Case Study: Dutch Marine Ingenuity

Van Oord: Dutch Marine Ingenuity

The key factors in this case study are strong leadership and entrepreneurship, practical vision, innovative drive, operational excellence, can do mentality, window of opportunity.

In an era dominated by multinational corporations, family-owned businesses find it increasingly hard to compete at a global level. Yet the Dutch dredging and marine engineering business Van Oord has managed to survive and prosper after expanding its operations from the Netherlands throughout the world. It has achieved this by a policy of judicious mergers, entrepreneurial ingenuity, technical innovation, long-term planning, and a deep involvement by successive generations of the Van Oord family.

Source: Jac. G. (Koos) van Oord, Robert Low, and Johanna Noom, https://archive.org/details/Breakthrough2180910/page/n151/mode/2up
This work is in the Public Domain.

Introduction

The beaches of the Maldives' many islands make the Indian Ocean archipelago a popular luxury tourist destination, but life in the capital, Male, isn't always as agreeable for its 130,000 residents. Male was running out of space for the new homes and facilities that the increasing number of people flocking to live or work there needed. The solution was to expand the Maldives' land mass by enlarging four of its islands, a difficult task in an environmentally sensitive area full of coral reefs.

The government called in the Dutch marine construction company Van Oord, which started the job in 2015 and completed it in little over a year. Part of the project involved removing the valuable coral and relocating it elsewhere, working throughout with a local NGO, Save the Beach, and other experts. All the rock used to replace the coral, and all the equipment used to do the work, had to be brought in from overseas: a typical example of marine ingenuity.

Such a complicated project is a typical example of work undertaken by Van Oord, which specializes in dredging and marine construction, oil and gas infrastructure, and offshore wind projects. It is one of the world's largest marine engineering companies, employing 4,500 people working on projects all around the world. Yet it is still a family-run business and intends to remain so. In 2017, Van Oord was involved in 180 projects in 42 countries. The coral relocation project in the Maldives is a good example of a technically complex project that shows the company's firm social involvement.

Other major Van Oord international projects included widening access to Rio de Janeiro's harbor so that it can accommodate the new generation of bulk carriers and supertankers; the Gemini Offshore Wind Park off the Dutch coast, consisting of 150 Siemens wind turbines providing energy for 750,000 people, which came fully into operation in May 2017; the Burbo Bank wind farm installation in the Irish Sea eight kilometers off Liverpool; in Kazakhstan, dredging a 68-kilometer-long channel to the port of Prorva, providing access to new oil and gas fields essential to the country's economic development; oil and gas-related offshore activities in Egypt; extensive dredging operations in Kuwait and Dubai; a large land reclamation project to expand the port of Kaohsiung, Taiwan; dredging operations in Indonesia and Australia; a new container terminal at Moin, Costa Rica which, like the Maldives project, involved delicate environmental issues; and even stabilizing the wreck of a sunken Second World War German submarine lying on the sea bed at a depth of 160 meters off the Norwegian cost to prevent its load of toxic mercury from escaping into the sea.

In the Netherlands, some of Van Oord's recent projects include the Rotterdam port extension project Maasvlakte 2 to safeguard the city's position as the most important port in Europe; dredging 600,000m³ of sand as part of the preparatory work for construction of the world's largest sea lock at Ijmuiden which is described as "a new front door" for Amsterdam and enables it to receive the new generation of large seagoing ships; a similar job for the Port of Rotterdam with the Breeddiep Channel Widening Project; and the creation of an artificial peninsula called the "sand motor" near The Hague for preventative natural coastal protection, allowing sand to spread along the coast by wind and water.

With this innovative pilot project, the Netherlands continues to set the standard in marine management by working with, instead of against, the water. Another innovative coastal defense initiative was the Hondsbossche and Pettemer Sea Defense project - the seaward extension of the beach and the construction of a dyke in a dune in front of the dyke between Camperduin and Petten, which increased the Netherlands' land mass by the equivalent of 400 football fields.

In 2017, Van Oord had a turnover of €1.5 billion and recorded a net profit of €78 million.

