In Good Company with Nicolai Tangen - Ilham Kadri CEO of Solvay

Episode Date: June 22, 2022

In this episode Nicolai Tangen talks to Ilham Kadri, CEO of Solvay. They discuss her humble upbringing in Casablanca, importance of empathy in leadership, and Ilham even shares her favourite chemical!The production team on this episode were PLAN B’s Tor-Erik Humlen and Olav Haraldsen Roen. Background research were done by Sigurd Brekke and Bård Ove Molberg with additional input from our portfolio managers Arnab Seal and Trym Torvund.Links:Watch the episode on YouTube: Norges Bank Investment Management - YouTubeWant to learn more about the fund? The fund | Norges Bank Investment Management (nbim.no)Follow Nicolai Tangen on LinkedIn: Nicolai Tangen | LinkedInFollow NBIM on LinkedIn: Norges Bank Investment Management: Administrator for bedriftsside | LinkedInFollow NBIM on Instagram: Explore Norges Bank Investment Management on Instagram Hosted on Acast. See acast.com/privacy for more information.

So Ilham, thank you so much for taking the time today. We are absolutely thrilled to have you on. Thank you very much, Nikolai, for having me. And you know what? You are the first person I speak to who grew up in Casablanca. And I would just love to hear from you. How was it? Well, listen, it's interesting.

First of all, it's my home city and my heart speaks when you hear that name. It means the White House, Casablanca in Spanish. And, you know, it's not, obviously, everybody knows the movie, the Casablanca. But nothing was, you know, it's a myth, by the way, because the movie was filmed in a Hollywood studio, not in a real Casablanca, but all the streets in my city was full of the movies.

And, you know, we were all dreaming about the American dream and Hollywood. Listen, I was raised by my grandmother in a humble yet loving home in the beautiful, that's beautiful city. And in fact, when I think about it, the most precious resources in my home was, were, you know, running water, potable water and electricity because we didn't have luxury to waste and we received electricity before even running water and this lesson stayed with me throughout my entire career as you can imagine nicolai my grandmother was my first role model couldn't read you know she was illate. And she inspired me about following my education.

She used to tell me about these Moroccan sayings, you know, saying that girls have two exits in their lives. One that leads from their father's home to their husband's home. So we were all asked to aim for a good marriage, right? And be a good wife and mother. And the second one that leads to their grave. And she used to tell me, this is not sexy, isn't it? She encouraged me to find my third and own exit, which I found in education. And education for me, Nicolai,

you know, just unlocked that many doors and still today and opens up so many possibilities. And this is, by the way, very true for everyone, but especially for the millions around the world who live in poverty or in less favorable circumstances for me education brings freedom of choice independence finding a job i'm free to marry who i want which i did and it brings

health prosperity it's life transforming so that's the basis of my life in Casablanca. Yeah. Fantastic. Now, so how do you think that has shaped who you are today? Oh, a lot. I mean, that's education key. Being greedy with the resources, I still do it as a CEO of Solveit today and in my professional life, because again, I didn't have the luxury to waste. So it stayed with me and when I take a shower every morning it's a miracle of of life right that's how I see it the second education learn and learn and relearn that that's 17 years of my life has shaped probably all my the rest of my life as a mother as a wife as a leader right um and i was fascinated by science by technology i loved books um i really and thanks to this grandma she really invited me to enrich my life and

and and the little resources we have you know through through education and reading and learning and learning she would say it and and andarning. But it's quite extraordinary to have a grandmother who is illiterate and who then kind of teaches you the wonder of books. Yeah, because, you know, it's not about just IQ, you know, and reading and, you know, being literate. It's about emotional intelligence, Nicolai. In Africa, we always learn from the wisdom of the oldest and the older people, right? So yeah, she gave me the name Ilham, which means inspiration in Arabic,

to be inspired all my life by others. So that was her wisdom and her wish for me. you know, her wisdom and her wish for me. And, you know, I was lucky. I got a lot of, you know, impressive teachers who taught me to stay curious, to go beyond. She taught me to never be totally satisfied. And, yeah, that was the opening up to the rest of the world. What's so interesting with chemicals? Well, chemistry, I call it the risk of the world. What's so interesting with chemicals? Wild chemistry, I call it,

