“Bouncing Back from Adversity” Article Series #11: Ronald Willems

Overview

The Covid-19 infection numbers are well-controlled in Singapore now. The Singapore government has announced that the country could move into Phase 3 by end-2020. However, Health Minister Gan Kim Yong also mentioned that Phase 3 could last for a year or more, and it would not be a return to pre-Covid days.

Photo: Eiffel Tower in Paris. Empty streets again. (source)

On the other side of the globe, many European countries (England, Germany, Netherlands, France, Italy, Spain, Portugal…) are moving back into lockdown mode due to the surge in infection numbers. It is rather worrying to read the news as the world continues to struggle through the pandemic.

Yet, businesses need to continue to find new ways of winning and surviving in this crisis. I continue to speak to business leaders and to find inspiration that hopefully will bring hope to others as we fight on!

Introduction

In my eleventh interview, I had the discussion with Ronald Willems, CEO at BEUMER Group Singapore. BEUMER is an international leader in the design and manufacturing of intralogistics systems for convering, loading, palletising, packaging, sortation, and distribution. The company has 4,500 employees worldwide and an annual sales of EUR 950M. Founded in 1935, the company is independent and privately owned by the 3rd generation.  

The interview was conducted face-to-face over a casual lunch on October 1st.  

Here are the excerpts from our interview:

There is an upside in every crisis

Ricky: Hi Ronald, thank you for being available for this interview. It is great that you are available to share some insights with us as your business serve two critical industries: aviation and logistics.

Can you share with us your overall perspective on the Covid-19 pandemic situation?

Ronald: It is without a doubt that it is affecting everybody and it is a global topic. From the Singapore perspective, I see that there is light at the end of the tunnel.

Strict restrictions are paying off. Business wise and for our personal lives, we are hoping that Phase 3 will not take forever to arrive. People are starting to go back to their offices and it is a positive change.

Globally, it really hurts my eyes to see how poorly the global coordination and communication is. There could not be a better example of individualism. Every country is having different measures and having their own specialists. For one country, mask is good and the other one says no good. One says the safe distancing is 1 metre, and the other says 3 metres. I think that the is the main reasons that the pandemic is still having this scale. The perspective is not so good, unless there is a medicine. It is really disappointing to look at the world leaders that they cannot look over their own ego or country. If only the leaders would be more united, this pandemic can be over faster.

On a positive note, I’m convinced that there is an upside in every crisis. We will get over it, it's just a matter of when and how.

Two out of three of businesses were significantly impacted

Ricky: What is the impact for your business?

Ronald: We have been really impacted to a large extend. In our three business segments: airport baggage handling, customer support, and logistics/sortation – the first two were significantly impacted.  

We have contracts that have been suspended or cancelled. 

On the other hand, there is a large upgrading and expansion project for our airport business. We have transferred our staff from customer support to this project. Normally, we would subcontract the work to vendors. Now, we do part of the work by ourselves and we keep our staff busy.  

We have open dialogues with this customer. They are suffering and we are suffering. We try to look for opportunities. With the large upgrading and expansion project, we can limit the damage to our business and we can control the headcount reduction. The support from the government helped us too.  

Photo: an e-commerce warehouse (source)

On the upside, our logistics business is growing. The online ordering / e-commerce is directly linked to our logistics business. It has gone up tremendously – and the retail business will not go back to what it was before.  

The big change in demand for online ordering have put high demand for our logistics business. Companies like DHL and FedEx are expanding their warehouses and distribution sites.  

Unfortunately, the airport business is expected to stay down for 2 to 3 years.  

In overall, it is a good thing that we have a diversified business and more than one business segment. All in all, it is looking not too bad!

We have an extra job to do – “Covid-19”

Ricky: How does it change your supply chain and operations?   

Ronald: We have our manufacturing plants in China and Europe. At the beginning of the crisis, we are impacted because China was closed. We managed to limit the impact and it was not really affecting our supply chain too much. We are still able to deliver according to schedule.  

With the lockdowns (Phase 1 “Circuit Breaker”), it has affected our schedule. We are not able to execute according to the original plan.  

However, with terminals closed now, we can actually perform our projects more efficiently. The original plan was to carry out the upgrading and expansion in short intervals at night. Now, we can actually perform our work faster.  

