From the 1st of January, FloraHolland is going to continue with the implementation of FloraHolland 2020 without current CEO Lucas Vos, who’s leaving the organisation. Jack Goossens, chairman of the Supervisory Board, feels confident about the auction’s plans for the future. Although, he admits: “When you start implementing, you see many projects running into the same problems: Royal FloraHolland still isn’t one company.”
It’s four days after the public announcement that Lucas Vos will no longer be CEO of Royal FloraHolland in a couple of months. We’re meeting Jack Goossens, chairman of the Supervisory Board, in the FloraHolland offices in Naaldwijk.
Goossens kicks off by saying that “many people were surprised about Lucas Vos’s departure, which wasn’t really necessary”. He explains that the Supervisory Board – employer of the management – has switched to a new system in which all directors are hired for a fixed, 4-year term. “Vos was still on an old contract, for an indefinite period, but Van Schilfgaarde has a 4-year contract. The Supervisory Board and the directors were meeting on a regular basis. To check how things were going and to talk about how to continue. During one of those meetings last summer, the CEO indicated that he was thinking of leaving FloraHolland.”
Vos’s first four years were all about developing the new strategy: FloraHolland 2020. The coming four years are going to be about the implementation. Vos felt he wouldn’t be as strong a leader in the implementation phase and that it would be better for the auction to look for a CEO whose strengths lie in that particular field.
Since the departure was announced, Goossens has heard all sorts of speculations regarding the reason. Does Vos no longer believe in FloraHolland 2020? Has the love affair between liaison Vos and the members, customers and employees come to an end? According to Goossens, none of this is the case.
People might feel that the captain is abandoning ship?
“I can imagine that that’s how it comes across, but personally, I consider Lucas’s decision a sign of strength. I think it’s an asset if someone knows his own strengths and weaknesses, uses that knowledge to draw conclusions and is able to accept the consequences. Looking around in corporate Holland, there are plenty of examples where this is lacking. We felt that Lucas was an excellent CEO, but if he indicates that he’s no longer the right man in the right place, we’ve got to respect that and find a solution. I’m pleased that with the appointment of Steven [van Schilfgaarde], we’ll have a new CEO who’s ready to focus on the implementation of our strategy. I can see us making great progress with FloraHolland 2020 under his leadership.”
But a good CFO doesn’t necessarily make a good CEO?
“Steven is a totally different person. Lucas is a visionary liaison. Steven is more of a doer. I believe it’s a switch that the company needs and that the entire organisation will benefit from it. Steven has been working with FloraHolland for a year and a half now. Looking at his analyses of the company and the sector, as well as the solutions that he develops and implements, he’s done phenomenal work so far. He is the right man in the right place.”
It seems like there’s been a clear choice for continuity?
“Yes, absolutely. The Supervisory Board feels that this is very important. We have made our plans and now we’re going to implement them. What we need at the moment is stability, security en continuity and Steven can offer that. Of course it’s true that the role of a CEO isn’t the same as that of a CFO, but Steven has done it before.”
Several other executives left the company earlier: Marcel Claessen and Ronald Teerds. What’s wrong?
“Nothing’s wrong. I think it’s quite common these days for executive staff not to stay with one company forever. A certain amount of turnover and renewal is good for an organisation and also for people themselves. Our organisation is currently changing from a traditional company into a more agile company. We’ve got to be able to quickly respond to the needs of our customers and our members. Digitalisation will play an important role in this. At a the strategic level. The digital agenda is going to be determined by strategic choices and vice versa. That’s an interdependence that very few of our people are familiar with. For our management, we sometimes choose people with experience in the field of digitalisation as well as in their professional domain. And other times, our priority is specific industry knowledge. Those are the trade-offs we have to consider each time. FloraHolland is currently going through many changes with regards to the organisation and the management, but it’s not like we’re witnessing some sort of exodus here.”
The implementation of FloraHolland 2020 already started a while ago. Is the departure of the various executives a result of problems with the implementation?
“Absolutely not. The ideas that FloraHolland has, are good. But when you start implementing them, it becomes clear that certain projects come to a halt. My conclusion is that we keep coming back to the same problem: Royal FloraHolland still hasn’t become one company. Our organisation consists of a number of different branches, which all have their own particular way of doing things with regards to some essential elements. Like the two different order delivery forms for Aalsmeer and Naaldwijk. And how clock buyers in Naaldwijk need to push in the numbers, but in Aalsmeer, they need to call them out. Those differences exist at a much deeper level than just at IT level and at the end of the day, they get in the way of a smooth implementation of new processes. That’s a real challenge.”
And how are you going to address that?
“We need to finalise the merger. We’re going to work on aligning the different branches. That’s one of our three main focus points for the coming years. We refer to it as ILB or ‘Integrale Logistieke Besturing’ (Integrated Logistics Control). Our second focus point is the optimisation of our current services for members and customers.”
