Strategy
- What does Transformation mean? Will Ampacet cease to exist?
- We need to change our mindset and behaviors to be a service and market-oriented company and not only a manufacturing company. Ampacet will continue to exist. We are just transforming the way we do business to best respond to the Mega Trends and our customer needs. We need to enter new markets, overcome the competition and win in the marketplace. The transformation is about remaining relevant.
- What are Mega Trends?
- There are many definitions but according to one source, Mega Trends are global, sustained and macro-economic forces of development that impact business, economy, society, cultures and personal lives thereby defining our future world and its increasing pace of change. Mega Trends have different meanings and impacts for different industries, companies and individuals. Analysis of these Mega Trends and their implications forms an important component of a company’s future strategy, development and innovation process, and impacts product and technology planning. For example, some of the Mega Trends that we have identified and a few of the implications are Urbanization. Implications: More construction products, more need for transportation. A Growing, Aging Population. Implications: Healthcare, Medical Products, Food. These are just two examples but there are others. The idea is to look at these Mega Trends and predict the impact to the masterbatch market.
- Is this transformation taking place to sell Ampacet?
- While the possibility of an acquisition always exists in the global business world we operate in, the objective of this transformation has nothing to do with a possible takeover by another company. Ampacet is not for sale.
- What are the 4 initiatives of the Transformation?
- Customer-Centric Innovation: Commodities will not be the only products that define Ampacet. We need to emphasize value-selling, which means selling on the benefits not the features.
- Get Out of Our Comfort Zone: In order to get into new markets and new regions we’ll need to do things differently.
- Behave Differently: Everyone, regardless of position and location needs to think and act as a leader, demonstrate accountability and possess a bias to action.
- Be Ever Conscious of the Brand that is Ampacet: Protect our Intellectual Property at all costs.
- What do we mean by being a leader, demonstrating accountability and bias to action?
- Anyone can be a leader because anyone can influence others regardless of their role or geographic location in the organization. Thinking and acting like a leader means putting others first and always connecting what we do with the work of others in the organization. It is about understanding how we add value and how we ALL contribute regardless of our geographic position. Acting like a leader means having a positive outlook and coming up with solutions and not just bringing up issues. It is about being a positive and motivating force with a “can-do” attitude.
- Accountability is demonstrating ownership and being willing to accept responsibility for one’s actions, for one’s team, for both successes and failures. It is about honesty and integrity. It is accepting where we do well and also where we need to improve. An accountable person seeks feedback, does not place the blame on others, but looks for ways he/she can bring solutions and make a difference.
- Bias to Action is one of our Ampacet values. It means that we need to respond quickly and assertively to business opportunities and challenges and prevent potential problems. We need to be willing and prepared to take calculated risks. It is about having a solutions-oriented attitude and not wait for others to lead the way.
- What techniques will be used to emphasize value-selling or selling on benefits and not features?
- We need to keep understanding and anticipating our customers’ needs. We will leverage digitized product development or e-commerce and will invest in new technology to help us sell our products and services going forward. We’ll need to understand the difference between a feature and a benefit. A feature is a factual statement about the product or service being promoted. But features are not what attract customers to buy. A benefit answers the question: “What is in it for me?” meaning the benefit provides the customer with something of value to them.
- What impact can e-commerce and e-channels have on customer service?
- In a more digitized world, customers are looking for the convenience and transparency to manage their orders in a virtual environment. Also, by increasing contact points with customers, we will be able to better identify and satisfy their needs. In the end, that approach will help us to focus more on value added activities to customers rather than transactional ones.
- What will be our brand positioning on the global level?
- The external brand positioning of “What makes Ampacet distinctive” is we are a global company with a focus on enhancing customer applications with foresight, concentrating on additives, colors and effects.
- To improve better serviceability and technical assistance, do we have any plans to hire technical experts for each application, specialized in their domain?
- Yes, we will evaluate the needs and bring in subject matter experts in different domains where we need them.
- In what markets/regions are we planning to expand into and penetrate?
- We would like to expand in China, Indonesia, Japan, Russia, South Africa, South Korea, and Taiwan. We plan to further penetrate India and Turkey.
- Latin American countries are not listed in the markets/regions, why is that?
- Ampacet has already a significant presence in the Latin American Region and it is not the intention to let that go away. We selected the areas mentioned for our geographic expansion based on where we have a low presence today and where we would like to better explore our potential and opportunities. We also followed mega-trends that predicted significant growth for the plastic industry in those areas.
- What markets would we target in the diversification?
- The following would be considered: Aerospace, Appliances, Automotive, Consumer Durables, Electronics, Furniture, Medical etc.
- Many of the new markets listed include new ones for us like Automotive, and Medical, etc. … but we do not know these markets, how will that work?
- We want to leverage our global presence to tackle this dilemma. Currently there are “pockets” of know-how and experience in different areas and regions, the plan is to develop those pockets further to a stage, that this knowledge can be translated to others rather than having each area start from zero.
- How will we diversify in a market where we have a limited presence?
- We will be using market intelligence/data and focus on value-added opportunities. We will experiment with multiple segments. We have started the preliminary work required to penetrate some markets already. We will continue to engage the right internal and external stakeholders and communicate appropriately with employees as we progress.
- Are there any plans to get out of certain markets and/or products that might be less beneficial for Ampacet?
- We currently have no plans to withdraw from any markets that we currently serve. In the future these decisions will be evaluated carefully and communicated in a timely manner.
