Inside the Chairman’s Circle: Ken Lousberg of Terex Corp, China

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For our ongoing interview series, AmCham China Communications Director Graham Norris spoke with Ken Lousberg, president of Terex Corp, China, about leading with enthusiasm and taking the shame out of sharing mistakes.

Lousberg has long worked in heavy equipment manufacturing, from engineering manager of the Trane Company to business unit manager at Genie Industries. Lousberg took on his current post with Terex China in 2011, and prior to that held other leadership positions within the company in Europe. An active member of AmCham, Lousberg co-chairs the Manufacturing and Sourcing forum.

What’s your vision for TEREX in China? What do you hope to achieve?

Our purpose statement at Terex is to improve the lives of people around the world. In China, our vision is to responsibly provide products that improve the safety and efficiency of the people of China who build in China. We’re very focused on safety. We have the (Manufacturing and Sourcing) working group at AmCham that I co-chair, because a lot of people get hurt, a lot of people die in China, especially from construction. We’re very focused on changing that.

Thinking three to five years down the road, is there any specific thing that you’d like to look at and say, “I changed that”?

When we talk to the people that are ultimately responsible for setting the policy, regulation, and enforcement for workplace safety in China, they would say the number two cause of death is falling from height during construction. Historically the number one cause of death in industry is mining, and now it’s quickly becoming construction and falling from height. When things are the number one, two, or three in China, they tend to get everyone’s attention. We would be very proud if in a few years that is essentially eliminated. Using our experience throughout the world, I'm pretty confident that we can really make a huge difference.

At TEREX, how do you get things done? Is influence important?

Influence is always critical to a leader. It’s more how you influence, and to make sure it’s positive influence and not negative influence. I think we’ve all worked for leaders that tended to operate on the negative side. I don’t think they’re as influential. They may be able to do something quickly short term, but rarely does it last over time. I wouldn’t say I’m overly positive, but I’m definitely positive. With enthusiasm I think we tend to accomplish a lot more than we would otherwise.

I think it’s critical to be a good role model. You know it’s as simple as doing what you say you’ll do, leading by example. I think you have to have good communications skills. You can be the best person in the world, but if you can’t articulate your vision or what it is you’re trying to do, it’s very difficult for people to be inspired by it. The key way to tell the difference between a good and great leader is what happens during a very difficult time or situation. If a team makes it through a very difficult situation as strong or stronger than when they went into that situation, typically you have a great leader leading that team.

Do you have any advice for those early on in their career, looking to move up the ladder into more senior positions?

I get asked that a lot. We have a mentorship program and a very active leadership development program in China that I’m very involved in. The number one advice I would give someone is if they think that’s what they want to do, do it for the right reason. The top reason people want to become a senior leader is because they want to make more money or be valued by the company, or it’s just what they or their family thinks they should do. So first make sure that’s what you really want to do. It’s a lot of responsibility. A lot of people are counting on you to inspire them and lead them. And I think if you do it for the wrong reasons, you just won’t be happy. Make sure you want to do it.

Can you tell me more about that mentoring program?

What we’ve started in China is we went out to all of our business site leaders, (general managers) typically, and HR leaders, and said, “Let us know who you think the top two to four people are in your organization that really have a lot of runway in front of them. People that you really think have some natural skills.” From there we did a selection process. On average, we took about two people from each organization in our first class. We’ve built a two-year curriculum around a learn/do model where we bring them together to interact with each other, learn from each other, but we also give them specific training on topics that typical leaders struggle with. Give them some training on it and ask them to go away and actually practice it. Then each person is assigned a mentor that then goes through how it went, gives advice, gives feedback, not only on the topics that they go away with but anything, they start to build a relationship with a senior leader in the company that they can seek advice from, get feedback from, that’s not in the normal line of the chain of command.

How do you measure success of that program?

Ultimately we’ll measure it in three to five years by how many of them have been promoted or are successful in more senior promotions.

What keeps you up at night?

I work hard, I travel a lot, and typically when I go to bed, I fall asleep.

How do you learn from your mistakes?

I think the key is to admit that you make mistakes. For me I don’t mind if I make mistakes. I don’t mind if my team makes mistakes. As long as we recognize it and get to the root cause of why we make mistakes, and try very hard not to repeat it. Problems are OK, mistakes are OK, just deal with them.

In a cross-cultured environment like China, or for a multinational in China, are there different perspectives on mistakes?

