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From an owner to an owner

Matty Zadnikar calls for more entrepeneurship

‘It’s not really a sign of weakness to talk about bad decisions’

In late 2011, Matty Zadnikar from Limburg sold his brainchild Z-Safety, which specialises in safety services for the petrochemical sector, to the American company Total Safety. Retirement is out of the question He is planning to use SeaNet to launch a co-ownership scheme for luxury yachts. 

"The weather here is good almost all of the time ", laughs the shop assistant. The Croatian city of Split sparkling under the rays of the autumn sun and the temperature as high as 25 degrees. Matty Zadnikar thinks the Dalmatian coast, with its 1,000-plus islands, offers the world's best sailing area. He spent an entire season sailing on the Mediterranean: the Balearic Islands, Southern France, Italy, Malta, Montenegro, Croatia. However, the man from Limburg cannot see himself doing that sort of thing for the rest of his life. "You end up just burning money. Nobody enjoys doing that, even if they can afford it." 

Zadnikar turned his passion into a business, SeaNet, which is focused on the co-ownership of luxury yachts. The first ship, a Benetti Delfino 93', was based in Split. "I have always been fascinated by boats. My first one was an inflatable dinghy. I had to wait until I was 16 to buy a motor. We once caught sight of a luxury yacht and I turned to my mother and said I was going to buy one later one. Childish nonsense, but the memory of that came back to me three years ago when I had this boat baptised. (he laughs)" 

Zadnikar's father was a Slovenian who, while on his way to New Zealand, came here to earn some money in the Liège mines and married a Belgian woman. His son Matty began working in the mines in August 1979 and was recruited in 1988 by Irea, the training centre for the rescue service of the Kempen Region Coalmines (KS). In 1995, he decided to found Safety Services, a key division of the subsequent Z-Group, which was involved in providing safety service staff for major maintenance operations in the industrial sector and renting and servicing safety equipment. 

Within the space of 17 years the business grew to achieve a turnover of over € 80 million, with 500 people on the payroll in seven establishments in Belgium, the Netherlands, Germany, France and the United Kingdom. "The first time the Americans came to me with a takeover bid, I was not interested at all. They then doubled their offer twice, whereupon my advisors told me this was too good to miss so I jumped at the chance." 

Zadnikar likes to talk about doing business but has given up starting discussions with people who only look at the end result. "They see all the wealth rather than the work, the sleepless nights and the risks that preceded it. You spent several years working day and night. My wife would sometimes ask me what I was doing. I made sure that everyone got paid on time but we could not afford any luxuries at home. 

"I was lucky enough to be able to keep limping on during the hard times. But others don’t succeed and find themselves being accused of being fools as well. I know enough entrepreneurs who simply had a stroke of bad luck: a key customer who went out business, the Belgian state that took too long to pay up." 

"When I talk about entrepreneurship I spend over half the time dwelling on mistakes I have made. I don't believe in perfection but you have to be prepared to learn from your mistakes. It's not really a sign of weakness to talk about bad decisions." 

What mistakes have you made? 

MATTY ZADNIKAR. "For one thing, I went on for too long putting my trust in people who were involved from the very beginning. You start off together and then you first of all make someone a coordinator, then manager and subsequently director, until he ends up in a position he can no longer cope with. A CEO does not need to be surrounded by yes-men but people who provide you with challenges. 

"It was a close shave for Z-Group during the 2008-2009 crisis. I had to let 19 people go. They were mainly senior managers. That caught the trade unionists by surprise, as it is usually the workers who have to pay the price. But every dismissal left its mark. I even brought some of them home. One man simply admitted that the job was too difficult for him and had been floundering for as long as two years. I once bumped into someone in a shop who I had told that the company could no longer use his skills. I was expecting him to react badly but he actually thanked me. I was right and he now worked for a company that suited him perfectly. But others will probably never forgive me. 

"I started networking much too late. Before that I was always busy with the company and customers. In 2008 I became president of C.E.O. Limburg, the Club van Eigenaars en Ondernemers (Club of Owners and Entrepreneurs). Networking helps to generate ideas. You can learn a great deal from sharing experiences with other entrepreneurs. I have taken a number of management courses but I have actually learned a lot more from fellow company managers. 

"SMEs continue to be the largest source of prosperity. I have a great deal of respect for multinationals – the majority of my clients – but owing to all kinds of tax optimization procedures, for which an SME does not have the staff and time, comparatively little remains at local level. That's not right The public authorities need to do something about this." 

Did you know what you wanted to do from the start? 

ZADNIKAR. "When I was with KS I noticed companies buying safety equipment. In the mid-1990s there was no way of renting this type of equipment and maintenance services were almost non-existent. I decided to write to one of the sector's leading companies, Vandeputte. It so happened that it had completed a strategic exercise three weeks previously and had reached the same conclusion. And I walked in there with my idea and a willingness to invest." 

You had no funds when you started. 

