Building Profit Bridges

Nov. 22, 2005

The decentralized businesses of North American Saint-Gobain Corp. share knowledge and skills to improve products, sales and operation profits.

John McClenahen

All around the world bridges are built to better the flow of cars, trucks, trains and people. In the U.S. and elsewhere, Saint-Gobain Corp. builds bridges by e-mail, telephone and face-to-face contact to boost the flow of knowledge, skills and materials among its deliberately decentralized businesses. It's a highly successful way to create synergy without creating formal organizations. "The enhanced dialog among our executives, who might not otherwise have an opportunity to interact, serves as a catalyst for positive change in our different businesses," states Jean-Franois Phelizon, president and CEO of Saint-Gobain Corp. Phelizon gave the effort new emphasis when he arrived in 2000.

"The connections we foster help us to take advantage of our size as a large company, even though we aren't centrally structured," explains Phelizon. "Pooling our resources helps us to strengthen our leadership position in some of the markets and industries we serve," he says. "Our managers are often faced with common problems. The bridge-building dialog helps them to reduce the need to re-invent the wheel."

Significantly, the dialog also is adding to the top and bottom lines of Saint-Gobain Corp., the $7.1 billion North American unit of $40 billion Paris-based Compagnie de Saint-Gobain, a maker of high-performance materials, construction products, packaging and flat glass. Between 2003 and 2004, its sales increased 10%, and operating profit increased 16%, says Saint-Gobain Corp.

How does bridge building work? In 2000, damage to a fiberglass furnace at the Wichita Falls, Texas, facility of Saint-Gobain Vetrotex America proved to be more severe than first thought. However, because Vetrotex and the Cohart Refractories operation in Buckhannon, W.Va., part of Saint-Gobain's ceramics and plastic business, had been talking with each other, the bricks needed for the repair were in inventory -- ready for just such an emergency. More than 250 refractory bricks were quickly shipped and the tank was back in production in a record five days.

In 2003, two of Saint-Gobain's U.S. businesses -- Saint-Gobain High-Performance Refractories in Worcester, Mass., and Saint-Gobain Structural Ceramics in Niagara Falls, N.Y. -- worked on the development of a unique new product with Saint-Gobain's German Ceramics Division. Together they came up with reinforcing ceramic plates that a major defense contractor uses in the protective vests that are worn by U.S. troops in Iraq.

Also in 2003, Saint-Gobain Films, Foams & Fabrics plants in Hoosick Falls, N.Y., and Merrimack, N.H., provided the solution when CertainTeed Corp., another Saint-Gobain company, was wrestling with a corner-joint melt problem in the manufacture of vinyl windows.

Recently, Saint-Gobain businesses have worked together to help reduce material and handling costs in the production of fiberglass roofing shingles, to improve the distribution of manhole covers and to illuminate a lighting customer about services and additional products Saint-Gobain could provide. And, "in the purchasing area, there have been many examples where collaborations among different businesses have secured more favorable prices or terms, or both," adds CEO Phelizon.

About the Author

John McClenahen | Former Senior Editor, IndustryWeek

John S. McClenahen, is an occasional essayist on the Web site of IndustryWeek, the executive management publication from which he retired in 2006. He began his journalism career as a broadcast journalist at Westinghouse Broadcasting’s KYW in Cleveland, Ohio. In May 1967, he joined Penton Media Inc. in Cleveland and in September 1967 was transferred to Washington, DC, the base from which for nearly 40 years he wrote primarily about national and international economics and politics, and corporate social responsibility.

      McClenahen, a native of Ohio now residing in Maryland, is an award-winning writer and photographer. He is the author of three books of poetry, most recently An Unexpected Poet (2013), and several books of photographs, including Black, White, and Shades of Grey (2014). He also is the author of a children’s book, Henry at His Beach (2014).

      His photograph “Provincetown: Fog Rising 2004” was selected for the Smithsonian Institution’s 2011 juried exhibition Artists at Work and displayed in the S. Dillon Ripley Center at the Smithsonian Institution in Washington, D.C., from June until October 2011. Five of his photographs are in the collection of St. Lawrence University and displayed on campus in Canton, New York.

      John McClenahen’s essay “Incorporating America: Whitman in Context” was designated one of the five best works published in The Journal of Graduate Liberal Studies during the twelve-year editorship of R. Barry Leavis of Rollins College. John McClenahen’s several journalism prizes include the coveted Jesse H. Neal Award. He also is the author of the commemorative poem “Upon 50 Years,” celebrating the fiftieth anniversary of the founding of Wolfson College Cambridge, and appearing in “The Wolfson Review.”

      John McClenahen received a B.A. (English with a minor in government) from St. Lawrence University, an M.A., (English) from Western Reserve University, and a Master of Arts in Liberal Studies from Georgetown University, where he also pursued doctoral studies. At St. Lawrence University, he was elected to academic honor societies in English and government and to Omicron Delta Kappa, the University’s highest undergraduate honor. John McClenahen was a participant in the 32nd Annual Wharton Seminars for Journalists at the Wharton School at the University of Pennsylvania in Philadelphia. During the Easter Term of the 1986 academic year, John McClenahen was the first American to hold a prestigious Press Fellowship at Wolfson College, Cambridge, in the United Kingdom.

      John McClenahen has served on the Editorial Board of Confluence: The Journal of Graduate Liberal Studies and was co-founder and first editor of Liberal Studies at Georgetown. He has been a volunteer researcher on the William Steinway Diary Project at the Smithsonian Institution, Washington, D.C., and has been an assistant professorial lecturer at The George Washington University in Washington, D.C.