Why Embracing Problems Is Good for Business

Tony Fogel welcomes every challenge to develop talent, minimize expenses, and improve operations at Coveris Group

Tony Fogel, Coveris Group

When Tony Fogel joined Coveris Group as senior vice president and chief people and culture officer, he brought the perfect blend of knowledge, experience, and attitude to the job. In fact, it was during his time at Pepsi where he learned the power of having outstanding people working in a great system and how to build consensus. At Morgan Stanley, he learned to identify, analyze, solve problems, and how to think on his feet to make quick decisions. And at Lehman Brothers, he gained experience growing and scaling an organization. Through these experiences, he believes problems present great opportunities to improve.

“Some of the methodologies and cultural norms from my previous companies were incompatible, so I had to adapt to a new environment,” Fogel says. “But together, they gave me a lot to draw from to address the challenges of developing fit for purpose, coherent, and comprehensive systems and processes at Coveris, where five independent companies were consolidated to form the sixth largest packaging company in the world.”

Those skills and values are also well-suited for the Coveris Business System, which is grounded in customer and operational excellence, talent leadership, and acquisition integration. It also prioritizes data-based decisions, transparency, and collaboration. For example, when a manufacturing issue is detected at any facility around the world, production employees closest to the problem implement kaizen—a Japanese approach to continuous improvement using systematic data collection, monitoring, evaluation, and improvement sessions. Their solutions and accomplishments are then shared in weekly enterprise-wide meetings.

“Everyone is involved in addressing the requirements of a high-performing culture at all levels,” Fogel explains. “With twelve thousand employees, we want twelve thousand problem-solvers.”

From the beginning, he focused on HR providing value to and aligning with the business. Initially, this meant mastering lean manufacturing to improving quality and reducing operating expenses. Later, he directed his attention toward developing strategies, processes, and systems to better serve customers and increase revenue. This included building a robust CRM platform, establishing appropriate metrics, and creating rigorous sales training and tools. The lean manufacturing focus reduced cost of goods sold by about $81 million in one year, and the focus on sales capability saw several business units double their annual new business revenue.

Simultaneously, Fogel was working to upgrade Coveris’ recruitment practices and procedures. The company was outsourcing about 60 percent of its professional roles to numerous contingency firms, had no employment branding or formal recruitment process, no recruitment metrics, and an inadequate applicant tracking system that provided no onboarding technology.

With the goals of improving the quality of the candidate pool and recruitment visibility, cutting fees, and developing meaningful metrics, Fogel began an uphill battle to build consensus for consolidating external recruitment. Ultimately, Tri-Search, a new, smaller firm was selected. He believed Tri-Search would act as a partner to address Coveris’ requirements and would develop the expertise needed to service the demands of its business.

“To change our recruitment practices, I had to be willing to take a risk and persevere at persuading managers to leave the firms they were familiar with,” Fogel recalls. “But I was able to demonstrate the benefits of working with a single partner that would develop the expertise to grow with us, instead of our having to conform to larger firms’ established models.”

That risk has paid off handsomely. Fees were cut nearly in half, time to fill positions has improved by an roughly 25 percent, and conflicts of interest—such as firms filling positions at the same time as they recruited talent away from the company—were eliminated. Additionally, Coveris now has a comprehensive employment branding package, as well as a full range of metrics to continue honing all recruitment and retention activities.

One year after Coveris was formed, Fogel was asked to lead a project to evaluate and improve expenses. Working with McKinsey & Company, a plan was developed to benchmark selling, general and administrative expense to identify both opportunities for reductions and potential areas of underinvestment. Spending on transportation, utilities, and warehousing was added to the project, and Fogel formed a global cross-departmental steering committee. The steering committee identified efficiency opportunities, and they were successful in identifying root causes and executing appropriate action plans.

“We tracked everything relentlessly to show deviations to best-in-class processes and progress toward reducing spending,” Fogel explains. “For some discretionary categories such as travel, we built zero-based budgets with a spend-category owner who was responsible for monitoring and managing the checkbook, with no overdrafts allowed.”

In addition to identifying areas, such as legal, where adding in-house talent would ultimately reduce external costs, or sales— where more investment was indicated in order to continue growth—this initiative achieved its initial target of saving about $13 million in the first year. The process is ongoing, working toward the goal of reducing spend by roughly $30 million over the course of three years.

In all of his endeavors, Fogel always looks for ways to align HR efforts with business needs. “I want to build capabilities for the long-term, not just check an item off a list,” he says. “I ask a lot of questions, do a lot of listening, and try to focus on how we can collaborate to solve a problem.”

That’s true even when he isn’t leading a project, such as a recent implementation during which he brought all the stakeholders together to constructively address issues that were impeding progress.

“Even though I was not directly accountable, it’s what the business needed,” he says.

Photo: David Markowski

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