Spotlight On Podcast
Spotlight On Podcast
Spotlight On with Marco Van Kalleveen, Group CEO at DKV Mobility
In this episode of Spotlight On we are joined by Marco Van Kalleveen, CEO at DKV Mobility, who shares his transformative journey from consulting to leading DKV Mobility, offering insights into the dynamics between private equity investors and operational teams. Marco discusses the importance of purposeful leadership, M&A strategies, and the role of digitalisation and AI in driving business success while emphasising stakeholder engagement for sustainable growth.
• Marco's career path and motivations from McKinsey to CEO
• The significance of building strong relationships with private equity investors
• Evolution of operating teams within the private equity landscape
• Insights for transitioning from consulting to operational roles
• The role of purpose-driven leadership in organisational success
• Strategic approaches to M&A and integration practices
• The impact of digital transformation and AI on business growth
• Aligning individual contributions with company objectives for enhanced engagement
Hello and welcome to Spotlight On the podcast that brings together business leaders, entrepreneurs and experts covering a range of topics. I'm Nicholas Barton, founder and CEO of the Barton Partnership. We're an award-winning executive recruitment and consulting solutions firm providing permanent search and independent consulting services across strategy, sustainability and M&A, data and analytics, and transformation and change.
Speaker 2:On this episode of Spotlight On. We welcome Marco van Calvin to the podcast. Marco is the CEO of DKV Mobility, the leading European B2B platform for on-the-road payments and solutions, with more than 17 billion euros of transaction value and over 320,000 customers. Marco's journey began with an MBA at Harvard Business School before working for over a decade at McKinsey Company in the US and Europe with a focus on transformational growth. He later left as partner where he joined Bain Capital Private Equity in London. Later, marco stepped into CEO and management board roles, leading transforming and growing multi-billion international businesses, initially at TNT Express, a public global overnight parcel delivery company, and later at LeasePlan, the largest car leasing company in the world. He now sits as CEO at DKV Mobility. He is also the author of Unleash your Transformation. Marco, it's a pleasure to have you with us today on this episode of Spotlight On.
Speaker 2:As an overview from McKinsey to Baincap and obviously now at DKV. What were your key motivators behind all of those different career moves? That's a good question.
Speaker 3:And in hindsight it makes sense, but maybe at the time you have to make the choice and have to think things over. I think the first move was out of business school. I did my MBA in the US, in Harvard Business School, and then I had to decide what would be my next step and I decided I want to learn. Still, I was still young at the time. Where can I learn? Where can I learn? And I already had a vision of being a CEO in the long term and also be able to change companies. I thought where can I learn the most?
Speaker 3:And then McKinsey came on my path and I joined McKinsey and I did that for 10 years, first in the US, then in Europe. It has been a fantastic experience and I learned tons. I see many different companies, many different industries in many different countries. You think, do I want to stay a consultant for life or not? And I concluded no, no, that was not my intent of joining.
Speaker 3:Although it's comfortable, although it's an amazing company, an amazing firm, I said no, I want to make a next move. And then I thought what should be my next 10-year horizon? Not my next step particularly, but my next 10-year horizon, 10 years time. I want to be able to lead larger, bigger businesses. And then Bain Capital came and said would you like to join the portfolio team? And I thought that's actually a very interesting step away from consulting to go into a portfolio role at a private equity firm and I learned another set of skills and another set of perspectives. You learn the investment side, you learn the M&A side, you learn the exit side. There are so many other elements that maybe as a consultant you haven't touched upon that much.
Speaker 1:So I did that for several years.
Speaker 3:But then really, really, there was a drive to really start leading myself something and that led to the next two, three steps, as I have lost years. First in T&T Express, where I joined the management board of a large public company and had to lead a large, big division around the globe. And then to LeasePlan, which was a large private equity buyout at the time. One of the largest car leasing companies in the world was bought out by a private equity consortium and I joined that management team and left the European business. And for the last six years I've been leading as a CEO DQV Mobility, which was a part investment of CVC. So I've seen the private equity part and actually these roles.
Speaker 1:I joined very much the T&T role, the lease plan role and the DQV role, Because I could really lead these businesses.
Speaker 2:It was also my original intent when I started my career For sure, and I guess, having worked in consulting, having worked in private equity as an operating partner and subsequently been an operator and now a CEO for a couple of private equity-backed assets, what would you say has been your experiences of building a healthy working relationship between a private equity fund and that portfolio, both being on the fund side but then actually being on the other end as an operator? The?
Speaker 3:experience I've been on a portfolio team has been tremendously helpful for me. To be a CEO where private equity investors are part of, you understand much better how the private sector side thinks about the business, how they operate, how they incentivize, how their world looks like, which makes it much easier to really stand shoulder to shoulder and work together. So that helped me a lot. How they look at the world. You have to understand how these deal partners, how they look at the case. What were their original investment case. You have to be really upfront with them about this is the strategic direction you want to take. These are the initiatives you want to take. Bring them along in the journey.
Speaker 3:So I would be very disciplined in laying out in a one, two year board agenda. But these are all the topics that will come up in the future. We'll address all of them. I would have a lot of formal and informal contacts with them, sometimes several times a week, just to quickly catch up. Even five-minute call like this is what we'd like to do, or this is what's happening, to make a sense of really being in a boat together. If you don't stay that close, you get more and more questions from the investor side and you get more like a ping-pong of question and answer and I think that can be a waste of time and I think working together on the business is the way to go, and I really enjoyed that. Actually, I really enjoyed having a PE partner next to me as a CEO to really bounce things off and make things happen, but in a common agenda.
