Executives in the flexible packaging industry grasp the challenges in front of them. The hard work lies in moving from understanding to action—or, as Peter Sheahan puts it, from acceptance to ownership.
Sheahan, the founder and CEO of Karrikins Group in Denver, Colorado, specializes in helping corporate leaders make internal changes to meet external challenges. He describes the process as moving from a burning platform to a burning ambition, which brings with it a real urgency for change. Other elements include shedding old narratives that justify the status quo at a company and moving beyond the feeling that one is a victim of external forces.
Sheahan has advised leaders from companies such as Apple, Goldman Sachs, Microsoft, Hyundai, IBM, Pfizer, Wells Fargo, and Cardinal Health. The author of seven books, including “Flip,” “Generation Y,” “Making it Happen,” and the recently released “Matter,” Sheahan spoke in September 2021 at the annual meeting for the Flexible Packaging Association (FPA) in Amelia Island, Florida. He later shared his insights on leadership and the flexible packaging industry in an interview with FlexPack VOICE®.
Sheahan, the founder and CEO of Karrikins Group in Denver, Colorado, specializes in helping corporate leaders make internal changes to meet external challenges. He describes the process as moving from a burning platform to a burning ambition, which brings with it a real urgency for change. Other elements include shedding old narratives that justify the status quo at a company and moving beyond the feeling that one is a victim of external forces.
Sheahan has advised leaders from companies such as Apple, Goldman Sachs, Microsoft, Hyundai, IBM, Pfizer, Wells Fargo, and Cardinal Health. The author of seven books, including “Flip,” “Generation Y,” “Making it Happen,” and the recently released “Matter,” Sheahan spoke in September 2021 at the annual meeting for the Flexible Packaging Association (FPA) in Amelia Island, Florida. He later shared his insights on leadership and the flexible packaging industry in an interview with FlexPack VOICE®.
FlexPack VOICE®: What do you see as your mission and the mission of your company?
Peter Sheahan: We work with executive teams to accelerate their growth through transformation. If you think about the flexible packaging space, there’s a lot of external changes to their world, both pressure from the CPG companies, environmental, social, and governance (ESG) related regulation, and reputational challenges with plastic. We would help a leadership group respond to that external disruption and accelerate the rate of internal change, which would lead to growth and continued relevance.
FPV: What form does that advice take?
PS: It almost is exclusively offered to executive teams and their direct reports. At the end of the day, companies don’t
transform, people do. If you start with a leadership team, it’s the place of maximum possible leverage because as goes their behavior, so goes every-one else’s. Practically, it involves three things. Number one is getting leadership teams to be brutally honest with themselves. It’s not just about the negatives, but about the opportunities, as well, and to break free from their desire to defend what they’ve already created. The second piece is around unleashing an ambition in that team—and therefore the organization as a whole—that makes them want to change, rather than waiting until the external environment makes them do it. You’re in a much stronger position to change when you’re ahead of the curve than you are when your back is to the wall. Number three is moving from agreement to alignment. Many teams agree they have to change, but then they go back to doing business the way they’ve always done it. They need to really work
on behavior change, shifting the way they invest and spend time, the way they work together as a team, the processes, the systems. That’s where you see the real heavy lifting.
FPV: What characterizes the teams that are best able to take advantage of this kind of advice?
PS: There are four characteristics. One is that they don’t waste time pretending they’re responding to the changing environment. They like to make decisions and move on. People sometimes say, “Oh, it took eight years to transform the company.” But in our experience, it takes two years. It just took them six years to figure out that they had to transform. The second is that they move toward disruption rather than away from it. Three, they have a desire to lead the customer to the future rather than get dragged there. They’re not trying to slow the customer’s progress to an inevitable future. The fourth and final is that they actually come together as a leadership team, rather than a group of individuals who report together.
The sooner you start on this journey of change, the easier it’s going to be because you have more runway, you have more cash flow and momentum. There’s nothing virtuous about waiting to be on a burning platform.
FPV: What typically prompts a leadership team to reach out to you in the first place?
PS: It might be a CEO who doesn’t believe his or her team is ready to really move with urgency. It could be a trade association that knows change is on the horizon and wants its members to really lean into that. The majority of my clients come after being exposed to our worldview, my thinking, our research in a keynote or workshop environment where they have a bit of a wake-up call. Five years ago, they struggled with accepting the need to change. These days, a lot more clients are ready to bite off the transformation. They just are struggling to get people to actually change their behavior. They know what they want to get to. They just don’t know how to get there.
FPV: By people, do you mean the leadership team, or do you mean their entire company?