- The “big” markets are our white and black products, however these are the areas where our main competitors play as well… will Ampacet be leaving these markets?
- Ampacet will continue to serve these markets but with a different mindset. We are looking for market share and price-based competition, helping customers solve their problems while focusing on value selling.
- Will our bigger lines (whites / blacks) be left behind?
- Investments are planned and will continue to happen to continue maximizing the capacity utilization and efficiency, through automation, Lean approach, etc.
- Since most of our production and sales is in white and black, does this mean that the company will get smaller?
- We do not plan to get smaller, just more focused on customer needs and finding the right products and services for them, rather than moving volumes of standard products. Most of the change may come from how we sell, the customers we serve, and where we ship our products.
- Will Ampacet stop manufacturing or selling any product from its current portfolio?
- We will make these decisions carefully and communicate clearly if this is decided in the future. We are constantly rationalizing our portfolio to ensure the best offering in the industry.
- Other Masterbatch manufacturers have been taken over by polymer manufacturers. Is Ampacet’s initiative a reaction to this trend?
- We are paying attention to all the mega-trends in the industry and will continue to evaluate our strategy in order to remain competitive in the marketplace.
Organization
- Will the company’s mission, vision or core values change?
- We are still committed to achieving performance beyond limits and living our values. We will be a performance based organization where value will be offered to our customers, not just products. We will continue to grow as a result and will end up being a Company recognized for its innovative products and services and as the best place to work.
- We have been working harder over the past year, yet the results have not been better, what is going on?
- We have been operating under the same models for the many years, following the same strategies and ways of working. In order to get different results, we need to think and act differently. This Transformation will allow us to get out of our comfort zone and work differently, leveraging systems so we can work better, not necessarily harder.
- What does it mean to “Get Out of Our Comfort Zone”
- It means to do things differently in order to get different results. This will require changing our mindset and it may be uncomfortable. However we must get out of our comfort zone to challenge ourselves, work collaboratively across all regions around the world, remove the silos, and be accountable for the results. Each employee needs to think and act as a leader. Training will be provided and employees will have goals related to the Transformation.
- We are asked to “Behave differently” but we already have a good work environment and we work well together, why do we need to change?
- Our customers are facing a quick changing environment, becoming more demanding and better informed. We need to use our global presence and internal know-how to better serve them, building on each other’s experiences and knowledge, removing barriers between regions and departments to become quicker, developing better products and being more efficient. We need to remove our silos and operate as One Ampacet. The work environment will become even more vibrant and collaborative as a result. Accountability for results will be even more important. We will need to collaborate internally across regions and countries in order to compete better externally.
- We have heard of “Accountability” for years but have not seen the company enforcing it so far, what will change?
- Without Accountability and Ownership, the company is not going to move forward. We will be leveraging different tools and systems such as the Talent Management System, SMART Goal Setting, Shared Goals, One-on-Ones, Development Planning, RACI etc. to allow us from now on to be Accountable at all levels. The “What” (goals and expectations) and the “How” (values and competencies) will be equally measured.
- Will this Transformation result in redundancies and restructuring measures? Which areas could be affected?
- We do not think the Transformation will result in redundancies. We might look at restructuring to take advantage of our global footprint. This decision has not been taken yet. We did introduce the Matrix Organization to allow us to better communicate as One Ampacet. We will re-communicate this way of working and train on how to most effectively work in a global, cross-functional and matrixed organization while maintaining accountability at each level.
- Will there be changes to job descriptions and job evaluations?
- New roles will be created. Current employees may be asked to volunteer on task forces based on their interests, workload and career aspirations. This would be based on the agreed upon development plans and the conversations of employees with their managers.
- Will we continue to tolerate poor individual performance year after year?
- Leaders will be expected to be clear on expectations, both on the “What” the employee needs to deliver and the “How” it needs to be delivered (competencies, values and behaviors). Smart Goals will be captured, feedback will be given on a regular basis and poor or non-performance will be handled in a timely manner going forward.
- Is this transformation initiative going to have an impact on Variable Compensation (VC)?
- It is expected that the changes will be positive and will favorably impact Variable Compensation over time.
- How do you intend to communicate on the progress made regarding the transformation?
- We will continue with the cascade mechanisms in place as well as leverage dedicated space on our SharePoint to share transformation updates. We will also establish a dedicated email address starting in June: transformation@ampacet.com to allow anyone to share continuous improvement ideas, and to answer questions employees may have about the Transformation and their role.
Training
- Will there be training to help change the way of thinking and working?
- Yes. Leaders will have leadership development plans. Courses in accountability and change leadership will be provided. Skills will need to be built in new ways of selling the Ampacet value. Processes to encourage each of us to hold ourselves and each other accountable will be introduced. We will expect all employees to have SMART (Specific, Measurable, Achievable, Realistic and Time-Bound) goals related to the transformation so we can each see and understand how we can each contribute and add value.
- Will there be specific training as the company moves to more value versus volume selling?
- Our people are the key differentiators for Ampacet. We will all need to follow the mega-trends and improve our skills to meet the needs of the marketplace. We will invest in enhancing the necessary skills of our current sales force as well as invest in additional resources in this area as need be.
Schedule/Timing
- What is the schedule and when will the changes become effective?
- These changes will be ongoing.
- What will happen on June 15?
- We will be in a position to reveal our new identity and brand, which will send a message that our mindset and ways of working are changing to meet the demands of the marketplace.