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Peter Bakker: Motivate, stimulate and inspire
 Peter Bakker SPECIAL REPORTYOUR SAY
LONDON, England (CNN) -- CNN Financial Editor Todd Benjamin speaks to Peter Bakker, CEO, TNT. The following is a transcript of the interview. Q: Peter, first of all what is your vision for TNT realistically over the next five years? A: Well as you know, we're active in three businesses: The mail; express; logistics. In mail we have a fight on our hands, mail volumes are declining, we need to get the company ready. At the same time the market is opening up so we're trying to become the first European postal operator. In express we are the European leader already, we're trying to expand positions into Asia, China, of course is high on my radar screen. And logistics, yeah, we're number two in the world and that's where we're focusing on sectors, automotives is important for us, and you know, we're going to be one of the world leaders there. Q: What's your biggest concern, regarding business, right now? A: Probably - put aside one or two crises that every company has - it's the battle with fall and declines in the Netherlands. It is always a lot more difficult to manage a company in a declining environment than it is in a growing environment, and mail has people who are more and more into electronic forms of communication, has a declining environment. Q: I want to ask that again - was that an asset or a negative? A: Personally I don't really think much about it in those terms. You know, I was familiar with the company, I knew the challenges that the company had, and I knew what I wanted to do. Being young, of course you know, particularly when you go to places like China, you occasionally get the comment: "Ah, you're so very young," but in the West I don't really think of it as a problem. I think it's a bit of an asset, because the energy level is high, and energy is an important resource these days in doing business. Q: But you obviously were acutely aware of your age, in your first immediate gathering you made your entrance to the music U2 - what sort of statement were you trying to make? A: Well I think every new leader needs a new symbol and you know, I am of the same age as Bono - the singer of U2 - it was a song, these days on the radio, called "A Beautiful Day" and it was, well a good set of results, the first set of results I got to present were good, so it was a beautiful day, and we made the link to my generation of music. Q: What about dealing with older executives - because several are still older than you? A: To me it is not an issue. You know, we're all professionals; we know where we want to take the company. We have a very common view on where it is going, and at the end of the day, sometimes, somebody needs to be the boss and that's me, and so far it hasn't really clashed. Q: Now you're the ripe old age of 43 do you think you're a much better executive now than you were four years ago? A: No, much better is a big word, but you do pick up a lot of experience in a short period, being a CEO. The world is changing, the environment in which listed companies like TNT operate is a harsh one, and so you pick up a lot of experience that way. We've made some changes in our board of management, so I have personally changed the team and of course every change means bringing in new people, but also saying goodbye to some of the sitting people, and those are tough calls, and I guess you become a little bit more mature, once you've done one or two of those. And all that experience together, you know I would say, it probably makes me a better manager. Q: Do you think being a chief executive is lonely? A: More and more yes. I used to hate that concept because I am relatively humble in terms of the position that the CEO has, I don't really believe one individual, even if it's the CEO, makes all the difference. But, again, in today's environment, there's lots of pressure on the company, and the CEO is the face out there who takes the brunt if something is wrong. Q: Well you've been quoted as saying "like it or not, being CEO of a public company these days has a decreasing job life expectancy" -- can you elaborate on that? A: Well there's statistics enough out there, I mean I think there's even a consultant industry by now advising CEOs that the average age in the job is something like two and a half years, and I don't know whether two and a half years is the right number or not, but you know, it's true that there's been quite a turnover of CEOs in recent years, that apparently the average sitting period of these guys is shortening, and that, I guess, puts pressure on individuals. Q: But whom do you blame for that? A: It is not so much a matter of blaming. I think, in all, I think the pressure to perform has gone up. I mean, I came to the office at the end of 2001, the economy started declining at that period, I mean, you know, we came out of a boom period which lasted all the way up to 2001. 