Speaker 2:We've been quite privileged that we see the market at a very macro view how operating teams are structured, how deal teams interact with our assets, but then how CEOs and other board members share their experiences of working with investment teams and operating teams as well, and I guess your time at Bain Capital the sort of evolution of the operating team since that point has probably gone through a few cycles. Really interesting to hear how it was to be in an operating team back in 2009, and maybe how that has perhaps evolved to your exposure to operating teams now.
Speaker 3:So when I joined, as you said, it was in the beginning the thought that PE firms started operating teams. I joined in the beginning stages and at that time people were finding the role, defining the role, what is it all about? You're not a CEO, you're not a deal team, but you are responsible for driving the change and creating the value with the company. So how much do you work with the CEO? How much do you support initiatives or not? So that was a bit of a finding your way, how to create value in that setting.
Speaker 3:What I experience now we have now people who have done this for a decade plus and experienced about it, and they are also much more in glue with the deal team. There's a much more clarity about what do you do, what does the portfolio team do? What does the portfolio team do? What does the deal team do? The language is aligned. People know immediately okay, in this deal situation, you do these four things or these five things. So I think these roles have become much more clear and much more aligned in the whole process.
Speaker 2:What I see, I think, when we meet with people who are looking to leave the MBB or other similar strategy houses. For those who are wanting to move into private equity as an operating partner, that is often seen as the holy grail, if you will. What advice would you have for someone that is either looking to leave consulting for the first time, or perhaps is in their first or second move out of consulting? For achieving that end goal, what would you say has been the recipe for success?
Speaker 3:There's a pre-step. So what do you do when you are at consulting? So if you want to be good at this role in consulting, you can choose where you focus on. If you become a very narrow specialist or a functional specialist, that's not very helpful in a mid-cap PE type environment where you have to deal with multiple topics, for example. So in consulting can you deal with companies or situations that reflect a bit the PE game, or where PE is invested, where you have a broad set of topics where you have to make change happen over multiple years. So have you seeked out these type of consulting engagements where you work on a broad set of issues, where you work with leaders that make things happen and where you work on programs that does longer term Versus?
Speaker 3:I work at a very big client and then there's only a small part I do there but I'm never part of the board, or I'm not part of the major decisions but I do operationally a smaller thing. So I think there's a choice before where you focus your activities as a consultant on, I think, being a bit broader. Having seen multiple things, having seen both strategy, org operations, different elements, have seen longer-term programs as helpful, because that skill set is valuable once you get into an operating role, Then, once you get out of consulting, it could be helpful to get a couple of years of real operating experience under your belt. I think that's extremely helpful and appreciated by the bigger PE firms.
Speaker 3:So now again, what context do you do that? If you get an operating experience in just a very slow-moving large corporate environment, that's maybe not the experience they seek. But if you step into something which was complicated, had to change, had to structure, restructure, had to grow, had to really change. I think, if you do that for several years and you are one of the players in a team that does that?
Speaker 1:I think that's extremely appreciated.
Speaker 3:And then, of course, if you've done that, how do you get to the PE seats? Players like yourself recruit people for that. But like yourself, recruit people for that. But also look at people who have made that step, talk to them, figure out. It's a bit of a networking element as well. To get in those roles which you do while you're a consultant. I think the first step out is interesting and important and then how you make a transition into that.
Speaker 2:Looking back on your career, would you say your intention from the beginning was to become a CEO and therefore, almost by sheer purpose, you've tried to open the doors that you've had opened for you, or you think it's been more by chance, as you've become more senior. Certain doors have therefore been open to you and that's how you've achieved those.
Speaker 3:I always wanted to become a CEO of a larger company and make things happen and really want to be in an environment where you can make change happen. Then, along the journey, I figured out that. Pe is a good environment for that because people want to make an investment. They stay five, six years in. Then they have to sell the company, exit the company. So with a strong agenda following that.
Speaker 3:So you work on an eight, nine-year horizon actually to make things happen in a quite rational fast decision-making environment, so I really enjoyed that, but that I learned along the way To lead a company. I decided I made moves about learning in the beginning of my career. I prioritized learning over already taking a role like that, so that's why I went to McKinsey and to Bank Capital.
Speaker 1:And once.
Speaker 3:I got more the range of a larger business. I could apply all these learnings and all these skills in that situation. It took a bit of patience to get to the right position. I also know people who go in early and say, after a couple of years of consulting, let me do it. But I have found that these years have been very precious and very helpful. I've seen many things, many elements. That's why I can do my job now much better than if I would have done it in a couple of years.
Speaker 2:And in terms of your current role at DKV You've obviously been there now for almost six years Could you maybe just talk me through the role that you're in, what you're responsible for, how that role has evolved over the last six years?
Speaker 3:If you are coming in and in a situation where a PE buys into or buys the whole asset.
Speaker 3:you have to very quickly lay out what could be the strategy, the value creation path and align people around it. So you have to get your head around very quickly be the strategy, the value creation path and align people around it. So you have to get your head around very quickly in the beginning. What's really going on in this industry? What is myth and what is reality? What are facts? What are just emotional elements? What's the real strength of the company? What is the areas you cannot leverage that much? What can you leverage?