the risk of making it sound feminine, is the mother of all industries, right, Nikolai? There is no circularity, there is no bio-based materials, there is no low carbon economy, net zero, or quite simply no progress of humanity without chemistry. It's one of those sciences like physics, mathematics, you know, which are really fundamental to human progress. And it's just amazing what you can achieve with the power of chemistry. So I did my research

throughout research, my own research, but what our researchers are doing today, I mean, I really became aware through my professional career about the crucial role of science and innovation in general and the service of humanity. Knowing what took us here will not took us there. Look at green hydrogen. This is the simple chemistry I learned at school to electrolyze water and make hydrogen. All right. Here we are. It's back to becoming maybe maybe the new oil right

hmm so a naive question what is your what is your favorite chemical water I used to water and Nikolai when I was young so water and potable water that's why by the way when I was in the kingdom of Saudi Arabia my my nickname was the water lady I was working yeah I was working for Dow Chemical at that time, and I was leading the downstream investments in their gen venture with Aramco called Sadara. And I built the first, you know, I justified and approved by the board and built, you know, the first reverse osmosis plants for water desalination or filtrating, cleaning, growing water in the kingdom of Saudi Arabia,

not based with fossil fuels, so using green energy already. And that was between 2010 and 2013, so it's ahead of time. So yeah, water is the red line, fil rouge, as we say in French. So you have been working in several chemical companies. What's the key to winning in the chemical industry? What's the key to success? I think it's like any industry, I believe. The key in any business is to have a vision,

but it's a vision of success and have an ambition for your business. I think at Solvi, for example, we didn't have bold ambitions. And my grandma used to tell me, ambitions need to scare you, raise the bar, you know. So that's important to have that vision and then to have a plan to execute a guest list with the right resources around you. So I learned to be resourceful as as an individual when I was young,

but also later. And today as a leader, right, it's not one woman show is one team show and you need to have better people with you good captains around you to make to make it to make it a success. So vision in any business, I always say it's strategy, structure and culture. Those are my three pillars, Nikolai. Strategy, structure, and culture. Why these three factors? Well, I mean, strategy is about, you know, having clear paths for your business and based on a purpose, right? And I love transforming organization through a true purpose led strategy. So first

is why why we're in business. Someone I think is trained to say the best days in life is the day you are born and the day you know why. So when I come to any business, I ask why we're in business, why our customers they buy from us and they stick with us so at sorby even if it's 160 years old company uh it was it was a great pleasure to repurpose the company back in 2019 and we launched a new purpose with values and mission and everything else um and then you need to have a clear strategy what you are going to do and more importantly what you are not going to do you know so that's as important as what you are going to do and and have a structure which gonna you know execute against it right if you keep if not it's going to stay as a concept paper and the culture is

everything else is what you smell in the air is how your people think is the mindset are they curious do they fail early and do they celebrate early failures and are determined to make it? Do they listen to customers? Are they customer obsessed, not only intimate? Do they speak with their mind and the heart? So the culture is as important because if not, you know, you are in transactional relationships. And that's not what makes companies great. So I think those are my three pillars.

companies great so I think those are my three pillars moving tax lightly here for those of the for those in the audience who don't know what Solvay is what is Solvay? Solvay is a 160 year old company have been transforming from day one I think our founder Ernest Solvay, used to say, you know, from science, we derive the progress of mankind. He invented the process of soda ash. This goes to your double, triple glazing. So he really imagined this industrial process which made us a first multinational after the first world war and then acquisitions and organic growth the company transformed a lot today our first customer 10 years ago used to be the glazing customers today is boeing airbus defense industry you know smartphone smart devices intelligent

devices makers semiconductors. We are under the hood application, invisible, but there is no battery without us. We are in your chocolates and birthday cakes with our natural venenil to give them flavor. So, yeah, we are invisible, but part of several sectors. So that's Solvay today and still transforming since I joined the company. So when you go about trying to improve Solvay today and still transforming since I joined the company. So when you go about trying to improve Solvay, how do you do it? When I came to Solvay, it was in March 2019. Obviously, they've chosen me and I've chosen them. I loved what I could see outside the company in terms of transformation program.