2001, 2002, even, 2003 were difficult economic times, so the pressure on companies to perform was higher, while performing became more challenging. Well I guess that has cost some people, caused some people to lose jobs. I think the new corporate government rules is an environment in which you need a certain management style, and maybe some of the sitting people didn't always have it, and I guess those are some of the explanations. Shareholders in general, it's been out there in the U.S. for longer, but particularly in Europe the power of shareholders, what shareholders have to say on who manages the company has increased, and again that puts pressure on people who do not perform. Q: Given your age do you think leadership is something innate or something learnt? A: It's a bit of both. I think you will have to have the core of it inside of yourself. The will to do it, the vision to do it - I don't think there's much you can learn about that, that's in you - but, but the things around it, how do you package it, how do you communicate it, how do you make sure that the vision you have has an impact on people, yeah, that's things where education, training, experience on the job better than any training, by the way, can help. Q: Was there an incident in your childhood, as you were a young man that made you think, I'm a leader? A: No, probably coming back to your question, is it innate, I knew on a very very early age, like when I was 16, I had only one ambition: That is to lead a large company. And don't ask me why, because I couldn't tell you then, I can't tell you now, but it happened. Q: Was there some incident in your childhood that fundamentally ... A: No! I had a very happy childhood thank you! No, no. I guess, the only thing if you go into the psychologies of things, there's always the son/father relationship. And my father was on the board of a listed company at the end of his career, so you know, I had an example looking at him, and maybe I've been racing him all my life, I don't know. Q: What do you think separates a good leader from a great leader? A: I think a great leader is able to not only have a good vision, but also convince his people about the quality of the vision. Motivate, stimulate, inspire the people around him, I think that's the main role you have as a great leader. I mean, there are many people who know what a good strategy is. I mean, it's one thing to write it, it's another thing to inspire your people to make them see it's the right strategy. Q: And how do you inspire those people? Especially when you have 161,000 employees around the world, who most of the time are spending their time in trucks? A: No, well true. No, it becomes more difficult if the company is the size that TNT has become over the years and spread over so many countries as we are. But I actually, personally, spend an enormous amount of time communicating, through sort of a cascaded system. We have an annual meeting, a physical meeting, where 250 people gather. Then I tour the world personally, to 15 or 16 locations. In each of those locations I will meet two hundred, three hundred people again. And then next to that we have, every month, we have chat sessions on the Internet, where five hundred people from all ranks, all countries can join in and talk to me. Through keyboards, not by physically meeting. But, and of course there's all kinds of paper publications, so there's a whole raft of communication and getting out there and listening. Q: But how do you know you are getting honest questions? A: Well we've actually done something, which some people occasionally think I'm a kamikaze pilot. But, on those cascade tours, we go out there and we have a session which is called 'shoot to kill', and that's only in the countries who can handle a bit of direct language, otherwise it is 'burning questions, straight answers', but the 'shoot to kill' questions are, I'm actually standing on a stage. There are 250 people in the room and I spend one and a half hour, two and a half hours, as much time as they like, and they can ask anything from personal questions to business questions - whatever they like. Q: The most personal and the most difficult questions you've ever gotten? A: On the personal side, it was 'how often do I succeed to drop my kids off at school?', because it is well known inside the company that I have an ambition to do that once a week. And then every time there's this smart person in the room, trying to figure out whether I actually make my statistics or not, and occasionally I make it twice a year, so that's always embarrassing. Difficult questions are 'share price has gone down when are you going to resign?', 'you are making a very very good salary, don't you think you make too much money?' and those are difficult questions, because you don't want to go into the obvious, I've had my communication training, and I know the smart answer, you want to be honest about those things as well. Q: So what do you say? A: Well, on salary items I will tell them how the composition is being decided upon, what the process is. I sympathise, that you know, if you want to consider that too much, I can understand it, but at the other end, there's a market and that is what it is. Q: Now, Tortune called TNT one of the top 10 companies to work for in Europe. What do you think is key in motivating employers and making them proud of the company they work for? A: It's been very good for us to be called one of the best companies to work for, because we're a real people based company. It's like you said, 165,000 people - hard to reach out to them, putting pride in people, putting motivation in people comes at different levels. You know, the job has to be good, the salary conditions have to be reasonable, in line with the market, and if possible, better than market. But more and more I believe new elements are being put into it. Employees are consumers of the world. You know, my employees are just ordinary people. We work in our company, we are consumers of the world and people these days, particularly in the western part of the world, do not only think about their salary, they think about the world. They think about hunger in our case, in the world. And they're proud when our company does something about it. They want the company to be responsible about the impact we have on the environment - we drive trucks, we fly planes, what are we doing to minimise the impact of those