A holding structure is perhaps one of the smartest forms of organization that exists. At least if you use it like Fritom does.

A group of companies with related activities, in this case logistics service providers, start a holding company to organize and share a number of overarching organizational activities. This is cost-efficient, because the knowledge is bundled in the right places, the subsidiaries can concentrate on their specialty, while the holding company facilitates them in areas such as IT, risk, finance, etc. And that works ideally.

Of course, this holding structure also has its challenges. What needs attention, for example, is “who is responsible for what?” and “who makes that decision?” This is extra relevant in the case of a change that affects both the subsidiaries and the holding company. In this article, we provide nine tips for how to approach such a change.

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An introduction: Fritom

Fritom Group is a group of seven logistics companies, each with a different identity and specialism. The companies work independently and are used to a high degree of autonomy. Entrepreneurship is decentralized, with the holding company playing a facilitating role.

That does not mean that the holding company does everything the daughters want. Together with the holding company, the daughters decide how to use the joint funds, so they choose together what is best for the group. After all, resources are, by definition, limited. For example, the subsidiaries themselves are about their operations and commerce and the overall holding company is about finance and IT, for example.

In the case of Fritom Group, the words autonomy and power are not simple terms. Because what are the relationships between them when a change process affects IT, operations, and commerce? That's what made this assignment at Fritom Group special.

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The issue

Of course, the developments in the technology landscape have not escaped the Fritom Group's attention. Technology comes with all kinds of opportunities, but also threats. The directors of the daughters and the holding company realized that it was time to develop a vision for this.

At the same time, the issue arose: how to organize the IT function given all these new opportunities? IT lies with the holding company, that's where the developers, administrators, et cetera are, but the responsibilities between subsidiaries and holding companies turned out to be not very sharp. That also had to be included in the process.

The process was carried out by Summiteers in very close cooperation with Node1. Where Node1 brought in deep technical expertise and Summiteers tackled the control and change management part of the puzzle.

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Nine change lessons

To learn more about the transition, we spoke to Arnold de Jong (CEO of Fritom Group), Reinder Beuving (Director of Operations at the holding company) and Wessel Veenstra (general manager of subsidiary Veenstra | Fritom). We asked them what they thought made the change process a success.

Tip 1: Prepare the change process properly

The directors of Fritom Group thought carefully beforehand about how the shared vision for IT could come about. Imposing a vision top-down is not 'the way to go'. And that preliminary work has proven to be very valuable. The goal is to create support.

Because they know their own culture well, they looked for external parties that brought the right weight and knowledge to convince the group. “Our directors are not just convinced. They are critical, which is why “the weight” of an external person is important,” says Arnold.

Tip 2: Give space to the different voices

Summiteers and Node1 set out to really get to know each of the individual subsidiaries, to understand exactly what's going on. In addition to forming a complete picture of the content, it is therefore also important to ask people how they view the dynamics with the holding company. After all, there can be quite some emotion in that. After all, not everything always goes perfectly.

By identifying any frustrations and assumptions, we were able to properly open the conversation within the organization. If you do not make a careful inventory, unsolved cases may jeopardize the content and will translate into a laborious process. By researching and interpreting conversations that you have with people throughout the organization, you come to a rough picture of possible outcomes and give all parties the opportunity to find something about that content.

Tip 3: Set up the process entirely from equality

IT lies with the holding company. Then you run the risk of steering too much from the holding company and speaking too much. Real equality leads to mutual understanding and thus support. As a holding company, it helps to place yourself at the back of the queue in such a process, for example by first doing the inventory rounds at the subsidiaries, instead of starting with the holding company.

“As a result, during 'our round' as a holding company from Summiteers, we were also severely challenged on our attitude and behavior towards daughters,” says Reinder. “That was also right,” he says with a laugh.

Tip 4: Ask for commitment

When enough attention has been paid to retrieving content, it's time to sit down at the table. It helps to emphasize (and keep repeating) that the process is a moving train. “We chose this together, it is not optional and we are actually going to commit to the end result. This prevents people from pulling the emergency brake at the expense of the group,” said the trio.

