Mid-Year Reset: Smart Moves For Leaders In Uncertain Times - Ep. 216

Welcome back to The Chemical Show where Leaders Talk Business. We're approaching the mid-year point of 2025. Well, okay, we're still in May, but let's get real. It feels like the middle of the year, and you started working on this year's business at the end of 2024, so it feels like you're approaching the midpoint of your business plan. And today is a great time to focus on that. It is a mid-year reset. Smart moves leaders can take in uncertain times.

smart move number one, register for the Chemical Summit, which is taking place September 30th and October 1st in Houston, Texas. The focus of this year's summit is leadership through industry transformation. And there is no doubt that our industry is going through change and transformation as we speak. So this is The Chemical Summit is a leadership conference by Leaders for Leaders.

We focus on thought leadership on stage and in the room, and you'll be joined by leaders from across the industry talking about things that are really impactful to business today, like ai. We call it practical magic and really how companies are actually using AI to transform and operate their business beyond price. Harnessing strategic levers for customer growth, right in this period of uncertainty and oversupply and.

Markets being what they are having more than just price as a strategic lever is so critical. And we've got a panel talking specifically about that. And then the third one is rebuilding supply chains for resilience and growth. So these are just three examples of the panels and talks that we will be having at the Chemical Summit this year. I hope you can join us. Visit the chemical summit.com for more information and to grab your ticket. Okay, that was smart move number one.

Let's talk though, um, as we get into this, about what is happening in 2025 and what's happened in the first half of 2025. Right. So first of all, we entered the year with hope is what I would say, right? So whether you called it cautious optimism, pragmatic confidence, that was the industry sentiment in January as we entered the new year. Recognizing that there was generally a weaker market oversupply, particularly in commodities and plastics, the China effect, right?

Which with its slow demand and yet continued build, the Europe effect with the regulations. And I mean, heck, we have seen a lot of. Rationalization, right, as we like to call it. So shutting down restructuring assets because of just the fundamental cost basis there. So industry in transformation with some market uncertainty. That's how we started the year. And an expectation of change, right? So we knew that we would have a new administration, not just in the US but also across the world.

There's been a number of elections and changes from a governmental front. That have frankly continued on through 2025. When we think about the US we knew that there was and expected some changes at the agency level, right? So the EPA and elsewhere, what we've gotten is turbulence and uncertainty, right? So tariffs, are they on, are they off? Doge, department of Government efficiency, is that what the E was for?

Which has really played a big part in the government operations as it relates to EPA, as it relates to other things. Um, and frankly just this overall sense of uncertainty. And, you know, and I know that it's difficult to operate in uncertainty. So where is this leftist? Really with a mixed bag. When I talk to leaders across the industry, I get mixed answers, right? So. Markets are soft, not so great. And countering that with our project pipeline is full. People are innovating, right?

So two different sides of the equation. Earnings are solid, right? So specialty chemicals maybe been a bit more resilient, maybe I'm gonna use that cautionary term. Whereas the more commoditized products earnings are okay, maybe not great. You know, some of the earnings reports were not bad. That came out for the first quarter. We haven't yet seen second quarter earning reports. We'll see what those come out to be. But it's been a bit of a mixed bag from a market perspective.

That's made it difficult to make big decisions, right? So the only big decisions we've seen happening is rationalization, from some of the biggest companies, and they're often the, leaders, right? So let's talk about Bing, uh, the. The first movers in some of these cases. So Dow announcing some permanent shutdowns of facilities. The ongoing adjustments that are taking place in rationalization such a pretty word, uh, for the not so pretty activity taking place in Europe as companies are.

Really questioning and exiting and shutting down some of their chemical operations in Europe. And I think what we're also seeing

is, you know, these companies starting to ratchet back, whether it be investments, whether it is Europe, et cetera. When I talked to leaders across the industry though, and I've spent the last couple of weeks just surveying leaders across the industry, talking to them about what are the tactics and approaches that they are taking to help their businesses. And their people navigate these uncertain times.

