Allard Castelein: 'Why Do CEOs Not Better Convey Their Company's Value?'

Allard Castelein: 'Why Do CEOs Not Better Convey Their Company's Value?'
Allard Castelein is in the last stretch of his time as CEO of the Port of Rotterdam Authority. This summer, after more than nine years as Chief Executive officer, he will take his leave with positive sentiments about the leading role the company is taking within an increasingly sustainable logistics chain. Nevertheless, there are developments that Castelein finds worrisome: ‘Society today thinks rather lightly about the value of industrial activities and business. The CEO must therefore take ownership of his role.'

'When I arrived here nine years ago, the company was very inward-looking.' Allard Castelein tells Bianca den Elsen, managing partner Netherlands of operations consultancy Valcon, that the focus is very different today. The outgoing Chief Executive takes stock, appreciating everything that might soon be different. ‘Look, over there at that square tower on the other side’. Castelein points from his office on the 16th floor of the Port of Rotterdam Authority to the other side of the Nieuwe Maas, ‘his’ river. The weather is bad and gray, with rain splashing against the windows. His apartment is over there on the other side. Every morning at six o'clock Castelein gets up. He then runs a stretch along the right bank of the river after which he takes the water cab to the office at Kop van Zuid. To him this was no punishment. He says he is going to miss this routine once he leaves his position as CEO of the Port Authority after the summer. 'I've had a lot of fun here,' he says. 'It was particularly special to be able to work in this place, especially since I was born in this city.'

You have been here since 2014. No doubt much has changed in that time ... Can you put words to that?
'The Port Authority was for a long time a kind of municipal department. Ten years before my arrival, in 2004, that service was "distanced”, and the Port Authority became a public limited company. I was able to help shape the transition from a somewhat conservative municipal management department to an international forerunner in the field of sustainability and logistics. We went from a management role to a developmental role, to an entrepreneurial role, an innovation role, an investigative role, a facilitating role and on to a leading role in the field of energy transition and digitalization of the logistics chain. That had major implications. It meant a quite different culture, a quite different mindset. It also needed quite different competencies. So yes, I saw the company change tremendously.'

Can you give an example of that different mindset?
'When I came here nine years ago, the company was very inward-looking. For example, there was never a focus on customers here. I remember indicating in one of my first staff meetings that we needed to become more customer oriented. I kept repeating that message. So often that after a while I was asked when we would be done with this customer focus. We had a considerable amount of work to do, I then realized. Now customer focus is the top priority and such a remark would be unthinkable. This whole company is buzzing with the realization that we can make a difference.'

Difference in what area exactly?
'That we are on our way to becoming a zero-emission port, that we are going to create a sustainable logistical chain and that we are going to take the leading role with this. Obviously in cooperation with a considerable number of partners. I believe in cooperation; I believe in creating coalitions to accomplish things. I especially believe in coalitions of the willing. I'm not looking for the mother of all coalitions. This environment is far too multifaceted and complex for that. For each project, each initiative, you can look for different partners. That way you can generate momentum and keep momentum. In this way you keep enthusiasm for the cause.'

In six months, you will be gone. Are you worried about things that are not going or that have been left behind?
'No, there is nothing in my agenda that must be finished before I leave. Not at all. The company is running along normally. The ship is sailing. It has a steady course. And everyone believes in the goal, in our strategy. We have a rich portfolio. And everything we do, we do in the context of the United Nations' sustainability goals. We have plenty of plans for the future, which I will continue to work hard on until the day I leave. But no, there is no stress. I will soon hand over my duties to my successor with peace of mind. That is’ a wonderful feeling, I can tell you.’

That is genuinely nice. Nevertheless, there will undoubtedly be great challenges for the Port Authority, especially in uncertain times like these.
'The versatility of this port complex means that my schedule looks very different every day. One minute I am dealing with the consequences of the COVID pandemic, the next day with the consequences of a ship trying to see how wide the Suez Canal is. It could be Brexit, it could be the impact of the war in Ukraine. Right now we are very much in the throes of energy prices or the impact of the U.S. Inflation Reduction Act on our port. Every day there are legions of issues that I get caught up in. All those issues directly affect our port.'

Do those challenges and crises follow each other faster than before?
'It is not that serious, in fact. I have been in the energy business for 35 years and I know no better than that it is always restless and unpredictable. That is no different now than it was before. In all those years I have learned that as a company you have to have adaptive capacity above all. Adaptive capability is more important than predictive capability. Of course: we have a strategy, we have a policy plan, we create scenarios, but most important is to be able to react swiftly to new developments. After all, no one knows exactly what the future will look like: today's wisdom is tomorrow's stupidity. It is therefore about resilience. Those qualities are now abundant in this organization. The DNA here has changed enormously. Also, because we now have an awful lot of talented young people on board, with a lot of ambition to do good for the world. That is a joy to work with.'

Can you give an example of what you are noticing or have noticed as a Port Authority because of the turbulent geopolitical times and the adaptive capacity required of your company in the process?
'When the pandemic broke out, we were faced with the question of how to keep the value chain going here. How were we going to ensure that the shelves remained stocked? I then set up the COVID port consultation: three times a week we had an online consultation with all parties in the port.’

