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The sky's the limit

Fifth-generation Johan Andresen runs one of Norway's oldest family businesses. He's transformed the company and isn't quite ready to step down.
Johan Andressen, the fifth-generation leader of Ferd

At the headquarters of Ferd, the billion-euro Norwegian conglomerate, even the chairman orders taxis for visitors. Johan Andresen doesn’t ask his PA to do it nor the receptionist; he simply goes downstairs and, using a tablet computer, does it himself. A taxi promptly turns up.

It reveals a lot about Andresen. This straight-talking, hard-working man might own Ferd – but he doesn’t seem to see himself as a superior with employees to do his bidding. He’s happy to do what some might consider menial tasks – after all, as Andresen says, Ferd’s credo is “don’t ask what the company can do for you but what you can do for the company”, a play on John Kennedy’s famous words. And this applies not just to employees, but the owner too, he says.

Upstairs in his office – where the large windows offer beautiful views of the sea in the small town of Lysaker, just outside of Oslo – the man who transformed the family business from a company best known for tobacco to a diversified industrial and investment firm seems relaxed. The 51-year-old is almost statesmanly – tall (191cm), with an athletic build and an assured air. Interestingly, there’s politics in his blood.

“[The Andresens] have been wealthy, engaged and influential for more than 200 years, not limiting their engagement to business but also being involved in politics,” says Professor Knut Sogner at BI Norwegian Business School, who recently wrote a book on the family. Andresen’s great-great-great-grandfather Nicolai was a member of parliament in Norway during the 1800s, as was his grandfather Joh. During World War II, Joh had to flee to Sweden because of his involvement in the resistance movement – and the Nazis took over the family’s factory.

Originally from Denmark, the Andresens came to Norway at the start of the 19th century. “They were sent here because Oslo was, not the Wild West, but it was a very entrepreneurial city,” says Andresen. Various members tried their hands at different things, from shipping to banking. But it is the industrial branch, which traces its business roots to 1849, that survives to this day. The patriarch of this line, Nicolai’s son Johan Henrik, started off by buying Tiedemanns Tobaksfabrik, a tobacco firm founded in 1778, and also ran an import-export business.

But it was under Andresen’s father, Johan Sr, that the first signs of diversified business group began to emerge. He set up packaging firm Elopak in 1957 and bought a number of companies, including ski products business Swix Sport (product pictured, left) in 1978. Finally, in 1998 – the same year Andresen took over from his father – Tiedemanns Group sold its tobacco holding. 

The pair jointly made the “easy decision” to sell, says Andresen. Tiedemanns was producing a tobacco brand under license – but the company that owned the brand decided to renew the contract on a yearly basis. For a family that thought long term, this wasn’t appealing – and Andresen found himself in charge of a firm named after a brand it no longer owned. 

Although he had worked for International Paper in Memphis in the US, and spent four years in the family business’s finance section, when Andresen took the helm he says “people felt the jury was out”, that he hadn’t proved himself in a commercial way. “I felt I had a responsibility to many, to my family, my colleagues and employees, to society even. But I never let responsibility burden me in the sense that I freeze like a deer in the headlights – you have to be clear on what it means to move a company forward.”

For Andresen, that meant transforming the family’s business. He decided to “put the bar high”, drawing inspiration from companies such as Warren Buffett’s Berkshire Hathaway (pictured, right) and the Wallenberg family’s investment group, Investor AB. “Learning from the best is obvious – if you do sports that’s what you do. You watch everybody else’s technique. Not everybody can be Lionel Messi but you’ve got to aim for something,” he says. The result was not just a new strategy, but also name, location and, in some cases, people. The four years previously spent working for the family had taught him a big lesson. “I found out I always need to recruit people that are better than me.” He adds, laughing: “And you say, ‘that shouldn’t be too hard!’”

Now, as well as long-term holdings in businesses including Elopak and Swix Sport, there’s a real estate arm and an investment division specialising in Scandinavian equities. Under its Ferd Capital division – which includes its long-term holdings – the company has a venture capital portfolio where it makes investments in communications and technology companies in particular. There’s also an alternative investment arm, covering hedge funds, fixed income, private equity funds and special investments.

In some ways, it is almost like the family has come full circle, says Sogner. “There is a link from the trade and banking past to today’s Ferd.”

But what did Johan Sr think of all the changes at the time? “He wasn’t very sure if I was doing the right thing, but he let me. And of course, I am extremely grateful for that,” says Andresen. “I did inform him of what I was doing, but he wasn’t part of the executive. At that point we didn’t have a board.”

Ferd now has a board, another one of the changes Andresen introduced. He also set about being more transparent by publishing the company’s financial results on its website. Those numbers show the business grew by more than 60% between 2004 and 2011, with revenues hitting 9.2 billion Norwegian kroner (€1.23 billion) at the end of that period. For the first half of 2012, operating revenue was 6.5 billion kroner, up from 3.9 billion kroner for the same period in 2011.

Andresen also decided to make Ferd’s website available in both Norwegian and English. “We have taken the tack that our most important value is credibility. And in order to be credible you have to be open,” he says. This extends to social media, where Andresen is active on Twitter (@FerdOwner), having decided to embrace social media at the 2011 World Economic Forum in Davos. Ferd doesn’t run marketing campaigns, so he uses Twitter to give people a sense of “who we are and what we stand for”. He’s now got about 27,000 followers. “I think I actually have a knack for it – I can be quite punchy; some people say too punchy,” he says.

