Conversation comes easily April 30 as Henkel executives from three continents gather at a Phoenix restaurant for dinner. After a weeklong leadership development program at Thunderbird, the 23 men and women are ready to say their farewells and return to their daily jobs supporting Henkel’s brands and technologies all over the world.
Some of the executives work less than three miles away at Henkel’s North American consumer products headquarters in Scottsdale, Arizona. Others come from faraway places such as China, Russia, Turkey and the company’s global headquarters in Düsseldorf, Germany.
The executives all work for the same parent company but oversee a wide range of operations. Henkel, which started as a detergent maker in northwest Germany more than 130 years ago, has grown over the decades to include three strategic business units.
The Fortune Global 500 Company develops laundry and home care products through brands such as Purex and Persil, personal care products through brands such as Dial and Fa, and adhesives technology through brands such as Loctite and Ablestik. Henkel also develops industrial adhesives, sealants and surface treatments for everything from cars to computers.
More than 52,000 employees help Henkel run these operations in 125 countries, and opportunities are sometimes limited for personal contact among company leaders.
Many of the top-tier executives who mingle in the Phoenix restaurant have never met until this week. As they take their seats for dinner, they swap stories about work, travel and cross-cultural adventures.
One Shanghai executive, who logs more airline miles than most flight attendants, jokes that his home address should be listed as an aisle seat on the commercial jet that carries him around Southeast Asia. Another executive from Düsseldorf shares updates on the German family that has guided the company for more than five generations.
After the meal is served, Henkel Consumer Goods President and CEO Brad Casper stands and makes a short speech.
He has just returned from a trip to Wal-Mart headquarters in Arkansas and is running on little sleep. But Casper, who came to The Dial Corporation in 2005 about one year after Henkel acquired the Scottsdale-based consumer products company, wants to show support for the budding partnership with Thunderbird.
“Even though I never attended Thunderbird, I embrace a lot of what Thunderbird embraces,” says Casper, who joined Thunderbird’s Board of Fellows in October 2008 after befriending Thunderbird President Ángel Cabrera, Ph.D.
Overall, about 75 Henkel executives have come to Thunderbird since the partnership started in May 2007, and two more groups are scheduled to arrive in fall 2009 for the program’s latest iterations. Among other benefits, Casper says, the interactive coursework at Thunderbird provides common ground for Henkel executives.
“When you’re as big and diverse as we are, it’s hard to come up with one culture,” he says. “This program helps accomplish that.”
Entrepreneur Fritz Henkel founded the company in 1876 and found early success with a universal detergent and bleaching soda that gave German consumers an easier way to wash clothes. New products followed, along with expansion into international markets.
Casper says Henkel, which has been a household name in Germany for decades, now faces the challenge of solidifying its position as a true multinational company. To accomplish this, Henkel needs global leaders who understand how to execute strategy in unfamiliar environments.
Casper gained his own international experience as a Procter and Gamble executive in Japan for six years, followed by three years in Hong Kong and China.
“Henkel values people who not only think globally but who have lived and worked globally,” he says. “If you’re going to be a global company, you’d better understand global business and customs.”
Henkel also values sustainable innovation that delivers short-term results without compromising opportunities in the future. Casper says the company began focusing on sustainability and corporate social responsibility long before the concepts became popular.
The efforts have brought acclaim. Wal-Mart, the world’s largest retailer, recognized Henkel in February as its most sustainable supplier. Two months later, the Ethisphere Institute and Forbes Magazine included Henkel in their 2009 list of the world’s most ethical companies. Henkel also received the 2009 Plus X Award in May for its standing as an ecologically committed company in Europe.
Casper says Henkel has made progress in many areas but still has work to do as it emerges as a multinational powerhouse. The goal is to reach a point where values such as diversity no longer require special attention.
“When you get to the pinnacle, you are multinational,” Casper says. “Diversity, which is another buzzword like sustainability, isn’t something you need to talk about. It’s something that you are.”
This drive toward the pinnacle is what brought Henkel to Thunderbird in 2007, when the company decided to launch a custom program in the United States to serve its top-tier executives.
Chief Compliance Officer Dirk-Stephan Koedijk, a Dutchman who has been with Henkel for 28 years, says Thunderbird won the contract because it listened to what Henkel wanted and developed a highly customized program.
“From the very first instance,” he says, “there was good personal contact with the people at Thunderbird.”
Koedijk says Thunderbird’s proximity to Henkel’s new North American consumer products headquarters also creates advantages.
Dial, which has made its home in Scottsdale for 30 years, moved recently into a 348,000-square-foot facility about 20 miles from Thunderbird. The new eco-friendly building includes underground parking and four levels of research laboratories and office space under the same roof.
Thunderbird Corporate Learning Senior Director Pauline Gibson, who manages the Henkel relationship, says many of the people Henkel sends to Thunderbird already have advanced degrees and years of international business experience. So the program must be cutting edge, relevant and responsive.
“These are seasoned professionals,” Gibson says. “We are held accountable.”
When she and Jan Mueller, Thunderbird’s vice president of global business development, visited Düsseldorf for the first time in August 2006 and listened to Henkel’s needs, they immediately thought of tapping Thunderbird Professor Kannan Ramaswamy, Ph.D., as the program’s academic director.
Gibson says that decision has made all the difference. “It was a perfect fit,” she says. “It worked like magic.”
Ramaswamy, Thunderbird’s William D. Hacker Chair, says one key when working with senior-level executives during a global economic downturn is to keep classroom discussions focused on practical application.
“A group like this at the very senior level hardly has any patience for any theory or any grand designs originating from the academic literature,” he says. “If it does not have practical relevance, it does not get into the program.”
Another key is to keep the classes interactive so participants can talk to each other and share ideas. “You have people in the room who might be meeting for the very first time,” Ramaswamy says. “They have a lot to contribute to each other.”
He says the global recession has heightened the need to share ideas across regions and strategic units.
“Competitors such as Procter and Gamble and Unilever are seeking the same opportunities as Henkel in many of the same markets,” Ramaswamy says. “It is becoming more and more difficult to differentiate your products.”
He says some of the biggest battles for brand dominance will take place in emerging markets such as China, where Henkel has a history of success.
“Henkel has been in these hard-to-reach, hard-to-access, hard-to-succeed markets for quite a long period of time,” Ramaswamy says. “They understand the ethos of the emerging market consumer far better than some of the other competitors.”
Henkel executives saying their farewells at the Phoenix restaurant express appreciation for the opportunity to gather at Thunderbird and focus on some of these issues. Raymond Wong, Henkel’s vice president of technology in Bay Point, California, has attended two previous Henkel executive education programs at business schools in Europe but says his experience at Thunderbird has been his favorite.
“This program was more focused on learning,” Wong says, “as opposed to process.”