Different cultures react to admitting or talking about mistakes differently. We’re all human, but the ALEB program I was telling you about, one of the key elements in China is problem recognition and problem solving. It’s not natural here to just stand up  in front of everyone and say, “Hey, I made a mistake,” or say, “There’s a problem, let’s fix it.” So we’re very much trying to fit that into our company culture in China. You have no idea how many times I say, “Hey, problems are OK.” If we know about them, we can fix them. If we hide them, they’re time bombs forever.

So you wouldn’t get mad then, in that kind of situation, because you encourage people to bring their problems forward. When would you get mad?

Our core playbook … is very much modeled after Toyota’s. Continuous improvement is one of the clear foundational elements of it. If you don’t know about problems, there’s no hope for improvement, so it can be a good thing to have them. It takes some convincing, and even more, it takes trust. You really don’t get mad at people if they bring up a problem or a mistake. That’s the tough part. It’s easy to say we won’t do it, but when you’re under pressure it’s a lot harder to say, “Hey thanks for bringing that problem to me. I appreciate it!”

I actually try very hard to remain composed, even if I’m disappointed. I would say the two things that I would get mad about would be making the same mistake two, three, or four times, or surprises – negative surprises. The door is always open. The first time you have an inkling that something might be wrong, that’s the time to talk about it. Not after it’s inevitable. Those would be the two things that test my patience more than anything else.

Back to the subject of leadership and inspiration, who would you look to for inspiration and as a model of a leader?

There’s obviously tons of people you can read about you can try to model. To me, I would answer it more personally. The owner of my old company (Genie Industries) who had built it into a multi-billion dollar business, just an incredible leader, and another gentleman who worked there, Colin Fox, were just genuinely good people. They gave me the freedom to make a difference, to take responsibility, to execute without a lot of micromanaging, or any micromanaging. But I always knew they were there to support me if I needed it. Just very unselfish leadership, very genuine leadership. I learned a lot from them. I try to operate similarly to them.

Do you get any inspiration from books?

I’m an avid reader. Of the four books that I think about the most or refer back to the most, one would be The Last Lecture by Randy Pausch. It’s about a professor who found out at 47 he had terminal pancreatic cancer, and he gives a lecture on how to think about life (and) how to think about time with your family and friends from an incredible perspective. And, it sounds cliché maybe, but The Seven Habits of Highly Effective People. I don’t know how many copies of that I’ve bought for people. I find it really helpful, and I’m so familiar with it, I can say, “Graham, I really want you to read page 8.” Truman by David McCullough is just incredible. It’s a biography of his life, the leadership and courage that he showed during some amazing events in the world. And then I’d say the last one is The Toyota Way by Jeffrey Liker, just because I’m a lean nut, and I’m constantly trying to improve things. It’s a book I go back to all the time.

You said you’re a “lean nut”?

I like lean manufacturing, lean business practices. There are definitely lean zealots out there, but I’m not one of those; I’ve mellowed. It’s purely about business processes and manufacturing processes – eliminating waste and continuous improvement. I’m just constantly trying to see how we can do this better. We talk about the paradox of perfection; anyone who thinks they’re perfect doesn’t quite understand the concept.

If you could have done something different in your career, what would it have been?

Honestly I don’t have any regrets about my career. I would say quite the opposite, I feel pretty lucky and fortunate that I’ve been given the opportunities that I’ve had. I’ve ended up having some pretty major roles in North America, Europe, and now Asia. I’ve been given a chance to really see firsthand the differences between cultures both on a personal level and on a business level. On that same note, on a family level, my two oldest boys have been to 55 or 60 different countries because of the choices we’ve made. I think they’re more citizens of the world than any particular country. So I feel pretty lucky. No regrets. (Well,) given that we’re talking about my capabilities, if I could have been a Formula 1 race car driver or fighter pilot, I would have done that.

What are the really valuable things you get out of your AmCham China membership?

The community of AmCham. Like I just said, I’ve lived and worked all over the world. Never in my career have I had such easy access to so many talented people that are willing and wanting to help you, give advice, bounce ideas off of, whether that’s friends I’ve made in the membership or the staff at AmCham. I think that’s pretty special. I’ve been a member now personally for almost five years. I think the progress or improvement made under the leadership over the last year has really been impressive.

How do you deal with the pollution?

I deal with it with a smile, but you just can’t tell because I have a mask on. We check the AQI 10 times a day, we wear masks, we have nine industrial filters in our house, there’s so much air moving. My wife is also just an avid traveler, so she uses every excuse she can to explore outside of Beijing. I’m pragmatic about this. I think it will improve. I just doubt it’ll happen in a time frame we’ll be satisfied with.