Nalco After the Acquisition

Three Years After Ecolab Acquired Nalco a Leader in Water Treatment

EcolabECL-0.05%is an example of a business-to-business leader that you may not know. They are a $15 billion colossus thatprovides cleaning and sanitizing products and programs, as well as pest elimination, equipment maintenance and repair services primarily to customers in the food service, food and beverage processing, hospitality, healthcare, government, and education, retail, textile care, commercial facilities management and vehicle wash sectors.It has been one of the best performing companies in the US stock market over the past decade.

Roughly three years ago, the company acquired Nalco, a leader in water treatment company. Nalco's Chief Information &Productivity Officer was Stewart McCutcheon. McCutcheon has been the COO and CEO of a technology firm prior to joining Nalco, and as a result, hehas brought an unusually broad perspective to the CIO role. The value he had created from his "CIO-plus" position at Nalco was one of the chief reasons he was one of the Nalco leaders to take a "chief" role at Ecolab despite coming from the acquired entity.

Even in the early days of the integration, McCutcheon and his team focused on being a source of innovation to the company becoming involved in Ecolab's efforts in the Internet of Things, for example, as he details in my interview with him.

High : Your role is Chief Information Officer. Can you talk a bit about your responsibilities within the organization?

McCutcheon : My role is to help transform the company's capabilities—both from a back-office standpoint, the things we do internally, but increasingly looking for ways to apply technology in customer facing roles that differentiate and help accelerate the growth of the company. I am responsible for information technology across the global company, which includes both a corporate IT organization, as well as organizations within our individual business sectors and regions throughout the world.

High : Can you give some examples of how IT is applied externally to be customer facing?

McCutcheon: I personally believe this is the golden age of information technology for a couple of reasons. One is that we now have the first generation entering the workforce that grew up computing, so the skills, intuition, and abilities of the workforce are rapidly transforming and demand for tools in the workforce is significantly increasing. This is coupled with the fact that technologies are getting so much better, less expensive, and more pervasive. So it is really enabling us to take IT out of the back office and apply it in areas of competitive advantage.

I'll give you a couple of examples. I mentioned we have 25,000 field associates visiting customer locations on a regular basis. Equipping these associates with technology is key to enabling them to best serve our customers. Ecolab differentiates itself with superior innovation and service. Providing our associates with information technology and mobile solutions is key to helping them service customers effectively. We strive to be the highest value option in the marketplace. To accomplish this, the onus is on us to prove the value we provide. We have a lot of capabilities to equip our field sales-and-service team to gather metrics that demonstrate to our customers the value we add.

One other area is in the "Internet of Things". We believe we are a leader in providing sensors and control systems at our customer sites that optimize our customers' operations. We are able to remotely monitor and optimize our customer's operations on a 24/7 basis. So while we have a large physical service organization, we augment that with technology-virtual service for our customers 24/7.

High: How have you thought about planning for the "Internet of Things" in addition to some of the process changes necessary to make sure that the right conclusion is being drawn and attention is being paid in the right locations?

McCutcheon : For us, it started by looking at the capability, talent, and knowledge of our organization. This is difficult to do, and I believe a lot of companies struggle with this because it is multi-disciplined in nature. In our case, it would require people to understand the chemistry, process control, traditional information technology capabilities, as well as business skills. It takes a triangle of talent - our IT organization, business, and R&D organization—coming together. This has been our "secret sauce," to pull the knowledge, capability, and collaboration cross-functionally and apply it together. In reality, IT could never do this alone. We don't have all of the engineering, chemistry, or business knowledge to be able to do this by ourselves.

We also do a lot to encourage our IT associates to get into the field through initiatives such as our ride-along program where IT associates will go out with our field associates to visit customer sites and see things in action. We see this as having dual benefit. One, obviously we learn a lot. We see our technologies in practice, we spot things and this is an opportunity for us. In addition, when we partner our IT associates with field associates, there is an opportunity for them to say "Hey, did you know you could do this more efficiently or effectively utilizing this type of capability?" Through these conversations we start to make our capabilities more valuable.

You mentioned some other key areas, partnering, and yes, we can't do it alone. Ultimately, the integrated solution is ours, but we do not always develop everything from scratch. Historically we were more of a "buy and apply" type of organization. But when you get into what differentiates a company in the marketplace, we found that we really did need to develop more custom solutions. So we had to develop much more competency in developing software. My background is a little bit of that: I started my career at DuPont and then did two start-up IT companies that developed software. Both of those gave me an appreciation of what the DNA is, to not only to be able to consume technologies, but to also produce custom technologies that differentiate us in the marketplace. It is a challenge for many organizations to gain that DNA and competency and produce custom technologies rather than just consume.

High : Has the shift towards "build" meant bringing in a new skillset or new portions of the team that were not there before?

McCutcheon : It has. It has also required that we partner more with others, it would have taken years for us to develop that talent and capability solely by ourselves. It has also required us to organize information technology in a new way.

Source: Forbes

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• Treatment
• Water Treatment & Control
• Governance & Planning