And as we approach midyear, what are they doing and what could you and should you be doing to help lead your business through these uncertain times? So I have for you, five SMART moves for leaders in uncertain times with a bonus. Six moves. So stick around 'cause that. Number six bonus I think is pretty good. So these moves, by the way, focus both internally and externally. 'cause I think often when we talk about business, we talk markets, we talk, what are we doing?

Because let's be honest, I. The external world, the buy sell is what generates revenue for the most part, right? And so revenue generating activities are always critical, and yet we have an entire ecosystem, an entire business system that we're running. And so I think it's important when we think about these moves that they're both internal and external to your company. So number one. Increase communication, right?

Increase communication and get really clear on what your goals and vision are and communicate that. So what does that look like internally? It's, um, communicating with your people and your teams, your goals, your visions, what you're working towards. Right. Your people are probably experiencing some uncertainty, right? The media, the tariff situation, people around them create uncertainty. Is it gonna be good? Is it gonna be bad? Do I have my job? Do I not have my job?

Your role as a leader is to create structure. And clarity, what's changed? What has not. 80% of your business continues to be the business, your vision and your strategy. Continues to be your vision and your strategy. Now there's probably some changes at the margins, right? But it's probably not a

full scale change. So increase your communication to create that clarity, to have that discussion around what's important and what you're continuing to do and help people, your teams. Across the globe, across your company, have some degree of certainty and confidence in what they're doing and what your company is doing, and what you as a leader are doing. So that's, that's the internal piece of communication. Externally, it's a little bit of the same thing, right?

With your business partners getting really clear on your plans and priorities. So as I've talked with leaders, you know, the producer distributor relationship or principle distributor, relationship partners, people use different terminology for it. Um, and alignment of goals and priorities about how you're going to market, how you're supporting customers, what's important to you, with the industry organizations, with the EPA and others.

And, uh, and I know often in the industry, a lot of our government communications and, Advocacy happens through our industry groups. And so I was talking with a leader, at HCPA recently, so the Household and Consumer Products Association, and I said, well, how are, how are you guys dealing with this uncertainty? Because there is uncertainty about what's happening at the EPA. What's happening with people that they work with, et cetera. Um, and a couple things.

Number one, that they are really honing in and focusing in on communication. So letter writing, which is an important thing when you're dealing with the government, right? So a lot of documentation has to take place, but also engaging in person with the right people on the hill. So you can be doing this with the right people, at your customers, at your business, partners, at your suppliers. The importance. And so when I talk to HCPA, it's around the importance of the industry.

It's companies, it's people, it's products, right? So again, when you think about your company and your business, it's about that. What makes it critical and important? What makes that relationship between you and your business partner critical and important? Restating priorities. So. This, this is a bit of a human thing. In the absence of information, we make up our own stuff, so, well, you didn't tell me it was a priority, so I didn't know it was still a priority. Right?

Restating your priorities with your business partners. With your people team internally is so critical, Having that clarity of goals, visions priority is even more important during uncertainty because people will make stuff up. You know this, I know this. And so having that clarity of what really matters is smart move number one. Smart move. Number two, reinforce relationships. And I've got a quote from.

Patty Summers, who is global business director at Z Chem, and what she says is, in times of uncertainty, relationships matter. and what does that mean? Businesses and people, and heck, it's people that are inside the businesses, right? Need higher levels of trust and confidence in their partners. When we're in these periods of uncertainty, when there's turbulent time. So from an. Internal relationship perspective.

It's your business partners, your team members, the relationships between sales and customer service, uh, between business leaders, across business lines, manufacturing, supply chain, et cetera, reinforcing those critical relationships that you have inside of your business, between people, between departments. Again, tying back to number one, there's a reason that I have these in this order.

Number one, clarifying your goals, your visions, priorities, and then with that reinforcing your relationships. So how does it, you know, what does that look like in business relationships? It's. It is that it's the spending time together. It's reinforcing why and how you're working together, why that relationship matters, how long that relationship

has been in place, what's the trusted and the fit in your value chain. It is ever more critical, not just because of this period of uncertainty, but secondly because people are establishing new relationships, right? So we're gonna get to this a little bit when I get to 0.4, but.