movements? What are we doing about road safety? And I believe, and that's what we're pushing in as TNT, if we take our responsibility in some of those areas, that will put motivation in people as well. Q: I want to ask you about your association with the United Nations World Food Programme, or WFP, what sparked your interest in fighting world hunger? A: The concept started after September 11th, there was an article in one of the business magazines that wrote about, you know, what caused 9/11 to happen. There was a long story, but it said at one point there is a difference between the haves and the have-nots, in the world, and that difference is so big that some people will be drawn into these sort of fanatic deeds. And the analysis went on, and then at one point it said, 'what are you going to do about it?' so, we started thinking, I started thinking, and we came to the idea, well what could a company like ours actually do about it? And if you look at it, every five seconds somewhere in the world a child dies of hunger, and yet there is enough food in the world to feed everybody, we just cannot get the food to everybody who needs it. That is a logistics problem. So, if you listen to me, I'm telling you we're the best logistics company in the world, if that problem is there in the world, how can I not go out and help? So that was the logic that we developed - it took us a while to develop it, it took us a while to find the world food programme, but we did, and three years ago we started the partnership. Q: And my understanding is: You run your contribution to the World Food Programme like a business? A: We've set it up from the beginning. We differentiate ourselves from just simply giving money to charity. So, we're spending ten million euros a year on our partnership with the World Food Programme. About one million of that is a cash donation. Nine million is us, supporting the World Food Programme with skills, people, or our efforts. And we've said this is not charity, let's run it as a business. Because what we are doing, our logistics skills are trying to help the WFP do a better job in feeding the hungry people of the world. And that is just like helping any of our customers - optimising their logistics operations. So, we've set it up as a business. It reports on a quarterly basis to me. They have a budget, of course they don't have a profit statement, that was not how far we were able to push it, but we do develop something that is called the benefit rate show. So for every euro that we invest in the partnership with WFP the benefit to WFP should be more than five euros. That's the budget for the target for this year. And every year we are trying to find ways to increase that benefit rate chart. Q: Are there risks involved in being so closely identified with a project like this? A: Yeah, there's a couple of risks, I think, which are potentially out there. There's always the risk that the partner that you have selected gets discredited themselves. With the WFP we think that's a manageable risk. They're the largest humanitarian organization in the world. You know, we think we're okay there. I think there's sort of a moral risk. It's, you know, in our history we were active in sports sponsorship. We've stopped all that and we've pushed all that money into this partnership. I don't think it will be very easy to depart from this partnership, because once you start helping fight hunger, as we do, until hunger is no longer part of the world, you can't really stop that fight. Whereas in sport sponsoring, there will always be a next sponsor. And that's a risk that we thought about, but we still feel this is a better place to spend our money. Q: How do you think the program has unified your company? A: That's one of the biggest benefits it has had for us as TNT. We're a company which is active in 200 countries, we have a history of acquisitions, so we, from our backgrounds, are different cultures in different parts of the world. And I would say through this program we have found one goal which unites us all. Because at the end of the day, children dying from hunger, if that can be prevented by applying our skills, or our system, or our people, that is something that everybody will support, and everybody does, around the world, across the visions, across regions. Q: Buy you're also very frustrated, aren't you? A: As you get to know the world in which governments funding un agencies and the whole NGO community, as you get to know that part of the world, it is far less well run as the industrial, or the corporate world is. It's high fragmentation, it's very indecisive at times. It is difficult to make very easy decisions happen, because it is all so fragmented - everybody is trying to be good in his own little corner. Q: Well let me ask you another way: Since you've tackled this problem of world hunger you've also been very frustrated because you see that agencies don't always use their money effectively - is that correct? A: Yeah, well, I'll give you an example. Our logistics engineers have spent eight or nine months recently in south Sudan. We have mapped out the country, we have looked at: Where are roads? Where are rivers? Where are areas which you need to connect through airports and aircraft? Through spending one million dollars on two bridges we could save three hundred thousand dollars a week in moving food over the road rather than doing air droppings. It turns out that spending money on bridges is not inside the charter of our partner and we need another agency, and that agency has no interest to invest that money because the saving is in our partners' budget. So we can't get the budget to build two bridges and save the world a lot of