He’s been using Twitter to draw attention to the company’s newest division. Four years ago he made what might seem to many a strange decision, creating a section in Ferd called Social Entrepreneurs – which works with organisations helping children and people (pictured left is Ferd's social entrepreneur team of Katinka Greve Leiner, Martine Turmo Garshol and Øyvind Sandvold). It was “unusual”, Andresen admits, to include it within the company. “I didn’t pull out a chunk of money and put it in a foundation. [The division is] actually an integrated business area with its own team, allocation and strategy. They in turn make use of the full resources of the company, especially people in the operating companies and in Ferd as board members, coaches and mentors.”

Ferd doesn’t hold a direct equity stake in the 10 social entrepreneurs it supports. Instead, they receive capital in the form of direct contributions, soft loans, grants or similar, but it is the ability to draw on the skills of Ferd and the various companies it owns that Andresen believes makes all the difference. It is, he says, “much more powerful to use a combination of capital and competence, than capital only”.

Plus, Ferd – as part of its venture capital portfolio – is used to turning around businesses; professionalising them and developing strong strategies. “These social entrepreneurs are the same as some of the smaller businesses we invest in. They need exactly the same things,” he says. And although there was one “crash and burn” – a social entrepreneur that lost the public contract it needed – overall it’s been a success. Three or four are “ready for exit – we can actually withdraw and they’ll be self-sustainable or have another partner”, says Andresen.

He’s spending about a third of his time on social entrepreneurship now – does he feel it’s his duty? “It’s not really our responsibility. No one would come here and say ‘Johan you are responsible for these kids’. But responsibility is a funny thing – once you take it, you have it. Once you are there, you feel – and rightly so – if you can do something about it, you should. And we can and do,” he says. Anyway, he reckons, family businesses are often best placed to do this. “Family companies have high credibility in local communities. They have a fantastic network of trust where public companies do not. I think they underestimate the way that could make an impact if they find the right cause or partner.”

Andresen also sees it as a good introduction to business for next-gens – and already has plans for his daughters. “I hope that one of the first board seats my girls have will be on one of those social entrepreneurs.” But that doesn’t mean he expects his children – both teenagers – to work at Ferd, although he does want them to be “active owners”. “My daughters are much freer to choose than I was. Of course, I had a theoretical choice but I think I was brainwashed from when I was young,” he says, with a hearty laugh.

In September, he surprised everybody by announcing plans to step down as chief executive. It wasn’t a decision taken on a whim – Andresen says he felt the business “had come to a point where it could be done”. Turnover was strong. And he says: “I had plenty of people who were better than me in different capacities.” The move triggered six internal promotions in Ferd’s head office alone, with chief financial officer and long-term Ferd veteran John Giverholt named as the new chief executive. It showed employees, says Andresen, that the top role was not reserved for family members.

Andresen will still be involved in Ferd, as chairman and owner. “For better or for worse, I am guardian of the faith. I am the one who promotes the values, talks about them everyday – and that will still be the case.”

But, he says, he needed more control over his time. “I’ve been the company man for so long, and diligently so. I’ve always come to work, I’m never sick. I never walk a dog if the weather is nice or do some fishing in the morning. You know you are supposed to be at work,” he says, banging on the table for emphasis. “And now I think I will work just as much, but I will simply do it when it pleases me to a large extent.” The plan is to spend more time with his daughters – and with his new puppy, a vizsla called Lucky (pictured, right). But it’s two weeks since he officially stepped down and it seems he’s as busy as ever.

“What I’ve said here is: ‘Don’t expect to see me here every Monday or Friday. But I will be here the other three days for sure.’ And it turns out that the other three days are full, so they are booking me on Monday or Fridays anyway,” he says, laughing again.

 

NORDIC NOUSE: INVESTMENT HOUSES

HARTWALL CAPITAL
Family: Hartwall
Country: Finland
Core investments: Stockmann, Cramo, Karelia-Upofloor

Hartwall Capital emerged from a brewing family that traces its origins back to 1836. The family rebranded its investment house to Hartwall Capital in 2003 after its brewing business merged with Scottish & Newcastle the year before. Much smaller than its Swedish counterparts Investment AB Kinnevik and Investor AB, Hartwall nevertheless had revenues of more than €180 million in 2011. Big holdings include flooring company Karelia-Upofloor and
retailer Stockmann.

INVESTOR AB
Family: Wallenberg
Country: Sweden
Core investments: Atlas Copco, ABB, Ericsson, SEB

Set up in 1916 by one of Sweden’s most famous business families, the Wallenbergs’ Investor AB is now among Europe’s best-known family-controlled investment firms. It remains firmly in the family’s hands, with Jacob Wallenberg chairing the business. As well as holdings in listed companies like AstraZeneca, Ericsson and SEB, Investor also has big stakes in unlisted groups. It owns a substantial share in EQT, one of Europe’s most successful private equity groups.

INVESTMENT AB KINNEVIK
Family: Stenbeck
Country: Sweden
Core investments: Korsnäs, Tele2, Metro

Robert von Horn, Wilhelm Klingspor and Hugo Stenbeck founded Kinnevik in 1936 – and their families still maintain holdings in the now listed business, although the Stenbeck family, with more than 35% of voting rights, is the most influential. Cristina Stenbeck chairs the firm, which has a portfolio of listed companies across the world. Kinnevik likes to hang on to its investments for a long time and works closely with the boards of the companies it has holdings in.
 

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