From management consultant to established industry leader, Henk de Vries has a clear view on the production of fully custom builds and has redefined Feadship’s yacht building process
Interviewed by Juliet Benning
If ever there was a demonstration of marketing prowess at a yacht show it was the ‘House of Feadship’. A short tender ride from the Fort Lauderdale show, the Italianate villa provided a sanctuary away from the public eye in which Feadship could discreetly conduct its business.
It is in the villa’s waterside gardens that I meet with Feadship’s outspoken director, Henk de Vries. Bumping into him earlier in the week he had told me there was a bone of contention that he wished to address, namely his concern over media portrayals of semi-custom builds being quicker and more efficient than fully custom. It was this desire to re-educate me, and reveal more about the super-efficient build processes at the Dutch shipyard, that became the cue for our interview.
After disembarking the Zeelander tender, I was given a tour of the premises – De Vries, as one might expect, was in a client meeting that had over run. The extravagant and rather baroque interior of the villa was a hive of activity as catering staff embellished it further with decorations for the Great Gatsby party that was being held for Feadship crew that evening. After my exploration I was in no doubt that Feadship’s clients would feel right at home negotiating deals in such charming surroundings.
Judging from Henk de Vries’s body language and mood, the show was going well for him. He seemed relaxed with a youthful vitality about him, and dressed in a pale blue cotton shirt and slacks, he projected an air of informality.
But far from the established industry leader he is now, De Vries’s entrance into the family business had at first been somewhat reluctant. Demonstrating an entrepreneurial spirit of independence, he had already carved for himself a career as a successful management consultant when he was invited into the Feadship fold. He says: “In 1987 I was in between jobs and I was looking around as to whether to continue in my current management consulting field and my father, who was in his mid 50s at the time, said ‘Are you coming or not?’ I said ‘I dunno, why should I?’”.
De Vries makes no secret of this reluctance, but why was he so hesitant about joining the successful ranks of his various family members? “It was really the complexity of family enterprise that put me off. Working with the five shareholders; uncles, cousins and brother. But I then had a meeting with my four uncles and I was really impressed with how entrepreneurial they were. I wasn’t previously aware of it,” he explains.
Swift to make his mark on joining the family business, De Vries made a comprehensive analysis of the market and was soon given the position of sales and financial manager. In 1996, De Vries’s father retired and he and his cousin Tom took over the company, taking on the roles of CEO
and COO respectively.
“When I joined it was one company with one small subsidiary, about 110 employees and a turnover of about NLG35-40m – that’s not even €20m. Now Feadship as a whole group has 1,500 employees, 900 of which are De Vries, and makes many times over the turnover we achieved in the ‘90s.” De Vries tells me, evidently proud of this significant growth.
Steep learning curve
Eager to enlighten me further on Feadship’s skill as a totally custom builder, De Vries explains about its brief foray into semi-custom builds: “In 2003 and 2004 our market was exploding. There was so much demand and everybody who was smart grew one way or another – either by taking over other companies or by broadening their spectrum. We figured that we were going in two directions: one was towards much bigger yachts (at that time 70-80m) and one was going into smaller boats and standardising them in order to build them competitively. That became the SL39, of which we eventually built three and the F45 Vantage, of which we eventually built six.”
The venture provided the shipyard with a steep learning curve. “In hindsight it was a good way to get a grip on what drives cost, but it was also an eye opener that our companies are not suitable for building a standardised product. It is not what we do,” says De Vries, taking on the mantel as a purely custom yacht builder with a stubborn pride. So what went wrong? “My guys missed the challenge of custom work,” he laughs, as if his staff were his children and he their father, delighted by their progress at school. “We are so geared towards building very specifically towards a client and what they require. That is just what we do. That is what’s embedded in our genes. So after delivery of the last F45 about three years ago, we had some strategic sessions and we concluded what we want to do is purely custom.”
It was after the global financial crisis hit that Feadship took a magnifying glass to its build processes, fine tuning every detail in order to create the most efficient fully custom builds. Returning to one of his original points De Vries says: “There is a misunderstanding that when you develop a semi-custom platform that it is a better, cheaper and quicker way to build. It’s a very narrow view on how you run a superyacht yard.”
De Vries continues: “In 2008 it was difficult to sell, even for us. Come 2009, we tried to explain to our workforce that we really had to revisit the way we produced boats and come up with a more efficient and smarter way to build. At the time there was a tremendous pressure on prices and it got to the point where yachts were being given away at 50% less their value.