Speaker 3:So in the beginning it's all about getting your head around it. Then you try to distill very fast what is the roadmap where the strategy needs to happen. And then you need to look for your team Very quickly. You have to assess what is the right people internally or externally. Typically in all the situations where I create a combination of great talents from the outside, great talents from the inside, to create a team and make that management team happen, and then get an operating mode of execution of your strategy in clear initiatives and roadmaps and yearly plans, et cetera. And you have to do it in a disciplined way. And then you need to create momentum. Right, that's all easy, set these plans, but how do you keep tech time and keep these businesses moving?
Speaker 3:and make decisions happen and celebrate victories and move and create momentum, and then at some point there, is an exit at the horizon. How do you structure for that? What are the elements you need to do so in all these phases, from getting your head around a business, creating a strategy, getting your team, getting it operationally moving, shifting the organization, getting wins on the board, and then to an exit your role shifts a bit in all those steps.
Speaker 3:Your role and also where you put your energy on has to shift along the steps, which I very much enjoy. It's a bit of a cycle you have to go through. That's how you could see over those years. It's a bit of a cycle, a typical cycle you go to in P&E investment where as a.
Speaker 3:CEO. You have to have different emphasis and different energy. If you want an example, well, if you establish your team and normally do that within the first, say, six, 12 months, you don't want to change your team all the time. Right, that's then the team in the boat. But that phase is a very important beginning phase to get the right management team in place with the right incentives and the right ways of behaviors.
Speaker 3:But you don't want to change in two years or three years, right? So in every phase there's a certain element which is extremely critical and what's less critical?
Speaker 2:a certain element which is extremely critical and what's less critical. It's interesting to hear how your style and your approach and your focus is very much in harmony with the stage that the business is at in relation to its deal cycle, and actually that's a really interesting perspective for someone that is considering a move into PE. Marrying the two together will be, critical to ensure that your objectives and your own priorities are matching the priorities of the investor.
Speaker 3:Yeah, I think it's very important to figure out.
Speaker 3:PE is a broad definition but every asset can be in a different phase, every industry could be in a different phase, every financial capital market can be in a different phase. So, for example, it's now not easy to IPO in this context. Two years ago, everybody could IPO. So the things are changing over time and you have to figure out what type of person are you. Are you more a person who wants to operate things in a clarity? There are certain situations where there's a clear strategy and they need a CEO, but the road continues.
Speaker 1:Or are you more like hey?
Speaker 3:let's get a new clarity and then to create a bit new momentum. That's a different type of game and nothing is good or bad.
Speaker 2:But these are different games and figure out which environment you fit best I think is important in terms of dkv and that journey that they've been on. I'm already saying there's been several acquisitions that have been made during that time in order to expand that digital portfolio and regional expertise. How have you gone about integrating these acquisitions into the business and what role has that played from an innovation perspective that's been able to keep DKV ahead of the curve.
Speaker 3:When I arrived, the company was almost already 90 years old and had never done any acquisitions. I knew strategically to accelerate our agenda, our geographical footprint, as you described, but also our technology capabilities. We had to move there. Now we've done 15 deals since, but the company mainly organically grew, but it was complementary and we strengthened our capabilities. In terms of how to integrate them, it depends a bit. I think there's no one way to do this. Certain companies, we're very close to our platform. You combine it with your business right, so you integrate it fully.
Speaker 3:On the other hand, you have businesses which you want to buy as a capability. So we bought on technology play and transport management.
Speaker 1:I'm not going to numb you with that, but it's a certain technology play.
Speaker 3:We bought one of the European leaders. We kept it relatively standalone, but with them we developed a new service for our core platform. We leveraged their capabilities. The worst thing would have been to put our own culture, processes, everything on that technology play, because then it would limit it. But for that play we said, okay, we acquire that, keep them relatively standalone, but with that capability these people have already built up for decades. And how do you understand the market? We develop a new service together and there's a spectrum of everything in between. So each of these acquisitions we did, some are fully integrated, some are more standalone, and then, if you integrate there somewhere, more standalone, and then, if you integrate, there are certain things that are prerequisite, like certain reporting certain way you deal with people et cetera.
Speaker 3:So that's kind of what everybody has to do. But in other elements you have to be really smart. What to integrate and not integrate.
Speaker 1:I learned that a lot.
Speaker 3:Also, mckinsey, that you have to be careful for what I call.
Speaker 1:M&A tourism where the mothership who buys?
Speaker 3:something in a great place, just wants to go by and tells how things are working or should work. No, no, no, no, no. So I always make a deal with the management team that we buy. So if you feel you get more stifled instead of helped, you call me. So make sure that the entity that you buy keeps on thriving.
Speaker 2:We see a lot of buy and builds within private equity. We see M&A acting as a key growth lever for a lot of businesses, commonly within private equity, and I guess when done right it works very well, but equally, if not done right it can be quite damaging.
Speaker 3:What I've seen is you need to have a very clear M&A strategy because things come to you and some people openistically react. So you need to understand what you really want to have for the next couple of years to add to your business and what are your criteria. So what is your non-negotiables, for example, what type of multiples you want to pay, what type of quality of the management team? You need to have a couple of views on what your criteria are. I think the other thing you need to have is a very good process how you evaluate and decide these things. So we set up a very efficient, quick process how a pulse gets developed, how decisions are made, how that even gets escalated to a supervisory board and to the PE firm. We do this yes or no very quickly. So you need to build up clarity about the strategy and clarity about the process. I would strongly recommend that.
