The second week of January is one of the highlights for the Rotterdam International Case Academy (RICA). Our All Stars travel to Burlington, VT, United States, to participate in what some call ‘the World Championship of Family Enterprise Case Competitions’. And who doesn’t want a world title on their name? After winning the first edition of the Dutch Case Competition, Benji Torrens (IB) and Joris Walraven (Bedrijfskunde) are eager for more. Accompanied by Alex Kind (Bedrijfskunde) and Dennis Hoekstra (IB), they are up for the task.
The team already overcame their first challenge. Hours before the start of the competition, a snowstorm rages over Burlington. With some teams, either in air or on the road, being stuck. During the opening ceremony of the biggest FECC (Family Enterprise Case Competition) in history, composing of 25 graduate and undergraduate teams, participants are gradually arriving with already memorable stories at hand.
The next morning, the team is shining just as bright as the weather outside. They are looking forward to competing against some of the most respectable institutions globally. They are drawn into the Pine Division, together Ohio University and Maastricht University. A Dutch onderonsje it is! But Maastricht is proven to be a tough opponent, as they reached the final last year. But so did we. North Star Consulting know what they are up to and are ready for their first presentation.
The situation of Lao Gan Ma, a Chinese spice manufacturer, resembles yesterday’s weather. The outlook is dark and within the company, storms thrive. The story of Tao Huabi, founder of the company, is a remarkable and inspiring one. As kid she suffered from hunger and cold and a few decades later, she is an illiterate widow with two kids and no way to go. Between working harsh shifts, she has a passion with home-grown chili peppers and starts experimenting with it. In 1984, a unique recipe is born. This marks the start of Lao Gan Ma. Over 40 years later, the spices brand is well-known throughout China and represents over 1 billion USD in annual revenue. By 2016, Tao Huabi (72 years old), is ready for her retirement. She passes Lao Gan Ma over to her sons, Li Guishan and Li Miaoxing.
In period following the succession, Li Guishan and Li Miaoxin were proven to be incapable of leading the business. Reckless risk taking, changing the recipe and financial scandals let to the downfall of Lao Gan Ma.
In 2019, Tao Huabi decides to take matter in own. At 75 years old, the decides to lead Lao Gan Ma once again. And she succeeds. But now that she is 77, the succession is becoming extremely urgent…
True Noth Consulting enters the stage. They are to kick-off the pine division! Dennis opens with a story about the legacy of the company and shines a little light on the proposed STABLE strategy. But before we move into that, Joris clearly defines the current bottleneck of Lao Gan Ma. How could it be that the company came in such a situation? What capabilities can they utilize to move forward? Are there any other problems involved next to the critical succession plan? After giving answers to these questions, the solution points in 1 direction: the STABLE strategy. In this strategy composing of 6 steps to get the company STABLE again, the focus is on succession by the 2 sons. But they need to be prepared for that.
A detailed plan to reach this goal is carried out by Alex. Unique elements as a company code of conduct, where matters as the recipe are set in stone and cannot be changed, is put in place to avoid repetitive mistakes. Benji takes the judges through both financial and non-financial impacts before Dennis closes off. Content-wise, a beautiful presentation. The Boys can be proud of that. But it was also complex to understand and brought with little energy. Will it be enough to beat Maastricht and Ohio?
After seeing all the presentations of the Pine Division, the coach wouldn’t be surprised if the team scored last today, based on the power of their presentation. But on the other hand, he wouldn’t be surprised if they scored first if the judges would go for content. No matter the score, the team knows what they need to improve on. A bit more energy and joy, and this team is a serious contester…
Later that evening
In the Davis Center at the Campus of the Grossman School of Business, the results are announced. Rotterdam places 2nd in the group, just after Maastricht. Not a bad start, but of course they hoped for more. Tomorrow, they have another shot. And they are eager to take that opportunity with both hands…
FECC 2024 Day 2: Dutch Delicacies
After some thorough debriefs, the plan for today is simple: keep on doing what we are doing well, but now with a bit more energy and flair. This energy starts at breakfast. Alex, Benji, Dennis and Joris woke up with a good mood. Disappointment from the previous day is being replaced by eagerness. The team is ready to solve the second case of this competition. Scoring first today will mean that they are on pole position for a spot in the finals, and they realize that very well.
