The transition back to a bio-based economy
DSM’s Managing Board Member Stephan Tanda described DSM’s transformation from a Dutch coal company into an international company focussed on biotechnology, life sciences and materials science and stated its ambition to be on the leading edge of the transition back to a bio-based economy.
In view of increasing demand on resources from a growing global population, and the need for innovation over the last 10 years, the company has shifted its activities away from the petrochemical industries. “DSM’s strategy is no longer defined by access to resources, but by global trends,” he said. The company is now developing products to improve health and nutrition, and to replace oil and coal.
“The oil age will end before we run out of oil and gas, and while running out it will become much more expensive,” he explained. “The debate is not whether or not we must have a transition, but what will the pace of that transition be? At DSM, we want to be on the leading edge of the transition back to a bio-based economy.”
Nutrition and pharmaceutical activities form the greater part of the company’s mix of activities, while sustainability is a core driver of its strategy with clear sustainability targets as well as financial targets. Increased employee satisfaction is also one of the company’s sustainability targets, said Tanda.
The company has transformed from a Netherlands-based European company to a truly international company, with leadership styles differing from country to country, he said. The company makes senior and aspirational positions available all over the world, benefitting from international employees with experience of international high-growth economies of India and China which spread throughout the company. DSM’s leadership model creates a common language. “It starts with insights and understanding yourself,” said Mr Tanda.
DSM has been boosting its innovation practices within the company since 2005, using a focused approached which aims to balance radical and incremental innovation, as well as internationalise the innovation process through its regional innovation centres in China and India. This has resulted in two new growth platforms; bio-based products and services, and DSM bio-medical products. Its innovation processes engage the whole of DSM’s value chain, with, for example, new delivery systems and forms for its nutritional products.
People working for DSM come from lots of different backgrounds, but the common belief across all of its businesses are an external orientation, accountability for performance such as talking about mistakes made and learning from them, plus speedy collaborations with businesses that come to join DSM’s portfolio, and finally inclusion and diversity, “because changing the demographic is the easy part. The difficult part is to make DSM a place where people want to build a career,” he said. “So this is where we put a lot of emphasis.”
Mr Tanda was joined on stage by Professor Gail Whiteman, holder of the endowed ECORYS Chair of Sustainability and Climate Change at RSM. She asked him if it was difficult for DSM to choose between sustainability and profit. “It depends what you choose as your strategies,” Mr Tanda replied. It’s possible to make a profit, improve the planet and improve lives, he said, and this is an integral part of DSM’s strategy. “The idea of doing something meaningful resonates with me,” responded Prof. Whiteman.
She asked about DSM’s Chairman, Feike Sijbesma, who is also a member of RSM’s Advisory Board. “He’s charismatic and strong – can it be disruptive if not handled well?” she asked, and mentioned Sijbesma’s statement in support of the ‘Occupy’ movement in Rotterdam last year.
“You don’t manage the leader!” joked Mr Tanda, and went on to explain that the company of DSM is “much more than just ‘the suits’”.
Prof. Whiteman asked Mr Tanda how the company approached making redundancies and DSM’s attitude to women and leadership. “We deal with redundancies with a healthy pragmatism,” he answered, and described it as a gradual process through retirement and other natural processes. Regarding women in leadership positions, Mr Tanda said: “We must have more women, not only on the board but also in the ‘feeder stream’. It will come as a natural sequence,” he said, and added that as a father of two daughters, it was a subject he felt very strongly about.
Mr Tanda’s leadership advice ‘for those trying to change the world’ is to ‘talk about it with the most senior decision-makers you can get access to.’ He said he was shocked at the lack of understanding of sustainability issues in some quarters.