Proving his Mettle in Metals

As a semi-professional Greek dancer since age 13, Lou Pahountis embodies concepts that he also applies to the business world.

“It’s all about getting out in front of a group of people, motivating them, and being creative,” says Pahountis, who performs intricate footwork, flips and other acrobatic dance moves with his fellow dancers. “One certainly needs to think out of the box wearing a pleated white skirt with white leotards, little booties that look like what the Oompa Loompas wear and the red beanie cap.”

But Pahountis is more likely to be seen in a suit and tie as Vice President of Novelis 2.0, leading a global business and supply chain transformation program that will bring about a globally integrated company with common processes that are efficient, simple and effective. He has stepped into this position having formerly been responsible for global supply chain.

When he joined Novelis in early 2012, it was a perfect fit. “This constant pursuit of excellence – which includes a sense of urgency and a great corporate vision -- is what I thrive on,” says Pahountis, who abhors complacency. “ And then you couple that with my experience in the ferrous and non-ferrous metals industry.”

Growing up in Pittsburgh, Pahountis was introduced to the metals industry by his father, an immigrant steelworker. Three of his four of his older sisters have worked at Alcoa, a global aluminum company based in Pittsburgh, as well as his brother-in-law. Pahountis even had a short stint there in the 1990s . “Metal is definitely in the family bloodstream,” he says.

Pahountis earned a bachelor’s degree in civil engineering and two master’s degrees -- in mechanical engineering and business administration -- from the University of Pittsburgh. He then started a couple of companies, one with a finite element analysis software product and another promoting an integrated modem/blood pressure device with a service.

Both start-up companies would later sell their intellectual property to a venture capitalist. “That’s when I decided to get a real job because I was doing all this and not making much money,” Pahountis says, adding, “ That's when I decided to work for reputed company for a change. While I was learning a lot and thrived off the innovation and business creation, it was time for some stability."

In 1985, Pahountis began the first of three stints at Arthur Andersen (which later evolved into Andersen Consulting, and then Accenture), where he was the metals industry expert. Even today, Pahountis feels a deep connection with the people he met there and the network they formed.

“In the mid ‘ 80s , we called it The Firm,” he says. “The leadership development philosophy that existed, and how people were put through the ‘school of hard knocks,’ was a one-of-a-kind engine of leadership talent in the marketplace. Unfortunately there’s nothing else like it in the world, despite a few companies that have sought to replicate the Andersen business model. Consequently, if you came out of that era, everybody knows what you’re made of, that you’ve got the work ethic, the guts, to conquer whatever obstacle is ahead of you.”

Pahountis moved on to Alcoa in 1991. Finding it in those years to be “very stodgy and hierarchical,” after three months on the job he wrote the white paper on the need for business process change with measurable improvement – “because I was without fear” – and sent it to then CEO Paul O’Neill and all other top company executives.

“The gist of the memo was, ‘We’re wasting millions and millions of dollars on technology, but we’re not getting any business value for it,’” says Pahountis. Two weeks later, O’Neill eliminated several layers of executives, removed the president, created an inverted pyramid structure with 24 business units and gave each of those new business unit presidents far greater authority … and accountability.

“He removed these layers of bureaucracy, borrowing some quotes from the white paper for his announcement to the corporation,” says Pahountis, who still counts driving change and delivering results among his core philosophies.

Paul O’Neill, who later became Secretary of the Treasury under President George W. Bush, borrowed a couple of statements from the white paper. “The big one, the one that stuck for the subsequent three years, was the transformation message around driving quantum leap improvements,” Pahountis says.

He was invited to join an elite core team of corporate strategists and change agents reporting to O’Neill’s Chairman’s council. They would later unleash nearly $1 billion of cost and working capital improvements from the business during the subsequent couple years.

Pahountis would also become involved in some of the company’s market leading programs such as the aluminum extrusion material delivery for the then-new Boeing 777 aircraft wings, as well as a Greenfield plant start-up in Germany for Audi’s new automotive space frame.

But, not seeing a long-term stream of challenging projects, he decided to move on. “So, after we achieved the glory, then it was, ‘OK, what’s the next big challenge?’” Being a Type A personality, and with a strong pull from Andersen Consulting, Pahountis was brought back to the Firm as the metals industry expert where he worked to grow its metals and mining business. He was “a consultant to the consultants,” working in more than 60 countries around the world, including India, where he worked with Hindalco Industries, which later would become the parent company of Novelis .

In 2001, Pahountis was lured in to Perot Systems Corporation by Ross Perot Jr. and James Champy , this time with even wider ambitions. For the next nine years, he was instrumental in leading the growth of Perot’s Consulting business to nearly 1,200 consultants across the globe, all while continuing to deliver hands-on work for large corporate clients.

One of his proudest accomplishments was his work on the Boeing 787, which comprised the next evolution in the commercial aircraft industry. It was the first composite aircraft and utilized a completely different supply chain philosophy that included 1,500 employees, two separate businesses and a training facility in South Carolina. “That was a design of a business, top to bottom, from cradle to launch,” Pahountis says, pointing out that the recent story of batteries catching fire and subsequent grounding of the planes were produced by a third-party supplier.

