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Developing Organizational Readiness for Risk Reduction and Risk Mitigation: Recent Lessons at Dow

Developing Organizational Readiness for Risk Reduction and Risk Mitigation: Recent Lessons at Dow. Greg Cochran Remediation and M&A Due Diligence EHS AHC Conference Saratoga Springs, NY June 2005. About Dow …. A science and technology leader with annual sales of $40 billion

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Developing Organizational Readiness for Risk Reduction and Risk Mitigation: Recent Lessons at Dow

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  1. Developing Organizational Readiness for Risk Reduction and Risk Mitigation: Recent Lessons at Dow Greg Cochran Remediation and M&A Due Diligence EHS AHC Conference Saratoga Springs, NY June 2005

  2. About Dow … • A science and technology leader with annual sales of $40 billion • Founded in 1897 by Herbert H. Dow in Midland, Michigan • Supplies more than 3,300 products to customers in 175 countries • From 165 manufacturing sites in 37 countries • Employs 43,000 people globally

  3. About Dow … Personal and Household Care Food Building Construction Home Care and Improvement Electronics and Entertainment Transportation WaterPurification Health and Medicine Furniture and Furnishings Paper and Publishing

  4. Remediation Organization

  5. Organizational Alignment • Global Scope • Oversight by the Remediation Strategy Board (EH&S, Finance, Legal) • Consistent Work Process & Implementation • Performance Metrics

  6. Global Remediation Scope • 5 Continents • 45 (out of 165) Operating Sites • 200 Non-Operating Orphan (Legacy) Sites • 50 U.S. Superfund Sites • ~500 Projects • People • 15 Remediation Leaders • 10 Project Leaders • 200-250 Partner (Contract) Employees

  7. Remediation Strategy Board

  8. Mission & Objectives Use Risk-Based Targets Manage Projects Effectively Meet Responsible Care Commitment At Least Long Term Cost of Ownership Utilize Cost-Saving Technology Negotiate Win-Win Solutions

  9. Performance Measures • EH&S – Compliance, Safety • Fiduciary – Environmental Liability Reserves, Sarbanes Oxley • Strategic Focus – Site and Business alignment • Spending Forecasting & Control • Strategic Partners (Contractors) Performance • Continuous Improvement - Creativity, Value Added, Breakthrough

  10. Drivers for Organizational Change External: • Emerging Issues – Vapor Intrusion, NRD, Brownfields Redevelopment • Alignment with Regulatory Agencies – Relationship, Credibility, Consistency • Accountability – Community, Public, Shareholders

  11. Drivers for Organizational Change(cont’d) Internal: • Corporate Restructuring – Re-aligned to EH&S function, Layers eliminated • Mergers & Acquisitions Due Diligence – Incorporate additional responsibilities • Organizational Renewal – Succession Planning, Career Development

  12. Changes Implemented Site by Site Orientation Shorter Term Focus Quiet and Invisible Systems - Weak Conventional Contracts Reacting to Influences Stagnant Organization Portfolio Orientation Strategic Focus Fully Integrated on Teams Systems Oriented Strategic Partnership Managing Emerging Issues High Powered Organization

  13. The Key Role: Remediation Leader Accountablefor All Aspects of Remediation within a geographic portfolio • Technology • Negotiations • Compliance • Communications • Implementation • Spending Done as a Team Leader with Other Functions

  14. Portfolio/Geographic Approach • Enables Relationship Building – Trust & Credibility • Consistency • Furthers Strategic Alignment • Issue Management

  15. Organizational Design David Graham Vice President – EH&S Greg Cochran Director of Remediation/EH&S Mergers & Acquisitions M&A Due Diligence UNITED STATES Texas Colorado/California Canada South America Europe/Africa/Asia Orphan Sites Louisiana/Arkansas W.Virginia/North East Michigan Superfund

  16. Early Team Successes • Site Strategic Leadership Teams • Regional Regulatory Affairs Teams • New Jersey NRD Team • Land Revitalization Team • Strategic “Peer Review” Process

  17. Continuous Improvement • Six Sigma Mindset – 4 Black Belts, 6 Green Belt Project Leaders • “Silo” Intolerant – Recognize those who “leverage” in or out • Win-Win solutions are critical • Challenges & change are constant – get over it!

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