The only mandate I got from the board, believe it or not, is to unleash the potential of Solvay. So that's very broad. So my first, I always practice Nikolai, my first 100 days are really precious because I make a big tour. Actually, I traveled twice around the world, and I was lucky it was prior to COVID in 2019 and listen listen to employees listen to the unions listen to clients listen to investors met you you you guys you know twice or three times and really gets this due diligence done like I would buy the company or sell it you see what I mean I really do that and it's very very precious. And then, you know, I start working on the strategy, co-create it with the team, do a competencies analysis,

what we have, what we don't have, and be very crisp about the strategy and what we do and what we're not going to do. And, you know, really educate. I'm a serial blogger with my teams, you know. So I really want, if I get something in my day-to-day in Paris, I'm on a roadshow and I heard a few things which are really exciting, I would just send it back to the survey team, right? You said to the Financial Times recently that you thought chemical companies should clean up their act. What do you mean by that?

Well, you know, you often hear the chemical or the industry, and the chemical industry is part of the problem in terms of greenhouse gas emissions, Nikolai. But I believe that we are even more so part of the solution. The chemical industry being the mother of all industries, there is no EV batteries or hybrid cars without chemistry. Green hydrogen is another one, circular solution.

So we're essential to enable the shift toward a more sustainable future for our kids and their kids. So that's what I meant. EV being electrical vehicles. EV, yeah, electrical vehicles and hybrids. And cleaning home, I mean, greenhouse gas emissions, when I joined the company, our trajectory was above Paris, of course, right? So I challenged the team in 2019 how we could really join Paris and even SBTI, which is

the science-based target initiative to follow the one and a half degree curve and be neutral. And I raised the carbon pricing inside the company to 50. Now it's 100 euro per tonne. And as you know, there is no carbon pricing on all continents, but in Europe. So and frankly, again, proud of the non-financial achievements. The team put together 40 projects now for decarbonizing our assets and our manufacturing. We did double Paris since 2019, double Paris every year. So, you know, it's amazing. And we pledge and we are committed to neutrality latest by 2050 in the company. And what's the biggest challenge for the industry in total to reach this net zero goal?

The infrastructure, infrastructure and infrastructure. I'm not, you know, Solvay needs renewables, needs infrastructure to be able to decarbonize its assets. So I give you an example. decarbonize its assets. So I give you an example, Nicolai, in Germany, I already invested and approved one plant exiting coal using biomass. And the biomass we found there was waste wood, non-recuperable waste wood. And we had to build an ecosystem around the plants to collect that wood and bring it to the plants and use it to decole. In France, the same, Dambal, we are exiting coal, I needed someone to help me here it's Veolia, who is using your bin, trash actually will be the largest boiler in Europe and in France using

trash, people trash, industrial trash to replace coal, which is fascinating. So I need an infrastructure. We cannot do it alone. And this is true for the whole industry, the chemical industry, right? That's number one challenge. Number two, and I repeat it to the regulators specifically in Europe, we cannot do it all at the same time. There is Green Deal, there is the Fit for 55, there is the digital transition, the chemical strategy coming in. So we need a journey. In the word transition, let's not forget transition, right? It's a transition. So we need to plan it. And I would say backcast it rather than forecast it. I think it's so critical to start having a master plan led by regulators, public company, private company. And we need that dialogue because they have to put the what.

And the Green Deal is not negotiable and we support that. But the how has to be co-created. We're in Paris today meeting shareholders. And of course, we are a shareholder owning roughly 1% of your company. Why do you bother meeting with us? Well, feedback is a gift. I mean, that's what I learned in my career, Nikolai. And you cannot be blind and not listen to people's views and insights.

Everybody is given an easier. Today, I got some insights from my conversations. We need investors. I mean, you put your money on us. So we owe you. Obviously, as a management team, as a CEO, we are the stewards and the guardian of the temple. And we defend our strategies. And you watch us every quarter every year and you

say are they delivering on their promise and that's i call it a track record and the resume so those are facts but we need a continuous dialogue frankly i met more investors during the covid and 19 and the confinements than before because virtually i could connect more easily and more frequently for me it was important that we impact the pocket to change the behavior. So we tested my variable pay and the whole variable compensation for the company now is raised to 15%. It's linked to Solve It One Planet. So we listen to our investors. We also benchmark with others, right, what they like and what they don't like.

