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Bayer CEO Teaches MBA Students His ‘Rule Of Five’

Greg-Babe-homepage-story-thumbnail-102x83Stressing the importance of communication skills and diversified skill sets, Greg Babe spells out a recipe for successful C-level management. The president and CEO of Bayer Corp and Bayer MaterialScience LLC. says his template of creating five strategic goals each year has helped the company pull successfully through the economic downturn and poise itself for the future. When developing long-term strategic plans to shape his company’s success, Greg Babe doesn’t like to count any higher than five.

That means creating five overarching goals each December that he intends to pursue and setting a five-year deadline to accomplish them: Not five weeks, and not five months. If the goals take anything other than five years, “I’m doing someone else’s job,” says the president and chief executive officer of Bayer Corp.

Anything beyond five strategic objectives will be too much to communicate to employees in a company of Bayer’s size, he said. So he sticks to the rule, and his loyalty to that tactic has paid off.

“One time, and one time only, I did six. It was a painful, painful change for me,” he joked.

Under Babe’s leadership of Bayer MaterialScience, the company has undergone a competitive transformation, surviving the economic downturn and cutting more than $100 million out of its cost structure. Today, the company is moving on to a new era emphasizing growth and innovation.

But while Babe described his leadership plan as simple and straightforward, he admitted it is time consuming to execute effectively.

Speaking to a packed auditorium of MBA students as part of the W.L. Mellon Speaker Series, Babe said he holds employee roundtable meetings when he travels to Bayer sites around the country, and he holds town hall meetings once a quarter that are published via webcast.

“I try to reach out and touch as many employees as I possibly can,” he said.

That tireless effort at personal communication has backfired in the past. Because employees have become so familiar with their CEO, they quickly figured out when he stopped personally answering comments they had posted on his blog, instead allowing members of his team to handle the communication.

“They know my voice. They know my phraseology,” Babe said. When he was called out by employees who suspected he was no longer personally responding, he got the message and resumed doing it himself.

In addition to emphasizing the importance of effective communication, Babe said diversified skill sets helped him succeed as he assumed bigger responsibilities. He urged students to view their careers not as a ladder, but as a pyramid.

“A pyramid, if you have a broad enough base, can withstand anything,” he explained.

That means developing an understanding of information technology, accounting, manufacturing, and operations, he said. While that approach might be more challenging and time-consuming than moving vertically in one discipline, he believes those skills will pay off in the long run.

“Accept the big, challenging jobs that no one wants,” said Babe, adding: “Make sure you deliver.”

A native of rural West Virginia, Babe was born in the middle of five children. He spent summers on his grandparents’ dairy farm, where he learned to live a work ethic 24 hours a day, seven days a week. Such training, combined with his natural academic ability and a football scholarship to Virginia Tech, helped to prepare him for Bayer, where he has worked for 33 years.

Babe recommended that students measure their first 100 days in a new position not by what they accomplish, but rather by what they learn — for it takes at least that long, and sometimes longer, to understand the environment and situation in which they have landed.

He also suggested that when they come up with their own “rule of five” strategic visions, they take pains to ensure that it resonates with employees and motivates change in worker behavior — which will ultimately be their stock-in-trade as executives, he said.

“C-level jobs require something different,” he said. “They become much less about what you do, and much more about how you do it. As an executive, there is very little you do other that get your employees to behave differently.”

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