Success Isn’t the Finish Line: DSM-Firmenich CEO Dimitri de Vreeze

0:00A CNBC original podcast. After more than three decades at science-based firm DSM, Dimitri de Vreeze made the hardest decision of his career. He sold the materials business, the part of the company where he had grown up professionally, built teams, made acquisitions and transformed the business. That was the most difficult thing I ever did. Strategically, he believed it was the right move. Personally, it felt like giving away part of himself. I said, you now need to take care of it. And if you don't, I come personally after you, right? And I even wrote him a letter where I copied all the employees and saying, listen, you now take care of my baby.

0:39For De Vries, that decision captured the philosophy that has kept him at one company for more than 35 years. Success is not the finish line. I'm going to change things anyway, because that's how I'm built. I'm even going to change stuff which is running very well, because I think it can run better. These are Dimitri De Vries' executive decisions.

1:03Tell me a little bit about who Dimitri De Vries is or was as a young person. Tell me a little bit about your background. Yeah, I mean, who is he? I'm still finding out, but let's start with the first steps. So I have one sister. So my mother is coming from an Indonesian background, and my father was coming from a background where my grandma and grandpa were pretty poor. and they had to work hard to be there. My father was the youngest of a family of eight and he had the ability to study, but there was no money for him to study and therefore he started working in an audit firm when he was 16, working and studying at the same time.

1:47And that obviously had an impact on me and he says, never waste time and talent. That's part of it. And my mom was an emergency doctor and I had to work four days a week just to make sure that my sister and myself had a decent life. So from the beginning, if you have certain talent and capability, that comes with responsibility. And luckily enough, I had certain capabilities, but my mom and dad made it very clear that that was not to be consumed, but that came with responsibility. So I think I was babysitting my sister when I was nine. I thought that very unfair because, I mean, nine years old, right?

2:28I still blame my sister for that, although she couldn't do anything about it. But I think responsibility to do something is something which was the starting point of my education. It's interesting, isn't it? Our parents give you that discipline. They give you that hardworking ethic. And as you say, at nine years old, it feels pretty unfair. But my goodness me, that is a lesson that it gives you for later on in your academic life. and then later on after that when you go into the workplace? Absolutely. And maybe it is part of who I am today because that was a starting point. So I always said to my dad, you did it smartly.

3:04You were not pushing that I should do it, but I knew very well what to do. For my dad, me going to university was a big step because he had to work when he was 16 and then work Monday till Friday. Then on Saturday and Sunday he was studying. The financing he got from the first five days, he was paying at the university. So for him, it was like a luxury to study during normal working hours, right? So for me, that was very clear that the study was something seriously. But I don't know about you, but if you study, you also want to enjoy life a little bit. So I became part of a fraternity. And I could become president of that fraternity, but you lose a year of study.

3:42Right. So I went home. And I was proud because you've been asked to do that, right? So I went to my mom and dad, and said, well, I have to discuss you a little bit. And I was so happy that I was asked to be president of that fraternity. I said, listen, I really want to do this. And my dad said, what do you mean? I said, well, I mean, yeah, it's an honor to be asked. Yeah, but you mean you will lose a year? I said, well, yeah. Well, I mean, there are better things to learn than being president of a fraternity. So we're not going to finance it. And I was so mad. and I remember that was a pivotal moment because I love my mom and dad but there I decided that there will be nobody in my life for the future that depends certain directions I would like to be taken so I couldn't be president of the fraternity because I didn't have the money but every step thereafter I was always looking for independency now you can have independency in your thoughts but if you're financially dependent on someone you're still being influenced by it So I think the first 10 years I wanted to make sure that I was completely independent in how to shape my life.

4:51That's fascinating. Your parents, your loving parents who have given you so much and so much discipline, who you absolutely adore, but you still had this fire in your belly because of their decision, which prevented you from that ostensibly fun year. And they said, no, you work. You've got to work. We're financing this as well. So you had that contradiction going on. Fully. I mean, and I still remember when we reconciled that, because I think I was angry with my mom and dad for almost 10 years. I mean, we still met. I mean, it was not that it was bad, but it was still nagging in my head. And I think when I was 32 and I was already working, I think at that time, 10 years with DSM, because I started early because my dad didn't want to finance it.

