CEO John Sheptor discusses how Imperial Sugar rebounded from tragedy after a plant explosion
Source: Bloomberg Business Week
These are challenging times for all chief executives, but it's fair to say that John Sheptor has had a tougher time than most over the past two years. On Feb. 7, 2008, just eight days into his new role as CEO of Imperial Sugar, the largest publicly held U.S. sugar producer, Sheptor was touring a plant in Port Wentworth, a sleepy town outside Savannah, Ga., when the unthinkable happened. A series of explosions caused by combustible dust ripped through the plant, killing 14 and injuring dozens more. It was the second most deadly industrial explosion in the U.S. over the past decade.
Sheptor was thrown to the ground by the shock, and upon leaving the plant got his first view of the extent of the damage. "It was a horror to see," he recalls. Thankfully, Sheptor's emergency response training, honed during his years spent as a manufacturing and operations manager in the chemical industry, immediately kicked in. Sheptor knew that his first priority was to set up a command center and determine which employees were missing or injured. After that, he established a briefing area to communicate with the media. Finally, he set up separate posts to speak with government officials, community leaders, and families. "I spent the better part of a week shuttling between those locations," says Sheptor, adding that more than 400 people from outside the company were on the scene within 24 hours.
Compounding the challenge was that Sheptor had to juggle his normal duties as a CEO at the same time, in an industry riven by profound change. For example, in January of 2008 the North American Free Trade Agreement eliminated all tariffs on Mexican sugar, creating a new competitor for Sheptor overnight. The U.S. is an attractive market for Mexican sugar producers because the price is higher than that found in the world market. Sheptor assigned each business problem to a member of his senior management team, which allowed him to focus on the aftermath of the explosion.
(Subsequent investigations by both the U.S. Occupational Safety Health Administration and the U.S. Chemical Safety Board have blamed poor equipment design and lax safety standards for the disaster.)
On Nov. 6, Sheptor was on hand as Imperial Sugar celebrated the grand opening of its new Port Wentworth facility, which includes technology that the company claims will provide "a competitive edge and an exemplary model for safety."
Boyle is deputy Corporations editor for BusinessWeek.
There are several lessons he can share with any manager coping with a catastrophe. One thing to remember, he says, is that crises need not be entirely negative—they can also provide a valuable opportunity to transform your company. "You can seize the moment to change who you are," he says.
Also, Sheptor learned the value of crafting different messages for different stakeholders of the company. For example, Sheptor chose to use one public relations firm to handle the crisis, one for general business topics, and one solely for online media. That strategy made it easier "to understand what we were telling them," he says, and also gave each constituency its own unique point of access to the company.
Finally, Sheptor advises managers to consider a different leadership model during times of crisis. Sheptor found success by separating his business strategy into key elements and assigning each element to a different member of his senior management team. "You then trust that they will do the best thing for the company," he says. As Imperial Sugar faces more challenges in the future in this uncertain economy, such a model should serve Sheptor, and his company, particularly well.
Source: Bloomberg Business Week
These are challenging times for all chief executives, but it's fair to say that John Sheptor has had a tougher time than most over the past two years. On Feb. 7, 2008, just eight days into his new role as CEO of Imperial Sugar, the largest publicly held U.S. sugar producer, Sheptor was touring a plant in Port Wentworth, a sleepy town outside Savannah, Ga., when the unthinkable happened. A series of explosions caused by combustible dust ripped through the plant, killing 14 and injuring dozens more. It was the second most deadly industrial explosion in the U.S. over the past decade.
Sheptor was thrown to the ground by the shock, and upon leaving the plant got his first view of the extent of the damage. "It was a horror to see," he recalls. Thankfully, Sheptor's emergency response training, honed during his years spent as a manufacturing and operations manager in the chemical industry, immediately kicked in. Sheptor knew that his first priority was to set up a command center and determine which employees were missing or injured. After that, he established a briefing area to communicate with the media. Finally, he set up separate posts to speak with government officials, community leaders, and families. "I spent the better part of a week shuttling between those locations," says Sheptor, adding that more than 400 people from outside the company were on the scene within 24 hours.
Compounding the challenge was that Sheptor had to juggle his normal duties as a CEO at the same time, in an industry riven by profound change. For example, in January of 2008 the North American Free Trade Agreement eliminated all tariffs on Mexican sugar, creating a new competitor for Sheptor overnight. The U.S. is an attractive market for Mexican sugar producers because the price is higher than that found in the world market. Sheptor assigned each business problem to a member of his senior management team, which allowed him to focus on the aftermath of the explosion.
(Subsequent investigations by both the U.S. Occupational Safety Health Administration and the U.S. Chemical Safety Board have blamed poor equipment design and lax safety standards for the disaster.)
On Nov. 6, Sheptor was on hand as Imperial Sugar celebrated the grand opening of its new Port Wentworth facility, which includes technology that the company claims will provide "a competitive edge and an exemplary model for safety."
Boyle is deputy Corporations editor for BusinessWeek.
The Analysis: Lessons Learned
Imperial Sugar CEO John Sheptor discusses what he's learned from a tragic plant explosion
Imperial Sugar CEO John Sheptor has learned quite a bit from the tragic explosion at one of his company's plants that killed 14 people in February 2008.
There are several lessons he can share with any manager coping with a catastrophe. One thing to remember, he says, is that crises need not be entirely negative—they can also provide a valuable opportunity to transform your company. "You can seize the moment to change who you are," he says.
Also, Sheptor learned the value of crafting different messages for different stakeholders of the company. For example, Sheptor chose to use one public relations firm to handle the crisis, one for general business topics, and one solely for online media. That strategy made it easier "to understand what we were telling them," he says, and also gave each constituency its own unique point of access to the company.
Finally, Sheptor advises managers to consider a different leadership model during times of crisis. Sheptor found success by separating his business strategy into key elements and assigning each element to a different member of his senior management team. "You then trust that they will do the best thing for the company," he says. As Imperial Sugar faces more challenges in the future in this uncertain economy, such a model should serve Sheptor, and his company, particularly well.