Vision

What is the vision that enabled Van Oord to remain a private, family-owned company in the 150 years of its existence during which it grew from a small Dutch business into a successful international operation with a turnover of more than 1.5 billion euros a year? According to Koos van Oord, CEO from 1995 to 2008 - when he handed over to his cousin Pieter - and still an influential voice as a member of the Supervisory Board and Chairman of the family holding company, its driving force is the Van Oord family's entrepreneurial spirit.

"It is a combination of wanting to be your own boss, shaping your own destiny, the desire to go beyond traditional boundaries, to draw up your own plans in a field you love and you are passionate about. Then you must have a firm dose of perseverance, a talent for the field in which you work, and a family that supports you.

"As a company we are used to taking major risks, for example when we went into offshore wind power in the Netherlands. When we started with these activities in 2002, the market was limited. Was that move thought through? No. Was that all planned? Barely. But it was entrepreneurship, seeing opportunities that drove us to enter that market. We originate from the Biesbosch region, an area where land and water meet. Many entrepreneurs come from there. So it's also a bit in our genes.

"Our founding father had a vision, but not a kind of grand vision from which all the other decisions developed logically. Without a vision you cannot be an entrepreneur but I think the entrepreneurial drive was more important for our family than the vision. The vision came along the way. To stay ahead and remain competitive, you need to think about new opportunities all the time. If I had asked my father, who ran the business earlier on, 'Dad, have you ever in your life been innovative?' he would have said, 'Help me, can you explain that word? What are we talking about?

"But was he innovative? Yes, by asking questions like: how do we avoid becoming too dependent on one market? Should we broaden our activity base? How do we as a company stay on top of events? How do we attract good people? Those kinds of questions determined his direction step by step".

The company was founded by Koos's great-grandfather Govert van Oord in 1868. He set up his own business, selling wood and reed products grown in the marshy land of the Biesbosch. He proved to be a talented, hard-working, and original entrepreneur who liked taking risks, the kind of qualities that have characterized the Van Oords ever since.

By 1948, the company had split into three competing family businesses, all active in the field of marine contracting. One was established in the city of Utrecht. It was Van Oord Utrecht that was the basis of today's successful construction company. It was owned and managed by Jac. G. Van Oord and his sons Goof and Jan (who were later joined by their younger brothers Koos and Andries). Jac. G. Van Oord had a vision: to develop the company by expanding it into a broad spectrum of marine-related activities. It was well-positioned to take advantage of the Netherlands' economic expansion after the Second World War along with most of Western Europe.

The company benefited from winning projects to replace the infrastructure destroyed or damaged during the war, and after that from the many other projects needed to fuel the country's steady economic development in the 1950s and 1960s. Projects included the expansion of the Port of Rotterdam, building canals such as the Scheldt-Rhine connection and the Amsterdam-Rhine canal, and the development of new industrial estates such as the Sloe industrial area in the province of Zeeland. The Netherlands' unique geographical situation also played a major role.

Van Oord was heavily involved in a number of projects that were part of the Delta Works (Deltawerken) carried out after the flooding in 1953 in which nearly 1,600 people lost their lives. The Delta Works were a series of construction projects in the south-west of the Netherlands aimed at shortening the primary seawall that defended the land against the sea by 700 km and intended to protect a large area of land around the Rhine-Meuse-Scheldt delta from the sea to prevent the disastrous consequences of future storm surges.

The massive challenges and size of the Delta Works projects turned out to be too large for one individual company. So in 1959 a new company called Aannemers Combinatie Zinkwerken [ACZ] was established to combine the expertise of its four shareholders, all companies active in the field of marine activities. Van Oord Utrecht was one of them. Because of their specific knowledge and experience, all four companies jointly developed many new innovative working methods such as machine manufacturing of subsea concrete protection mattresses. The collaboration proved to be a success.

It participated in the construction of a number of dykes and barriers culminating in the famous Eastern Scheldt Storm Surge Barrier (Oosterscheldekering), the largest and last of 13 ambitious projects which marked the completion of the Delta Works in 1986. This cutting-edge engineering and construction project involved closing off the Oosterschelde river by a dam and a barrier. A four-kilometre section in the barrier has huge sluice gates, which are normally open but can be closed in adverse weather. This complex solution was chosen to maintain the saline condition of the ecological environment in the Oosterschelde. The influx of salt water and the tides in the Oosterschelde national park have thus been retained, though restricted.