5:34So I started to work for a beautiful company called DSM when I was 23, 23, almost 22, beginning 23. So after 10 years and making a bit of promotion and showing my dad that I was not consuming my talent, but was doing something with it, I told him, I said, listen, you remember what was a critical moment for me? He said, well, what? I said, when you decided I could not become president of the fraternity. And he said, yeah, but that was a good decision. I said, well, that, maybe it was a good decision, but it really impacted him on how I was shaping my career. And he didn't get it. For him, it was so intrinsically the right decision that he didn't even understand it was a topic.

6:15And I said, well, I mean, now you know how I felt about it. Is there something where you would have done differently? No. But he said, I now understand your situation better. Because he didn't study with a fraternity, with a student life, because he needed to study to earn money and to move forward. So there was also an understanding from both sides. but still today from that moment i still have that little bit of rebellious side to me all young men have that rebelliousness you've just reminded me of the conflicts i had with my own father at same similar kind of period i went straight into trading at 18 rather than going off to study at university i did my night school later on as well so all young men have that conflict with their father even though their father's trying to do the right thing but as angry as you were from 23 or 22 to 32 with your father and you had to have it out of him in your early 30s that decision of your father's made you the man you are now well i mean unfortunately he died four five years ago so now i can admit because he's no longer there uh obviously i admitted it when when he was still alive so we had a very good conversation about it together with my mom mom was always trying to reconcile right because my my dad was relatively stubborn as well like like me So my mom was the ambassador and trying to be diplomatic between the two of us because, I mean, she loved me and my dad, obviously.

7:40But no, I told them that. And I think it's fair. On the other hand, and that's what I told them. I said, listen, if you would have accepted that year as president of the fraternity, it was not only fun. It was also learning because it's a mini society in itself, right? But I think the drive, the rebellion was already there when I was five. So even before that has happened. And the interesting is still today that rebelliousness is still there. The only thing is that I'm aware of it. I can, in most of the cases, control it. So it is something which also has shaped me. It's the first time in I've recorded 21 of these executive decisions that rebelliousness has come up as a key quality.

8:23Do you see it as a key quality of you as a CEO at DSM? I think it's a key quality and it's a key risk Okay So I mean in all fairness I mean I have a few mentors in my life Who always Loved me for think radically And do things radically And they've always said Let's be careful that you don't take any shortcuts Because the rebellion is in itself And I think I have learned over time What the opportunity is To be rebellious To think differently But also what the risk is And if you're aware of it I think it's in a good balance. If you have that, I think it's super powerful. It's super critical. But you need to be aware of it, and you need to understand the downsides of it.

9:08You clearly still have that passion of a very young man. This is coming out. I would call it fire in your belly. Does your management team have to rein you in? Well, I mean, yeah, I'm super high intense. And I think, by the way, I think every CEO needs to have a high level of intensity because this is not a job. This is a lifestyle. This is passion. It's one of the reasons why I still work for Dears and Firmities, right? 35 years. I mean, most probably I will not trump my father with 50 years in one company, but 35 years because it's who I am, what I stand for, which is fully aligned with the company I represent.

9:49So for me, it's like, okay, it's a stock listed company, but I could be just a family shareholder, right? Because it feels like it's my company. Now, it's partly my company because I own a few shares, but that's not the point. The point is that I feel like it's mine. And obviously, the team sees it as such. And I think the people working with me and the people I select to work with need to have a certain high level of intensity for two reasons. One, because I like to work people with high intensity. And B, you need to have high intensity people to push back on me. Sure. So do I. You and I are very similar in terms of the intensity we put into our job.

10:27But I've got one of my Squatbox producers sitting here now. And sometimes I think I must drive them mad with my intensity on the show because I'm always boom, boom, boom, boom, boom. No, we can do this. I'm like, no, we're producing the show, Steve. You do your job well and I will do ours. but not everyone has the same intensity in their career. Not everyone wants that same fact. They're just there to do a job. Do you have a problem with those kind of employees who are just there to do the job? No, I think if we were 30 ,000 of people with the same intensity at DSM Fimini, we will go nowhere. You need better other qualities.