North Star Consulting presents last today, meaning that they have plenty of time available to prepare the room and go over some of the agreements they made. A quick first-bump with their coach marks the start of this round: now they are alone. Moments after that, their coach receives the case. On his way down, he bumps into the coach of what looks like our biggest competitor, Maastricht University. Quinten Lieven makes a quick joke: “Why do they fly us all the way over to Vermont, to solve a Dutch problem?”
CEO of Jacobs Catering –market leader in high-school cafeteria in the Netherlands- Emily Jacobs found herself thinking of the past four years, which in many ways had been a rollercoaster ride. After a rough succession process, causing a split in the family, Ms. Jacobs took over the company. And just when she arrived at that position, the COVID-crisis hit. Schools were closed and the revenue evaporated. The company went through tough times and Emily’s leadership was tested. Jacobs Catering managed to survive, but at what cost? Financial reserves were plundered. The rough market of high school catering (Dutch high school students typically brought food from home) became increasingly harder due to the following inflation. With families having less purchasing power, luxury goods as high school catering was impacted. On top of that, a valued board member decided to step down. She asks herself: How should I further develop my leadership style? How could the continuality of Jacobs Catering be preserved? What guiding principles should I use to selecta new board member? And why? True North Consulting is up for the task!
Dennis stars: “When I was a kid, my mom always used to make my lunch. But once I got to high school, she told me do to it myself. As the lazy student that I was back then, the Jacobs Cafeteria was the perfect outcome”.
Joris provides the judges with an excellent analysis, not only showing the current and past family and business-related bottlenecks Jacobs Catering is facing, but also maps out the whole process of high-schools and government related tenders. Not being provided by the case, this must be very valuable inside information that the team possesses. Benji takes over with an analysis on the rough market conditions before the final way forward is provided: A new tender manager must be hired. Alex is very specific about the profile. Governmental tender experience in relevant markets is a must. But where to find these people?
After a thorough explanation and implementation of the way forward, the team is clearly happy. But do the judges agree? They have 10 minutes to start firing questions at True North Consulting. The first few minutes are rough, to say the least. A serious question on the main reasoning for decisions is given, followed up by a rather strange question. Can you elaborate more on the “Frikandelbroodje” you just mentioned? Polite and enthusiastic as they are, all the ins and outs on this -for the students legendary- piece of bread is given. Not exactly the best way to clarify on the strategy, but Emily, CEO of Jacobs Catering, somewhere hidden in the crowd, seems entertained. During other questions, some cracks start to appear. Is a tender specialist really needed on C-level, or will a sales manager be enough? How to keep family values intact after the proposed replacement? Have you thought about the reaction of other stakeholders? And a very bold question: Do you think Emily is competent to lead this company? Some rough minutes follows, but True North Consulting keep standing tall. Once the time is up, they walk away with pride, they have given everything they could.
Later that evening, the results are announced. Rotterdam Business School places… 2nd. Ay, that’s a bummer. The team really hoped for a first place but realize that this is not easily earned on a competition of this level. Maastricht performed exceptionally well on stage today. But the finals are not out of reach. Tomorrow is the all-deciding last round where double points can be earned. And apart from that, a wildcard is provided to the best place 2nd. Everything to win, nothing to lose.
FECC 2024 Day 3: Rotterdam’s Peak Performance: A spot in the final!