The situation is still quite unpredictable as majority of our workers live in the dormitories. We had a few times that we have the approval to start work, but we were not able to get people out of the dormitories.  

The worker restrictions in the beginning made it almost impossible for us to carry out any work. Things are starting to go well now.  

Today, we also have an extra job to do – which is to manage Covid-19. Our project managers have lots of extra work and that is creating challenges for the team.  

Ricky: How did your team react to the change?  

Ronald: Communication is key. We used to have alignment meetings every month. Now, we do it on a weekly basis. We have regular townhall meetings and we do it online. We reach out to many people.  

Now that we are getting back to the office, we communicate as clear as possible. We continue to put in a lot of effort in making sure that we are staying close to the staff – that people are not being too concerned or too isolated.  

For managers, everyone needs to have their regular dialogues. We need to follow-up if people have concerns. As we are an European company, we have an open communication culture. If people have concerns, they are not spreading the negative news to their colleagues.  

“We can solve many problems, but we definitely cannot solve problems that we are not aware of.”.  

Ricky: Did you do anything that was very different in this crisis?  

Ronald: Our motto is that we are looking for long-term success and not for the short-term profit. Those are not only words, but our way of working and thinking. These values are infiltrated really well into our organisation – with our suppliers, consultants and customers.  

Long-term thinking is our daily routine. We are not trying to get an extra dollar from our customers. We help to find solutions and we are not just a supplier-customer relationship. Our owner is doing regular video messages to more than 4,500 employees. He assured everyone that the company is healthy and we are looking after our people.  

Ricky: How are your customers reacting in this crisis?  

Ronald: With our biggest customer the partnership has lasted for more than 20 years. The real partnership is tested when it is not going well. We have a good and open dialogue. We acknowledge the fact that we are both in a challenging period. They are sharing their challenges with us and we jointly come up with solutions together.  

This open approach is very important. If they keep their cards close to their chest and we are just being informed, we will end up with a huge challenge that we cannot solve. We really appreciate the dialogues at all levels.  

We have other customers that are in a different situation. Their business is growing. We are helping them out to facilitate this growth.  

Airports will remain in a challenging situation and it is going to take at least another year before travel picks up again. It might take another 3 years before it can reach pre-Covid levels.  

People need to have the confidence to travel again.  

Photo: "Up in the air" movie poster

If you recall the movie “Up in the Air” (starring George Clooney and Anna Kendrick), he is going through the airport as a routine. I do the same when I travel! All this automatic thinking will be gone! We are used to walk through – but now, there will be a new norm for travel.  

People will eventually adapt, as long as there is a common norm.

You should not just be cutting costs, but are willing to invest.

Ricky: Where do you see the opportunities in the current situation?  

Ronald: We have been very busy in the last few years. Everything was growing. Now that business is lower, it is a good time to consider: 1) are we doing things in the smart way? 2) can we be leaner and better?  

It should not be the same old, same old, after this crisis. Processes should improve and products should improve too. This will require true leadership.  

You should not just be cutting costs, but willing to invest where possible. You can grow further than your competition. There will be different requirements in the future and it might create new businesses.  

For example, in airports, it's possible to sanitise luggage. We can create automated solutions so that no one will touch the luggage.  Don’t sit back and wait. Grab the opportunities.  

Don’t sit back and wait. Grab the opportunities.  

BEUMER Group has the benefit that we are not only focusing on growth but in getting better. Our 5-year strategy is running through 2023. We want to be the best, not the biggest. We want to do things better, smarter – not just growing, but also have good quality growth.

Final advice for business leaders

Ricky: What final advice do you have for business leaders?

Ronald: First, identify and focus on the opportunities. Don’t get depressed and distracted by the challenges.

Next, focus on your most important assets, your people. Be clear and open in your communication, and raise your leadership level. True leadership will make a difference.

Finally, help create awareness that we need to chip in to stop this individualisation and having sustainability, especially for leaders. It is very important to preserve our planet. We have the responsibility! The better world starts with you.

Conclusion

It was inspiring lunch discussion with Ronald as he shared his insights in two major industries, aviation and logistics. I agree with him that true leaders will be able to use this crisis to make their organisation and their offerings better. There are opportunities that leaders can seek out for in this crisis. Most importantly, we need to play our part to build a better world after the crisis.  

If you are interested to discuss how to attract and develop the right leaders for your business, drop me a note at [email protected] and we can start a discussion.