Assets: Decades of executive management success grounded in the value of people skills
Yield: Head job with an ailing B.C. paper giant following successful stint as an executive with a major Canadian printing company
One thing you need to know about Kevin Clarke is that he’s all about people skills.
During a recent interview at his Richmond office, the new president and CEO of Catalyst Paper Corp. (TSX:CTL) talked a lot about the importance of communication for a company meandering through tough times.
“It’s all about being honest and forthright with the employees,” said Clarke, who made a point of saying he prefers to be called Kevin
He should know.
The 58-year-old’s last major role was president of the publishing services group at Quebecor World, where 7,500 workers called him boss until the printing giant slipped into bankruptcy.
He helped steer Quebecor through that bankruptcy, but became a casualty along the way.
Another thing you need to know about Clarke is that when he speaks he uses a lot of sports and military analogies to get his point across.
“As soon as we took it out of bankruptcy… guys like me with a lot of stars on our shoulder, we got shot,” he said of being downsized. “That’s what happened to me. I got shot, but they shot me nicely.”
What he means is that his 28-year career with Quebecor wasn’t all for nothing.
He left with his reputation intact and a Rolodex full of blue-chip contacts.
Then came Catalyst, a major B.C.-based paper manufacturer with four mills, 1,850 employees and a balance sheet splattered in red.
On June 22, the day after he took the company’s reins, he sent a letter to every employee that used a sports analogy to explain his plan for Catalyst.
“Each of us has a position to play in what’s clearly a very challenging circumstance,” the letter read.
When he sat down with Business in Vancouver, he outlined his plan with a different analogy.
“When you’re in a war, right? You can’t just have the best ability to fight hand-to-hand combat; you don’t want to fight hand-to-hand combat. Strategically, you want the air power to come over to drop bombs on the opposition. You want to be able to attack the enemy at the flank.”
In other words, survival means shoring up your strengths and diversifying into new areas in an industry where “70% of the players in this business are either in bankruptcy, coming out of bankruptcy or considering bankruptcy.”
In addition to a less-than-profitable balance sheet, Catalyst is in the midst of legal wrangles, mill closures and job cuts.
In his letter to employees, Clarke outlined seven strategies he believes are fundamental to the company’s survival:
- safety and environmental stewardship;
- financial performance;
- leadership;
- communication;
- neutron microscope theory (which essentially means drawing on the company’s internal expertise to overcome challenges);
- personal accountability; and
- sales and customer focus.
Clarke said tough market conditions and a management focus that was too internalized has exacerbated Catalyst’s problems, but he has a plan.
“I’m looking at expanding our top line, changing the way we do business, attaching ourselves to the winners in the marketplace.”
That means a major focus on cost control, expanding product lines where “opportunity exists” and a “robust” communications plan to eliminate the rumour mill.
Clarke’s initiatives are derived from a career that has spanned the North American manufacturing sector for 37 years.
After obtaining a bachelor of science with a direction in logistics from Niagara University in 1973, the Brooklyn native went to work for Vaseline-maker Chesebrough-Pond’s, where he learned to use logistics data to draw out inefficiencies in business systems.
His success at that firm eventually led to a job at Arcata Graphics where he became the “fly in” guy who tended to troubled printing plants.
“That’s where the next phase in my education came from, really valuing people on the floor,” Clarke said.
At a plant in Clarkesville, Tennessee, he would start every day with a tour of the 1.5 million-square-foot facility to stay in touch with his people.
“I would make sure that I physically engaged probably 25 to 30 people,” he said.
“Kevin really made it a requirement of his and his people to not be looked at as part of the corporate office, to step outside of the office and connect and reach out to employees on the floor,” said John Ross, who would later become Clarke’s executive vice-president of finance at Quebecor.
“One of the key things he talked about often was the 25 touches, which is an imperative for anyone running a plant to get out and personally talk to at least 25 production people on a daily basis.”
Eventually, Quebecor bought Arcata and Clarke rose through the ranks at the printing giant by banking on his logistical and people skills.
After he sent out his new “game plan” letter to Catalyst employees in June, Clarke spent the balance of his first week touring its mills.
He said he found nearly 1,900 employees who were passionate about what they do, but a company that was “unfocused.”
In addition to getting costs and communication in order, Clarke also intends to keep up the company’s property tax fight.
Last year, Catalyst petitioned B.C. Supreme Court to lower property taxes in four B.C. municipalities where it operates, but lost all four fights.
In April, the company cut a deal with Powell River to slash its tax bill in exchange for waste treatment, an initiative Clarke hopes to replicate in other municipalities (see “Catalyst to cut property tax bill by treating waste” – issue 1069, April 20-26).
He also believes Catalyst would do well to join forces with another paper company.
“This paper industry is too fragmented, has way too much capacity and it’s not going to get cured unless there’s more consolidation,” Clarke said. “So either we can wait for it or we can be an active participant in it.”
But the question Catalyst’s employees may care about most is whether or not the company will shutter any more mills.
Clarke said it all depends on how successful his strategies are.
“If they are we will not be closing any mills. I don’t see that as a short-term horizon, but the world could flip over … there are no guarantees in life.”