‘The pandemic was not over yet, and we had the war in Ukraine. Well, the phone list still existed, so I at once converted COVID port consultations to Ukraine port consultations, with the same set of people. With that, we immediately tried to put things on the agenda and find out exactly what sanction package 4 meant for us. I believe it said that anything of economic value over 300 euros could no longer be exported to Russia. But was that 300 euros retail value or 300 euros wholesale value? Was it inclusive or exclusive of VAT? The 1,000 questions which then arose, we tried to address right away. In this way we tried to prevent loads from not being able to leave as a result of stagnation, that a congestion developed. Because even in times of crisis we want to be an efficient, reliable partner.'

The Port Authority's ambition is to become the green hydrogen hub of Europe. What is the status of that ambition?
'My goal is to keep this complex as relevant in the future as it is now. That automatically means switching from fossil to hydrogen - because hydrogen will partially be the future. We want to be a zero-emission port by 2050. Considerable steps are needed to achieve that, because now this complex still runs 50 percent on fossil fuel. So, the task of transition is unprecedented. It has never been seen anywhere in the world. But we think it can be done. We have detailed plans on how we think we can get there. We can do it through working more efficiently, for example. But also, by opting for electrification and hydrogen. We already make a lot of gray hydrogen here, hydrogen generated with fossil energy.’

‘Soon, once we become a zero-emission port, we will need 20 million tons of green hydrogen per year. Currently, about zero tons are being made - there clearly is a challenge there. Furthermore, we are looking at hydrogen processing, storage and transportation here. We want to accommodate hydrogen plants, build terminals, infrastructure to transport hydrogen, build pipelines to the Ruhr. We are talking about billions of investments. We are convinced that we have to do these investments to remain relevant.'

Another ambition is to become the smartest port in the world.
'Digitalization goes partly hand in hand with the whole hydrogen narrative. We are also doing everything we can to make the port of Rotterdam as efficient as possible. Anything that is not efficient is also not sustainable. So we are developing all kinds of smart things for the customer.’ ‘Think of our route scanner, a kind of route planner for goods transport. You can see in the route scanner all the route options between China and southern Germany. Everyone can see what the fastest and most efficient route is, also in terms of CO2 emissions and whether you go via Hamburg, Antwerp or Rotterdam. We are convinced that the route via Rotterdam always works well, so we are completely transparent and have made our route scanner open access. Thanks to just-in-time sailing, ships know exactly how fast they need to sail in order to arrive at an available terminal on time. That saves a tremendous amount of fuel.’

‘Another example is our robotic fleet cleaner, which removes algae from ships so that they sail more economically. Or take our dredging program. Thanks to digital data we can now dredge more intelligently. It used to be done according to a paper schedule; now we only dredge when sensors tell us it is necessary. The information is much more correct now than it used to be, and that means you can do operations much more efficiently - and efficiency is sustainability.’

‘What I like is that other companies recognize that we're doing a good job. The CEO of Cisco Systems wants to pay us a visit soon to have a look at our digitization processes. IBM's annual report mentions one port and that is ours, because we are the only port in the world that is building a digital twin, a digital representation of all our physical processes. We were able to give Tesla so much digital information about the logistics value chain that they decided to take their goods to Berlin via Rotterdam and not Hamburg. All thanks to our digital innovations.'

Next summer it ends here for you. What will you do after that?
‘I hope to stay active. I would like to get even more involved in a number of social causes. That is important. I also hope to develop a number of business activities. Helping companies shape change, whether or not as director. I have a fairly broad orientation, but I find maritime, energy and geopolitics particularly interesting clusters.’

‘I can also imagine doing something for a ministry. I am originally a physician and recently jokingly said to Minister Ernst Kuipers, the Dutch Minister of Health, Welfare and Sport, that I would like to examine health care in the Netherlands. That seems remarkably interesting. Oh well, I will see what comes my way.’

As you leave, do you have a message for your fellow CEOs?
'This is an era when society thinks quite lightly about the value of industrial activities and business. I think CEO's have an obligation to make more sense of the usefulness and necessity of their business themselves. There is currently a rather easy way of saying in the Netherlands: oh well, we can scrap that industry. There is a kind of apathy in society that really worries me. That is a bad development. We deal too easily with the departure of DSM, Unilever, or Shell. The job of a CEO is to contribute to the discussion. To explain what your company stands for.'

The CEO should go to Op1 or Jinek more often?
'Not necessarily. That is not our métier. But it is generally about explaining, as CEO, what your company stands for. And how relevant your company is, also for the whole ecosystem around it: for the accountant and the lawyer, for the baker and the window cleaner. Just start by telling your story to your employees. Make them supporters of your company.’

‘Here in the port of Rotterdam, 585,000 people work. They are our ambassadors. If they each tell ten people what wonderful things we do, we have five million people who are also enthusiastic. And I don't think the business community should just point fingers at others. We are part of a society. Take the initiative yourself and tell your story. Grab your role.’

This article is published in Management Scope 02 2023.

This article was last changed on 07-02-2023