After Perot Systems was sold for $3.9 billion to Michael Dell in 2009, becoming Dell Services, Pahountis again turned to a start-up. He founded Kitazzo , whose suite of personal software solutions performed utility and control monitoring for homes or businesses, giving users the ability to control everything remotely. “I’m always into these businesses that use technology to transform the way we live and work,” Pahountis says. However, he adds, “The market of related technologies was too flooded for raising the kind of capital we were shooting for.”

Drawn to Alvarez and Marsal by ex-Arthur Andersen colleagues, he was a Managing Director before joining Novelis in early 2012.

Spun off from Canadian mining and aluminum manufacturer Alcan, Novelis employs 11,000 people in nine countries on four continents, with 25 operating locations. Customers include Coca-Cola, Samsung, Audi, Jaguar, BMW and Ford.

Novelis produces an estimated 14 percent of the world's flat-rolled aluminum products and recycles approximately 40 billion cans each year, enough to circle the globe more than 100 times. Recycled aluminum, which comes from used beverage cans and other products, such as construction and automotive, is converted into new aluminum sheet. Unlike many other materials, aluminum does not degrade during the recycling process.

“We have a powerful and exciting brand centered on sustainability and recycling,” Pahountis says.

When he came on board, his mission was to integrate the global supply chain across a variety of disparate operating locations, and to bring leading supply chain practices for greater efficiency and effectiveness.

“This was a company that just a few years ago was comprised of a whole bunch of plants pretty much doing their own thing,” Pahountis says, “so I found this to be an exciting challenge.”

This provided an opportunity to create a region and corporate centered operating model and structure that would allow Novelis to scale its business for the upcoming growth.

With revenue of $11 billion a year, the goal is to increase to $20 billion. Global customers are driving the growth, from cars using aluminum sheet in China to a strong demand for cans in South America.

Pahountis’ mandate is the global supply chain -- moving a huge volume of metal cost-effectively and efficiently without a large increase in the working capital required.

Novelis is implementing an aggressive program of about $1.5 billion in capital projects and global expansions over a three-year period. These include a $200 million strategic project in Oswego, N.Y., comprised of two continuous annealing lines to produce metal for the automotive industry.

Last November, Novelis broke ground on the largest recycling facility in the world, a $250-million plant in Nachterstedt , Germany, that will enable the company to produce 400 kilotons a year. Another continuous annealing line is being built in China, while aluminum rolling operations in Brazil are undergoing a $350 million expansion. Production is also increasing at a recycling facility in Korea.

And then there’s Evercan , the proposed beverage can of the future with up to 100 percent recycled content . This is a challenge today for many reasons, one being that beverage cans currently use three different alloys (one for the body, another for the end and a third for the tab).

Likewise, the Novelis 2.0 transformation program is also aiming for consistency. “It’s all about team, a One Novelis ,” Pahountis says of his leadership philosophy. “It’s easy to delegate, but I like to focus on breaking down hierarchy and leading by example, which is why displaying a passion for the work at hand, and having a strong work ethic, is important to team confidence and success.”

As one of his secrets to success, Pahountis believes that connecting the dots between functional department areas “opens the door for simplification and reducing complexity.” Pahountis also follows the principles set out by Stephen Covey in “The 7 Habits of Highly Effective People.” Pahountis believes that, “’seeking to understand and then be understood’ is the only path to successful outcomes with people. Not listening and just plunging ahead almost always results in a win-lose or lose-lose.”

The concept of business alignment, which he has carried with him from his Accenture days, is also part of connecting the dots. “When you think about organizational change and transformation,” Pahountis says, “you say to yourself, ‘OK, if I just change the information technology, does that really change how people think?’ No. ‘Does that change a culture?’ No. ‘Does that drive a higher-level performance?’ Rarely. So, this concept of business alignment -- thinking in terms of target operating model, processes, organization, culture, performance metrics – is where results are delivered.”

Pahountis says that it’s also crucial to have wins along the way instead of just dragging out a process without rewards. Discipline, accountability and follow-through are other critical components.

“Doing what you say you’re going to do is the key to confidence and trust,” he says.

That doesn’t leave much time for Greek dancing. Although his travel schedule isn’t as hectic as it once was, Pahountis considers himself “retired” from performing.

However, he is still very active in Greek organizations. The married father of four, who lives in Brookhaven, is president of a non-profit organization for people from Karpathos, the Greek island where his parents were born and where he owns property. He’s also a “Spartan” supporter of the Greek-America Foundation that sponsors the bi-annual Gabby Awards in Hollywood.

And even though Pahountis doesn’t practice them often, he still has his moves, which several dance leaders know all too well. “Whenever I show up at a Greek festival,” Pahountis says. “I get yanked out of the crowd to perform with the dance troupe.”