Economie en werk

Wijze woorden van een groot Arubaans ondernemer

Onderstaand college door Eduardo de Veer kan een inspiratie zijn voor mensen die op of met de eilanden zaken (willen) doen. Het bedrijf dat De Veer en zijn medewerkers liet uitgroeien tot de grootste private werkgever van Aruba is een voorbeeld voor velen, zowel binnen als buiten de Cariben.

TOUJOURS PRET

Are you ready to have some fun?

I was asked by our host to deliver a speech about “Challenging leadership to ever increasing goals”. That is the mission!

I prefer to approach today’s topic by selecting and reviewing some effective ways to “motivate and inspire your employees and your organization as a whole with the objective of reaching ever increasing personal and collective goals”.

Let me first set the set the stage for you with some general thoughts:

A very successful Dutch farmer once showed me a bumper sticker that stated “no farmers, no food”. He then told me “no fun, no profit” and I thought to myself, wow, how true that is. The moral of that story is that you must enjoy what you do for a living if you are to be successful. Hold on to that thought and we will talk more about fun and motivation later.

Here is another lesson, this time given to me by my friend, Dr. Osvaldo Anaya.

The Greek Philosopher Socrates debated with his disciples Plato, Thrasymachus and others in 469 BC on the topic of justice, and that justice is nothing but the interest of the stronger. In other words, that “might makes right”. Many still hold that theory to be true today.

President Abraham Lincoln contradicted this theory in 1859 in his “right makes might” speech. Might makes right or right makes might, which is it? I realize that if you have the power you can claim to be right, but, I subscribe to Abraham Lincoln’s thought that ultimate power comes from doing the right thing. More about the ultimate power later.

Here is one more lesson to set the stage for my presentation on leadership, this one is a quote from British Prime Minister Winston Churchill on private enterprise, and it goes like this:

“Some regard private enterprise as if it were a predatory tiger to be shot. Others look upon it as a cow that they can milk. Only a few see free enterprise for what it really is: A robust locomotive pulling a very heavy load.” The load of the economy that is. 

OK are you ready now?

Here we go, sharing with you some of the leadership tips that have worked for me and I am sure are also used by you, perhaps even without you ever realizing it. Let’s just call it a refresher of things we know while placing these in their proper perspective. 

On leadership:

Let’s first agree that there are no leaders without followers and that it starts when you understand that you have to earn the title of “leader” by being respectful, trustworthy, fair and consistent in your approach to your employees. That respect does not come with the appointed title of “boss” and it is certainly not something you can inherit, you must earn it. If it were easy everyone would be a leader but you know how difficult that is, which reminds me of a slogan often used by union leaders to describe a dysfunctional organization. “Too many chiefs and not enough Indians”. Thus, keep your organization flat as a pancake and avoid the usual pyramid.

I have always used the two-handed approach to leadership, one the one hand you must instill high discipline in the organization. Good employees prefer clear and uniform rules to adhere to. They function best when the rules are well known and are implemented fairly and consistently. Employees who do not like or adapt to a structured environment will be pressed out of the organization by their own peers. That is the hard hand of discipline.

On the other hand, you must show compassion, compassion must be deserved, not claimed in order to justify indifference, non-compliance or incompetence. This compassion is the necessary consideration or flexibility by the leader for extenuating circumstances beyond the control of the employee. That is the soft hand of compassion. You have to earn the confidence of your followers so that when you ask them to “follow me”, you already know that they are engaged and that they trust your ability to lead.

When you are known as a tough but fair leader you know that you are on the right track and ready to embark on the journey to the next level.

On business objective:

The objective of an enterprise is to generate a good and sustainable return on the invested capital. To accomplish this objective, we use many management tools, some are more effective than others, but ultimately, it is the composite of all of these management tools, policies, principles and company culture working in sync that create the platform to generate sustainable profits. One such tool, which was popular in the late 1900’s, was the so-called quality management contests to measure compliance against defined quality standards. The Malcom Baldridge Quality Award was probably the most prestigious among these competitions.