Speaker 3:And many companies maybe don't do that that often. You need to be, really clear who's internally the owner of the deal, but also to make it a success afterward. And they need to make really clear, if you just discussed about. You can have pretty standalone where you leverage maybe specific capability or specific knowledge to fully integrate into your business, but you need to make aware of all the stakeholders in your company and all the different functions what you expect from that.
Speaker 3:M&A, Because the worst thing is to get stuck in the middle. So a bit integration, but not fully. Then that serves none of these companies. So it's much better to say okay, that's clear. This might stand alone, with some minimum governance around it. That's fully integration, and this is the year and a half or year integration path. Sure, and then we know success or not and who's responsible. So I think that's a logic that needs to get work, and then you need to consistently evaluate how this M&A went.
Speaker 3:So it's always easy to have an investment case, anchor tier et cetera up front. But you need to learn honestly, brutally, is this working, Not working?
Speaker 1:So there's an art to it and a process and how to make M&A work in this context particularly if you want to accelerate M&A, or a company that's never done M&A, so I'll give you one example, if it's helpful, dkv. As I said, 90 years without any M&A but it was an M&A department and I said, okay, we have to do M&A, give have to do M&A, give us a strategy to be developed and I thought how do we get this thing moving so literally?
Speaker 3:in my first month we identified a target. I met the owners on the other side and I said we will close this deal together in four months from now. Pick your agenda, we pick a date and by that date we close it. And they thought these guys are crazy. I was crazy, could?
Speaker 3:never do that, but the date was set we did all the work and the deal was closed. So that gave a lot of trust and muscle in the organization to get deals done. So you need to find also catalysts to get M&A moving. So once you have to make a change you need to get what I call points on the board. M&a is this if you do a very complicated M&A first that you lose or goes off the rails, it's not helpful.
Speaker 1:If you have an M&A agenda of multiple M&As for the next three four years.
Speaker 3:So you need to make sure, as a CEO, that you pick the right one first that you go pretty fast in a professional way and that you make that a success Because that creates muscle. Capacity for change grows. So once you've done one M&A, you learn have you done three? Number six, seven, eight, nine, ten. It becomes even easier. So you need to make sure how you get up the learning curve and the change curve in the organization.
Speaker 1:And I mean it's just one example, but you can take many other areas in the business where you want to change how you create momentum by first step, second step, third step.
Speaker 2:One of the real hot topics in the market for the last definitely 12 months, maybe even longer, has been around AI. I think every business has a different opportunity but also risk factor to AI. How has the emergence of AI impacted DKV and what challenges or opportunities do you think it presents for the business?
Speaker 3:I think you have to be always careful for hypes Always. I've seen so many come and go, and this is an extension of a development that you see in businesses.
Speaker 1:It has to do with digitalization and awareness of the power of data.
Speaker 3:And then, on top of that, you can work with AI tools to get even better insights and make better decisions and create better services for your customers. So we have been on this journey. We said, okay, digitalization is key, and so we have been on this journey, we said, okay, digitalization is key, and we made massive steps along that way, Therefore also data is key, so we set up data in a proper way how to do that get the right team in.
Speaker 1:But then we also saw already, even before AI boom, it happened that these types of tools are relevant.
Speaker 3:So we seeked out one of the key partners at the time, which was Microsoft, and they picked us one of the key partners at the time, which was Microsoft, and they picked us one of the global partners to work with them already, even before Jet CDP became almost mainstream to start working with us and pioneering with us. So we decided, yes, we want to be pioneering. We didn't want to do it for the show for the outside world.
Speaker 1:None of these.
Speaker 3:So it's a different factor. I think you have to do what's really meaningful, so you pick the right partners, you pick the right use cases. You don't do it. For PR to look good, you need to really look with the eye on the ball, do you?
Speaker 1:have all the elements in place.
Speaker 3:Who's my partner If you cannot do it on your own?
Speaker 1:you have the right team that understands this. You have the right priorities.
Speaker 3:And then do we have a real clean roadmap of initiatives instead of just scrambling and doing many things. So it's all about making meaningful steps again. Then AI can be extremely powerful. Ai is relevant in certain specific areas in each company at this stage. How do we deal with that? And how we make that work and how do we measure that? That's helpful.
Speaker 1:And how do we create the environment? From the right data, the right team the right digital environment, that can be helpful. So I think again it's one of those things.
Speaker 3:It's just a development of technology that you have to deal with. What I personally don't think is this massive hype and down, because maybe a year ago people overestimated it. Some people underestimate it now and go no, no, it's relevant, it's important and I think you need to build in your strategic logic and in your initiatives where it makes sense and keep your eyes wide open. Is it working?
Speaker 2:or not?
Speaker 3:And if it's working, how can we scale it up? So I think that that's the attitude we took and that's why we're pretty advanced in what we're doing.
Speaker 2:That perspective is quite refreshing, I think, from the event that we hosted and some of the answers that we received. It was, from what I understood, a topic that many people lacked enough of the understanding of what the potential really is, and that's perhaps where the fear came or the fear of missing out, I should say, because the fear is, if you don't capitalize, someone else will, and that's the biggest risk to any business that you'll lose market share to the next disruptor.
Speaker 3:It's one of the topics you have to deal with as a company?