Yesterday’s 2nd place felt worse than the result of the first case. The team clearly improved and felt that in all their veins. But still, it was not enough to beat Maastricht. That being said: all the cards are shuffled today, as teams are awarded double points. And in case of a tie in overall score, today’s result will also be decisive. This means that a win will guarantee North Star Consulting a spot in the prestigious finals. Because of the wildcard-system, an extra place in the finals for the best 2nd placer, there is hope for another way to reach the goal for today. But in this case, the team is dependent on performances by other teams. Eager as they are, every possible scenario is being plotted. One thing is for sure, the boys from Rotterdam need to perform today. Double points are not being earned easily, though. The 3rd case is known to be rough and complex. And we can say that the organizing committee lived up to that challenge…
As the world leader in water pump technology, Danish company Grundfos finds themselves in calm waters. In its rich history, spanning over almost a century long, the organization never reported a net loss. In fact, they experienced such a year-on-year growth that they are now responsible for 19.000 employees, producing an annual revenue of a staggering 4.3 billion USD. With being present in 59 countries, in 34 plants and more than 80 offices in excellent market conditions, the future looks bright. On top of that, Grundfos Holding was awarded the “2021 IMD Global Family Business Awards”. Very impressive. You can see some of the coach scratching behind their ears. What to recommend to such a successful business?
Well, there are some interesting factors resolving around the concept of a ‘Family Business’. The ownership of the family is continuously decreasing. The past years, family shares dropped from 15% to 9.6%, which is below the critical amount of 10% to prevent the company from being sold to private investors. But would that be a bad thing? Also, the interest and connection with the company is slightly more diluted per new generation. How to get G4 on board? And what can we offer the -not yet born- generation 5? Was the structure of the foundation model complementary for the business? Rough questions in a complex and dynamic case. With only 4 hours of solving time, the judges are ready to hear about the answers from North Star Consulting.
The team is entering the room with a smile on their faces. Ready to present. The room is packed and ready to hear True North’s advice. After the introduction by the officials, Dennis takes a short moment, and then kicks-off the presentation.
Starting with energy, the executive summary is presented. Key takeaway: the business is managed exceptionally well, but the decreasing percentage of family ownership is very urgent. The foundation of Grundfos, founded by Poul Due Jensen, is clearly the family. Their endless effort and technical expertise lead up to what the company is today. And the family is not only present in the history, but also dictates every operation in the day-to-day business and operations. The family values, ‘Be, Think, Innovate’ are taken seriously by all 19.000 employees, who are surprisingly aligned and close-knit for this number of people. It is those family values that are believed to be the accelerator of success. A possible acquisition of the company could mean the end of these success factors.
The plan is well presented and easy to understand urgently stimulate the buy-back of shares to get back to the minimum of 10%. And afterwards, facilitate a further increase to 15%. What stands out from other teams, is the financial plan to fund these actions. Apart from that, creative plans to keep next generations on board are included in this strategy. 20 minutes later, all the questions posed in the case seem to be answered in a concise and well-though plan. The 10 minutes of questions from the judges are fierce. “What would founder Poul think of your idea?” “How to get all stakeholders involved?” “What if the family does not want to buy back the shares, they sold them for a reason, right?” The judges really test True North consulting, but they withstand the challenge. From now on, it is fingers crossed…
Later that evening…
All the teams gather in the central hall, where the finalists are announced. The team wants a spot in the finals, no matter what. Hopes are on both the first place today, as well as the wildcard. After the first spots are announced, it is up to the Pine division. The winner.. of the Pine division…. Going to the final…. Is…. ROTTERDAM BUSINESS SCHOOL!
They will face – as only European team- University of California, Berkeley (USA), Bishops University – Montréal (Canada), Metropolitan University of Toronto (Canada), Universidad de Guadalajara (Mexico) and Grand Valley State (USA). They will present on Saturday at 20:30 Dutch time
FECC, the final
The team is a bit baffled after the announcement. Winning meant that they placed to the finals as one of the teams with the highest scores. No one is hungry, no one is thirty and no one is sleepy. They are not ready to continue the network event, nor are they ready to pick a restaurant for tonight. They don’t want to prepare the room for tomorrow or be social with some other teams. All they need is to sit down for a few minutes and prepare for their descending back to earth. This result means a lot for North Star Consulting and that is perfectly displayed at these moments. ‘Hard work pays off’ is one of the million lessons that were learned today. After some time, the coach tries to grab the team together. It is time for dinner.
