Making a Difference by Being Different

By Dale Long

It’s not every Fortune 500 chief executive who is as comfortable talking about the coefficient of friction as he is the company’s earnings ratio.

Then, Steve McCracken takes pride in being different.  Since April 1, the 1975 Rose-Hulman Institute of Technology mechanical engineering graduate has been the top executive of Owens-Illinois, Inc. (O-I).  The corporation is the largest manufacturer of glass containers in the world, with leading positions in Europe, North America, Asia Pacific and South America.  About half of all glass containers made worldwide are manufactured by O-I, its subsidiaries or licensees, whether you’re talking about spaghetti sauce, jams, juice, beer, wine or spirits.  Customers include Coors, SABMiller, Anheuser-Busch Diageo, Heinz and Nestle’s.

O-I is also a leading manufacturer of health care packaging and specialty closures, including tamper-evident caps and dispensing systems.  The company reported 2003 net sales of $6 billion.

However, McCracken was brought in to reenergize O-I, improve its Fortune 500 standing (now No. 298), redefine its market presence and regain investor confidence.  He’s the first CEO in O-I’s 101-year history not from the glass industry.

“O-I has great potential, but the company has underperformed,” admitted the 51-year-old executive during a telephone interview from his office on the 27th floor of the firm’s Toledo, Ohio, headquarters.  He has introduced a financial turnaround and cultural transformation agenda that could pave the way for O-I to nearly double in size to $10 billion in annual sales by 2014.  The firm reported third-quarter profits of $69 million, more than double than a year earlier.

McCracken’s early success hasn’t gone unnoticed.  Forbes magazine named O-I as one of its five turnaround candidates for the year, largely because of McCracken’s restructuring efforts.

“O-I needed new insight on how to run the company better,” states George Staphos, an industry analyst with Banc of America Securities in New York City.  “Thus far, I’m impressed, but it’s still early.”

Richard Crawford, vice president of O-I’s European Glass Integration Team, adds “Steve has brought a global perspective to our organization that is consistent with our global growth efforts within the worldwide glass industry.  He has challenged us to look for new growth segments.”

McCracken brushes aside such praise, stating that the corporation is reaping the benefits of good business decisions, several made before he arrived; a strong leadership team; and quality work by more than 31,000 employees worldwide.

“My appointment was a signal that the board of directors wanted change,” he says.  “Change is hard.  It’s going to be a multi-year process, but we’re off to a great start.  It’s been a lot of fun so far.”  McCracken’s style is approachable and team-based.  He’s considered a quick study and decisive.  Immediately upon his arrival, he conducted a Town Hall meeting for all employees at the worldwide headquarters to calm anxieties about the leadership change. 

The outsider also exhibited confidence in O-I by buying a substantial quantity of company stock.  He believes top officers should be linked financially to their companies.  “To get people to change, people have to know the reason for the changes.  You can’t make progress with a non-motivated work force,” he says.  “Once you get something started the energy is contagious and the coefficient of friction is lowered to the point where momentum is on your side.”  Success is nothing new for the Franklin, Ind., native. Before joining O-I, McCracken spent 29 years as an engineer and executive with E.I. DuPont DeNemours & Co.  He served in operations, finance, planning, marketing and business management.  Leadership positions at DuPont Lycra in Europe and DuPont Corian Surfaces resulted in record financial growth for both entities.  Then, he spent three years as president of Invista, a DuPont global textiles unit that had revenues of $7 billion in 2003, before it was purchased late last year.  He had been working on special assignments in semi-retirement until being approached to lead O-I.

“I’m a Midwesterner, with Midwestern values, and moving closer to home with a positive career opportunity was attractive after living throughout the world since graduating from Rose-Hulman,” McCracken said.  He and his wife of nine years, Judy, are the parents of three daughters and one son.  “Rose-Hulman provided me a strong foundation in understanding the analytical approach to decision making.”  Later, he adds, “I like to gather as much data as I can, and then a decision is made, and I have to live with it.”  Spoken like a true engineer.