You know, there's some diversification going on and, businesses and customers are establishing new relationships, maybe new supply chains, trying to figure out, well, heck, if tariffs are hitting X percent over here, I need to have a different play in in mind. and you know, I talked to a leader just recently who said that she'd had this conversation with one of their key suppliers, a key business partner, and she said, remember.

We've been a strategic partner for a long time, not just when tariffs shift. So recognize the value in those relationships, right? So you're gonna build new relationships. In fact, you should be building new relationships. That is a critical part of this, but reinforcing the strength and power and the trust in your relationships and why you do business with the companies that you do business with and the people that you do business with is critical, and that's smart. Move number two, smart move.

Number three is scenario planning. Right. So we've been doing this and we've been talking about this all year. Scenario planning is a bit of the what ifs. So what if tariffs get to be 145%? Um, by the way, as I've talked to leaders, nobody had that on their scenario planning, work that they had done previously, but continuing to do scenario planning. 'cause again, we are in a period of uncertainty. So when the zig happens, if you will. So, you know, we move all the way to the.

The upper left quadrant, all the way to the upper right quadrant, whatever that is. I'm not going, you know, however it looks for you. the whole point of scenario planning is to understand what might happen, what it means to you in your business, and to have a plan. So this whole aspect of scenario planning. It requires regular refreshing, so maybe you did it at the beginning of the year. Maybe you did it at the beginning of the quarter.

Here we are sitting in midyear, and one of the smart moves that leaders can take is scenario planning around business supply. Tariffs, technology, people, growth, et cetera. There's a wide range of things that you could scenario plan around, pick your three or five. It doesn't have to be exhaustive, but understand how you and your business can and will and should respond. When a situation occurs, a scenario comes true. Smart move number four. Mindful diversification.

We're really good at strengthening the core, right? So 80% of what we do is around the core, but here we are in a period of uncertain times and we really need to have mindful diversification and, and what does that mean? That means you're not going wildly crazy in terms of the businesses that you're pursuing and what you're doing, but it's about being. Strategic, resourceful.

So you know, some areas of diversification around diversifying supply chains, continuing to do more work to understand back to your scenarios, what supply chains do you need to have in place to have a robust and resilient rest of 2025 going into 2026? Right? And one of the lessons we learned during COVID was the importance of relationships, scenario planning, diversification, right? So putting all your eggs in one basket. Is not great.

I think we probably backed away from some of the diversification we took on in 2020 and 2021 because we get a little comfortable, we get complacent and hey, things look good. But getting very focused and specific on diversification of supply chains is one of the things and one of the smart moves that you can be making. The other. Smart move that companies are making. And I was talking with somebody recently about this. In fact it's gonna come out, in next week's podcast.

Uh, when I was talking with Sonny Desai from, uh, from Klein and Company and what she said, and this makes sense that companies are doing in their asking is. What are the products or markets that I can get into today and to serve and to bolster and to boost my business in 2025 and beyond.

Now, by the way, this is not hand sanitizer, right? So what do I mean by that? So if you go back to 2020, in, maybe even into 2021, it seemed like. Every company that had the potential to mix a batch of hand sanitizer was doing it, whether they were distilleries, whether they were chemical companies, right. People found ways to make hand sanitizer. It was a very opportunistic play in a lot of ways. Number one, we needed the product as. Right.

We went through a lot of hand sanitizer in 2020 and 2021. so that was opportunistic from a demand perspective, but also just to, to fill the void of products that you weren't selling. So where I think we're at right now and why it's mindful diversification is around being strategic, strategic around what products. That you make that can fit into a new market, strategic around your technologies and strategic and mindful about the relationships.

So this is more about extending your diversification versus saying, Hey, I can mix up a batch of hand sanitizer. Being strategic, and I think part of that is as well as getting back to my smart move number one about relationships. We as leaders should not be whipsawing,

our relationships flowing hot and cold, being totally opportunistic. Instead, it needs to be about being mindful strategic diversification. Absolutely taking advantage when you can of, Hey, there's an opportunity I can go grab. Great, go grab it. But understand how you're gonna back it up, not just in the short term, but also in the long term. How does this fit? Is it a one time opportunity or does this become the start?