money on a weekly basis. Q: Let me ask you, let's go back to the world you deal with daily, which is TNT. When you're hiring people what do you look for in your key lieutenants? A: Well first and foremost I would say you try to understand what are the values of this person. Does he fit the culture that we have, if you look at the values: teamwork, integrity, those type of words, do I think the person that we're talking to are there? You do look a little bi at the history of a person, but in all honesty I think personality and the fit of personality is more important. Q: And the biggest mistake most CEOs make? A: When times get tough to do everything yourself. I mean, whether it is easy sailing or tough sailing keep relying on your people don't make the mistake of pulling everything onto your own desk. Q: And you obviously love business and what you do, what do you love so much about business? A: Well it's the continuous change, there's always something going on. It's the many people you get to work with, I mean, yeah, I have got so many friends inside this company. Just people that you like working with, you know some people you've been in real crisis situations with, other people in very entrepreneurial, new environments. It's just fun. Every day is new, every day is different, every day is trying to solve problems, and yet not being so busy trying to only do that but also keeping an eye on my next year the year after. Q: The biggest downside of being a chief executive? A: Well, I think being a chief executive in current time and age, of stock listed companies is a lot of time being consumed by things which are very little to do with running the business or building the business for the future, you know? There's so much time going into controls, and all those other type of elements, that's tough. Q: What about life/work balance? You say you're passionate about work. A: That's an impossible combination. I've not cracked it at least. I'm sure there will be CEOs who have done it, but... Q: Do you see that as a flaw in yourself? A: No, I've gotten so used to it, but I don't think in those terms. But, I do have very small kids, and I do think I spend too little time with them, yeah that's for sure. Q: Don't you think you're missing out on a big part of life? A: Yeah, but I see all these, older colleagues of mine being far better granddads than daddies, so you know. I don't know. I do my best. I've given up most of my hobbies as a result of it, so when I'm not working I'm with the kids. Q: You also love U2, what is it about U2 you love so much? A: Well, it's two things. It's first and foremost the music and if you've ever been to a U2 concert you'll be a fan yourself, they're just amazing - the best band in the world. But the reason why I love U2 so much is the singer - a guy called Bono - who's a very famous singer because he's in U2, but he's using his fame to actually, you know, talk to the world about the problems the world is facing. He's really using his skills, just like we are using our logistics skills, to try and make the world a better place. Q: I want to go back to something - what do you think is key in motivating employers or making them proud of the company they work for? A: It's different. Different things. The first thing they need to be comfortable inside their job, they need to feel that the company has a strategy, has a way of working, that you know, is the right one, that you know, faces the challenges. But more and more I think people in the modern world expect the company to also take on its responsibilities for society, whether that is the impact we have on the environment, whether it is what can companies do to contribute to some of the world's problems. And in our experience, and again coming back to this partnership with the world food programme, pride in our people, the engagement of our people has really gone up since we started fighting hunger together with the world food programme. I want to ask you another question, I want to ask you one other question on communication: Do you believe that employers should be able to evaluate their managers anonymously? A: Yes and no. I think the best culture to have is the culture to be so open, that it does not have to be anonymous. But I know that for most arenas in which you would operate that is not something that is automatic. So, a first step then could be anonymous. But I, if I, I want all my direct reports to tell me honestly what I am doing right, but particularly what I am doing wrong. And particularly what I am not doing that makes their life difficult. Because in my mind I have much more opportunity to de-motivate people than I have to motivate them, because I believe, if you find the right people around you, they are intrinsically motivated, I just need to create the environment for that motivation to work for the company. Q: And openness is a big part of it? A: Absolutely. They need to feel that when they talk, I listen, whether it's positive or negative views they want to share with me. And it should not be, I mean that's the flip side of it, if it becomes an environment in which criticism is all they give, without it being constructively and used to make it better, then it's not going to work. But be brutal about the facts but be confident that together you can fix them. Q: You're relatively young now - what do you want your legacy to be? A: That's a difficult question. I don't think much about my legacy. I think that if I ever quit this job, I would hope that employees are proud of this place, proud to work here, proud of what it is. And if I can contribute to that then that's a legacy I would be proud of. 
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