Speaker 3:Sure, but you need to organize in a proper way that you get some results out of it, For sure, and doing that out of fear or out of panic or out of high emotion is not helpful in a PE context. In a PE context, you want to improve this company in four or five years and with an agenda for the next three, four years. Of course, in most companies there's a data, digital and an AI type of agenda. It would be almost weird not to have that agenda.
Speaker 2:But that's one of the elements of your agenda and how you organize. For that and in terms of your own belief around what's been key to you staying relevant and maintaining success in both competitive but dynamic landscapes, particularly with the demands that a private equity fund has. What do you feel you've been good at in order to stay so relevant across the duration of your career?
Speaker 3:I think every person is different, but I've seen not only for me, but I've seen many other people.
Speaker 1:But I think what is relevant as a leader.
Speaker 3:You are the ultimate 24-7 responsible person to lead this company to a better future, and you need to have a picture about what that better future is. If you don't can articulate in four or five years, success is there and people don't understand that you get wobbly because then you react to AI.
Speaker 1:To a dinner here, to a dinner there, no, no, if that's what we try to achieve.
Speaker 3:You need to keep your eyes open and learn consistently, but not get distracted by minor things. You have to have a course where you want to bring the ship. That's the goal of the captain, I think, if they realize that, as you're ultimately responsible, it's all about a team. So who is the team? And it's a very important question. And so it starts with a management team. Who's part of that? People, as a management team, feel that it's one team or they're just representing their own area in that team.
Speaker 3:No, no, it has to be one team.
Speaker 1:Are people motivated? Do they have enough?
Speaker 3:capabilities? Do they have enough responsibilities? Are they thriving?
Speaker 3:So, if the team thrives, and there's a clear, compelling vision, that's already a way to go. Then you say how do you create an organization and a culture that supports that? You need to have a culture that people want to progress. Progress is happiness, so you need to make sure that people progress, that things are moving. So, for example, in our business, everybody has their top five priorities and they know them from each other. We share them with pride. Every slide, the first slide, I have to my boards. These are the priorities for this year and this is what every slide at first, I have to my boards. These are the priorities for this year and this is what I'm doing and everybody has that, so you create clarity about how everybody is contributing.
Speaker 3:You need to have an organization, you need to have a purpose. If you don't have a clear purpose, from why do we exist as a group of people? What do we want to achieve for society? Then people optimize for themselves. So there are many topics you can bring together, but I think the true north you're ultimately responsible to bring that company to a better future and think about night and day about it and what you need to do for that Learn, bring the best people along. Drive to that direction is absolutely key and therefore you need to learn, you need to improve yourself every day, but that's your ultimate responsibility.
Speaker 2:And do you think that it's always achievable to align what's best for the business as well as what's best for the fund? That's a very good question.
Speaker 3:You need to do what's right for all the key stakeholders for the long term and in principle that is also the right thing for a PE firm if they want to successfully sell a business after four or five years. So you have to have what I call three horizon agenda. There's always a short-term agenda.
Speaker 1:You need to get some improvements right now, Otherwise a PE firm gets nervous.
Speaker 3:But also an organization doesn't see progress. I gave you an example about that M&A deal. But if you don't see shorter-term movement, you have a second horizon the current business for the current three, four, five years. How to improve it and sometimes taking initiatives takes longer time. But you also need to put seeds in the ground for your five, six, seven, eight, how you will grow then and how you make sure this company thrives then I have found, if you become explicit to the PE firm and the deal, partners this is the direction you want to go, these are our KPIs and this is our value creation bridge.
Speaker 3:To get there, that's the plan that we have, then interstitials come and align it up front. If then, for example, ad hoc questions come from a PE firm who reads something in the Financial Times or the Wall Street Journal, or had a body that says, oh, this is important, then you can refer back, but this is our plan.
Speaker 1:Maybe that's the topic, but maybe you should wait for next year about the topic, because this is what we're driving for, so you need to focus on the future where you want to go and get stakeholders behind, if you start focusing only on the PE firm, what they want.
Speaker 3:They have three, four investments to deal with. They maybe had a bad night's sleep or a good night's sleep. You, they have three, four investments to deal with. They maybe had a bad night's sleep or a good night's sleep. You cannot steer a company about what only deal partner makes him or her happy all the time. But you need to take that into account. But you need to have a dialogue about yeah, but for the company, that's the right direction to go.
Speaker 3:So I think sometimes there can be tension. Normally it's not in the start and the middle of a program. It gets more to an exit where I've seen there could be tension. They are roads separate but in the beginning I found people are mostly aligned because you want to create a value, you want to create a much better company in four or five years, because also for the e-firm there's much more value when you sell it. So there should be a good story also for year six, seven, eight, yeah, so, so there's a logic with that. But once you get closer to an exit the company needs to continue with all the stakeholders. Maybe there's a P exit. Derek could have some tension. You need to be very explicit about it, discuss it right and open this.
Speaker 2:It's one of the questions that we're often asked when speaking about an opportunity in a private exit-backed business that is maybe about to go through an exit or has just been acquired, and it's ensuring that the fund is able to confidently instill that buy-in from the CEO and the management team in order to be committed to the cycle. And obviously there are mechanisms that financially incentives people, but I think ethically and from a values perspective, it's important that funds are able to also articulate what their priorities and objectives are in order to keep people like yourself.
Speaker 3:I think it's very important Start a journey with them in the end. Like what success for you as a PE firm in five, six years.
Speaker 1:What?
