“The sustainability transition is easier than it seems”
Peter Oosterveer started his second term as CEO of the Dutch engineering firm Arcadis last month. Before that, he worked for more than 28 years at the American engineering firm Fluor. As a trained control systems engineer, he started there as an engineer and grew into the role of Chief Operating Officer. He lived alternately in America and the Netherlands with his family of three daughters. Partly due to Arcadis’ sustainability attitude, he is now also a member of the Executive Committee of the World Business Council for Sustainable Development. In collaboration with other international companies, he is committed to a more sustainable world.
“The nicest place to live”
Arcadis has a long history and has its origins in 1888 as the Nederlandsche Heidemaatschappij (Association for Wasteland Redevelopment). The name Arcadis, which the company bears since 1997, is derived from Arcadia, the most pleasant place on earth in Greek mythology. Sustainability has been one of the main pillars for at least twenty years. Twenty years ago the company had 5,000 employees in and around the Netherlands, but it has now grown into an international company with 27,000 employees spread across Europe, North and South America, Asia and Oceania. “This growth was accompanied by many acquisitions, for which I can thank my predecessors.”
The head office in the Netherlands
Despite the majority of employees working abroad, Arcadis is proud of its Dutch roots and expects to keep those. Partly due to the favorable laws and regulations in the Netherlands, the company is protected against hostile takeovers. In addition, the structure of Arcadis is anchored in the Netherlands because almost 20% of the shares are held by a foundation that represents the staff.
Remaining a reliable partner is crucial for Arcadis. Partly to make this possible, they are currently going through a fairly radical business transformation. The four classical sectors, water, infrastructure, buildings, and environment, are consolidated into three global sectors that are managed horizontally. These new sectors, places, mobility, and resilience, enable knowledge sharing and collaboration between international colleagues to offer customers the best of Arcadis.
Dutch culture supplemented by local influences
In this transformation, it is important for Oosterveer to monitor the corporate culture. Due to the international structure, it is always a challenge to promote the Dutch culture direct communication and horizontal knowledge transfer. Oosterveer therefore ensures that he is in direct contact with the foreign management teams. “In return, they get the freedom to embed local influences.” For customers, one of the distinguishing features of Arcadis is that it can share expertise and knowledge gained from previous projects abroad in the local implementation of new projects.
Oosterveer keeps in touch with the offices through monthly performance reviews with the regions. Every three months, the board receives feedback via an engagement survey. “I am happy that engagement has increased even during the corona crisis.” Oosterveer hopes to further reduce turnover by being frequently involved with the staff. “Three years ago we had a 15% turnover rate, now that has fallen below 9%, but I hope to reduce this even further in the coming years.”
One way to do that is to place greater emphasis on mental health. “For us, as with many other companies, May has been dominated by mental health awareness,” says Oosterveer. The corona crisis made it more clear than ever that a healthy work-home balance is important. The management has an exemplary role in this. I also take days off when I turn off my mobile and really sit in the garden with a glass of wine.”
The lessons learned as CEO
Although Oosterveer also worked for an engineering company in the US, he notices major differences with the Netherlands. His biggest lesson over the years is that you are never too old to learn. “Where in the US there is much more of a culture of get on with it and move on, in the Netherlands consensus based decision making and inclusivity is important.” In the transformation, he learned from this to explain things much more frequently and to keep the staff involved.
Initially, he feared that this approach would lead to a mostly internal focus. “We mustn’t forget the customer, of course.” That is the reason he kept stressing that the customer always has precedence, and with success. In fact, customers hardly notice the transformation. Ultimately, Arcadis manages to continue to grow during the corona crisis and business transformation.
One of the sectors in which Arcadis continues to grow is the development of smart cities. Arcadis City Executives work in 26 cities worldwide. “This person is a point of contact in the city for the flow of information, contacts and knowledge.” This initiative, which exists in Rotterdam and Amsterdam, among others, allows the company to quickly pick up projects. An example of such an initiative is how Arcadis works to keep Amsterdam livable, which has become increasingly difficult due to increasing population growth.
The sustainability transition
Keeping cities liveable goes in combination with the sustainability transition that has already started. Fortunately, Oosterveer calls this transition “easier than it seems” for Arcadis. The four major stakeholders, customers, employees, societies, and shareholders, are more aligned than ever. “The corona crisis has clarified the need to become more sustainable for everyone.” Where previously shareholders were mainly interested in Arcadis’ financial performance, discussions are now sometimes entirely focused on sustainability.
The strength of Arcadis here lies in the many years of development as a sustainable company. “Customers know us as a company with a great focus on sustainable production, and we now know how to clearly calculate how much and in what way we can contribute,” says Oosterveer. Arcadis has identified six Sustainable Development Goals (out of a total of 17 that the United Nations has introduced) that they can influence. “80% of our projects support at least one of those goals.” Because they want to go to a percentage of 100%, the focus is now on making choices in which projects are hired.