How to Radically Create a Happy Company From Scratch
On our way to local Bucket List hero Rene van Loon we pass a newly build Tesla factory. The electrotechnical installations of this giant factory have been constructed partly by Rene’s employees.
Rene founded Van Loon Elektrotechniek some 35 years ago, a company specialized in electrotechnical installations. Earlier this year, Van Loon merged with local competitor Hoppenbrouwers making them employ over 500 installers today.
We meet with Rene in what feels like a cosy living room but what Rene prefers to call the ‘experience area’. It’s a specially designed area within their headquarters where potential clients can discover and experience Van Loon's products to discover what they want for their new building. Rene seems very proud of the space, claiming it to be a unique feature in the industry. We feel directly at ease in the room in which Rene starts sharing his story.
Rene founded the company 35 years ago to chase his dream to be fully autonomous. He succeeds and successfully grows a thriving business. But there is a downside; Rene is so focused on realizing his dreams, that he loses the connection with his employees. He feels like he is flogging a dead horse. At first, he is convinced that he can this by changing the employees, but along the way it turns out he can't. It takes all his energy and leads ultimately to a burn-out. He starts asking himself lots of questions such as: What can I do differently? How does my role influence this situation?
Answering the above questions forces him to consider changing the organization. Soon Rene realizes that if things don't work out properly it is mainly due to his own faults. This realization kicks off a big search, he wants to discover what works best in his organization. Together with the employees, Rene starts a 4-year trajectory that radically changes the organization. The search of Rene is highly inspired by the 'Golden circle' of Simon Sinek (who we will be visiting this month in New York).
Rene is very much aware of the influence he has on the organization: "I define the culture. When I change personally, the rest will change along, and ultimately the culture of the organization will change." That's why in 2012 he gathers all the employees to share his vision and dreams for 2016. He asks his employees to think along in developing those dreams. He wants them to collectively share the organization's dream, and therefore hands his employees the responsibility of defining the dream. It turns out to be hard. Rene: "Giving away power sounds pretty easy but is very hard. I have to constantly tell myself to stay away from making decisions for the employees".
Turning the pyramid around
We are still enjoying our coffee when Rene walks up to a flip-over board and starts drawing like a real professor. He draws two pyramids and explains that he decided to invert the pyramid around. At Van Loon the employees are on top of the pyramid and the leadership is at the bottom. This structure enables his employees to enjoy maximum autonomy. Rene: "This works only when there is a good infrastructure, good use of technology and a clear purpose. You have to be able to tap into the potential of the higher purpose by providing big amounts of autonomy." It turned out to be a brilliant decision. After the change the company is growing over 25% every single year. They report extremely low rates of sick leave and a low employee turnover.
Rene advocates that working in liberated workplaces is the new reality. Rene: "I'm convinced that the typical hierarchical organizations will disappear over time since management layers are nonsense." He envisions that the big solid hierarchical structures will be replaced by flexible structures build up by many fast moving small cells. We like the metaphor Rene is frequently using to describe this transition; "we have to move from one huge ship to a fleet of many small boats." But working in liberated workplaces is not as fun as it sounds. Rene: "The pressure in liberated workplaces is way higher than in traditional organizations. There are no options to hide yourself from your responsibilities. And you can not piggyback on other people's success."
The next destination
Recently Rene took the decision to merge his company with the local competitor on his own. To us this seems a pretty clear example of top-down decision making. Rene admits that it was a sensitive case for himself and his employees. After his final decision was made, it took him three months to clearly explain everyone within the organization about his motives. Rene showed complete transparency and openness about his motives which gave the employees all information to make up their own minds. Most of them understood why Rene acted on his own in this manner.
Van Loon and the local competitor Hoppenbrouwers share the same organizational structure, values and purpose. For Rene this was of utmost importance. Rene: "The fleet gets bigger, there are just more little boats. The purpose is the same, we all sail the same direction". Whether the unique organization of Van Loon will remain, is something only time will tell.
The company next door
We drive back home and discuss the unique aspects of Van Loon Elektrotechniek. Once again, we've seen a great example of a leader that is able to radically change the organization by stepping aside to let the employees step forward. We are, again, inspired by the immense effect this has on the company's success. And we enjoy the fact that, even if they're hard to find, there are organizations close to home that work in a way that is radically challenging the status quo.
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In early 2018 I took on a new challenge. After two years in the popular management world I decided to take a leap into academic life. I started a part-time PhD program in Business at the VU University Amsterdam. Since then I have researched how large organizations (with thousands of employees) can scale and organize without the need for middle management. It’s time to share what we’ve learned.