The Ritz Carlton Hotel Company was the only company to ever win the Malcom Baldrige quality award twice. So, you may wonder why was the Ritz chain suddenly sold to Marriot if they were supposedly the best. I suggest that the Malcom Baldridge quality award process placed a disproportionate value on guest satisfaction and employee satisfaction and thus making it possible to win the competition without scoring well on sustainable financial performance.

Essential management tools such as human resources, public relations, good governance or “having fun” for that matter —- to name only a few, should not be the core objectives of an organization, even if most experts or consultants may want you to believe that. The core objective must be the long-term sustainability of a financially healthy organization. Without financial stability there is no job security, no customer satisfaction, no dividends and no upward mobility for any of the stakeholders. A marginal enterprise will not have the financial means to sustain service levels and secondary employee benefits. It takes a profitable enterprise to deliver above expectations and make capital investments in order to compete and grow market share. My suggestion is, yes, to seek advice and council from experts, but to not abdicate anything to the ultimate objective of the sustainable financial health of the organization.

 

On Challenging the Experts:

My comments in this regard are focused on a small island economy such as ours and may vary from the classical text book organizational structure.

Years ago, I delivered a speech ending with the difficulty of leading an enterprise on an island like ours. I disagreed with Frank Sinatra’s song, “New York, New York” which closed with “If I can make it there, I can make it anywhere”

Albert Einstein –

 In theory, theory and practice are the same. In practice, they are not

As I said then, in our small island situation – you have to be the chief cook and the bottle washer at the same time, because we cannot afford to have all the specialties in our small organizations and some specialties may not even be available on the Island, which brings me to a long standing debate I have had with one of our expert consultants regarding organizational structures. His point is that a staff positon may never be involved in a line responsibility, for example, that an internal auditor may not have executive authority to order any change in policy, only to enforce compliance. This is theoretically correct but it could be practically wrong.

If you stick to the theory you may be missing out on some great in house talent with a staff positon who can comfortably and effectively handle an additional line responsibility.

This, in my experience, is acceptable, provided you are aware that it is an exception and it should not open the door to arbitrary commingling of line and staff functions. 

On Corporate Citizenship:

In the past, the reference to stakeholders was synonymous to only shareholders and referred to the investors in the risk capital of the company. Today, we realize that there are many stakeholders in a company in addition to the shareholders, the stakeholders in a modern enterprise include the employees, clients, creditors, the economy and the community at large. If we are not sensitive to the need to take them all into account in our business plan we will not reach the true potential of the enterprise, and the leadership will fall short on the required motivation. Remember that as leaders we must build a team, train them, motivate them, guide them, empower them and hold them accountable. 

On Accountability:

Empowerment, or the delegation of authority, is essential to every organization, however, empowerment without accountability could be a formula for disaster. Accountability is something that no one likes, it is the unquestionable requirement for leaders to follow-up and ascertain that their directives are implemented. Or, as Ronald Reagan put it: “Trust but verify”. Accountability should also be the unquestionable requirement of subordinates to render account to their boss on the progress of directives received. If left alone, your subordinate will wait for you, the boss, to ask about the directive, and you will wait for your subordinate to report any progress. If the subordinate is too busy or procrastinates in carrying out the directive it will remain pending and more directives will eventually come their way. Some of these may pile up on a “to do list” with the likelihood that some important maters will be swept under the rug and never be executed. I am sure that you recognize this phenomenon and, this is not the way to motivate and inspire your employees or your organization in reaching ever increasing personal and collective goals. Lack of giving and receiving accountability is one of the biggest risks in any organization and since it does not come easy, we must institutionalize it as an integral part of our “DNA” so that our entire organization knows that this is how we do business on a consistent basis. Let’s be very clear on this matter, a strong leader empowers and delegates but must demand accountability, if you do not, you are abdicating your authority and that is a sign of weakness. 

On building a team:

The practice of “leading by example: places a heavy burden on leaders because it requires that you carry yourself, on and off the job, in a dignified manner. Remember that perception is reality, as incorrect as that may seem and, after all, you represent the entre work force.