Of a new business opportunity that helps you build and bolster your relationships, your diversification, and more so mindful diversification is smart. Move number four, smart. Move. Number five is strategic cash management. So I frame it this way. About it being strategic cash management, because this is not necessarily about slash and burn cost cutting. Right. You know, you've been, you know, the one, and, and we've all been there and we know it doesn't really work, right?

So it's the cut all travel great, but you still need to build relationships. You maybe need to visit your suppliers and customers, et cetera. So, so maybe it's reducing travel. In a very mindful way, cutting r and d spend. Well, you know, every time you cut r and d spend, sure great in the short term, but then a couple years later you're looking at it and you're wondering, why don't I have any innovations in my pipeline? Well, because you stopped investing.

So, strategic cash management is really. Being strategic and deliberate. Invest and spend appropriately. Have a clear ROI return on investment, um, and spend on the things that matter. People maybe travel innovation for areas I've identified that companies are continuing to spend even in these periods of uncertain time. Number one is AI in digitization. In fact, I had a conversation with somebody today who said, eh, it's really just AI and. Digitization has kind of gotten wrapped into that.

You guys know the drill. It's, it's a bit of a encompassing tool and to, and topic. However, this is about investing in making your business better, faster, easier. Now, one of the challenges, and this has long been a challenge when we talk about investing in digital, is, oh, but what's my return? Sometimes you don't know, but you make that investment because it's the right strategic investment to make, uncertainty in ai.

Yeah. People, you know, I, I talked to leaders and they're like, well, our executive team, our board is uncertain about investing in AI 'cause they don't really know what it is. Well. Go figure it out. In fact, if part of your investment is figuring out what it is and how it's gonna improve your business, do it. so that's an area of investment that's continuing. Um, continue to invest in marketing, You can't disappear. I. In periods of uncertainty, you can't disappear.

You have to keep investing. And in your marketing, in your presence, in keeping your company, your products, your value, your people visible, investing in relationship management, right? So Zoom is awesome. But let's be honest, sometimes you have to go face to face and face-to-face is great. And as I mentioned earlier, I was talking with somebody from, uh, HCPA who talked about how the fact that we're on the hill, we can go visit that person and, and spending five minutes in somebody's presence.

Can be sometimes better than five hours virtually. So invest in relationship management, um, and then investing in diversification, right? So back to this whole strategic cash management. You can't always make money without spending money. So getting very strategic about where you're willing to invest to support market diversification, product diversification, going after some new businesses is critical. So strategic cash management is my smart move. Number five. and here's my bonus. Smart move.

Smart move number six, or the smart Move bonus, which is around, it's be ready. Be ready to act. So how do you get ready? Clarify your strategy, your vision, your business,

and your portfolio enhancers, right? And get ready for strategic deal making. You know, I had a conversation earlier today with somebody that said, well, m and a is cold because, you know, because of this uncertainty, uncertainty causes a pause. And yet what we also see and know.

And people are openly stating, companies are openly stating that there is very deliberate restructuring going on, that companies are exiting non-strategic businesses, that perhaps they are moving product production out of maybe one of their core assets and moving it to, a toll or a third party supplier that they're making some moves. So be ready. To act fast on smart strategic opportunities because there will be opportunities we know, and you see it every time.

There will be a period of shifts, portfolio changes, buying, selling, restructuring. frankly, it may not actually even be, there may be no asset sale in place, but as companies start evaluating. Cost of doing business, right? As part of their strategic cash management, there may be segments of the market that they don't feel like they can serve anymore.

That's an opportunity for you to be ready and when you're clear on your strategy, your vision, your business priorities, number one, you can talk about it as we talked about smart move number one, about communicating these things, but also my bonus smart move is be ready to take action. Because in these turbulent times. Smart, strategic fast action often wins. So that's it for you. This is your mid-year reset Smart moves for leaders in uncertain times. I'd love to hear your feedback.

So connect with me on LinkedIn. I'm on there as Victoria King Meyer. If you have some questions, if you wanna connect and talk about this further, let's do it. And in terms of the chemical show, I am so glad you're here and so glad that you are part. Of the chemical show community. Keep listening, keep following, keep sharing, and we will talk with you again soon.