During my visit at United Plantations, Carl Bek-Nielsen, the chief executive director, invited me to his home for dinner. Carl’s brother, Martin, joined us. Martin is Executive Director (Finance and Marketing) at UP. Both their wives joined us for dinner.
At dinner I got the sense that Carl is the decider at UP. But in reality, Carl and Martin lead the company together with their executive team. When the brothers have issues to resolve, they walk to one another’s office. Or they walk one hundred meters to one another’s homes in Jendarata estate in Perak.
On the night I was with the Bek-Nielsen brain trust, the two brothers sat at opposite ends of the dinner table. Their affection for one another was palpable. I saw it in their eye contact. They spent a lot of time looking at each other in the eye. The two brothers also took turns completing each other’s sentences when I asked them about UP.
“If I were to become your successor at UP, what are the most important things I need to know?” I asked two brothers.
“You need to understand the history of the company, how it was built, who are the people involved, and the characteristics of the people who have been a big part of the organization,” Martin told me.
“You also need to spend a lot of time in the operations – the fields, the mills, the refinery. You’ve got to preach the message of the company, and where you want to take the company,” Carl said.
“You need to understand our family values. It’s not just bottom-line. We will always emphasize the environmental and social issues. But if we don’t make money, the business will close, so we need to find a balance,” Martin said.
“That’s why you need to focus on R&D to push the frontiers of knowledge – we always need to develop new agronomic and husbandry and milling practices,” Carl said.
The two brothers built on one another’s thoughts so seamlessly that that they reminded me of the co-pilots of who operated the right and left hemisphere of a Jaeger robot in the summer blockbuster movie, “Pacific Rim.”
During my two days at UP, I spent ninety percent of the time talking to Carl, but I might as well be talking to the two brothers, because all the time, Carl was using the royal “we”, referring to Martin.
“We designed the houses for the staff,” Carl told me. “We worked on this together.”
Carl and Martin have decided they must know their managers and assistant managers by name. They should be able to visit one estate a week.
One difference between UP and larger plantations is its size. UP’s estates cover 40,855 hectares in Malaysia and 10,000 hectares in Indonesia. They have twelve estates in Perak. (Sime Darby Plantation, the world’s largest oil palm company, has a landbank that is about ten times larger).
Although UP’s management is sitting on a massive pile of cash, the company has resisted unfettered growth.
“Isn’t that a bit limiting?” I asked. “Why not expand much faster? After World War II, United Plantations was producing 20 percent of Malaysia’s palm oil. Now, decades later, the company’s land bank is so much smaller compared to the industry’s big players. Have you lost the plot, uhh, so to speak?”
“We can easily grow, but we wouldn’t be able to get to know our people. We want to expand. But we are not a slave to expansion,” Carl said, once again using the royal we.
He paused to think before continuing.
“This is a publicly listed company with 4000-5000 shareholders. But it’s crazy if we bite into something so big that we cannot swallow it. There are some companies that are so big that if the CEO were to visit one estate a week, it’d take years before he came back to the same estate,” Carl said.
“Martin and I say that if we want to shape the direction of the company, we can’t know all 6500 employees. But we have to know the managers and assistants by name – as well as their strengths and their weaknesses,” headed.
That’s when I was struck by another epiphany: now I knew why it took me nearly nine months to set up an interview with Carl. Carl Bek-Nielsen kept on saying he was busy. I assumed he was busy doing deals, meeting investors or flying in a private jet. But he was more likely to be visiting his estates, conducting spot checks on his workers, and mentoring his managers. Or having dinner with his brother and family.
As we ended dinner, I asked the burning question that was always on my mind.
“Why do you go that extra mile to provide so much for your workers?” I said.
“If you provide people the best facilities possible, they can deliver results for you,” Martin said.
“How?” I said.
“It is much easier for our managers to challenge their workers to be more productive if we have provide them everything they need to perform – including shelter, electricity, water, medical care,” Carl said. “They can’t say that their children have fallen sick because the roof was leaking. When you give them the best, you are able to get the best out of them because of their loyalty.”