Jackie Robinson – I am not concerned with being liked or disliked. I am concerned with being respected.

Strong leaders surround themselves with strong and competent people and I advocate that leaders must be accessible to the work force.

As a leader, you must distinguish yourself, retain authority and credibility not by socializing and drinking frequently with the troops or concerning yourself too much with being liked but rather with being respected.

Paolo Coelho – A mistake repeated more than once is a decision.

Finding the balance between humility on the one hand and determination on the other hand is the constant struggle between the duality of the modest and the fearless. Strong leaders learn to deal with adversity and overcome mistakes. There are risks in every decision but give me a leader that makes 9 decisions per day of which 2 are bad or doubtful and please, do not give me a leader who makes one perfect decision per day, such a leader would have missed out on 7 good decisions.

We learn from these mistakes but what is not acceptable is when we don’t determine the cause of these mistakes and repeat them over and over again. 

On the soft side of the enterprise:

There are two assets in every enterprise which cannot be found on the financial statements. These are human resources and public opinion. We talked earlier about sustainability and about management tools and while these two so called soft assets do not appear on the debit or credit side of your financial statements, they are extremely valuable. It takes years to build these and you could lose them in an instant. I refer to these as the unseen or soft side of the enterprise because one cannot place a monetary value on these as is the case with buildings and machinery. Like a two component glue, these two assets will bond the stakeholders of the enterprise. These will keep your enterprise humming and profitable.

On the ultimate power:

General Douglas MacArthur – A true leader has the confidence to stand alone, the courage to make tough decisions, and the compassion to listen to the needs of others.

It can be a lonely job because “the buck stops here” and remember that you are protected by your reputation as a respectful, trustworthy, fair and consistent leader. You show passion for your cause and resist those who would discourage you. When building your team, don’t surround yourself with people and advisors who always agree, find diversity of opinions and stimulus. However, running a business is not a democracy and while you will get the best performance by leading with a consensus of differing opinions, you must use your executive privilege whenever this is absolutely necessary to accomplish the vision or mission of your enterprise.

I am coming to the end of my speech and I have covered some but certainly not all the topics to accomplish the stated objective for today that would take much more time but I am open for questions after my presentation.

Before closing, here is a bonus topic.

On Fun:

I started with the slogan “No Fun, No Profit” and we reviewed the importance of a healthy, profitable and sustainable enterprise in the interest of all the stakeholders. Please also remember to celebrate success with your employees amidst all of the high discipline you have created. Break the stress with humor and organize social and athletic events. When the work force is proud and happy about their company it will motivate and inspire your employees and your organization as a whole in reaching ever increasing personal and collective goals. 

So……

No farmers – No food

No fun – No profit

I should also say – No profit – No fun

Right makes might

Free enterprise

Too many chiefs – not enough Indians

Frank Sinatra

Socrates

Lincoln

Churchill

Einstein

Ronald Reagan

Jackie Robinson

Paulo Coelho

General Mac Arthur,

It does not get any better.

I’m in very good company, don’t you agree?

But when all is said and done, it’s about delivering results.

“It’s not enough to have a good mind: the main thing is to use it well”

Questions and Answers 

Q: Being leaders in the industry right now you will be confronted with change, especially coming from the technology. How do you deal with that?

A: Some things you do intuitively, some things you do because you are very aware of the need.   I think that in the case of our enterprise, we deal with change intuitively, but if you take a snapshot of MetaCorp over the course of many years you will see the constant change. We centralized, we decentralized, we consolidated, we deconsolidated, we constantly reinvented ourselves.  When we couldn’t grow vertically we grew horizontally. We have been changing and adjusting as a normal course of business, not necessarily because we made a plan but because we were driven by the needs of the times, adjusting to the changing circumstances, adjusting to the size of your market and the composition of the demographics of the market. You ask about technology, well technology is part of change, and you need to go with it and for some of us it is easier than others. In my particular case, I need to surround myself well as I indicated in my presentation. So, while I was growing up there were no Iphones and many other technologies that we take for granted today, but they came about and I learned to work them to the extend necessary while surrounding myself with wiz kids that know how to do it.