As a result of the Delta Works and the qualified staff Van Oord developed over time, the company gained a vast amount of experience in handling big, complex marine projects. This was the driving force for developing into a leading international business.

Van Oord did not get involved in the dredging business until 1953: it did so to avoid being too dependent on other companies for the dredging work that was crucial for the building of marine-related projects. It started by buying a 27-year-old dredging vessel, the Westerschelde, after which it bought a second dredger, the Waddenzee. Van Oord adapted it for its own purposes. In 1958 the company built a third vessel, the Oosterschelde, in its own yard. It was still a small fleet by Dutch standards, but Van Oord was on its way.

Breakthrough

Van Oord's dredging breakthrough came with the widening and deepening of the Terneuzen Canal in 1963. The project seemed too big for the firm but it would last long enough for Van Oord to build a new ship during its execution. The family took the risk and Van Oord won the contract with the lowest tender bid. It was three times the size of any project Van Oord had hitherto won, and it provided the impetus to order a new cutter suction dredger, the Utrecht, which was built at the Verolme yard in Heusden. In 1964, the firm was awarded a large contract by the Ministry of Public Works for the construction of the connecting roads on the south side of the Benelux Tunnel in Pernis. Again, it meant investment in new vessels - a dredger and four large barges - further increasing the size of the company's fleet. By 2017, Van Oord had amassed a fleet of more than 100 vessels for its dredging, offshore oil and gas, and offshore wind activities.

Concept

By the mid-1960s Van Oord Utrecht had developed into a company with a turnover of approximately €15 million, 400 employees and a wide range of activities: coastal and river bank protection works, dredging, and earthmoving works. But in the late 1960s the growth of the marine construction market in the Netherlands slowed considerably. The company was faced with a choice: should it stay in the Netherlands and try to expand its domestic activities, or should it seek to conquer new markets abroad? And if the latter, what were the risks, and what investment would be involved? Could the company do it on its own?

Jac. G. had died in 1966 and the company was now run by his sons Goof and Jan. Goof was a strong proponent of expansion abroad, while Jan advocated staying in the Netherlands and growing the company with associated activities such as road building, concrete works, piling, etc. He believed expanding abroad was too risky and the company might be forced to give up its independence, maintaining that independence was a prerequisite for the whole family. During this period several major Dutch construction companies sounded out the brothers about their willingness to sell the company. They rejected all advances. Not so their cousins and rivals at Van Oord Werkendam who sold out to the Hollandsche Beton Groep (HBG) in 1971.

Strategy

After much deliberation, Goof's strategy was adopted and the company expanded overseas, at first to Belgium, Germany, France, and Spain, and later outside Europe. Another key part of the strategy for conquering new markets was to find partners and so increase its knowledge and equipment base by working together. "With the hindsight of today," says Koos van Oord, "long-term business partners have played a crucial role in the development of our company. We have always been keen to invest in good long-lasting working relationships with our business partners. They have been instrumental in our growth".

One by one, the shareholders in ACZ sold their stakes to their partners so that in 1973 Van Oord Utrecht became the sole owner. But the family's ambition to become an international dredging contractor was seriously hindered by two circumstances: first, it lacked the capital to invest in seagoing equipment, and second, it did not understand how the world outside Europe worked. Hence the company decided in 1979 to join forces with the Rotterdam shipping company Phs. Van Ommeren. On a 50/50 basis they established Dredging VO2 to jointly enter the trailing suction hopper dredging market. This collaboration also proved to be successful and was a decisive factor in the further worldwide growth of Van Oord. In 1983, when Phs. Van Ommeren restructured its activities, Van Oord Utrecht bought its share of VO2.

In the 1970s Van Oord benefited from the boom in the Middle East, where it was involved in the reclamation works for the new port, industrial and urban area of Jubail, Saudi Arabia. But this turned out to be a double-edged sword: when a fall in oil prices in the 1980s led to a global recession, the major oil-exporting countries halted such projects. Meanwhile, dredging contractors like Van Oord had invested large sums in new equipment. A shake-out in the industry was inevitable. In the late 1980s a number of smaller family dredging companies closed down or were taken over by larger companies. It was a huge challenge for Van Oord, at that stage still one of the smaller international dredging companies. The family was determined to remain independent, but was the company big enough to survive? By now, Koos van Oord Sr. - one of the younger brothers - was in charge: he explored the possibility of a merger with other dredging companies but to no avail. The solution he arrived at was to merge the two operating companies Van Oord Utrecht and ACZ into one company called Van Oord ACZ. This took place in 1990.

