benefits of uniting IT infrastructure components are significant.
We made excellent progress during 2007, reaching a landmark figure of 1,000 sites worldwide on a single network early in the year. The so-called OneHub program – which connects the company to suppliers and customers to enable e-business – has been another success.
In addition, OneVoice – combined telephone services – is really starting to accelerate, and our OneWeb project, which will create a global, unified intranet, is starting to gain momentum. Other major projects related to IT security, data centers and end-user computing are also in the pipeline, which will have a significant impact in the near future.
Creating effective shared services to facilitate true collaboration can be challenging in a global company such as Akzo Nobel, but the successes we are having prove that working together as one can be highly beneficial for all concerned.”
11. ANDRÉ veneman
Director of Corporate Social Responsibility
“Sustainability is shaping business throughout Akzo Nobel. The company has gone beyond the basics of putting governance and compliance systems in place and having a solid grasp of risk and reputation management. To be a true leader, you must understand that while being successful is indeed about integrity, it is also about creating business opportunities from sustainability.
Having been ranked as the Chemicals industry leader on the Dow Jones Sustainability index in 2007, we are now recognized as part of this elite group of leaders. Not only do we have global HSE standards in place, but we can also point to more than 100 examples around the world where we are providing eco-efficient solutions for our customers.
This unified approach is focused on achieving the best economic performance, against the smallest environmental footprint. In a world where companies with distinctive capabilities to create sustainable value will prosper, Akzo Nobel is committed to shaping a successful future for all stakeholders.”
12. Derek Welch
Director of Corporate Strategy
“Any year which involves negotiating deals worth more than EUR 27 billion must be regarded as somewhat historic and 2007 can certainly be classed as such. But it’s safe to say that the hard work is far from over. The challenge now is to make the transformed, more focused company work. It has to be properly integrated and we have to get the synergies. So there’s still a lot to do in terms of completing the journey which really started back in 2004, when Akzo Nobel refocused its Chemicals portfolio, and followed up with the Decorative Coatings reorganization.
That was basically the beginning of a long-term change process, because it laid the foundations for what we are doing now. Of course, the ongoing integration doesn’t mean that the door is closed to other developments. We’re still continuing to look at other opportunities that come our way, because the company will continue to grow, both organically and through acquisitions.”
