Marein Smits (60) is a lawyer and in that role has been active in mergers and acquisitions for 25 years. Arnold Mars (42) is CFO of family company AFAS Software. Fambizz talked to them about norms and values, ownership and remuneration.

Written by: Dennis Mensink

Wintertaling is a law firm on Amsterdam's Zuidas business district that often does things just a little differently. AFAS Software also does almost everything just a little differently, with the office building - excuse me: experience centre - where the interview takes place as a shining example. Smits and Mars both have a preference for family businesses. Smits mostly assists family businesses, Mars is co-owner of a family business. Ownership is an essential part of how they look at companies in general.

Educational
Mars has now been at the helm of AFAS for 15 years, together with CEO Bas van de Veldt. AFAS was started in '96 by Ton van de Veldt (Bas' father, ed.) and Piet Mars (Arnold's father, ed.). In 2008, Arnold and Bas were appointed general and a finance director. "It has been a very fun early days, during which we have learned an awful lot ourselves and also made an awful lot of mistakes. Well, the latter, we still do."
Smits has been a partner at a large firm as a lawyer. "Everything involved is very instructive, but it certainly wasn't blissful for me," she says. That is why she moved to a smaller firm about 12 years ago, where she was allowed to invent the wheel herself. And she did so again three years ago. "Then we took a different approach again, because since then we have been using holacracy. Everyone is a shareholder and has voting rights. "That's really different, especially in our world. We want as few wrong drivers as possible, where it's all about the individual rather than the group. I did bomb myself as CEO, And I'm going to do that for the rest of my career and see how that turns out."

Mars: "I like what you're doing. Also kind of exciting. You want to motivate employees intrinsically by making everyone a shareholder. We once did that ourselves, in the early years tooWe stopped doing it. Human capital is a huge scarcity, but a bit of throughput and outflow of staff is also important." AFAS itself has moved towards a profit-sharing scheme for all employees. "That's slightly less favourable fiscally, but that's the way it is for now. You can't buy intrinsic motivation, but I do think: if AFAS is doing well, our employees should also do well. We already reward above average, but the profit-sharing scheme is certainly generous as well. I think it's fantastic that we can offer that."

Productivity thinking
At AFAS, the management strongly believes in productivity thinking, i.e. revenue per employee. "It's better to employ five people in a good way and also pay them very well than to have ten average people and pay them slightly less. You end up losing more for that while they perform less. I think we can move much more towards that: working smarter instead of hiring extra people when there are problems. And ultimately giving the people you have a lot of ownership, motivating them and giving them a very good salary. That is where we as Europe and as the Netherlands will have to move much more towards. I don't mind at all if someone says: I would like to earn 10 per cent more. If he also ends up earning 20 per cent more, well, that's good for everyone anyway. If you create such an organisation, yes, in our case you can get to a turnover per employee of almost 500,000 euros. So you may and can also give people a high income. Not just the usual suspects, but also the facilities organisation, the people from the events team, the consultants and the support staff. Everyone."

Smits sees differences and similarities with Wintertaling. "Because ownership at our office lies with everyone, everyone also benefits from success. We do it together, so we also earn it together. But everyone also has to do things, just like here at AFAS. Convenience is something we have to eliminate. This is also just like with children: some things just have to be done. Can I have a sweet? Then I would always say: you can always have anything, but you have to ask first, and maybe say: wouldn't you eat an apple first? But employees are not children, so imposing things sometimes remains tricky. Especially if you want to create a flat organisation."

When it comes to rewarding entrepreneurs, Smits has assisted many people in her career in selling a business, and that has not taught her that that is "a nice place to be". "Because then you have a lot of money, but then you only have that. I have yet to meet the person, no matter how strong in their shoes, who is very happy with that bag of money they get then, as weird as that may sound." Mars nods in agreement. The AFAS CFO talks about an article he read recently, about a man who wanted to give his company away to his employees. "Like: I have enough and I will give it to my employees. That is technically very difficult, of course, but I think the idea behind it is ironclad. That is a completely different way of thinking that may also be named."

Trust
Which values are important to Smits and Mars within the company? "Trust is the most important one; as colleagues we should be able to trust each other completely. Excellence, or being super good at your job, and professionalism, are other very important values. You are always a flesh-and-blood human being, but you are also in a certain role and you have to 'play' and perform it as well as possible. I sometimes compare the role of a lawyer to that of a flight attendant. It is also a role. Of course you are not a robot, but no matter how annoying you might find someone or a situation: you are doing something for your client and you do that to the best of your ability."

AFAS has named four clear core values: family, doing, crazy and trust. "I personally think the last one is a very nice value. And I also find it very difficult to implement. Take the relationship with Bas, for example. We said fairly early on in our collaboration: we have to be able to trust each other one hundred per cent and that is what our relationship is based on. Besides: trust is zero or a hundred. It cannot be in between . That is very important. You represent each other. So you also want the other person to trust you in how you talk, how you also take care of each other, how you also protect each other. It is interesting the moment you don't understand each other for a moment or you just really disagree. As far as I am concerned, trust does not mean that there should be no discussion or no arguments. On the contrary, there should be. Sometimes you feel that the other person doesn't quite agree on something. Then you call each other in the evening and say something like: I do have the idea that you have a different view on this. That is the development of the relationship."