our investors, we also benchmark with others, right? What they like and what they don't like. And in the split, for example, scenario, since the announcements, I met the top 30 shareholders and asked them what they think, you know, what do they need, you know, to, and not shareholders, because we want also churn and we want to attract other shareholders. So that conversation, that dialogue,

and frankly, face-to- face make a big difference is so critical. You know, what took us here will not bring us there. It's interesting, you mentioned the CEO pay, because we are, as you know, increasingly vocal in this area. We think that generally, it's more problematic in the US than in Europe. But still, it's an important thing for us. But what do you think about the conversations you have with Norges Bank Investment Management? Really great conversations. I think from the financials to non-financials, the rights is important. And early enough, you guys, you have been very open about what you like and what you

don't like, which was equally important. For example, we were labeled and you told me that we were buying high and selling low, which, you know, stuck with me, the discipline in M&A, you know, how you can create value. Transparency in the non-financials, because we were saying, yeah,

sustainability is important for us, but we were not aligned with Paris Accords, which we did now, you now. We were not very transparent on the non-financials. Now we are making it as a yearly disclosure or even sometimes on a quarterly basis, I share with the investors where we stand. So I think those early insights are so critical, Nicolai. Well, thank you. Moving on to leadership and your philosophy, how would you describe your leadership philosophy? People describe it as an iron fist in a velvet glove. I believe in care and dare, the end, the power of the end. That's actually, if I can make some publicity for my own podcast,

which I would love to welcome you, is the power of the end. In many companies, I had to transform, they were doing this or this. Well, I believe you can do both. You care and you dare. You do it with your kids, with your family. Do it with your people in any organization. As a leader, you have to make tough decisions while still showing that caring and that emotional intelligence and empathy. Empathy is so critical.

Could you elaborate a bit on that? Just how how empathy is finding its way through your leadership style? You know, during COVID-19, for example, you know, I couldn't allow myself to look at the mirror, restructure, follow people without doing something about my own salary, for example, Nikolai. So I cut it by 15%. And by the way, by doing this, all my top 30 leaders followed me. We created the Solidarity Fund,

which people told me, this is a charity, the US stuff is not Europe, a European thing. So I said, let's start it. And then I asked shareholders for those who want to forfeit part of their dividends.

And the fund collected 15 million euros in six weeks, Nikolai. So I think, you know, you have just to, you know, walk the talk, right? Role model your own beliefs. But also vulnerability is key. And it's a strength, not a weakness. I mean, in the old days, Nikolai, they were asking us, you can do it with the big muscles. Well, I mean, in quarter two, 2022, I was a chief mask officer, not executive officer anymore. I mean, we were all looking after, you know, security of our employees, how we're not going to disrupt and stop our manufacturing.

I ran out of masks. So I had, and I asked people help, you know, really people help. The unions remember that, you know, that I said, guys, let's focus on this. We need help because we closed three manufacturing asset, Nikolai, never happened in the history of this business, mainly due to aviation, civil aviation, etc. So I truly believe leaders who do not have emotional intelligence and empathy are not gonna thrive and succeed so i've heard you talk about grit several times and the importance of grit in your life and in leadership and interestingly in the next episode we're going to interview angela duckworth who is perhaps the world leading expert on exactly grit.

So what would you have asked her? Resilience is so critical to today's life, in your personal life and in your professional life as a leader. We've done a lot of mental health inside out, principles education throughout the teams right with our teams who loved it some came with their families with their spouses and and and kids because when when you build and you grab this resilience in your DNA in your day to day you know you are less exposed to the externalities and the macros

which you cannot control. You build it and it prepares you to become a better, stronger person. Yeah, I would ask her about her magic recipe, right? Do you think you need a lot of it when you're a female leader in a male-dominated industry as you are? Absolutely. Absolutely. Absolutely. There is still glass ceiling and diversity

by the way, not only gender. Diversity challenges around us and without determination, resilience as a survival tool, without these attributes, I would have changed

my path several times at the expense of my dreams, Nikolai. So, yeah, I mean, we need, you know, to develop that in the early stages, by the way, not later in your career. I wish that school, at elementary school, with the teacher at home, by the way, young girls are living their ambition,

are very vocal about it, and I think it's so critical. We recently spoke to the CEO of L'Oreal, Nicolas Irunomus, and you are actually on the board of that company. Are you anything from L'Oreal that you are kind of taking to your job as CEO of Solvay? Yeah, I mean, L'Oreal is a fabulous company with a pure purpose around beauty. And I was extremely honored when they reached out to me back in 2020 in the middle of the crisis and ask me to join their board.

