How do you make a culture and strategy change happen as CEO with a Private Equity firm as a shareholder?
We recently delved into these challenges with someone who has firsthand experience: Carel van Boetzelaer, CEO of World Wide Lighting (WWL), a prominent e-commerce lighting player recognized for brands like Lampdirect.nl. We explored how he got to this current position and what it entailed to succeed the founder as CEO of the Nordian-backed company.
You are the CEO of World Wide Lighting. What did you do to get into this position?
I began my career at Roland Berger, drawn to its entrepreneurial spirit. As a consultant, I found particular satisfaction in working on private equity portfolio company projects. Later on, I joined a portfolio company of HAL Investments (Audionova, now Sonova International) and took on the role of regional manager at Schoonenberg Hoorsupport. It was during this time that I had the valuable opportunity to learn directly from an entrepreneur about running a business and achieving financial success, something not typically emphasized in consulting.
Several years later, I assumed the position of CEO at Emesa, renowned for its platform Vakantieveilingen.nl, which was later acquired by Talpa. Following the acquisition, I observed that my responsibilities increasingly revolved around stakeholder management, which proved to be a challenging activity for me. I see the value of managing shareholders, as their interests and motivations are clear. Dealing with 'stakeholders' in a political context is not always aligned with the strong orientation I have towards company goals.
My desire to focus on value creation rather than stakeholder management ultimately led me to engage in discussions with Nordian Capital. Their approach resonated with my values, as they are driven by a commitment to sustainability and taking their corporate responsibility as investors. Through Nordian, I was given the opportunity to join World Wide Lighting (WWL) as CEO.
What were the major changes you made as new CEO?
After a year, I realized that the company's biggest challenge was to increase long term sustainable profitability. Our growth engine heavily relied on Google ads, which was getting more and more expensive. We now focus strongly on reducing customer acquisition costs and increasing lifetime value of loyal customers (CLTV/CAC). Essentially, we are transforming into an e-commerce company built on long term B2B customer relationships.
To realize this transformation, we initiated two major organizational changes. Firstly, we brought in young talent and formed a new executive management team to bring in fresh perspectives and innovative ideas to the table. Another crucial step we took was writing a company wide playbook. Previously, decisions were often made based on data, in combination with intuition. With the playbook in place, we could analyze and predict potential pitfalls within a year's time.
Which trade-offs do you make when deciding to hire external support to realize your strategy, vs. execute in-house?
As an ex consultant myself, I am rather hesitant to bring in consultants. When it comes to operational roles I often chose a less experienced but eager and talented internal professional. However, for key strategic work, which could distinguish us from competition, I usually seek external specialists. Their deep experience on a certain topic can give our teams and myself a kickstart towards our strategic objectives. Think about building a B2B relational sales organization, benchmarking life time value / customer acquisition costs or to realize company wide cultural change.
To achieve this type of ambition, I prefer working with Sweav over working with the usual consulting suspects Roland Berger or Deloitte. Mainly because it’s easier to bring in an expert in a very specific domain without the need of hiring a full team. These experts bring both expertise, but also get stuff done and make an impact. Next to that, it’s more reasonably priced, and the still heavily involved founder makes sure I get what I need very fast.
Do you already see some results from those changes?
Definitely. Currently, the majority of our revenue streams come from recurring sales, bolstered by strong customer relationships. Our goal was to move away from the transactional nature of e-commerce to a loyal customer base. To achieve this, we have built a comprehensive world behind the login for the so-called ‘gold customers’. Furthermore, we have assigned dedicated account managers to specific customers, to gain a deep understanding of their specific needs.
To wrap it up: What advice would you give to people aspiring for a similar role like yours?
There are three main lessons I learned. Firstly, transition to a medium-sized company as early as possible and immerse yourself in the operations to learn the business and how to make money. In corporate environments, it's possible to work for 15 years without talking to a customer. However, in smaller businesses, any missteps in customer interaction are immediately felt.
Second, be clear in your communication and try to be patient. Finally, never underestimate the significance of the founder. Understanding their magic is crucial to your success!