During dinner, it is finally time to relax. With 6 men around the table, beer and sports are popular topics. But it is inevitable that every few seconds, the conversation automatically redirects to case-competition related subjects. After everything has been discussed, it is time to go home and get some well-deserved rest. Tomorrow is one of the most important days of their undergraduate career.
Premier Real Estate Development is a family business started by a father and a son-in-law in Mexico. Now focused on prime real estate, luxury homes and premium multifamily buildings, Premier started as a small single homebuilder in 1988. Now, changes of ownership have led to the company being a three-family owned business.
As the next generation grows into adulthood, differences in outlook and career objectives between the three families pose a challenge to both continued shareholder loyalty and to the successful continuity of the business under control of the three owing families. One of the two owner-partner families added by the founding family finds himself in a tough spot when his own children demonstrate interest and capability and encourage him to consider them in the continuity plans of the business.
If this scenario is not acceptable to the founding families, the next generation would like to leave the company and start a new estate development company. The owners pose some questions to this tricky situation:
Can three unrelated families successfully plan for generational transition and continuity of the business they way single families do? What long-and short-term options do they have? What would the continuity plan for the chosen option entail?
When Rotterdam is up, 3 presentations were already given. The level of this year’s final is substantial. Berkeley, Bishops, and Toronto are well-established names in the Case Competition world, and they are showcasing that right here and right now. Excellent presenters with mesmerizing slides make the presentation pleasant to watch. But our boys have been trained properly as well. They enter the stage with confidence and show that throughout the presentation. Their solution is a perfect example of ‘Dutch Bluntness’ – but in a good way. The proper analysis leads to one solution: selling the shares and starting a new real estate company. Where other teams try to glue the broken pieces with all kinds of boards and systems, True North Consulting chose to follow the rational path.
The solution and the way it was brought to the public might not be as sophisticated as some of the other presentations. But the rationale to go for this idea feels a lot more in line with the agendas of all stakeholders involved. This is going to be a rough call for the judges, as there are 2 more teams to present. All in all, True North consulting swinged on stage. They were able argument and reason every decision that they propose and stood tall during the following Q&A. A big applause is followed for this popular team, as they make their way off stage. They have given everything, and the waiting game starts…
Later that evening, all teams gather for the awards ceremony. The outlook is impressive. With 25 teams representing 6 continents, institutions from all over the world are gathered for the ‘World Championship of Family Enterprise Case Competitions’. The organizing committee, consisting of over 50 people, are applauding when all teams, including their coaches and ambassadors, are asked to enter the ballroom team-by-team.
The team has a hard time eating the delicious served dinner. They are here for one thing: the results. Dennis can’t think of a better birthday-gift than the first prize. Some time later, the ceremony begins. First, awards for the best presenters, coaches and ambassadors and organizers are given. Now it’s time for the real deal. 3rd place… Toronto Metropolitan University. 2nd place… Universidad de Panamericana-Guadalajara! And last but not least, the first place… goes to… Grand Valley State University. Ouch. That is a hard one to swallow. The judges were clearly looking for something else…
It is hard to comfort the team after this result. Some are speechless, and others take the moment to congratulate the winners. This is the rough part of competition. Being so close, and yet so far. Of course, everyone participating is a winner, as every team has shown tremendous growth in only a few days. But this lesson is not landing tonight for True North Consulting. They buckle up and know that there might still be 1 prize to win! Dance competition at the afterparty it is. And before they even got to the party, other teams already thought of a nickname for True North Consulting. This night, the team goes by Robberdam. A little bit of comfort for the team, who have been coached by a proud coach.
A final cheer, from Burlington, Vermont, The United States. Rotterdam is on the map.