At the same time, the risks of working overseas became apparent during the Sentosa Island project that the Singapore government was developing as a holiday resort and in which Van Oord was heavily involved. Van Oord had been keen on participating in this project in the hope of raising its international profile. Serious problems were uncovered in its design and execution, forcing the company to suspend operations. In Kuwait another problem appeared without warning when on 2 August 1990 the Iraqis invaded the country. Several Van Oord employees were in Kuwait at the time for the construction of a port. All international flights were canceled and telephone lines were down. After repeated attempts to get out of the country, they finally succeeded after five weeks.

The setbacks in Singapore and Kuwait, on top of the generally depressed market situation, meant that Van Oord had to pull out of a planned takeover of the German dredging firm Broekhoven from its parent company Hochtief. Fortunately Van Oord's financial position was strong enough to withstand these shocks and enabled the company to survive and eventually prosper again as an independent, family-owned entity. But it was a difficult period in its existence.

Things improved in the 1990s, with Van Oord ACZ's involvement in a number of Asian countries, for example in Hong Kong for the construction of Chek Lap Kok (the new Hong Kong airport), the connecting road projects to Kowloon and Hong Kong Island, and huge reclamation developments in Singapore to extend the land base of the city. Then, out of the blue, projects in Dubai surfaced. This came at an unexpected but crucial moment for Van Oord as the large reclamation projects in Singapore had come to a standstill because of the "sand war" between Singapore and its neighbors Malaysia and Indonesia.

At the start of the twenty-first century Dubai's ruler Sheik Mohammed bin Rashid Al Maktoum presented his masterplan. Given the country's modest gas and oil reserves, the sheik gradually developed a grand strategy for Dubai - its future would lie in service and tourism. To make the country attractive to investors, substantial investments were made in infrastructure, accommodation, and iconic buildings.

However, the sheik's greatest dream, developed in only a few years, was the construction of a series of islands resembling palm trees by using sand dredged from the sea bottom. They would give Dubai a drastically different view, even from space. In less than a decade, Dubai achieved the ultimate in city rebranding. Because of Van Oord ACZ's major role in a number of Dubai's leading projects, the company benefited greatly from the country's skyrocketing ambition.

It all started for Van Oord ACZ with the construction of the Palm Jumeirah island. The project was awarded to Van Oord for two reasons: the innovative design of palm and crescent, and the deployment of dredging equipment that traditionally had not worked in the Middle East. This resulted in substantial cost savings. The successful completion of this project led to even bigger projects: The World and Palm Deira. The World comprised a series of small islands shaped in the form of countries and continents which, seen from the sky, looked like the world. These new islands were 10 times larger than Palm Jumeirah, costing €2.5 billion, and it was the largest land reclamation project ever in dredging history awarded to a single company.

In 2003 Van Oord ACZ merged with a much larger company, Ballast Ham Dredging (BHD). The main reason for this expansion was that the ever-increasing size of projects such as Dubai required a much stronger and bigger company in terms of staff, equipment and knowledge. Van Oord ACZ had an 8 percent share of the top lead dredging and marine construction market and considered itself too small in view of the latest developments. Although BHD had a 22 percent market share, the new, enlarged company bore the name of Van Oord.