Could you be more specific about the improvement of your services?
“Our services for members and customers do not suffice. We’re going to try and make the logistics process of clock sales faster. We’re going to invest millions of euros in 2018, in people, trolleys and containers, to improve the day-to-day operations. We’re also going to look at the processes on peak days and see how we can improve those.”
Heavy investments. How does that fit in with the €100 million savings that was planned to achieve better margins for members and customers?
“That 100 million took on a life of its own. When we’re talking about better margins for members and customers, we mean that we’d like to reduce the costs for our members and customers. But that will only be possible after we’ve made a start with ILB. The 100 million was based on certain scenarios and variables, which have changed by now, because the market has changed. It’s a different calculation these days. Anyway, we just need to provide a good service and work as cost efficiently as possible. We need to invest in a good service, rather than count the euros all the time. Eventually, those better margins for growers and buyers will be achieved.”
What’s your third focus point?
“The introduction and expansion of Floriday. We’ll be focusing on both members and customers. We want to make it easy for everyone to manage and access the supply. We’re going to launch the basic version at the Trade Fair in two weeks and gradually expand the system after that. A lesson we learned from the 21st of September [extraordinary AGM] is that we shouldn’t immediately launch a Big Bang. Hence the basic version, so that members and customers can get used to Floriday. The innovation will develop rapidly, though. Floriday is an evolution, but one that’s moving along at full speed. Floriday will have advantages for both members and customers. Members will be able to save time, because they will no longer need to keep track of all sorts of lists and web shops, which are fragmenting the market at the moment. The real-time overview is going to make supply management much simpler. Real-time stock is an important aspect for customers, too. Furthermore, customers will be able to develop their own channels for particular target groups and add them to their Floriday account. It means that customers no longer need to invest in the basic system. FloraHolland does it for them. Customers will be able to focus their investments on sales.”
Blueroots, a project of Dutch Flower Group and FleuraMetz, might become Floriday’s competitor?
“I’m not sure what they’re planning exactly. If I understand correctly, it’s a certain group of customers who want to start something up with a certain group of growers. A perfect example of an initiative that could be embedded in Floriday. Perhaps it’s a result of discontent. The initiators said that processes at FloraHolland are slow and sticky and that the day-to-day performance has been below par. I agree to a certain extent. That’s why we’re investing in people, trolleys and containers. Blueroots might have been born out of fear. The initiators considered their place in the industry and how it’s developing. But fear is a bad counsellor. FloraHolland focuses on supply, now and in the future. What often happens in this phase in other industries, is a battle for the standard. I hope we’ll be able to skip that, because it would save a lot of time and money. I’m appealing for all parties to take on their own responsibilities. We take care of the supply, traders take care of sales. I’d be very happy to sit down and talk with the intitiators.”
What would you talk about?
“I’ve got two questions. I don’t really understand how a second platform, next to Floriday, is going to work and how that can be in the interest of the members and the initiators. Are they going to compete with us or is the idea to strengthen Floriday? Why invest in two platforms? I’d also like to ask them for a clear answer to the question about payment; are they going to ask our members to pay through Blueroots, now or in the future? I think it’s important to avoid some sort of the Greenery scenario. Nobody wants that. I’m appealing to the initiators to invest in their own core competencies, rather than create something that already exists.”
There doesn’t seem to be much of a connection between auction, members, customers and employees. Is that true?
“No, it isn’t. We’ve been saying for years that the industry is going to change. Now that we’ve started changing, we’ve got to learn how to do it together. Of course it’s not all going to go smoothly immediately. But I consider the friction as a symptom of the process. We might be going too far left at times and too far right at other times. But we all know where we’re heading. Nobody questions the need for digitalisation. I’d be worried if there was no friction. The fact that there is friction is a sign that people care – we’ve all got the same goal and we’re trying to reach it together. It’s important to keep things moving along, so we don’t miss the boat. And that goes with trial and error. As far as I can see, we’re all investing heavily in learning from our mistakes. If you consider it like that, we’re not having conflicts, but discussions about the road we need to travel.”
More European consumers, who buy more flowers and plants in 2020. How are you getting on with that second, major ambition of FloraHolland 2020?
“We’re currently focusing on the other part of the strategy: better margins for members and customers. We’re focusing on improving our day-to-day services, ILB and Floriday. Once we’ve got that sorted, we’ll move on to expanding the market.
Is FloraHolland’s desire to be the centre of the global plant and flower trade too ambitious maybe?
“There’s nothing wrong with stating your ambitions, but you’ve got to try and fulfill them one step at the time. That’s why we’re expanding Floriday gradually. We’re providing growers and customers with different features and they will see the ecosystem develop. I can assure you that that ecosystem will get us somewhere nice. There’s nothing wrong with the ambition of being the global leader. If you don’t set yourself a challenge, you’re never going to try.”