Q: What’s the most difficult situation or decision you had to make ever, and what learning did you take from that?

A: Trust me, I’ve been keenly aware of what I am about to tell you now for a long, long time. The most difficult decision I had to make was upon arriving back from University and finding a company that was practically bankrupt, having to terminate people to safe the pieces of the company that could be rescued and to tell the shareholders that they were on a shoestring budget, they didn’t talk to me for a few years. That was very difficult, probably the most difficult thing because these were employees that we had to terminate in the interest of survival and making sure that we spared jobs for as many as we could instead of losing them all.  It was a family business, so telling my own family “you will have to go live together because we can’t afford your lifestyle anymore”.

Q: How does your company deal with the generational gap?

A: I don’t know, we go with the flow. Generational gap, hmmm. One of my kids, present here today, was not getting the final grades for graduation in college because he was too busy partying, told me “Dad you don’t understand, It is not the same as it used to be when you were in college”. I replied, “I’m going to show you that it is exactly the same as it was”, so I went with him to his school to talk to his dean. I had already prepared myself with the curriculum and I knew the courses that he had taken and the courses that were available to him. Eddie do you remember this? So we went to the dean and my first question was “I have selected some courses for my son, he needs to graduate”. He had completed the full curriculum, but he needed to bump his score, his average grade, so I selected four courses for my son and I asked the dean if he could tell me if it was the best selection of courses and professors to accomplish the mission. He said to me “I cannot help you with the professors, but if you tell me which period you want to select the class, I can tell you if it is the right period or not”. A good way of getting around the question. So I selected some very easy courses for Eddie and he pulled up his average grade  and graduated.  Well, is it the same or not? The generational gap… ahh I don’t know, If you are flexible and if you have an open mind and you are willing to listen and realize that you  need to adjust with changing circumstances it’s the same as the previous question, you need to go with it.

Q: Mi ta prefer di papia Papiamento paso tin un ex minister cu’n ta muchu contento si nos papia Hulandes of Ingles den nos compania of den nos systema na Aruba kinan. Mi kier a puntra Mr. de Veer, ki Mr. de Veer su opinion ta con pa deal cu e sindicatonan, si Mr. de Veer ta di opinion cu mester tin un sindicato den un compania of no?

A: Tin un politico akiden? Should I answer in Papiamento or in English? English, okay. The question is, in a nutshell, do I agree that an enterprise needs a labor union? I have known this answer for a long, long time and my answer is YES…… if the enterprise deserves a union it should have a union. For myself I consider it a personal failure if I am unable to deal with the necessities, the needs, and the sentiments of the people working for our enterprise. I need to be not one step ahead, I need to be ten steps ahead, I need to make sure I understand what is happening in the community, in the labor force, I need to understand the labor laws, I need to understand the needs of our employees. Those are the people who make our enterprise hummm, those are the people that make our enterprise profitable, and I need to be very concerned about that. Those are the most important assets of the enterprise. While I say yes to your question, you need a labor union, I also qualify it by saying, if you deserve it, because sometimes managers are too busy dealing with numbers and statistics, with the hard side of the business and are not paying attention to the soft side of the business. In such a case you may need someone to come in from the outside and help you in dealing with issues that have to do with your workforce. I put the soft side ahead of the hard side because I think that one of the management tools that I mentioned earlier in my presentation to you, there are many things you do in business and they should all be in sync to accomplish the ultimate objective of creating a sustainable enterprise. I am not embarrassed to tell you that sustainable enterprise means that you need to be profitable. If the people working for us are going to help us make it profitable then we are on the right track and I have made it my business to be the union leader and I hope that the example will be followed because that means we are dealing with the needs of the employees. 

Q: You are a very much respected business man and we all look up to you for what you have accomplished, but my question is: What moment in your life did you realize that Aruba was too small for you and you decided that you have to expand and go internationally? How was this transition actually and still having your roots in Aruba and having your main business here, your startup business here, what was the moment you decided ‘okay this is the moment to make the right step and to go internationally?