Unprecedented Quantities of Sand and Rock

• Paris' Eiffel Tower is 317 meters tall, New York's Empire State Building is 381 meters tall and Kuala Lumpur's Petronas Twin Towers are 414 meters tall. At 828 meters tall, Dubai's Burj Khalifa is the world's tallest building.
• Here, Van Oord's total sand production during the years they were active in Dubai is compared with the volume of Egypt's Great Pyramid. The Great Pyramid would be dwarfed by the imaginary pyramid that could be built with all the sand they dredged and handled during the Dubai Decade, which would tower over even the world's tallest building.
• It is difficult for most people to imagine what a billion cubic meters would really look like, or what a weekly production rate of 500,000 tonnes really means. To make this a bit easier to imagine: the total quantities of sand and rock that Van Oord used to build Palm Jumeirah, The World, Deira Corniche, and all of the other projects it constructed in Dubai would build a pyramid so large that it could house all of the largest structures in the world.
• All of the sand that Van Oord supplied in Dubai for the construction of the various projects would build a pyramid 910 meters tall on a square base measuring 1,818 meters on each side.
• All of the rock that Van Oord transported and installed in Dubai would build a pyramid 323 meters tall on a square base measuring 646 meters on each side. For comparison purposes: The Great Pyramid is 147 meters tall on a square base measuring 230 meters on each side, and its volume is approximately 2.5 million cubic meters.

Figure 4: Reclamation Works in Dubai 2

The new firm benefited greatly from the increasing number of projects in Dubai until the global financial crisis struck in 2008. At that time the Dubai projects accounted for a €500 million annual turnover. In November 2008 Dubai imploded overnight and immediately all projects were put on hold. The consequences for Van Oord were severe. Within months it had to cut down drastically on its local workforce of 2,000 employees, whilst moving its dredgers and expat staff elsewhere in the world.

The firm proved flexible and financially strong enough to overcome this major setback. This was partly due to Van Oord's move into a new and exciting area: offshore wind power. The opportunity arose because of Western Europe's concerns about climate change and its focus on clean, sustainable energy. In 2017, offshore wind brought in revenues of €403 million, accounting for 27 percent of Van Oord's annual income of €1,530 million (dredging accounted for 60 percent, oil and gas 13 percent).

Innovation

Product/Market Innovation

Van Oord has always sought to innovate to stay ahead of the pack. It has done so in a number of ways, most importantly by adapting its product portfolio in accordance with market developments. In post-war Holland, it seized the opportunities created by reconstruction and economic development to move into new areas such as port expansion and the building of new roads, canals, harbors, and industrial estates.

When the Middle East dredging business was about to boom, Van Oord Utrecht moved in. When the oil boom fuelled economic development in the North Sea, the Middle East, and the Far East, Van Oord was there to benefit, as it did when Dubai wanted to realize its ambitions. At the beginning of the twenty-first century, it saw the potential opportunities offered by the new industry of offshore wind power, again in the North Sea. This helped neutralize the effects of the sharp fall in oil and gas prices after 2015.

Many of the projects Van Oord participates in are awarded on the basis of a tender process. This is a well-known but complicated system. "The potential bidders extensively study the project for a limited amount of time, calculate a price, and put forward a bid proposal," explains Koos van Oord. "The client studies the various bids carefully and awards the project based on a limited number of criteria which often are unknown to the bidders.

This does not make the tender system transparent, it is complex and often frustrating. But on the other hand it is a driving factor for innovation and for staying competitive. Nowadays the tender system generally allows the bidders more design flexibility, which stimulates innovation".

Project Innovation

"Project innovation - do it better, do it faster, do it cheaper - is a driving force," says Koos van Oord. "If we want to win tenders we have to be innovative".

A good example of a technically innovative project was the Delta Works. The technical challenges were so huge that new knowledge, equipment, and execution methods had to be developed. So Van Oord, in association with its consortium partners, the client, the Ministry of Public Works, and knowledge institutes, developed the technology to be able to carry out these projects with the required purpose-built floating equipment.

Equipment Innovation 

For decades now, Van Oord has been in the forefront of developing marine equipment, frequently purpose-built. Van Oord was one of the main contractors in the Maasvlakte 2 project, Rotterdam, the Netherlands. The works involved reclaiming land from the sea to create a huge harbor area. Maasvlakte 2 was the biggest civil engineering project in the Netherlands since the Delta Works.

Van Oord used a specially developed crane, the "Blockbuster", to place 2.5-meter3 blocks in an 11-kilometer sea wall. This type of crane had never been used before in marine construction. "In our field of activities, the equipment you use is vital," says Koos van Oord. "We are not like civil engineering companies that can rent equipment such as cranes, trucks, and other tools. There is no rental market in marine construction. So we have to own and operate the marine equipment - there is no alternative.