11:03Yeah, you need all the qualities as well. But I think if you want to drive and shape a company, you need to have that intensity because you need to keep pushing, you need to go on. And therefore, if you would give me a company in a status quo, I think that would not be a right choice. Because I'm going to change things anyway. Because that's how I'm built, right? I'm even going to change stuff which is running very well because I think it can run better. 1990, you're 23, you've joined DSM, which was originally called Dutch State Mines. So it just gives us an example, I think it's 1902, of how this company has evolved so incredibly as well.

11:41but just tie that in with your father stayed at the company for nearly 50 years you've stayed at DSM for 36 years, what were you thinking 1990 when you joined this company? Well that was very funny because I thought I would stay there for a couple of years and then move on in all fairness, I did my traineeship at Shell as good Dutch guys. You're not the only one, that came up with another CEO in one of our conversations recently It's a fantastic education That was the benchmark, I mean management development, trainees, that was the place to be. I mean, if you really wanted to learn, that was it.

12:12So I was in, I was as a trainee, I was there and we were traveling around and, and we basically wanted to land in, in the Netherlands. And then basically they said, well, okay, fine, go to The Hague and, and we'll settle you in. They said, well, I'm not sure whether I like trading. So I said, do you have another job for me? He said, no, we want you in trading because you're good in trading, continue trading. I said, I don't know. So I was looking around at other companies at that time. And I decided for DSM because they basically said, come over. You are allowed to have a postgraduate finance study, which we pay for you.

12:47You work four days. You study one day. My dad found that ridiculous. He said, work five days and work in the weekend. But apart from that. And they would pay my relocation costs. I'd say, hey, that's great, right? So I get study paid. I get the relocation cost paid. I will go there for two or three years. They pay for everything. and after three years, I go to work for a very cool other company. Because it was Dutch State Mines, right? It was not the coolest place to be at that time for youngsters. So I just came in and said, listen, I will do it for two, three years, and then I move on. Now, guess what?

13:18I'm still there. Why? It's a special company. It's a company that's always on the move and has this unique capability to think around the corner. Not to think what's happening next year, but what is it what the company needs in five plus years from now? And within the company that was called a business strategy dialogue, and about 1 ,000 people were involved in that dialogue. It was a true dialogue with customers, with employees, with governments. It was really fantastic. And therefore, every five years, the review of the portfolio was taking place. But that has been part of why I'm still here.

14:04The second part is the culture. We do care about each other. And maybe in the beginning of DSM, it was too much. It was cozy. It was all fine. Now it's a performance-driven company. But we still do care, truly care about people. By the way, that has been one of the key elements of the success of the merger. Because the Feminist company had exactly the same. Well, it's a family company. It is.

14:34Give me an example of how you treated failure, because I haven't met a CEO yet who have made good decisions all the way through their career without learning from the bad ones. Can you think of any examples where you've absolutely made some terrible decisions and how it went or what you've learned from it? I think, and it was a joint decision also with my dear Fike, who has been a fantastic mentor to me. is Fiky C. Besma, who for me had such an amazing relationship as well. He was a CEO for 13 years. He was the man that you and Geraldine took over from in 2020. Tell me about what happened with this decision with Fiky C.

15:10Besma. So we are a biotech, biotechnology giant. And we had this fantastic project, which was second generation biofuel. So you lose waste from crops, corn stoves and then you make biofuel out of it right and this was 15 years ago you know and that was a fantastic technology in a world on the pilot plant and we were scaling it up in in iowa in the u.s and that technology worked on the pilot plant but it didn't really work on large scale yet and every time every year there was an update and every year about 15 million need to be added to it. And every year the story was, give us 50 million, we'll make it work next year.

15:56Good old fashioned mission creep. Up you go. And every year, there was a great story. And every year we were convinced this was it. I think we've burned more than half a billion. Hang on. So 15 million increments and you've burned more than half a billion. Every year. Dollars? And why dollars? And why? Partly because of the normal trick of sun costs, right? I mean, I had been played. But part is you so strongly believe that this has to happen. And we never failed within, at that time, DSM, on a technology that didn't work. When we failed, in most of the cases, it was because the market was not ready.

