Sometimes help needed for business can be found within the business itself

August 15

The big idea: Kurt Swogger took the job of global director of Dow Chemical’s polyolefin and elastomers operation, an ailing business specializing in commodity products with margins that only a magnifying glass could reveal. Swogger leveraged his successful career at Dow to carefully mine the stagnant business for innovative opportunities.

The scenario: Many of his colleagues thought the only good business option for the unit was divestiture. For Swogger, the prospect of rejuvenating it was more rewarding than ascending to the helm of a successful business line within the Dow group.

The resolution: Swogger had the experience to realize that the knowledge needed to improve the unit probably was buried within the business itself. He joined Dow’s R&D department and built his repertoire by jumping from manufacturing to consumer products research and then to general management roles, where he oversaw manufacturing, research, finance and marketing. These experiences allowed him to generate good questions. In his first days, he talked with people across the organization — functional leaders, finance and marketing staff members, and research scientists — and looked for ideas and patterns. “Your people actually have the answers,” he said. “They just don’t know it. And there’s a piece here and a piece there that you have got to put together.”

The chemists were the first to provide a sparkling jewel of an idea — one that had been unceremoniously filed away and left unused. They had developed a catalyst that was more of a novelty for the R&D scientists and the business insiders were too entrenched in the business model to appreciate its potential value. But Swogger saw tremendous value in the catalyst’s power.

The catalyst helped make customized polymers within six days, bypassing the industry’s standard six- to 24-month trial-and-error process for creating the ideal output. Innovation in this commodity business was negligible, and customers had grown accustomed to either waiting for custom products or selecting from existing offerings.

Dow’s newfound ability would be a major change in the industry and would require a few strategic partnerships with customers to succeed. Swogger again tapped into his organization’s knowledge bank. His team had a deep understanding of the industry’s major players and knew which customers would be willing to experiment with partnerships designed to scale this game-changing capability. Swogger and his team found willing partners and the catalysts’ success helped launch the unit on a decade-long innovation spree.

The lesson: Swogger put together a snapshot of the unit’s capabilities from disparate bits of knowledge buried within the business. Sifting through that knowledge and finding patterns helped him lead a team to find ways to exploit those patterns in the marketplace.

— Andrew King

King is a senior researcher at the University of Virginia Darden School of Business. This “Case in Point” was adapted from original Darden cases by King, Jeanne Liedtka, Sean Carr, Tom Cross and Alec Horniman.

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