Mailman with a hunger to help: THE LEADERSHIP INTERVIEW PETER BAKKER, TPG
Peter Bakker has a way of confounding expectations. His first media lunch as chief executive of TPG, the Dutch mail and logistics company, was highly unusual. He made his entrance to the beat of U2, the Irish rock band.
"I wanted to make a bit of a statement, saying that 'I'm not your ordinary CEO, perhaps because of my age'," says Mr Bakker, who was 40 when he assumed control of one of the largest companies in the Netherlands three years ago.
His passion for fast cars – he used to drive a Porsche until he got fed up with the attention it attracted – led journalists to speculate that he would switch the company's sponsorship activities from golf to Formula One. In fact, he chose something very different: fighting world hunger.
The company's five-year partnership with the United Nations World Food Programme (WFP), launched in December 2002, has led to his being nicknamed "Bono Bakker", after the campaigning lead singer of U2.
It has also won external recognition for the company, which has 160,000 employees in 64 countries, made sales of Euros 11.9bn (Dollars 14.4bn) (Pounds 8bn) last year and is expanding into new markets, including China. Fortune magazine has ranked it as one of the 10 best European companies to work for. Michael Porter, a Harvard Business School professor, has advised the management team on the project, and Insead, the leading business school, has made it a case study.
Mr Bakker has become a mailman with a mission. Start him off on the subject of "Moving the World", as the programme is known, and it is hard to stop him. Yet he insists that none of this happened out of any idealistic or pre-ordained plan.
The seeds were sown shortly after the September 11 2001 terrorist attacks in the US. He saw an article in Business Week about the poverty and despair that drove some people to support extremism. The author asked readers what they planned to do about it.
Mr Bakker took the question to heart. Initially, he thought of setting up a philanthropic company, he says, speaking in the hallowed surroundings of Amsterdam's Oude Kerk. Images of war and famine hang all around the ancient church, which is temporarily housing the World Press Photo exhibition, sponsored by TNT, the company's express and logistics businesses.
Direct and down-to-earth, he says that he quickly realised the company should work with an expert agency, not alone. He assigned a close colleague, Ludo Oelrich, to seek out a potential partner. It had to be a neutral body with global reach, a compatible culture and a need for TPG's logistics skills. That turned out to be the WFP, where Mr Bakker found common cause with James Morris, executive director. TPG's involvement includes advice on reducing logistics costs, emergency relief flights, food for schools and fund-raising. In June TNT Airways flew an Airbus 300 to Sudan with enough high-energy biscuits to feed 13,000 malnourished children for a month. Another airlift is planned in the next fortnight.
Mr Bakker acknowledges that there are risks in tying the company so closely to such a monumental challenge. "One of the risks is that you overspend either time, money or application of your skills at the cost of your business.
"At the end of the day, we're a transport and logistics company," he says. This is why the project is run as a business unit, with a budget, targets and quarterly progress reviews.
Each member of the executive board acts as a sponsor for part of the programme. He does not want it to depend entirely on him. "Like it or not, being CEO of a public company these days has decreasing job-life expectancy," he says. "This is a programme that you cannot walk away from easily. If you start this, you had better make sure you have a long-term commitment to it."
There is another risk, and it lies at the heart of any company's claims of corporate responsibility. Mr Bakker, however, prefers to see it as a benefit. "As a company, you can't go out claiming that you're going to help save some hungry people and make a complete mess of your accounting, or take a huge pay rise as an executive, or pollute the environment."
This is a risky thing for any chief executive to put on record. TPG has just been through a tough year of restructuring, during which it lost its highly rated head of the express division and uncovered tax-related problems at a UK subsidiary. Now, though, it is riding high, having reported record quarterly revenues last month and declared itself on track for double-digit profit growth this year.
But does it make sense for a company to get involved in social programmes of this kind?
It is a question Mr Bakker has clearly spent much time debating, for he volunteers the argument deployed by Milton Friedman, the economist, that it is not for managements to decide how shareholders should allocate their money. His counter-argument is that, by investing its skills in a good cause, a logistics company can create more value than a shareholder can by simply writing a cheque. TPG's logistics experts have, for example, achieved big cost savings at the food programme's distribution centre in the Italian town of Brindisi.
This may not overcome the Friedman hurdle, he admits. "So then you say: what does it do for my company?" In his view, there is a direct link with the bottom line. "You grow your profit in a service company by making your customers happy. The best way is to make sure your people are motivated. One element of motivation is pride in the company for which they work." He says business benefits were not part of the original plan – but the company has stumbled upon them. The first discovery was that the majority of managers wanted to support food distribution rather than Formula One. The same was true of staff, with whom Mr Bakker, a workaholic and fanatical e-mailer, has regular interactions.
TPG is working with Insead on ways to measure the impact on its business. But already an internet survey of 2,000 staff by MeyerMonitor, the management consultant, has found that 92 per cent give the highest possible score to the question: "Do you think the partnership with WFP has created value for TPG?"
Mr Bakker believes the programme has helped unify a company made up of different cultures from its scores of acquisitions. Each year, 40 rank-and-file employees become volunteers on school feeding programmes. They are given digital cameras, so they can post photos of their experiences on the company website, and they are given time on their return to tell colleagues what they did. "That proves very powerful," he says.
Not all staff are as enthusiastic as the managers, however. There have been questions about whether the money could be better used to save posts at a time when the company has been cutting jobs.
But Mr Bakker's reputation has been growing. The Dutch government recently asked him for advice on improving logistics in the healthcare sector. His report proposed savings of Euros 3bn.
Instead of basking in this recognition, however, he tells a story against himself: he received an e-mail from the boss of one of the TPG people who worked on the government-commissioned report. The e-mail noted that, while the report had a photo of Mr Bakker on the back, it made no mention of the internal team. "Is this all about your ego?" it asked.
Many bosses would prefer to brush such an incident under the carpet. Mr Bakker relishes it. "In some cultures, people would get punished for writing such free opinions," he says. "I think it's great."
What was his reply to the e-mail? "I said: 'I'm very sorry this is your interpretation. My ego is the least interesting thing in this exercise, but we felt that giving a whole list of internal names in an external publication was a bit over the top. I will make sure these people get a proper thank you note. Thanks for the openness.' "
On the advice of Prof Porter, TPG does not advertise its partnership with the WFP. But Mr Bakker does want other companies to respond to global crises such as HIV/Aids or famine.
Another band whose music he likes to play at the start of meetings is Primal Scream. The name seems fitting, given the dreadful fact – one he repeats for emphasis – that a child dies of hunger somewhere in the world every few seconds.