In addition, involving external parties gives extra weight to the process, because the investments made in it add extra importance to the end result.

Tip 5: A clear and tight process

By carefully planning the various moments such as check-ins and presentations in time, you provide a clear overview of the route from A to B. All meetings must be very well prepared, so that everyone knows exactly where the process stands and what has already been decided.

Always communicate: this is what we did, this is what we are doing now and this is coming. This shows time and again the logic and the shared interest. Facilitate by delivering on time and always meeting deadlines. So choose these deadlines wisely.

In order to talk properly about the content, it is important to solve bottlenecks that come to light together. If there are issues that hamper the progress of a change process, you should get started with them first.

At Fritom Group, for example, there has always been a lot of use of informal lines and we had to learn to follow the agreed route through the companies. If a problem occurs, people within the holding company should be able to climb higher up the tree, but in the right way.

It is essential to have confidence in the structure, each other's solutions and speed of response, as this prevents things from getting mixed up. After all, that makes it much slower as a whole, and you don't want that. A change project often requires additional consultation structures to keep the watches on the same page and to set priorities together.

Tip 6: Keep testing

At every point in the process, it is important to always check with the entire group whether the analyses and conclusions presented are correct. This is by asking the question over and over again: “Based on what we have heard, this is our preliminary picture and/or advice. Does this match your image? ' This ensures that everyone can 'tick' at every intermediate step and the vision finally presented becomes predictable.

Tip 7: Work from “common ground”

The role of the holding company is to facilitate the subsidiaries to reach joint decisions and thus also to make concessions. This includes a clear vision and leadership from the holding company. Commitment to the holding structure and associated roles is crucial.

It often comes down to the holding company's role to continuously ensure that commitment. This is both by continuing to dialogue with the daughters and by setting up the organization in such a way that the structure helps facilitate the commitment. That is no different with such a change process.

Because it is often difficult to agree on the content in detail, it helps to investigate where the “common ground” lies. Because concessions also have to be made and the changes can 'hurt', there must be good reasons to keep the change on track together. Although the conversation about the details could be challenging, people could always go back to shared interests.

For example, the modernization of IT is being stimulated from outside, such as digitization in society and customer expectations, but the demand for better IT applications came from the subsidiaries themselves. In its facilitating role, the holding company was therefore also able to continue to emphasize: “We are here for you together.”

Tip 8: Take your time, care over speed

During this process with a dynamic where autonomy is a sensitive topic, there must be a lot of space to let the group “do its thing”. It is quite exciting to see if everyone is willing to sacrifice some autonomy in order to improve together. And that just takes time. What helps is when everyone feels and experiences that they are being listened to and that there is also room to let off steam on things that are not going well.

“The 'collective wailing wall' has certainly helped,” says Wessel. “If you can leave history and assumptions behind, you won't have to talk about that in the future. If you give space for that, when something new is invented, you can also fully focus on it.”

The final vision was 80% similar to the vision that the group had roughly in mind before the process. However, due to the care of this process, strong buy-in has been created. Support for the final IT vision was very high, because it became clear that there was a willingness to make mutual concessions and a joint process was carefully completed.

“Everyone had every opportunity to provide their input. By taking care in the process and constantly testing and checking off together, you ensure that the content and progress of the change process are not jeopardized by dissatisfaction with the process. Everyone can see the end result coming in this way and therefore accepts it. Together, you can therefore confidently tick the end result at the end result,” the trio looks back.

Tip 9: Support = implementation

Committing to the end result together in this way helps implement the vision. Actually, you're already implementing a bit. Because implementing the vision can also hurt in certain parts of the organization.

For example, Wessel really had to take a moment when his own talented application manager started working for the holding, a consequence of the joint IT vision and organization setup. And that level of commitment is only possible when all parties also understand the usefulness of these kinds of consequences.

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