Speaker 3:type of exit do you envision? Is this an IPO exit, an industry sale? Is it a rollover? Is it selling to another PE or whatever the plan is? Or what do you think is your prioritization of that? Because that determines how you make some moves up front. If you want to do an IPO in four or five years, you need to get a company IPO ready. There's a lot of work to be done for that. You cannot just say half a year before we want to do an IPO. If it's more an industry sale, well, who could be the partners? Exit is, I think, with a PE firm upfront, continuously along the journey. Are we still on that track? Are you guys having a dual track or are you thinking a different track?
Speaker 3:And then you need to have a plan that once you sell it for somebody else, what is the financial plan or strategic?
Speaker 1:plan for the coming years as management.
Speaker 3:The better PE firms. They have a reputation to keep up. If they sell an asset and that asset does well with the next owner, that's beneficial to them in the long run. Because if they sell an asset and it's doing worse than was thought, their reputation and people pay less for these assets of that PE firm down the road. So I think if you have a long-term PE firm that wants to build a real firm and a generation of people and next generation of people internally there is a benefit of saying we need to get the right value.
Speaker 3:You understand me. Of course there's a negotiation element to it. But you cannot dress up the bride to extreme because then the next guy or situation has a problem and it also hurts the PE. So you ought to have a great story and it's a backed up story. That's why I'm investing also in this third horizon. How can you have substantiation, say there's a great plan with a great financial logic for the next four or five years after the exit, and that's true. That's a good plan but not a made-up stuff. But if that's your commitment, I need to invest right now, already in certain initiatives. That's why I'm investing in AI. So if there's a good plan and strong growth and financial prospects, that's the help of everybody. If you milk the company and don't invest and you make up a story, I think for the good PE firms that's not helpful either, right, because that will come out and it hurts their reputation and people down the road will pay less for their assets. So I think that alignment of there should be a good plan going forward as well. How do you do that? I think that's helpful to align and have that dialogue.
Speaker 3:There is a topic always called mind the exit. You have it in the underground. Mind the exit right or mind the step. I have it in the underground. Mind the exit right or mind the step. I think you need to be aware in a PE is a beautiful thing.
Speaker 3:They are in there for several years and there's an exit.
Speaker 1:So what is that exit?
Speaker 3:And when's it likely going to happen? Under what conditions? What do we need? So it's also extremely important to understand what type of return does that PE fund need to have, more or less with that asset? You need to understand that as management. So I'm pretty aware. I ask normally what does your model look like? What was your original scenarios? How were you funded this? What would be your money and money multiple in four or five years with these type of dividends, with this type of exit and this type of exit multiple? When will you be happy? When will you internally be a hero? So you need to understand where you are targeting to it. Sure, you understand what I'm saying? Yeah, so those type of logics, how we get along that road.
Speaker 3:It's a normal dialogue to have If you're unaware what for them successes or their internal models look like in the dark.
Speaker 2:Your book. One of the quotes I quite liked was everybody loves progress, but nobody wants to change. Can you share some of the most impactful strategies that you've seen for transforming a business whilst managing complex stakeholder expectations?
Speaker 1:Oh, again a very good question.
Speaker 3:Covid hit Writing. Such a book was on my bucket list so literally the next day when I could not travel that much anymore, I started to write that book, Got a good partner with Forbes to publish it in the US.
Speaker 1:And.
Speaker 3:I leveraged quite a lot. I looked at all kinds of cases that are available around the world where people really transformed large companies and smaller companies, looked at all kinds of academic data, all kinds of things you could prove and also my own experiences, and I found that almost all the large transformation in case studies found there's a pattern.
Speaker 3:So there are 10, 12 things people normally do to a better and higher degree, and if you skip several of those, these larger transformation where 1,000 people have to move and do something differently and create progress, it gets more complicated.
Speaker 1:I'm not going to numb you with all of them, and let me share a few.
Speaker 3:So we talked about purpose. It's extremely important to have a company that has purpose, and there are four levels of purpose. It could be purpose, was written up by a PR agency and is somewhere as a note mentioned in annual report, but nobody understands it Could be purpose is well known. It's hammered on the wall. People get trained and could be purpose really gives people, energy and direction.
Speaker 3:That's at different levels, so we create OLS and DKV, a purpose that makes sense and people thrive and everybody knows, and it should be something always like what we do for somebody else. It's extremely important as an organization to attract people. So when Steve Jobs came back to Apple to help turn that around, the company was not doing well. It was short for bankruptcy. He had to go to Microsoft to make a deal done all kinds of other things he rationalized the product portfolio.
Speaker 3:But one of the things he did in the background he said I need to spend time every week thinking about the purpose of this company, because it's probably the most important thing.
Speaker 3:And then he figured out something that was profound. He didn't come up with a purpose, but the meaning was around that we empower people's passions, and it's a very different thing. And then, therefore, he decided okay, what does it mean? What are people passionate about Music? People are passionate about music, everybody's passionate about music. The iPod got developed. Next thing what are people passionate about? Pictures? Iphone. That trailed Apple from almost bankruptcy with a market share of, I think, 1% in the PC, or a couple single digit percent points per market share in the computer market, to the most valuable company in the world. I think it's profoundly also driven by having a purpose.
