The bedrock of sustainability at delaware

Apr 12, 2017
  • people

Start. Grow. Sell. These three words seem to define the path of many startups. But surely there must be other options? At delaware we believe there are. And there’s more. Based on our own experience – we only started writing our own story in 2003 – we can tell you that the path we took was even the key factor on the road to our success.

Sustainability principles in everything we do

We started with a dream. A dream to create an organization that would last for 200 years. And to obtain that, we need sustainable leadership. That is why we apply sustainability principles in everything we do, in all dimensions of the organization and, in particular, in governing the ownership of delaware itself.

Here’s how we do it: 

1. Renewable scarce resources

One of the most obvious scarce resources for any organization, is leadership. If we want to assure sustainable leadership in our organization, we need renewable leadership. That is an interesting theory, but how do we put this into practice? The current shareholders pass on the ownership of delaware to the best performing people of delaware. And they do that for free, without valuating their shares. We cherish it when people join the organization, take their time to grow in a broad array of areas to become the best possible person they can be and, in the end, take up the challenge of ownership. They only do that when they want it and are truly ready for it. And when we are too. That is why we often say that we are a family business that chooses its children.

2. Generation reasoning

We allow one generation of leaders to fulfill its needs, but make sure they cannot jeopardize the chances of the next generation to do the same thing. We have structures, culture and governance in place to safeguard this. Everything is set to make sure that the current generation of leaders does in fact hand over and that the next generation has all it takes to step forward. As a consequence, all governance roles have a clear expiration date. The managing director (CEO), the management committee as well as the chairman of the board are all elected for a five-year period. After that time, they are asked to step down and make way for the next generation. This key element in our governance strategy leads to ‘generation reasoning’ in our strategy and strategy execution.

The combination of these two things, the complete lack of valuation of shares and temporary leadership, ensures that the owners are obliged to pass on ownership, even legally. But there’s more. The current generation of partners plays a key role in the financing of the company. When one of them decides to leave, he will not immediately receive his investment back. He knows that he will need to wait quite a long time. This mechanism ensures that partners are financially motivated not to jeopardize the next generation. They will not receive their money back if the organization gets into (financial) difficulties through bad leadership decisions.

The future leadership

The future leadership of delaware is already in the genes of delaware today, if we continue to work with that family metaphor. We make sure that the next generation is truly up for the challenge by letting them become the best possible person and delawarean they can be, by giving ample opportunity to become entrepreneurs and defining failure as a learning experience. And they are not on their own: they can count on the current generation of leaders to train, coach and guide them when engaging with customers, and working on projects, innovation and leadership in general.

Yearly partner evaluations

Since sustainable performance is key to the organization, all owners, who are the partners, are evaluated yearly. It is the General Meeting that is in the driver’s seat for partner evaluations. Depending on their individual evaluation, the partners receive more shares (positive evaluation) or might be asked to give shares back (negative evaluation). That is how we aim to ensure that the owners, and thus the leadership of delaware, lead by example and instill a sense of responsibility and accountability at shareholder level, and in delaware as a whole.

We are all entrepreneurs

Another thing that is in the DNA of the delaware partners, is entrepreneurship. We are all entrepreneurs. The only difference with many other startups, is that we decided not to write just our own story, but to dedicate ourselves to writing delaware’s story. We give a lot, but we get just as much in return. It’s a good balancing act. Within the partner group, we stimulate each other to be ourselves and aim to get as many different views together as possible, all while keeping in mind that we are accountable towards the team that we are part of.

And that’s how our dream of still being around in 200 years is kept alive.
Author: Peter Oyserman. You can follow Peter on Twitter or connect with him on LinkedIn