"In the development of marine equipment, over time you see on the one hand a limited number of breakthrough innovations while on the other hand there are many more incremental innovations. If you look at the ships we are building nowadays, they look very much like the same equipment we built 20-30 years ago.

But if you look at output, fuel consumption, emission, and so on, the differences are significant. The basic requirement is for new marine equipment that can be employed in an efficient and effective way for a period of 20-30 years and that it is a cost price leader. The new ships Van Oord brings to the market are largely developed in-house.

"If we work on the development of new equipment, we have to realize that new equipment must last for many years so we have to think ahead about possible future market developments. We can only predict changes in the market for a limited number of years, say two to three, but we need to think much further ahead.

To avoid becoming too dependent on one single market, we also build ships that have a multi-purpose character. The downside of a multi-purpose ship is the risk that they appear to not be competitive in any specific market. This is the dilemma of multiple functionality versus competitiveness.

Logistics

"What is important is that our equipment is in excellent working condition. Maintenance and repairs of the marine equipment and its parts that are subject to wear and tear is a key task for our ships maintenance department".

"We need enough spare parts on the shelf to be able to operate worldwide on a 24-hour basis. If we do not have spare parts available at the right time, then we have a big problem because the ship might not be able to continue its operations. But too many spare parts leads to unnecessary capital being tied up. So the question is, what spare parts do we order, what can we do to use more standard parts across different ships? This really is a strong focus. Can we do it better?"

Long-term Thinking

Another key priority for Van Oord is long-term thinking. "That is particularly important in a family business like ours," says Koos van Oord, "with an increasing number of family shareholders and the objective to hand over the ownership from one generation to the next. However, without our many very committed and loyal employees, that would not even have been possible. Basically the Van Oord employees are the backbone of the family company.

"For decades now, we have not been not the sole owner of Van Oord. We are happy to have capable minority shareholders on board who help in preventing us becoming complacent. NPM Capital was our external minority shareholder for more than thirty years. A few years ago, four other investment advisors took their place. Most family-owned businesses don't like external influences, but we do. It leads to better decision-making. In a family-owned business, probably more than in any other business, you have to think about and anticipate the changes which might occur in the future and be ready for them.

"In the 1990s 'the three-pillar strategy', a strategic concept, was developed. The three pillars were dredging, marine construction, and offshore. The reason behind this strategy was that three legs - or activities - give more stability than two legs, let alone one leg. So if one activity has a slow or negative growth for a couple of years, the other one can hopefully balance it out. And this strategy, which is now more than 20 years old, is still the basis of our thinking.

"The other important element of our business model is focus. There are companies with limited size but multiple areas of activities, some five, six, or even more. I wonder whether they are able to oversee all these activities and develop them properly. Van Oord has never had the ambition to spread its activity base too widely and become a general contractor. Not because this would have been impossible, but because we want to stay focused. You need to concentrate. And if you do that, you can stay on top of events.

Strategic Planning

"When I went to business school in the 1970s, we were extensively taught the planning processes of the big conglomerates: try to plan your activities for the next ten to twenty years and follow that all the way through. If you look at the fast-changing world of today, it doesn't make much sense any more. On the other hand, you need some kind of long-term strategic plan, but you must build flexibility into it. One way of doing that is by making use of scenario planning which really helps you to understand the different options in different situations. This is an ongoing process".

Human Factors

Shareholders

"In a family-owned business it is crucial that you keep your family shareholders committed. If a large part of the shareholders want to sell their shares, you have a problem. So you pay them a fair dividend and you keep them involved. That is why we invite our family to ship launches, encourage them to visit projects in execution, and continuously tell them about the history of the company. Keeping the history alive creates a feeling that one is part of something that is bigger than oneself.

The Next Generation 

Koos continues: "Another objective is developing the next generation. It is important that they are aware of the family's roots, internalize the family values and learn to become responsible shareholders. This is why we have set up the extensive Next Generation Development Programme for family members from the age of 13 to 30. It is divided into age groups. The programme is a combination of getting to know each other, personal development, and having fun together. We engage them in a number of practical subjects like finance for those who are not experts to prepare young family members for their future roles based on the family values of stewardship, entrepreneurship, and long-term perspective. The Van Oord company has set its core values in the spirit of the family values.