Speaker 3:Second thing is you need to have some fresh perspectives on your business and industry. People have beliefs that are outdated and not working anymore. Give you an example Classical example Netflix. Netflix was a bunch of guys who were pretty upset about returning these DVDs and they have to pay for that. And they went to the biggest DVD player game out there, which was blockbusters, and they tried to get a meeting with the senior team. It was a big tower. They went to the top floor, they got a meeting and they offered why don't you invest a bit in us or buy us and we, as a team, built for you, built for you? We have a future about also streaming logic. And people said these guys are crazy. We believe in our stores. I think six, seven years later, blockbusters was bankrupt. What are you missing? What is your perspective in the industry that you're seeing and not seeing?
Speaker 1:So at.
Speaker 3:DigiV, for example. We saw already six years ago, ev is growing.
Speaker 1:We invested massively in it.
Speaker 3:We're now winning in this game with a very attractive model, but when we started to invest, people thought we were crazy of doing that. What I really like is the CEO of Disney. Inger when doing that. What I really like is the CEO of Disney, inger. When his predecessor stepped away and he was in the running for the top job, he was an internal candidate and people said that he didn't have a chance.
Speaker 3:And then he had some friend over and he said what do you want to do with that company? Give me your priorities. And he mumbled a bit and no, no, give me the four or five priorities. And he wrote them down. He went to the board and said these are my priorities I want to do. I want to become streaming. I want to get new content, the best content in the world. I want to go global. I want to do this.
Speaker 1:And if you look at it, for the next 10 years he kept his priorities and delivered on it and turned Disney around.
Speaker 3:That's what is important to have. If you have, then you need to get your people in place. We talked about earlier. All the transformations start with the right set of people at the top, and then the next layers, et cetera.
Speaker 1:You have the right people with the right capabilities, with the right drive, et cetera Absolutely fundamental.
Speaker 3:That's how Microsoft started turning around with such a. He assessed the. Create a new team. He said what's the capabilities we need? This is the team. Invest it in the team. You need to get your radical principles, which are your values. You need to get straight what do you stand for as a company? Let me give you one example. So, Sappos at the time was a floundering online shoe selling business.
Speaker 1:They found some people and they sat together and said okay, what are we really about?
Speaker 3:about what are our real principles? And it came something around, call it fanatical customer service. It's one of the things they wanted to do. Our warehouse we need to own it. We cannot have a third party because otherwise you cannot deliver quality. We need to move it next to a big airport hub so people can deliver the next day. We need to do all kinds of things. So if a customer calls and the shoe is not in store for us, we refer them to a competitor. So they went really extreme. That company took off without any marketing money almost because of that choice. Once you have a strategy logic, you need to communicate, communicate, communicate consistently that plan. What you cannot do is six months later a new consultant comes with a new idea and you change it. You cannot say, six months, all about AI and then it's all about green and then it's all about no. No, you need to have consistency and most people forget about the communication, communication, communication, communication. And then one of my favorite is Vincent van Gogh.
Speaker 3:The painter said you rather die from passion than from boredom. So all that comes to turn around. You need to find passion. Why do you like this? It's not easy. I mean, what's the passion that drives you? Phil Knight started Nike. He just got a group of people together who loved running and at the time they were crazy because nobody was running on the street at the time. And if you read the insights about how that motivation helped these people to drive hundreds of miles to try to sell a shoe or follow up customers or that passion drove that company, not analytics, but it was that passion drove that company, not analytics, but it was that passion. And I see any great company is also driven by passion for what people want to do Managing the politics better. So we always have stakeholders and we talked a lot about it. I think there's a great example about Instagram when the guys who founded Instagram were bought by Facebook.
Speaker 1:I think they were an outfit of 15 or 13 people.
Speaker 3:The next day they were bought, or a month later they were shipped into the campus of, at the time, facebook, where already 10,000 people were working on a big campus and everything. And these 10,000 people came into it and Facebook had paid a billion for that company and all these people working on the campus thought these people were crazy, stupid people. How can I pay a billion for them? And a lot of startups that were bought by Facebook at the time. They died because they came to this big campus and died. But these people were smarter. I said, okay, how can we do this better? So they got a room somewhere in the middle of the campus and they started to hand out muffins, I think at coffee time, and invited people. They helped people sign up on Facebook. So you see how it worked. They looked at the board and said there was a person in the most senior layer who could be a sponsor of us. They said, okay, what is Zuckerberg's agenda? How can we help?
Speaker 3:So over time, within four, five, six, seven years, instagram grew massively. It became stronger and didn't die because they were facing reality about okay, who's important? What are we going to do? Party, you need to celebrate progress. There are milestones Also. If it not goes well, you have to evaluate and be critical. But once there's a milestone reached, you have to celebrate. For example, in DKV we have now close to a million charge points connected to our network in Europe for EVs.
Speaker 1:When I started I said I want to go to a million.
Speaker 3:Everybody in the company thought I was crazy.
Speaker 3:I think, we had 30,000 at the time, connected Every 100,000, we'd get a big cake. We're going to celebrate. So it took a while. Then we had 100,000, but then faster and faster, right, so you need to celebrate. This is an example, and then maybe a profound one is what I call. It only works and maybe that's why you I think, in my logic, primarily you start with your employees. They spend all their time and life and energy in this company to do something together. So what's in it for them when you transform? How will their world be better? What will they learn? What will they get? How would they feel about that and be serious about that? So, dkv, we have extremely high people engagement scores and rate is very high because we take that seriously. Of course, you need customers. You serve them. So what do you do that the transformation makes?
Speaker 1:their lives better.
