An appeal for cultural change

Culture of Contentment

For Luc De Bruyckere, the state of entrepreneurship in Belgium and Flanders is not what it should be.  He offers his diagnosis of the situation; and a possible remedy.

“The stats are reasonably clear on this.  For example, we do not rank well in the Global Entrepreneurship Monitor, the biggest international entrepreneurship study.  One may dispute the specifics of some of these studies, but the overall pattern is indisputable: we’re not doing well.  

I’ve said it before, also in the VOKA context, that in this society we live in a culture of contentment, a culture of the hammock, and that we are stuck in it.  We have one of the highest rates of subsidised employment—tax-payer funded employment, in the broadest sense—with the result that most of us are not feeling the current crisis, the worst economic crisis in generations for that matter.  It is clear that we are too risk averse and that we do not sufficiently reward those who do take risks.  Also, we are too inwardly focused and lack a real international vision or sense.  All that is abundantly clear today—we shouldn’t be debating those facts anymore.  What we need to debate is how we move on from here.

It’s not all negative off course.  We do have people who are doing all those things, but we have far too few of them.  And when you consider that we’re in the worst economic crisis since the 1930s then I would expect to feel a much greater sense of urgency among all stakeholders in this society.  We should be standing shoulder to shoulder in dealing with this crisis.  

Culture change required

So how do we move forward? I am more convinced than ever that we need a process of cultural change.  And I’m not alone in this—the King Baudouin Foundation’s Economic Circle published a book on the very matter.  Now I recognise that cultural change doesn’t happen overnight.  At Ter Beke we also learned those lessons– you cannot force change just by giving a few presentations.   To drive change you need to come to clear agreements among stakeholders, with well-defined incentives and sanctions in place.   

VIA, the Flemish government’s strategic plan is a good initiative but it is looking like we will not have the money—probably for the next two years—to implement it as planned.  That’s a pity, but there is still opportunity to commence the process of culture change by using a number of very practical initiatives.   Specifically, we could start by bringing people into another environment.  For example, I have been appealing that all students should spend some time abroad, possibly via the Erasmus programme.   It turns out there is not enough money for that.  But at least at an EU level we are seeing consensus that at least 20% of students should have an international experience.  That’s too little, in my eyes, until I learned that today only 7% of students go abroad!  

This is so important.  Young people need to open their eyes to the wider world.  And I am not talking here about study trips to Europe’s fashionable cities, like Barcelona.  That’s a holiday.  Send people to places like “Uzbekistan”.  And place people in internships, not just a course at university.  The quality of the education isn’t what matters here.   What matters is that young people learn how to survive in a different culture and environment.   

If we can’t send all our students abroad then at a minimum we should be sending our teachers-in-training abroad.   This is because teachers are so crucial in shaping young people’s values.  They not only transfer knowledge; they transfer values and culture.   If a teacher has spent time abroad, out of his or her comfort zone, and maybe even had a hard time in the first couple of weeks, but carried on because the diploma depended on it, that will have been such a stimulating experience for that person.

Similarly at the Vlerick Management School, I am suggesting that all the foreign students who come here, to Leuven or Ghent, are asked to spend some time in our schools.  Why not try out a few initiatives.  Let’s see what works.  Let them visit schools three times a year, to explain a bit about whom they are, where they come from, what their impressions of Belgium are.

None of this is going to change things overnight but if you keep at it for 10 years then you will start seeing change.   These are just a few examples of the things that we can do today; and they don’t need to cost a lot of money.  Budget cannot be the excuse here.  Maybe I’m being naive but I believe that it is possible to help our young people develop into more open and internationally-minded individuals. 

I was trained as an organisational psychologist.  I’m a behaviourist, I believe that people can change; you just have to put them in the right environment.  Take Wallonia for example.  People talk in such clichéd ways about Wallonia and the Walloons.  I’ve always resisted that, and still resist it today.  But I do believe that if you take the Walloons out of the entrenched PS (Parti Socialist) environment then they will change—but things are already changing, we simply refuse to see it in Flanders.  Similarly, if you were to place the Flemings in the Walloon environment, they’d change too.  There’s nothing innate about any of this.  People can change.

At VOKA we preparing a survey in 8 countries based upon the IMD stress-ranking, such as  Denmark and Singapore (high rankings on entrepreneurship metrics) to figure out why they are doing well and to learn  what measures are working and which don’t.  I think we know what we have to do, but let’s objectify it too.

Sustainable growth and the role of governance

Culture is about motivating young people to be more entrepreneurial.  But what about our existing companies, our growth companies?  Here I would like to highlight the importance of governance.

Looking back at my time at Ter Beke, seeing that company undergo its different phases of growth, I can say that one of the most crucial success factors was the governing structure we imposed on ourselves.   I’m careful to use the word ‘governance’ because we didn’t call it that when we first started doing it—we simply came to a number of agreements about how the company would be managed and controlled.  Also, there is no one-size-fits-all model here—you have to adapt these structures to your organisation and its specific growth stage.  

In order to grow you need to structure yourself.  In Flanders we find this difficult to do because we tend to personify everything.   For example, at VOKA we lost our managing director Philippe Muyters to the Flemish government.  Now all are asking who will replace him.  But I’m not looking for a replacement of Philippe—you can’t replace him anyway.  But the point is that our organisation has changed fundamentally since he first came on board.  We’re bigger, more complex and have more responsibilities.  Therefore I’m looking at it structurally: is this structure still optimal?  (Editor’s note: In the weeks following this interview VOKA appointed two senior managers, one to manage the internal operations, the other to manage the external relations with government, the trade unions, etc).   

In order to endow your choices with sustainability you need to structure yourself; Louis Verbeke used to say it like this.  Take Ter Beke, when I first started work at the company there was no distinction between the shareholders, the board of directors and the executive management team.  The Coopman family embodied all three.  But as the company grew we reorganised ourselves.  Mr Coopman summed up that process as follows: first I was the company; then I had a company; later I shared a company. Those are the different stages you need to get through, and these are each critical moments in a company’s development.   Many entrepreneurs struggle to get through those transitions, for various reasons.  They may be tired, or cannot find a suitable successor.  And so they sell the company.  I respect those decisions but sometimes it is a pity, because many of these companies could continue growing if they had the right governance structure in place.   

At Ter Beke we started early.  We first put in place an Advisory Board.  It functioned exactly as a Board of Directors—in fact it was one except in name.  Then in 1980 when I was given operational control over the company we transformed the Advisory Board into a formal Board of Directors.   It all needs to put on paper: the relationship between the shareholders, the Board of Directors and Management; whether and in what capacity the shareholders can work at the company; the rights of the shareholders’ children, etc.  Those are all important elements of a company’s governing context and they need to be clearly demarcated.  That way you prepare the company for growth, the next steps, as opposed to having to sell the company in its entirety.

That’s the crux of it for me.  You need to structure yourself, organise yourself, to make sustainable growth possible.   Otherwise your company simply cannot outlive you.