In 2010 I interviewed Timo Huges, then director of Flora Holland. I am happy to share this old story. It has become part of my book Slangenbezweerders and provides an additional view of the top executive who unexpectedly left the Dutch Railways.
Timo Huges and flower auctions on the cutting edge
He looks young, dynamic, in control. Timo Huges (1965), the highest man of Flora Holland, stands with both feet firmly on the Dutch clay soil. His sharp mind surprises time and again. He seems a capable captain to lead this mega-large Dutch company through the stormy crisis.
'The growers are having a hard time, the water is up to their lips at this time. Flora Holland is still doing well. But that's all there is to it. Our goal for the short term is a reduction of the rates for the growers. As it looks now, a stabilization of the rates will succeed in any case.'
'It has been about a hundred years since Dutch growers united. They were played off against each other by the buyers, in response to which they decided to form a bloc together. Bundling forces was the solution, a cooperative was formed. The first name was “Cooperation based on a well-understood self-interest.” The signal from the grower to the buyers was nothing more than: “Dear trade, if you want to buy from me, you have to go to the collective.” And if you look at Flora Holland now, that ironclad credo still applies every day. The six thousand growers are the owners, the shareholders. At the front are the buyers, about fifteen hundred. They are all SMEs.
Pure entrepreneurs, without support from political The Hague. The auction, with the well-known clock, is the platform to market their products. On the one hand, there is the supply side, on the other hand, the demand side. We facilitate and organize the marketplace where supply and demand meet, based on rules and agreements. I work on that, together with 4,500 people.'
'Flora Holland is the merged organisation of Bloemenveiling Aalsmeer and the old Flora Holland. Every day you see thousands of carts with flowers and plants passing by here, an impressive sight. About twenty million flowers and two million plants per day, and eighty-five percent is for the European market. All those transactions, that is four billion euros in trade per year, are processed here. We also arrange the transport of the trade and the commercial aspect of that clock. We are a service company, the growers are the owners. I think it is a wonderful company. One of the few truly Dutch companies, active in a Dutch sector.'
'Of the six thousand growers, shareholders, ninety percent are still Dutch. But those ten percent foreign growers are enormous companies. A quarter of the supply comes from them. They are mainly flower growers, and for the most part located in Kenya, Ecuador, Ethiopia and Colombia. The growers there have nurseries of sometimes sixty hectares of land. For comparison; in the Netherlands a grower has to make do with a maximum of one hectare. These growers left the Netherlands about fifteen years ago. The wage costs are low in those countries around the equator and the heat and lighting are free. Moreover, the nurseries are located at an altitude of about two kilometers.
In short, perfect climatological and economic conditions. The flowers are flown in from those countries. Nowadays, flying is so controlled that the quality hardly suffers. It was an important point of discussion for a while whether these foreign companies should be admitted to the cooperative. After all, they are foreign companies. Yet we have to, in this era of globalization. We cannot build fences around this.''I was here for a hundred days, the honeymoon period was over in the meantime. From all sides I was told that I now had to “define a strategy.” It seemed nonsense to me, a healthy company does not need to be resuscitated. But in addition to Bloemenveiling Aalsmeer, the company Flora Holland also still existed. The auction market was divided between these two behemoths. Although each in their own way, they did exactly the same thing.
The large growers were shareholders in both, and the large buyers bought their goods at both the Aalsmeer flower auction and Flora Holland. In a concentrated world, that was a curious spectacle. A strange spectacle, also because we are not there for ourselves. It is not about us, after all, we are there for the grower. The process of merging these two giants was a simple decision, but an incredibly complicated operation. I was not looking to lead the new, large company. I would have gladly taken a step back, certainly in the first period. Jacques Teelen, the great man behind the Aalsmeer flower auction, would in my eyes be the perfect strong man for the newly created Flora Holland. But Jacques Teelen withdrew completely after the merger, without scruples by the way. We still meet each other here and there. Fantastic guy.'
'I am an optimistic person by nature. The economy has always had its ups and downs. However, this crisis cannot be compared to previous recessions, because of its quadratic form. The result of the quadratic form, and the speed at which the crisis developed, was that companies slammed on the brakes. To be fair, many collapsed companies had been on the verge of collapse for a long time. Usually because of mismanagement and poor financial policy, and because the supervisors were asleep. The crisis is then used as an excuse for the dramatic bankruptcy. Slamming on the brakes, as we are seeing now, is indeed a good choice. You can hardly do anything other than cut costs and postpone investments. Despite the fact that I am optimistic by nature, I do see that not much more needs to be done. After all, the consumer is leading, a second blow to confidence will hit hard. We are not there yet, so to speak.'
'When I started working at Bloemenveiling Aalsmeer, experts told me that I had made a very good choice. Apart from the fact that this is a Dutch company, it is also a stable sector, I was told. We do not have any payment problems with our debtors. A trader pays immediately after "pressing the button", via a collection system. The growers almost always receive their money very quickly, we pay them weekly. Moreover, as the cheerful ones knew, the flower sector is recession-proof. When the economy is doing badly, people want cheerfulness on the windowsill. It is also an affordable product, a bunch of tulips can always be bought. One day somewhere in October or November 2008, I got the first warning. “Watch out, take your measures.” But there was almost nothing other than slightly lower prices for the growers. But the first week of January 2009 we saw an unprecedented drop in turnover of no less than fifteen percent. That was a shock for the sector and for the grower.