Speaker 3:They get better services, better products at a lower price. Or how do they get something If the transformation is only increased prices for them? That's not a good transformation. That's not a transformation right. Only increase prices for them? That's not a good transformation. That's not a transformation right. Then they go down. How do you make sure these customers get better results, easier to deal with, for example, or with a more digital interface, or get better services or whatever the logic is, but they need to get something better out of it.
Speaker 3:You have suppliers In a transformation. If you just squeeze your suppliers at some point, it doesn't matter because they also partner with you, right? So how get they benefits from a transformation? You have a community, so we invest a lot in our community at DKV.
Speaker 3:We think it's very relevant because they provide a lot of infrastructure for us, a lot of where people live and we get our resources from. So what do you do for your community? And then, if you do all those things well, they have your financial investors, then they get a good return. But if you turn this around and you would say, well, I squeeze the customers, I squeeze the suppliers, I squeeze my employees, I don't do what's properly right for my environment, you get some financial results, but that's not real success. And I've learned if you do these things right, the financial success is much bigger, right?
Speaker 3:So that's a long story but I think I give you a couple of feel about the different levers. Having clear purpose makes sense. Having a future plan that people align on makes sense. It's better than not having a plan. Having a plan based on good insights and not somehow ideas or ideas from the past is helpful. Having a good team Everybody knows that if a top team in organization is not working or is political, that goes straight to the organization.
Speaker 3:If they're not priorities and people don't know where to work on, how to contribute, it doesn't make sense. Right? If there's no clear communication about where you're going, it doesn't make sense. If you don't have good values you live by, so you can go through the whole list, if you don't have a good execution rhythm, if you don't celebrate certain moments, if you don't take care of your stakeholders. So I have learned that there is no real shortcut. Now. There are phases in an organization where, for example, you're in real restructuring, like the water is, so financially on the water the company is literally in dire straits. You have to make some drastic measures. But if there is a bit of a base case of I want to create a better company and you have three, four, five years which is the normal term
Speaker 3:and it has to be strength afterwards. Doing the basics right pays off. Not doing the basics right will give pain in your three four. At the moment you want to sell it, then maybe your key employees go or your customers are unhappy and somebody who assesses that business at the time with the dealings will see that they say, okay, your MPS score is going down or your people engagement is low, instead of it goes up and up. So I think if you explain that to a good PE firm and you work together.
Speaker 3:You say we want to create this much better company, Of course, in a sound financial way. You want to make sure EBDA goes up and et cetera. But that's, I think, the logic that makes most sense In my book what I've seen of companies that create real success in transformation.
Speaker 2:Yeah, listen, I don't meet people every day that have written their own books. It's also quite refreshing to see someone that's been able to document some of the things that they've learned over the years and, equally, to meet someone with your success, but someone that's super humble and really down to earth, despite the things that you've achieved and the heights that you've reached despite the things that you've achieved and the heights that you've reached.
Speaker 3:I call it. It's not about reporting up, it's about supporting down right. So what I've seen often in an organization goes wrong when people feel you have to get information up and report up and people want to have bigger offices and bigger corner offices and those type of things. An organization is a group of people that all dedicate their energy to get something happening. The more senior you are, the more you need to be supportive that people have the right circumstances to thrive. It's not that people have the responsibility for you to thrive as leaders. It's the other way around.
Speaker 1:It's how do you create an environment?
Speaker 3:that people can thrive and progress creates happiness. That's, I think, the attitude you need to have, and it's not about the more senior, the more important yeah you have more important decisions to take and more responsibilities, but I strongly believe everybody matters. Without anybody, you cannot succeed. Everybody's important in that context. There's not one person more important. Everybody's important. But everybody has to play their role to be successful.
Speaker 2:What do you think has shaped that ethos for you?
Speaker 3:I guess I come from a hardworking, entrepreneurial background, people who want to really do well. I grew up in a country that's pretty Calvinistic, but I think for me what's more important is if you're really committed and I try to dedicate my career from early on. If a company, a business, thrives, it has a massive impact on society. It doesn't matter how big or small the company is. First, the employees. If people feel they're thriving and developing and can contribute and the company makes sense and is purposeful and we're making progress, they leave with better energy when they go home, to their relationships, to their neighbors, to their community, or they're frustrated because it's political and nothing is confusing and no decisions are made and they get frustrated.
Speaker 1:It's a massive thing your customers.
Speaker 3:you need to solve problems for your customers and make them better, right For your supplies, for your community. Making business organizations thrive is a very noble, extremely important role in society. Be one of the most important roles that we have. Of course, politics and governments create facilities around it, but that's where a lot of people are active and it needs to thrive. How to make that happen? You won't make that happen by big corner offices, hierarchy, long meetings. That's actually moving things backwards. So if you dedicate yourself as a team, it doesn't matter it can be a smaller team, bigger team, senior role, smaller role.
Speaker 3:But if that's what you want to do, yeah, there's some universal principles how to get that done. Creating an environment for us to thrive is a very important one. You feel, if an organization is thriving or not, you feel are people that work there are engaged or not? Did they take care of the stuff in the store? Is so? Then you feel if people are engaged or not, and I think you feel every organization and I think as a leader, you need to make sure that people are engaged. There's a clarity, there's moving forward and things are happening. And then some of the things like how big is the corner office is not important. That's the wrong element and that's why I like PE and that's for people who listen to you now and want to go into PE. Pe values value creation, right Short-term, middle-term, long-term. So those skills are important.