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More top managers have technical backgrounds C&EN survey shows that among chief executives in 20 U.S. chemical firms, 73% have some technical training; 53% of this have bachelors in chemistry or chemical engineering—substantially up from decade ago William J. Storck C&EN, New York
What does it take to be a top manager in the U.S. chemical industry? It appears to be a combination of a good grasp of the business world, a keen perception of the marketplace, and an awareness of the needs of people working under the manager. But, in addition, there seems to be another desirable qualification—some sort of technical training, more commonly in chemistry or chemical engineering. That hasn't always been the case. In the 1950s, many managers seemed to be drawn from the marketing ranks. This was only natural at the time, as the chemical industry, along with the economy as a whole, was expanding rapidly. Marketing was the magic word as companies looked for new places to sell their products, and new ways to make those sales. In the 1960s the financial wizards took over, and toward the end of the decade the lawyers came in, perhaps in response to what was becoming a confrontational society. Thus, the lawyers, the accountants, and some marketers reigned through the 1970s. In a survey in the early seventies, C&EN found that although 52% of chemical industry executives had undergraduate majors in chemistry and chemical engineering, only 38% had graduate-level education in chemistry-related fields. Most had their training in business administration, law, or economics. These three disciplines combined made up for the graduate education of 59% of the executives surveyed at the time. Chemistry and chemical engineering were the graduate majors of just 37% of the executives surveyed (C&EN, May 3,1971, page 12). The 1971 survey, conducted among 20 chemical companies, reached far down into the management of the companies, thus assuring a hefty representation of technical people in the ranks.
Recently, C&EN again surveyed management personnel in 20 U.S. chemical companies. From those who responded, 54% of the managers had chemical or chemical engineering educations, about the same as in the earlier survey. In addition, another 19% had technical training in other engineering disciplines, making a total of 73%, compared with 67% in 1971. Among chief executive officers and chief operating officers in the companies surveyed, a total of 73% had some technical training, with 53% of these having bachelor degrees in chemistry or chemical engineering. Most surprising, however, is that of
the 17 chief executive or chief operating officers named since 1980, 89% have technical degrees. Of the 17, four have bachelor degrees in chemistry, seven have such degrees in chemical engineering, and another four have bachelor degrees in other technical disciplines—mainly mechanical engineering. Also rather surprising is that four of the 17 chief executives or chief operating officers, or almost one quarter, have Ph.D. degrees in chemistry. Among top management in general, just 18% had Ph.D.s in chemistry. So, the questions arise, "Is management of the U.S. chemical indus-
Many recently named top ex< s have technical training CHEMISTRY Warren M. Anderson, Union Carbide chairman of the board and chief executive officer since 1982; A.B. degree in chemistry from Colgate, LL.B. from Case Western Reserve Richard J. Mahoney, Monsanto president and chief operating officer since 1980; B.S. degree in chemistry from Massachusetts (also attended Columbia) CHEMICAL ENGINEERING William G. Bares, Lubrizol president since 1982; B.S. degree in chemical engineering from Purdue, MBA from Case Western Reserve Kenneth E. Davis, Stauffer Chemical president and chief operating officer since 1980; B.S. degree in chemical engineering from Ohio State John M. Henske, Olin chairman of the board since 1980, chief executive officer since 1978; B.S. degree in chemical engineering and industrial administration from Yale Robert W. Lundeen, Dow Chemical chairman of the board since 1962; B.S. degree in chemical engineering from Oregon State (also studied meteorology)
C. Robert Powell, Reichhold Chemicals chairman of the board and chief executive officer since 1982; B.S. degree in chemical engineering from Pennsylvania State OTHER ENGINEERING Worley H. Clark, Nalco Chemical president and chief executive officer since Dec. 1; B.S. degree in industrial engineering from North Carolina State; postgraduate work at Northwestern and Cleveland Marshall Law School; graduate of Stanford executive program Orell T. Collins, Nalco Chemical chairman of the board since Dec. 1 (had been president and chief executive officer); B.S. degree in mechanical engineering from Purdue, graduated from Harvard Business School's advanced management program Alec Flamm, Union Carbide president and chief operating officer since 1982; B.S. degree in mechanical engineering from Cornell Carl N. Graff, W. R. Grace & Co. president and chief operating officer since 1981; B.S. degree in mechanical engineering from MIT, MBA from Harvard Business School Dec. 6, 1982 C&EN 9
The chemical industry's top Ph.D.s James G. Affleck, American Cyanamid chairman of the board and chief executive officer since 1976; B.A. degree in chemistry and Ph.D. in organic chemistry from Princeton Louis Fernandez, Monsanto vice chairman of the board since 1980; B.S. degree in chemistry and Ph.D. in chemistry from Case Western Reserve
James G. Affleck
Richard E. Heckert, Du Pont vice chairman of the board since 1981; B.A. degree in chemistry from Miami, Ph.D. in organic chemistry from Illinois Ray R. Irani, Olin president and chief operating officer since 1981; B.S. degree in chemistry from American University (Beirut), Ph.D. in physical chemistry from Southern California Edward G. Jefferson, Du Pont chairman of the board and chief executive officer since 1981; Ph.D. in physical chemistry from Kings College, University of London
Edward G. Jefferson
H. Barclay Morley, Stauffer Chemical chairman of the board and chief executive officer since 1977; B.S. degree in chemistry from St. Francis Xavier, Ph.D. in physical chemistry from Toronto
Louis Fernandez
Richard E. Heckert
try coming more into the hands of the chemists? And if it is, why?" The answer to the first question, according to many observers, is that more technically trained chief executive and chief operating officers are indeed being named within the industry. The answer to why it's taking place comes in multiple choice. One 10
C&EN Dec. 6, 1982
Lester E. Coleman, Lubrizol chairman of the board and chief executive officer since 1982; B.S. degree in chemistry from Akron, Ph.D. in chemistry from Illinois
Ray R. Irani
rather cynical view is that maybe it is because chemists take a look at C&EN's annual salary survey for chemists and decide to go into management so that they can make more money. Others think that perhaps there are just more chemists now in the management ranks to choose from.