PS: Both. But if you change the behavior of the leadership team, it has an unstoppable impact on the rest of the business. It doesn’t mean the rest of the transformation happens by itself. And so, you can’t just change the senior team. But the truth is, changing that team is the most powerful lever for changing the rest of the organization. That’s why we focus so much of our attention there.
FPV: You mentioned that CEOs are more open to this sort of message than they were five years ago. Is the pandemic the reason or are there other factors that have made leaders more receptive?
PS: It was happening pre-pandemic, but the pandemic definitely amplified that. If you look at the major trends affecting flexible packaging, they’re not radically different today than they were before the pandemic. There are some small market fluctuations, as a move toward convenience; the importance of health, safety, and hygiene; and there are
operational challenges in this environment. But the core shifts around environ-mental sustainability, around packaging as a real point of differentiation for a consumer packaged goods or medical device company, that was happening already. Now, though, there is a greater sense of urgency.
FPV: What other challenges do you see facing the flexible packaging industry?
PS: One of the challenges is the uneven legislative environment. In addition, I don’t think anyone along the value chain is making as much money as they would like to. And what usually happens is that people keep squeezing further and further back. So, you have this tension between the need to drive innovation, but with less free cash flow, because your margins are getting squeezed. We want innovation, but we want it all for nothing, basically. That’s really going to test the industry.
I also think there’s a genuine risk from the “plastics issue,” its reputation, whilst not entirely accurate, regarding environmental impact and sustainability. I’m a little worried that the industry is not going to come together and really begin to regulate itself, much like you’ve seen beverage companies do and some other segments that have done that. I would like to think that the industry finds a way to continue to innovate and gets ahead of this issue to the point that people stop pointing their fingers at it.
Another one of the challenges for plastic is that you have the aluminum companies telling some pretty powerful stories about recycled material, and how much remains in circulation, and you’re beginning to see it positioned as an environmentally friendly alternative. There are real challenges.
FPV: When you were speaking to members of the Flexible Packaging Association, what do you feel resonated the most?
PS: I feel like there was a moment of honesty and self-reflection after I showed them a snapshot of the changes facing the industry. I asked them if there was anything new on my slide that they didn’t already know. And they all said, “Absolutely already knew that.” And I said, “Well, with the exception of crisis fatigue and broken supply chains, is there
anything on the slide that wouldn’t have been there three, four, or five years ago?” And they’re like, “No. We’ve been dealing with that stuff for five years.” And I said, “Alright, is it going to speed up, or slow down?” “Oh, speed up, for sure.” And I said, “Alright, well, if I’m invited back in five years, don’t tell me you never saw it coming.” Leaders also resonated with the message that perhaps they had not been as action-oriented as they thought.
FPV: In your experience, what keeps CEOs and leadership teams from reaching that brutal honesty?
PS: A CEO needs to see around the next corner. But when times are good, and your resources are stretched already, and you’re trying to make hay whilst the sun shines, and particularly if you’ve founded the company or you built it, you’ve been working very hard for years. You kind of want a little bit of stability and consistency. And the level of uncertainty, and variety, and change that you’re just dealing with, even at an internal level, is debilitating in some ways. So, there is an element of wanting to execute cleanly and predictably and keeping investors happy. Second, there’s a
vested interest in maintaining the status quo. And as you see more and more private equity and more and more publicly listed companies, companies have very, very strict ROI expectations from the investment community.
FPV: How do companies move from agreeing on the need to change to actually aligning their businesses to change?
PS: Part of it is when they think seriously about their own legacy, and what condition they want to leave the company in. Number two is when they realize that defining the “what” of change is the easy bit and that making it happen—the “how” of change—is hard. That realization brings their attention to discussing and addressing the real obstacles to change and the fear that people have. They can then create a psychologically safe environment for their leadership team to start an honest discussion about the obstacles to change.
FPV: How do you create that environment of psychological safety and what does that look like?
PS: Number one, it’s to seek input and honest feedback from the whole team. Second, it’s to meet that input and feedback with curiosity, not judgment. Third, it is to be acutely aware of how your leadership style impacts people’s experiences. If you’re naturally argumentative, for example, it might be because you want to really tease out an issue. But another person might experience that as oppositional and adversarial. Fourth, when people are not perfect, you don’t beat them down for a failure. Finally, you seek to learn, and you encourage progress over perfection. You facilitate reactions to underperformance by collectively working together to solve the problem. Those are five of the things that CEOs do to create psychological safety.
FPV: When is the best time for a leadership team to get started?
PS: The sooner you start on this journey of change, the easier it’s going to be because you have more runway, you have more cash flow and momentum. There’s nothing virtuous about waiting to be on a burning platform. Move now from a place of desire and ambition and a real wish to lead the customer and be innovative. And, by the way, that’s where everyone wants to work. Who doesn’t want to lead a company like that?