I'm learning a lot from them. I hope as much as I am impacting. But the power of having a pure purpose, which is very, very clear, the power of innovation, you know, that they are not only in the green chemistry, but on the digital transformation, they are leading the way. The power of being an M&A machine. And they are, I mean, it's just amazing how many brands came through M&A and successful brands, by the way, because L'Oreal is not one brand, it's 100 brands, right? brands right the power of and this is important and i think i i i got it before but they this is one of the best companies out there showing case that is how you can build the repeatable model so i mean repeatable in business repeatable in innovation repeatable in mna so you make an anecdote a larger you know larger story right which I love because if not, it's wasted.

And that's what I try to do at Solveys. I love anecdotes, successful ones, making it bigger. That's why we launch our growth platforms at Solveys. Tell us about the power of fun. Fun is important. I mean, in Morocco, coming back to Casablanca, we had a lot of fun. I mean, I was, you know, yeah, a humble home, but full of love and fun with very simple things.

So fun is important. Fun in the job is important. I have simple hobbies, and it's reading, it's yoga, it's playing with my 16-year-old son when he has time, he's getting, he's grown up now, but we still enjoy some games together and having fun as a team, right? So now that we can meet physically, we have a lot of retreats. So I take my team two days without slides, just talking about business and non-business and thinking about ourselves as individuals, as leaders,

how we can do better and having fun together. So I think fun is important. And how do you relax? Is that where the yoga comes in? Yeah, every morning at 5.45, I am on a mat doing yoga. I've been coached by my two coaches since now 15 years of the inside out principle, how I get a better person, how the energy is inside out. And it's made me frankly transform my life, a better mother, better spouse, a better colleague

and a leader. What are the main principles behind that? Grounding and balance, really. Always stay grounded and balanced uh nobody has the power to to make you unhappy or angry i mean i'm not at the buddha stage and i'm not a robot neither but you know getting stronger into you know understanding the link between the thinking and the emotions, right? So, and how you can live in your planet.

And each one of us has reality. You have a reality about me. I have a reality about you. And hopefully there is an intersection. So that's the principle of humanity and human, you know, interactions, right? And relationships. When you understand this, I think you can be a better leader to bring others to be at their best. And if your people or your kid, I mean, if my kid is at his best,

I know he will be a successful person, including empathy, including patience, etc. So I think I learned a lot from that. And it's essential to my life today. I think I have to come and take some classes with you. Ah, anytime, anytime, anytime. And I'm sure I will learn from you. Lastly, we have a lot of young people listening into the podcast.

What kind of advice do you have to the young people these days? Find your purpose, your why. And if you don't know it, you remember the second day, keep looking for it. And it's And if you don't know it, you remember the second day, keep looking for it. And it's okay that you don't know. When I was younger, I didn't know.

Find your why. Find your why. Learn and learn and relearn. Be curious. Be disruptive. You are unique. Each of us is unique. And find it.

Don't get into the mold. I'm hiring people because I see something in their eyes which is different. IQ is a commodity. it don't get into the mold i'm hiring people because i see something in their eyes which is different iq is a commodity eq passion will disruption are are unique in a life find your mentors and sponsors you know the difference nicolai the mentors speaks to you the sponsor speaks about you when you are not in the room and specifically for the young female or the minority in the audience, right? Throughout my career for sponsors, I have benefited from incredible mentors from academia, professionally, personal spheres who helped me shape my path. But sponsors are

equally important. And those are the people who made bets on me, who allowed me to get to another job, to be able as a female business lady to take a job in the Kingdom of Saudi Arabia against all the odds. And finally, like at Solveig, bring the whole self. I'm really, that's something I'm very passionate and vocal about it, bring the whole self to work. At Solvay, for example, the sexual orientation was a taboo.

You know, nobody was speaking about it, right? So we put it on the table. We put code of business integrity in 2019, where there is zero tolerance for discrimination and harassment, etc. So yeah, follow your dreams, even if this means challenging the statu quo and the truth is that if I had played by the existing rules, I would not be here with you today, Nikolai.

Well, Ilem, it's easy to understand why people have made bets on you over the years. It's been such a pleasure to have you on here and I look forward to staying in touch. Thank you. Thank you, Nikolaj.