16:38And in this case, the market was there. It was even, there was a sort of a requirement to add to the normal fuels. You needed to have temperature. So it was all there. process together. And we couldn't have the technology to be worked. It was the enzyme technology, it was biotechnology, it was ours. And then a certain moment in time, we just basically said, okay, let's stop argumenting about the project. When it hits more than 500, we pull the plug. And we could have pulled the plug already years before because the technology, it was so clear. I mean, the message was out that we would not solve it.

17:10It took us two and a half years to come to that mental pulling the pluck. And still today, I sometimes think, maybe we did it too early. You never know. That's the point, right? You just mentioned the trader mentality, Dimitri. You and I are ex-traders. We know what it can be like when you've got a bad trade, but you still fall in love with a bad trade. That's what you did. Was it you or Feike, or is it because it was two of you? Well, I mean, you know Fike as well. I mean, he is in love with this technology and innovation. I think I'm a little bit more on the finance and the economics of it. That's why we were a fantastic combination.

17:50But we all agreed. I mean, if there's no progress, you need to pull the plug. But it's still painful. If I talk about it, it even hurts. Could you imagine? I think I know what you learned from it because I've got a line here that says one of your biggest risks in decision-making is treating assumptions as fact. And I think that maybe comes from this as well. You assumed it was going to work rather than the fact saying to you, it's not going to work. It's super scary. You need to ask yourself whether what you think is an assumption or whether it's based on fact. And why do I say that? I mean, I fly a lot.

18:27I'm also like to watch this documentary on these airplane crashes. While you're flying? Yeah, while I'm flying. I'm perfectly okay. I like it. I love it. I think it's on National Geographic or whatever. And they always do the analysis on why. Yeah. Right? And the interesting is, and I've also learned that, that it's normally two or three factors why there's a failure. And normally it is people assume things and confuse that with facts. And if you have one or two wrong assumptions, it goes down the drain. You make a mistake. And therefore, I'm pretty rigid when we make a business decision. I say, listen, is this an assumption?

19:08Is this a fact? Or is it a belief? To your point on the second version. And that's the basis of how you make all your decisions. And the last one, the belief, is the last question I ask. Because if you have such a strong belief, like we have with the second generation biofuels, there's such a strong belief that it should work, you don't care whether there's assumptions or facts. because your belief is overruling everything, which is the most dangerous assumption you could make. We've mentioned Faiqi a lot. He is an amazing character, and I've thoroughly enjoyed my time over the years chatting to him as well.

19:42You took over as joint CEO in 2020 with Gilles Rémaché. Yep. Tell me a little bit about that, because it was a strange thing to come up with a co-CEO role after quite a process of DSM saying, oh, we think this is the right structure going forward, but taking over from such a big character. Yeah. Well, I mean, Feige always said, listen, I mean, I was such a great CEO, I can only replace by two.

20:07And externally, Geraldine and myself said the same. I can imagine him saying that. How much do you and I believe that Feige meant that? No, I mean, Feige has a great sense of humor. So, I mean, you can joke about it. But at the end of the day, I think why it was chosen for a co-CEO was very clearly that if I would become CEO, Geraldine would leave. If Geraldine would be CEO, I would leave. So at the end of the day, there was a decision by the supervisor board to be made. And Geraldine and myself really felt that we were on the trajectory. When FICA left, why not explore doing it together? And we said, hmm, interesting.

20:39Is that a preferred route for both of us? Not initially, but it was a fantastic continuance of DSM at that time. I can only think of a couple of other corporate examples. One was in the British finance industry, and I think there was someone in the States as well. It doesn't tend to work as a rule. That's why. And I feel myself quoting the Highlander movie from our youth. There can be only one. At the end of the day, to make the ultimate decision, the model throughout the whole corporate world is there can be only one. At certain times, but it's very traditional thinking, right? So remember, we had DSM.