The grower simply needs a certain basic price. For Flora Holland the shock also huge. We had just gone through that huge merger, two times two billion in turnover had been merged, and the two and a half thousand employees were far from used to each other. The turnover of 2008 was all time high, so we lacked a targeted approach to bring the two blood groups together. We lacked the experience to deal with this. This is a service company, partly financed by the commission that we charge on the turnover. If the turnover drops, then the income drops. And there was no other option than to cut costs, and that was a huge mind shift. People here weren't used to something like that. I can tell you that it kept me awake at night.
We took immediate measures, we acted directively. For example, staff parties and Christmas packages were cancelled. That was painful for the employees, they had to say goodbye to a tradition. Incidentally, we did not cross out all the extras. For example, it was a custom for the staff to receive a gross weekly salary as a gift after twelve and a half years of employment. We left that intact, as a gesture of goodwill towards the employees. The directors refused their annual salary increase, as a signal to the employees. It is creaking and groaning, but there is support. I assume that we are reasonably successful. Open communication with the people is important. We have to do it together.'
'The merger has cost a lot of energy. The advantage of a merger is that you can now really implement your future plans, and also accelerate them. An example is the digitalisation drive. Or actually you could call it a visualisation drive. Let me explain; a physical product, a quality product that a flower and a plant simply are, wants to be seen by the buyer. Must be seen even. And the buyer wants to see the product passing by the clock. But actually that is outdated, it can be done perfectly with a visual projection. With a digital image of the flower or the plant. This is called 'image auctioning', and we already partially apply it to some products. It has a lot of advantages. The products do not have to go over the auction floor. The product is bought at the auction, but it does not matter where the product is. That can even be at the grower, in the garden. It benefits the quality of the flower or plant, the auctioning is much faster and it is less complicated. It saves on transport costs, is more environmentally friendly. You can also project additional information, such as specific characteristics. The time is ripe for it, why not? But it is an emotional switch. The dynamics of the auction floor partly disappear. I understand the resistance to that, but you should not hinder improvements.'
'The rose is the mother of all flowers. The auctioning of the rose in Aalsmeer is now only done via image auctioning. That works fantastically, despite the fact that we initially encountered a lot of protest. The grower regularly takes a new photo, but his roses are predictable. Image auctioning really improves the quality of the roses. The tulip, primarily a Dutch product, is a completely different story. I didn't know it at first, but a tulip changes shape after being cut. The tulip is cut on Monday morning, and by the time of the auction on Tuesday, the tulip has already undergone various developments. The tulip continues to grow after being cut, it opens up a bit more, the colour changes. Deeper, sometimes more beautiful. What image do you project then? The image after cutting from the garden? The image just before it goes to auction here? And how do you organise that then? That is technically and logistically almost impossible. The North Holland tulip growers have mobilised against the plans for image auctioning. You could say there is fierce opposition. That is their right. We have not yet reached an agreement with all of us.'
'As a board, you can make all sorts of decisions that you expect to be good for the company. At the speed I am going, I encounter obstacles. As soon as I see those obstacles, there is no longer any question of my decision being good for the company. You can come up with the most beautiful things at the top, but it will only become clear on the work floor whether or not the decision is feasible. The most skilled people are on the work floor, and a few floors above. I am a means, not an end. Flora Holland's motto for 2010 is "Transform". That is a nice idea, but does it come across well on the work floor? Won't they think that the motto is a certificate of incompetence? What I mean by that is that you come up with beautiful things at the top, but let's keep looking at who we are doing all this for. The current era also has something purifying. Yes, purifying is the right word.'
'Entrepreneurs need to consider their decisions in detail during this time of crisis. More detail than before. More carefully too. In my sector, you have to deal with many disciplines. An example? Governments need to provide space for greenhouses, but because of the crisis, they can suddenly decide to give preference to Vinex districts. What I have learned is this: you have to stick to your line. The biggest mistake you can make is to suddenly change course drastically. It is unwise to create even more unrest in turbulent times. If you make mistakes now, it could cost you your head. During a storm, you should not just hoist a spinnaker. You have to stick to your course.'
'A suggestion? Employees should not hide now. We are indeed entering a period in which more unemployment will arise. Dare to continue to come up with initiatives, and in any case do not lose your self-confidence. Basic self-confidence is between your own ears. After all, you are in a place because you are good. We have had ten percent unemployment before and later that also dropped back to five percent. Good times are coming again. For me, it is such that I have more use for everything from my gut feeling than from everything I learned from books. Common sense. I like to compare the current crisis to a vicious dog. I am not afraid of dogs, not at all, but this one turned out not to be trustworthy. Yet real fear is unnecessary. People are traditionally wary of change. You should not give in to that. Never. Show courage. Dare to live.'