Delegating
According to Smits, it is also about trust and the qualities of employees. As a manager, daring to hand things over, daring to delegate. "That's also necessary, because I can't do everything myself or sit on it, because a customer is not going to pay twice. Often things also just go well. And sometimes something goes wrong; then you can actually be happy about that too, because someone learns from that. The challenge is for people to take that responsibility themselves and to be guided and trained in that. That they realise sufficiently: this is a delegated responsibility and this is how I have to deal with it."
Mars acknowledges the importance of this: "Delegation is a very important facet to achieve success. I am also quite clear about that. If I have a meeting, it can't be that you delegate everything to one person and that there are always a few people who completely wipe their own street with a little sweep. If you want to position each other in his or her strengths, you also have to look together: who does what? I am also someone who prefers to do a lot of things myself, but I cannot do everything myself. You have people you have to assign everything to, but also people who say: come here, I'll take over."

Idiot
AFAS' core value of 'doing', for example, work hard, play hard, Mars explains. "How we prepare lunch, sports and outings. Lots of facets that reflect the bonding, the culture. But that culture is also formed in working, in working hard. Not just chatting with each other, but always looking at consultations: can we take concrete points from them and how are we going to give substance to them? Can we create speed and differentiate ourselves?"
The core value 'family' is strongly reflected in AFAS' culture. "Are you there for each other when someone has had an accident? And if there is a birth or something else to celebrate, do you send a card? That family feeling comes back strongly."
According to Mars, the most fun core value is "crazy". "The fun element in our work ensures that we just really enjoy our work. That we can laugh every day. I think the element 'crazy' is the most powerful one myself. Of course, you have to use that in the right way because to be labelled an idiot..."

Rules
But what rules belong to core values? Mars: "The question is, of course: what do you want to achieve with rules? Does a rule contribute to a better product or service? That should always be the condition. We have one maxim: work with common sense in the interests of AFAS. With that, we have jettisoned all our staff manuals. Humanly speaking, this is very challenging but also terribly fun. Because everyone thinks it's a great story until they themselves are faced with something at some point. That you think: okay, how are we going to sort this out? Then a rule is really nice, but we then have to talk to each other. That provides us with a lot, by the way."
Smits: "I notice that people themselves feel the need to make up rules when they are not there. That is a serious challenge. Whether that has become more so since everyone is in charge? Yes, I think so. People finally feel really responsible and then they want something to do with it. Transferring shares was so done, but then it only begins."
Mars: "So we don't think from rules, but from people. If a problem comes up, you don't point to a rule, you say: I'm going to solve it for you, I'm going to help you. And you try to do that as decentralised as possible within the organisation, giving employees a lot of space and freedom. There is a lot of flexibility, but sometimes there are a few rules. If we have a Culture Café, everyone has to attend. Then it's not: I have to look after the neighbour's cat. No, you're just there."

Family businesses
When it comes to company ownership and financing, Mars finds it unfortunate that there is so much focus on private equity. He speaks of an "erosion of the Dutch economy" and Dutch values. "I am not against private equity, but I am against eroding your sustainability ambitions, which after all often go together. How do you deal with each other? What do you want to stand for? Does it still include the name of the employee and the customer? As a family business with its own values, you have less pressure from that shareholder. So you can say: well, we'll do it this way, we'll take that risk. There is another form of capital present within family businesses. If investment needs to be made here to get to a more sustainable deployment, it's done within minutes. We are going to do that and through. I think that is beautiful and good for a company. That's partly why I love family businesses so much."
Smits: "In every business, there is a horizon. In family businesses, there is the continuity horizon, looking across generations. In the classic sense of the word, you are then talking about sustainability. Economically, there is also a very different perception of what a business should bring. That, of course, characterises a family business. This is linked to those long, generational terms, which ensure that you can and will also do other things that the competition does not. But do you dare to do that, when nobody else has done it yet?"
Mars: "I think you're right. If you are intrinsically into it, you are also committed to systems. How do you deal with your employees, how do you deal with your relationships, and with your environment? You yourself are just a passer-by in this world. So how, how do you leave that environment? I think that's very close together."

Family statute and STAK
AFAS Software has a family statute naming its shareholders. Those shareholders are in some cases employed at AFAS sometimes not, but they are all members of the Van de Veldt and Mars families. Meanwhile, that generational transfer has taken place. "Our fathers are in their early seventies. One is still in the Supervisory Board and the other has already quit. Of course, it's very nice that the company continues visibly." In a STAK, AFAS has formalised control. "Bas and I can do business in freedom and we are very happy with that. We did define nine anchor points about which we have to consult with the shareholders. Take a change of management or dividend policy, for example. But anyway, that's no trouble of course, because it's very nice to meet regularly as shareholders too.That's what we fortunately do."