21:16We didn't have any portfolio change. We needed to grow what we had on the life science. Geraldine and myself were 100 % aligned on the strategy. not 99.9 to your point because if you were aligned on the strategy for 99.9 the whole world will zoom in on the 0.1 percent we were 100 percent aligned so and we were because during covid we acquired glycon we acquired herber we sold off the material so there was there was there was a hundred percent alignment and we we also set it up front to each other so listen if we have 100 alignment it could work secondly we made a clear distinction on responsibilities so we were co-CEO on the strategy.

21:57I was running the business with Science and Research. She was doing CFO with CHRO and All Legal. So it was, I mean, obviously we were sharing a lot of stuff together, but the strategy we co-owned, there we agreed 100%, so it really worked. Now, then your next question could be, well, why did you stop it? It was so successful. 2023, you became the sole CEO. Yeah, because at the end of the day, when we merged, a new leadership is required. If you merge and integrate the company, you need someone who takes the decisions with sole responsibility than if you continue the pathway as we had with DSM.

22:32So it was a very natural evolution. And in all fairness, for me, I've learned quite a bit. I've learned from how Geraldine looks at it. I've learned from myself. What was the hardest lesson? Letting go of your ego. Did you do that? It was difficult. You just said to me, you know, about your rebelliousness, your independence. You should ask Geraldine, I was rebellious at the time. Were you hard to work with as a co-CEO? I don't think I was easy. Geraldine strikes me as a very calm, measured person. And you are an incredibly passionate, fire in your belly kind of guy. I think in all fairness, I think it's more due to Geraldine that it worked than it was about me.

23:12I learned quite a bit and I've changed. And I have parked my ego. because a co-CEO can only – I don't have a big ego, but I do have an ego. You have to have an ego to be a CEO, don't you? And I've learned. So I think I've become a better CEO because of that co-CEO experience. That's interesting. I get on incredibly well with you. We have very good frank conversations on earnings as well, but I don't believe a CEO who tells me they haven't got an ego. Would you? Because I think to get to the top, you have to push yourself forward. A bit like saying, let's take the former prime minister of the Netherlands.

23:47Fantastic man, Mark Rutter. I've got on very well with him. I've known him for 15 years or so. He strikes me as stunningly personable. But he wouldn't be the PM for so long if he didn't have an ego. Well, I think, you know what, Steve? People think that ego is negative, right? And it can have a huge negative collateral if you are. But if you want to shape things, and you also take responsibility if things go wrong. Owning it. Yeah, that ownership requires certain self-confidence and ego in itself. Now, if you only couple that with I'm the king, so everybody should listen to what I'm saying, that is the wrong ego.

24:25I think the best ego is, okay, how can I improve myself? Where can I take responsibility for what I've done? How do I reflect on what went wrong and what went well? And that also requires a little vulnerability on the ego. Everybody thinks ego is strong. Ego for me is also being vulnerable to yourself and to be looking into the mirror and say, hmm, did I do the right things? I couldn't agree more. I'm better at my job when Tom over there can turn around to me and say, you're saying that, that's not good. Or you need to pause here. Or actually, you're approaching that topic in the wrong way. And yet some producers at CNBC, don't say that to Steve.

25:06I wouldn't if I was you. But the interesting is, because of our intensity, sometimes people are scared to say that to us. Yes. And you need to be aware of that. So sometimes you need to invite people to give feedback. Because in all fairness, I mean, Robin is also here. He knows that he can say anything to me. I don't take it personally. I take it because I want to learn. But if you don't work one-on-one on a daily basis, our intensity could be frightening. Look, I'm not saying we're the same person, but we're in our mid-50s now. And I think that we both are passionate about what we do. I know we are.

25:37we are both always trying to learn and always trying to do the right thing for our organizations just one word before i move on but i still to that point i still want to run a marathon faster than you you inspired me and triggered me so i go for the ship you are an amazing man in many ways that's never going to happen oh let's see i would love the competition is on i'm so excited um i've one more decision before we come to you as a solo cea and obviously the transformational deal of this firm inish you divested you mentioned it earlier you divested the materials business from dsm that was a big decision did it really hurt you because i'm pretty sure i've seen a quote that that's the business that you felt was your baby that you'd built up that was the most difficult thing i ever did and why a business and give it up yeah but why in this specific case because i think i knew almost everybody i've been raised in that business we did acquisitions we did amazing things.