Succession Planning 

"Last but not least, we want to encourage family members with leadership potential to have a career in the company. And that is the most difficult task. Why? Because they understand that it is not easy to work as a Van Oord member in such a big company. In the first half of their career in the company they feel the burden that they have to perform better than non-family members. Once that period is over, they grasp the benefits of being a family member. It goes without saying that they must be willing to travel frequently. They also might be asked to live and work overseas.

"Living abroad requires family members to be willing and able to adapt to a new environment - being flexible and mobile is essential. All in all, it is an adventurous but demanding existence that in time can be very rewarding. In the first 15 years of my career my family and I moved about 10 times. It is not easy, but we enjoyed it intensively". Currently seven family members hold leadership positions in different ranks in the company.

Leadership 

"Leadership plays a key role in any business, but particularly in a family-run business. In our family there are a number of leaders, each with their own field of responsibility. My cousin Pieter, who is the CEO of Van Oord, represents the fourth Van Oord generation. Another cousin is CEO of another family business. I am the chairman of the family holding company, MerweOord, which looks after the family's shareholding [about 78 percent of the company stock].

"Another family member chairs the family association. There are many more family members involved in committee work. This system of involvement, besides giving opportunities for learning and development, also creates a culture of checks and balances which we consider to be crucial.

"Managing a family-owned business requires a variety of skills. Decisions have to be taken, but there should also be room among the family shareholders for debate and different opinions. The most important element of my role is to keep the family united and connected with the business".

The Three-circle Model 

"Our governance structure is based on the so called 'three-circle model' which is a family-owned business concept that originated in the US:

FIGURE 5: THE THREE-CIRCLE MODEL

"The figure shows three circles of influence: the business, the shareholders, and the family. In the first generation all circles overlap; there is just one circle. As the business matures and it is passed on to the next generation, these three circles grow apart. This creates potential areas of tension. Traditionally family businesses are well-organized in the business circle, but they tend to forget the family circle. To avoid this, we have a Family Association with its own board, budget, activities, sub-committees, and so on. Its primary role is to keep the family interested in the business - as the business is the cement of the family - and to educate the next generation to become responsible shareholders.

The Importance of Stakeholder Management  

"Marine contractors are viewed as disturbers of nature. We arrive at a project location, build a port or an offshore wind park, or make an artificial island. That means interaction with the existing environment. We do our utmost to avoid a negative impact on the environment. However, this is not always possible".

Van Oord is conscious of the impact of its work on ecosystems, human health and safety, local communities, and human rights, but is also limited in what it can do. The need to strike the right balance between people, planet, and profit is beyond dispute. Sustainability is embedded in the decision-making process and in business operations.

The Van Oord Sustainability Agenda 2020 subscribes to four of the United Nations' Sustainability Goals. "This is our ambition", admits Koos, "but it is not easy to achieve. As a company we have a Sustainability Board with external experts to advise and assist us in preparing for this increasing trend of accountability.

"In the past, when the environment was not yet a hot topic, we could rely on the data provided by clients and engineering companies. They were responsible for the design of the projects, for the environmental impact studies, and the compensation of the locals who were affected. Today, stakeholders demand a much larger responsibility from contractors. For example, together with a research institute, we have done extensive research on the effect on fish stocks of removing sand from the bottom of the North Sea".

Stewardship

Both the Van Oord family and company give to charity. "Spending wisely on charity is even more difficult than earning money. It is not difficult to give money away," says Koos van Oord with a smile. "Water development projects in the third world are the main focus of the family, while the company sponsors a wide range of social activities in countries where it is present. We try to find projects which have an impact".

Seasoned Advice

What advice would Koos van Oord give to the next generation of family members who will be involved with the company in the coming decades? "To our family members I would say: follow your passion. They should be happy in what they do. If they are not interested in working for the company or if their studies don't fit the requirements of the company, no problem - let them find their own destiny. We will help them where we can. Second: be a responsible shareholder. And third: do not consider your shareholding as your property but as something which was given to you to take care of and hand over to the next generation in a better state than you received it. Don't forget your heritage, be compassionate to others and have fun".