H. Barclay Morley
Lester E. Coleman
H. Barclay Morley, chairman and chief executive officer of Stauffer Chemical, and a Ph.D. in physical chemistry, is of the latter opinion. Morley thinks that, although not exactly coincidence, the normal entry screens and the opportunities in the chemical industry just naturally set up a situation in which top manage-
ment slots are filled by people with technical training. Morley says, "Most of the people entering the chemical industry are chemists or chemical engineers. The company will put them in jobs and allow them to go through management development programs of one type or another and they naturally start bubbling to the top. It's sheer numbers. The ratio of chemists and chemical engineering to others in our industry clearly favors the technically trained person. I don't think that there is a deliberate, conscious feeling that the top manager must be a technical person." Not everyone agrees with this assessment, though. For instance, George B. Hegeman, senior consultant at Arthur D. Little, a consultant firm associated with the chemical industry, thinks that a number of factors may enter in. For one thing, he says, more administratively minded chemists may be inclined more toward management and thus leave the laboratories for corporate management. Couple this with the idea that there may be more opportunities for chemists because the chemical industry is not attracting the ambitious outsider because of slower growth. "The chemical industry, when it was growing fast, was probably attracting the bright young executive trainee who saw great opportunity to get ahead," Hegeman says. "Now that growth in the industry has slowed, these people are certainly not fighting to break the door down. They have opted for today's faster-growing fields," he says. In addition, the industry is maturing so rapidly that a marginal difference in management may mean the difference between success and failure. This difference, in these times of changing technologies, may well come from someone at the top who knows about chemicals and processes. "Someone who knows chemistry is essential to the decision-making process," Hegeman says. If corporate executives, in Hegeman's view, do not know what's going on in the processes t h a t their companies are using, they're going to be in trouble. And it is much easier for a chemically trained executive to grasp the subtleties in the differences between competing processes than it is for an accountant. This theme runs through a number of comments on what seems to be the trend toward more technically trained management. That is, that it is much easier for chemists or chemical engineers to understand mar-
Most top officers have technical degrees... Chemistry 3 3 % Chemical engineering 2 0 % Other engineering 2 0 % Business administration 1 6 % Other 1 1 % Sample: 45
. . . but business dominates at graduate level Business administration 4 6 % Chemistry 2 7 % Law 1 9 % Chemical engineering 4 % Other engineering 4 % Sample: 26
keting or finance and receive advice on these areas from people under them than it is for accountants, marketers, or financial experts to understand process technology when it is presented. Virgil Baldi, a recruiter with Korn/Ferry, the executive search firm, takes a somewhat middle view of the situation. He believes that ex-
ecutives with technical training are fine, but that they also must have some financial or marketing training as well. "The chemical industry executive needs marketing experience as well as technical training to get an edge," according to Baldi, "especially in the commodity segment of the industry." However, he thinks that scientists may bring more discipline to management than financial and marketing people. Scientists are trained problem solvers, Baldi says, so they may be better at getting to the crux of a problem in the company. If this is true, the chemical industry, with its great number of technically trained people may be better off than other industries. It is certainly true in the chemical industry, that many of the managers have bachelor degrees in a technical discipline, but have graduate degrees in business administration. Of the 15 managers who have been named since 1980 and who have a degree in chemistry, four have master of business administration degrees and two others have taken advanced management courses at business schools. •
Training the technically trained to be managers It is not all hit or miss for chemists or engineers who want to move up the corporate ladder. Many companies provide in-house training for technically trained employees who have their eyes on other things. One of those companies is Air Products & Chemicals, which long has helped new employees gain a broad base of experience within the company. Air Products years ago instituted what it calls a career development program. Under this program, newly hired chemists or engineers or those with only a year or two of experience are exposed to various parts of the company. After being hired for a particular job, employees work in that job for eight to 10 months and then can move to work in another part of the company, whether it be sales, marketing, or something else. It is up to the employees, and the moves occur as jobs open up. After working in this area for about the same period of time, they can make a move again. An Air Products spokesman says that after about three of these assignments, the employees usually settle into a permanent position.
The important thing, though, is that the moves into other assignments are almost always initiated by the employees themselves. Thus, they are able to get the kind of experience needed for whatever they want to do on a longrange basis. The company benefits by building a base of employees with a broad range of experience. In addition, for the past five or six years, Air Products has had a management succession planning and development program for outside-hired middle to upper management. This program consists of individualized plans for the manager to correct possible weaknesses. It is somewhat like the career development program for the younger employees, but it is a more high-powered plan; the moves in this program may be scheduled six to 10 years in advance of the time when employees are hired. Air Products management thinks that these programs, giving employees a wide background within the company, enhance both employees and the company itself by providing, eventually, self-motivated, broadly experienced people on the management ladder.
Dec. 6, 1982 C&EN
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