“We didn’t want to cut corners on quality. A typical way that many of our colleagues were cutting costs was to standardise their product – either the entire boat or the structure of the boat. We did neither. Instead we standardised the process. With the help of a consultant we literally redefined the way we look at building yachts. We became substantially more efficient.”
Given such an overwhelmingly successful outcome it is almost surprising that De Vries should consent to give away these secrets. “We took a much more structured approach,” he explains. “You have a process and you define the milestones in the process between 12 and 16 measuring points and at each one you define what you want to know, how far you want to be and where you are with the information about the cost and the manhours. And if the project is not ticking all the boxes the reporting gets to the top of the company.”
Challenging new plan
The process of thoroughly auditing builds means the management team are often in the yard keeping a sharp eye on progress. “We are capable of asking very uncomfortable questions in order to get all the boxes ticked before we go on. We stop everything before we get to the next stage in order to understand what needs to be improved. The review is simply a line that falls out of the regular purchase reporting. The reports are created by the project teams themselves in a format that they use to monitor the product. It is high-end managing,” he says.
But it wasn’t all plain sailing and attempting to convince a large and very well-established workforce about the new plan proved challenging. De Vries explains: “It took us six months to convince our staff that we needed to do this. We had all these projects on and we were working overtime, but despite being busy the order intake was lower than before 2009. We knew we had to be prepared. It took us until the middle of 2009 to get the consciousness in the collective company psyche that we needed to change something.”
But it wasn’t just the in-house staff who would be challenged by the post-2008 shake up. De Vries continues: “In the spring of 2009 we contacted all of our major suppliers to explain the need to reduce costs by 15%. The small suppliers were sent a letter and the 50 most important ones were invited in for a face-to-face conversation. Of the 50 most important ones, 40 to 45 understood the problem as they were going through the same with their business. They said, ‘sure, we will review what we are doing and see what cost savings can be made from our end.’ The two or three which did not understand are no longer in business. So that was an original cost saving – simply changing the way you collaborate with your main co-makers and suppliers.” The move, somewhat ruthless as it may have been, only served to demonstrate the value of Feadship to its wider industry family.
“In early 2010 we had just signed a contract that was at a price that would have resulted in a loss if we hadn’t done all this. The project manager was one of my clever cousins who’s now also a company director and his assignment was to make this build profitable. He went in with zero and when the boat was finished he came out with a small but satisfactory profit. And that’s now our standard operating procedure at Feadship.”
Nimble and flexible
In the wake of the recession many builders adopted lean manufacturing techniques, did Feadship also jump on the bandwagon? “Lean is a bit too one dimensional. Sometimes you need excess capacity. Lean works in a very standardised environment. If your product is custom it has two important elements in it – first, not each part is identical and secondly, with my clients, one thing I can be certain of is that they are going to change their mind. If my client wants something different halfway through I had better be nimble and flexible. It’s not that I have people sitting around doing nothing waiting for accidents to happen but we have an extremely structured way of dealing with specification changes. It’s very simple and very direct. There is not much fumbling possible with Feadship. We’re almost German in that respect, but with a lot more smiles.”
Given the success of the company’s overhaul, growth is inevitable but Feadship isn’t in the habit of overreaching itself as De Vries explains: “We typically grow in an organic way. We do some takeovers every now and again but growth happens naturally every couple of years. You will not see us building a 120m or 130m boat for some years to come. Our maximum capacity is self-imposed. If I have 300 people in a company and I want to get 100 more, it would probably take me three or four years to get there. There is no skill pool so you have to create it yourself.”
So there are no acquisitions on the horizon? “Not at the moment but we always have our eyes open. You have to understand it’s not growth for growth’s sake – it is relevant to have a significant market share and it helps that a market share is not so much defined by how much output you have per year but by the amount of boats you have on the water. In that we are still ahead of everybody else by a huge margin.”
Given that ‘professionalise the industry’ is a buzz phrase that’s regularly heard, as one of the most established figure-heads, what is De Vries’s view on progress? “I think
the market is improving by itself. I have no desire to push that forward. My way of dealing with customers is to be as open to them as I am to you now. If you know what you’re doing you have nothing to hide.” Indeed with a handsome villa proudly flying the Feadship banner at the Fort Lauderdale show, hiding seems to be the last thing on Henk de Vries’s agenda.