ZADNIKAR. "My father, my grandfather and my uncles worked in the mines, me too. I finished secondary school and took evening classes to achieve an A1 qualification in mining. Consequently, I had to be excessively leveraged with the banks: the debt-equity ratio during the first few years was 80-20, and even 90-10 at one time. Bankers were a necessity for me and I invested heavily to remain on good terms with them. 

"So I am not going to join the chorus of people complaining about bankers. If it were not for them I would never have been able to extend Z-Group. I wonder if it is still possible nowadays. Many banks would probably now refer me to venture capitalists. I think that is a pity, as they are no longer playing their full part. 

"I have always been very aware of the need for me to maintain good relations with my bankers. Transparency is hugely important for me, particularly vis à vis the banks. I had two of them, Fortis and another one. I allowed them to see all the figures every quarter. The positive and the negative ones. When the crisis struck, I started cost-cutting like mad. One of my bankers nonetheless wanted to cancel my loans but Fortis continued to lend its support to me precisely because of the trust that had been built up. I am still working together with this bank. 

"The Vandeputte family from Boechout has always lent me its support. In 1995, Walter offered me the opportunity to launch my company, and I also enjoy excellent relations with his nephews Dirk and Stefan. In 1999, we saw the future differently and agreed to part on friendly terms, only to merge our safety businesses again in 2008. The crisis then hit, unfortunately. We each wanted to invest in our own branches and so, two years later, we decided to disband the merger. I still look upon it as a missed opportunity." 

The size of the workforce grew to include 500 employees. How did you deal with that? 

ZADNIKAR. "With the same spirit of openness. My door is always open at the office in Dilsen-Stokkem. I have always involved all my staff in everything, from the cleaning lady to the management board member. Everyone has always known how things stood with the company. When Z-Group was experiencing such a strong level of growth that I needed a works council I looked for people who were not only committed to the company but also dared to express their opinions. Over 90% of these people are also elected. That helped me, when it was sink or swim, to conclude a company collective agreement rapidly, according to which some bonuses were temporarily done away with. That enabled me to save nearly €1 million per annum. Once the crisis had passed, I created a bonus scheme for everybody in our company. 

"Apart from skills, staff motivation and personality are the most important qualities. Clients have often said that my employees are always laughing and displaying a positive attitude. If you treat your staff well and involve them in the success of the business, it has a huge impact on your reputation. If you allow your employees to take pride in their company, it can only be to your customers' advantage. 

"I organised an international project every year. Clients knew that if things went wrong, the boss would roll up his sleeves and join in. My staff sometimes did not know how they should react to start with but eventually I was just one of the team. I was then able to experience just how effective and efficient our organisation was. Apart from the respect of my staff in the workplace, I therefore I gained a wealth of potential opportunities for my company's improvement." 

In the end, you sold your life's work. You never mentioned the purchase price. 

ZADNIKAR. "And I won't do it now either (he grins). Z-Group specialised in safety services, with the largest branch being focused on supplying safety personnel during shutdowns. We grew step by step and extended our activities abroad. Total Safety Solutions followed the same path in the United States but was six years further ahead in terms of its development. They had had venture capital funds at their disposal for over five years. They bought Total Safety when it generated $100 million in sales and financed fourteen acquisitions, which tripled the turnover after six years. We were a perfect match, because the company hardly any presence in Europe, for one thing. 

"When it made a bid, I wondered if I were still the right man in the right place. I wanted to do business, create new businesses. But taking a business from zero to a € 80 million turnover requires another skill than increasing it from 80 to 100 or 150 million." 

Rather than working for a family-run SME, your former staff are now employed by a multinational. How does that affect you? 

ZADNIKAR. "It was a major change. Particularly as I lived behind the company. Instead of setting off early in the morning and returning home late in the evening, I was able to eat my lunch and dinner at home and enjoy maintaining a relationship with my wife and children. 

"During the first year a lot of people came to ask me questions about various matters but I was no longer the owner. I was not taking any more decisions. The Americans decided on the strategy over in Houston. The local European organisations were called up to implement this. That is a completely different business model." 

Was transferring ownership to your children an option? 

ZADNIKAR. "My youngest daughter Vicky has caught the entrepreneurship bug but she was still too young. The twins have chosen another path." 

Your real name is Matheus. It sounds a bit biblical. Is religion important to you? 

ZADNIKAR. "Everyone called me Matheus until I was 16. A lady teacher at school found that too difficult to say and started calling me Matty. My mother is now the only one who sometimes calls me Matheus. 

"I take religion very seriously. I had a very Christian upbringing and I was a Jehovah's Witness until I was 28. My wife and children still are. "I attach a great deal of importance to values. Respect for your nearest and dearest, honesty, friendship. I think people are now too quick to expect schools to instil this sense of values. Whereas it is primarily the family's responsibility. I also seek to operate according to ethical standards when doing business. You have to be true to your word. I never stick knives in people's backs. However, that does not mean giving presents away. I wanted to see Z-Group, and now SeaNet, grow very quickly, mainly so as to raise the threshold for newcomers. That is merely a question of a sound business strategy." 

Luc Huysmans in Split

Source: Trends 12.10.17