March 2016

“There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to
take the lead in the introduction of a new order of things.  For the reformer has enemies in all those who profit by
the old order, and only lukewarm defenders in all those who would profit by the new order, this luke warmness
arising partly from fear of their adversaries….. and partly from the incredulity of mankind, who do not truly believe
in anything new until they have had actual experience of it.”
Niccolo Machiavelli

Wow! That’s a mouthful. And, some of you may read this quote twice to decipher what Machiavelli had to say.
But, let me take a shot at breaking this down for you, into simple, easy-to-understand English.

Change is hard! The people who resist change the most, and who hang on the tightest to the old ways are those
who have benefitted the most due to those old ways of doing things, or fear for how the new way might negatively
impact them or their position. And, finally, most people won’t believe that the new ways are any good until it’s
been proven by someone else, or until they’ve actually tried it themselves.

There you go. Make sense now?

Niccolo Machiavelli was a Renaissance historian, writing in Florence in the late 1400’s, and early 1500’s. He’s most
known for his work The Prince, and the term “Machiavellian” which is often times associated with political deceit
or deviousness. His theories and methods are widely debated. But, on this matter of change, he got it right. And,
what this illustrates for me is that this issue of change has been perplexing leaders for centuries. The issues that
we, at Michelman, deal with are not dissimilar to what the Medicis and their contemporaries might have been
dealing with in ancient Florence.

Over the past couple of years I’ve talked regularly to our organization about the need for change at Michelman.
I’ve reminded us that what got us here will not get us to where we’re going. I’ve reminded us that our world is
spinning so quickly that if we don’t proactively, and aggressively initiate and manage change, then we stand the
chance of becoming irrelevant. And, I don’t know about you, but irrelevance is not a part of my personal plan. On
that topic, allow me to slip in another quote that I love:

“If you don't like change, you're going to like irrelevance even less."
General Erick Shinseki

But, even though the data is clear, and even though we know that leaders, writers, and scholars have been dealing
with this issue for generations, change is still hard. We gain personal skills and expertise and don’t want to have to
painstakingly learn new ones. We earn a certain status based upon the rules that were in place as we were
developing our careers. We grow comfortable in “the way things are around here.” But, in many, many cases,
we’ve missed the fact that the way things are around here aren’t actually the way things are around here anymore.
So, we talk a lot about change, but I find it easier to digest if we get a bit more specific about what really is
changing at Michelman. Here are a few examples:

 Marketing used to be “sales support.” Today, we’ve got entirely new expectations for what our marketing
professionals do, and for their leadership position within the company. Marketing does way more today
than just create sales literature, help with pricing, and manage trade shows. Those things are all
incredibly important, and we do them well. But, we now rely upon our marketing leadership to help us to
set a strategic path forward based upon data, real, authentic voice of the customer information, and
thoughtful al analysis about where we should play and how we can win. This is crucial for where we’re
trying to go and it requires tremendous skills, a lot of investment, and new talent. That is change!
 Sales used to essentially mean managing customer relationships and sales service. And, as we’ve
discussed, over the years Michelman has done this well. And, going forward, we must continue to do this
well. But, sales service is not the same as real, aggressive selling and business development. That passion
for, and ability to essentially find new customers for Michelman is a set of skills that must be developed if
we’re to successfully navigate our future. We have a few examples of where we’ve done that, but
candidly too many examples of where we’ve not. Instead, we’ve sent the samples, and waited for the
customer to run a trial. We must manage our customer relationships AND aggressively create new ones.
That is change!
 We used to consider IT the guys who kept our computers running, made sure that JDE was working, took
care of our BlackBerry devices, and then said “no” to everything else! That is certainly not the case today.
We’re living in a digital world and Michelman must not only keep up, but find a way to develop the
strategic tools that will allow us to create solutions, interact with our customers and other stakeholders,
scale our business, and generate the information that we need to make great decisions. That is change!
 We used to speak about Finance and Accounting in the same breath, and many of us presumed that they
were simply two words for the same thing. Not true. We need our accountants to keep track of the
money, pay our bills, collect our cash, pay our taxes, and generate our financial statements. And, our
accountants do a great job of this. But, we also need our Finance team to assist in our investment
decision-making, help us develop our strategic plans, analyze acquisitions, and to help our business
groups and regions to make sound financial decisions. That is change!
 Speaking of Business Groups and Regions, this is really brand new for Michelman. Historically our
business groups were really just commercial or go-to-market teams. These groups were mostly
responsible for managing the relationships with our customers. And for a while that was very successful.
But, to get to where we’re going, we need our business groups – each with relatively new and
experienced group leadership – to essentially create the long-term sustainable growth engines for
Michelman. Their primary responsibility is not to manage day-to-day relationships with customers. Their
primary responsibility is to create and help us to navigate a path to our future. And, our regions
(Americas, EMEA, and Asia) have the primary responsibility to execute against these plans in the near-
term. In other words, we’re really looking to our regions, led by talented Managing Directors, to drive our
sales, deliver on our operating plans, and win today! That is change!

I could go on and on about our many other changes – and I promise to continue to communicate regularly, with
transparency and clarity – But, my real objective here, right now, is to once again remind all of us that these
changes are happening and that the notion of change will be with us forever. But, here’s the positive thing, with
all of this change that we’re going through – change you’ll remember that we’re initiating because we can. – We
continue to win today. Through the first two months of 2016 we are ahead of plan in both revenue and EBITDA.
And, while I always remind us that two months does not make a trend, it is still wonderful news.

I want to thank all of you for your willingness to either happily embrace our changes or your willingness to be
dragged along for the ride! Join me in my quest to stave off irrelevance, prepare our business for the future, while
continuing to win today.

Until next month,