A: Six months after I graduated from college. My intention was to continue in the US and work but my family asked me to stay here and of course I felt very proud to able to do that. I did struggled with the idea of continuing to get further education but I started working and after that I never thought about that question again. That it happened that we expand beyond the geographic boundaries of Aruba was because of relationships, people that came in contact with us and felt that we could be of service to them somewhere else. Like in the particular case of Venezuela, we were approached at one time by General Electric of Venezuela with a problem. They had a big problem of getting their raw materials from US in containers discharged in Venezuela because the ports of La Guaira and Puerto Cabello were congested. Ships were waiting outside to be discharged and once discharged the cargo was waiting for weeks and weeks in the port to be dispatched. The request was ‘can we get cargo from the US to Aruba and from Aruba to Venezuela in Punto Fijo?’.  I don’t usually say no before I check it out, so I checked it out and we could take railroad containers through an interchange with a couple of ocean going lines from Miami to Aruba, discharge them here in transit, put them on the ferry that was operating at the time and discharging them in Punto Fijo. We setup customs brokers in Punto Fijo, we moved equipment and manpower to Punto Fijo, established a corporation there and we started. This activity lasted for three or four years while the congestion lasted, we were moving containers like crazy to Punto Fijo and from Punto Fijo on to Valencia and Caracas. We found cargo coming back for export, so it was a very profitable activity going against the grain. This was not the normal way of moving cargo, but the normal way, was congested. Then we were approached some years later by a company out of Rotterdam, SSM Coal. The request was, after we had finished clearing up a pitch field here on the North Coast, to help them move coal from Colombia over the border to Venezuela in transit to Lake Maracaibo and from there on Ocean going vessels to Europe and the US. They knew it was possible but they just couldn’t make it happen. It was a cultural shock that prevented them, in their Dutch logic of doing business they could not understand why it was not possible. We embarked on the mission to find reasons why it could be done and, indeed, it was legally possible, everything was provided for in the law. But since it was never done before, no one was willing to sign for approval of the operation, not on the Colombian side, not on the Venezuelan side, no minister, no one, no authority, no custom, nobody was willing to say “I agree with this operation”. So our recommendation to SSM Coal was ‘let’s load 600 tons on big trucks and show up with the documents on the Colombian border, it took two to three days before they scrambled and figured out that they couldn’t stop us. And we crossed, we were stopped again on the Venezuelan side. Everybody calling back and forth to Caracas, finally they agreed everything was legal and they let them go. Then we arrived in Maracaibo, customs was having a nervous breakdown because they did not know what to do with this stuff being piled up in our port. The operation continued for two months and we got the first ship loaded with 60.000 tons. Subsequent to that we expanded with partners, at one time with Chevron when we operated a coal mine company in Venezuela and we were doing about 1.5 million ton of coal per year. Eventually we sold when the timing was right for us to sell. We are not involved in that anymore. Yes, things like that happened, not because we went looking for them but because we were approached by people who knew us and felt that we could be of service to them. Same thing in Curacao, our friend Freddy Berends approached us about doing a shopping mall with him, and we turned his offer down, there was not enough critical mass in his project and we didn’t think it could work.  We did make business plan for him, but he could not pull it off. Later on he called me again and he said “you know, my partners and I can’t pull it and the project is going into chapter 11”, can you take it over he asked.  We agreed to take it over if the government of Curacao would expand the area and the destination of the area to include a hotel, shopping mall and casino which today is Renaissance Curacao. Same thing in Bonaire, we operated in Bonaire for Chicago Bridge and Iron Works. We hauled  thousands of tons of steel plates from Kralendijk to BOPEC. But all of these ventures were on invitation, we did the pioneering work and that was really great, but it was all on invitation.

Thank you!

(PWC masterclass leadership 2017; 2 november 2017; door Eduardo de Veer)

Eduardo de Veer eind vorig jaar te gast bij conservator Valika Smeulders in het Rijksmuseum

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