How transparency helped time:matters build a culture that never really felt like work
Interview with Franz-JosephMiller founder & CEO of time:matters
Franz-Joseph (FJ) Miller is the founder and CEOof time:matters Group, an international service and technology platform offeringsameday deliveries and global special speed logistics. “The time:mattersexperts & freaks save butts, bucks, and sometimes lives by deliveringglobally within hours.” time:matters' serves leading logisticsplayers and blue chip companies from various industries (incl. online retail,automotive, high-tech, machinery, oil&gas, aerospace) when time is criticalor complex special solutions are required. The company operates a network of 600+ partnersdedicated to Sameday & Emergency deliveries with offices in Frankfurt,Vienna, Amsterdam, Shanghai, Dubai and Singapore. FJ has grown the business to almost €75m in revenues, 200staff over the last 10 years and the business consistently realizes a NetPromoter Score (NPS) of 70 with its customers. In AUG 2016 Lufthansa Cargo acquired 100% of theshares as part of a strategic acquisition to focus on service & technologydriven asset-light business models.
When did you start the company?
time:matters was originally anidea within Lufthansa built around customized logistics solutions tailored to abusiness’s specific needs, which could be anything from time-critical spareparts, large machines, highly urgent documents, unique prototypes or even sensitivespecimens. I joined Lufthansa as Managing Director of the Same Day division withthe task and opportunity to spin the time:matters business out of Lufthansa in2001. I immediately liked the idea of a service business that you could buildout as a platform. I saw the opportunity to create a sophisticated, scalable businessthat focused on the high-urgency, high-importance transportation requirementsbusiness, and with Lufthansa as a partner we had a great foundation to build on.
What were the first steps you took once youspun the business out?
I studied other corporate spinoffsthat were not successful and one of the main reasons for failure was becausethe spinoff stayed too close to the corporation. Based on that research and myexperience at Jamba, it was clear to me that in order to be really successful,we needed to create our own company environment – that is, we had to leave theLufthansa corporate mother ship and develop our own culture and we had to do sofrom the beginning. Fortunately, the Chairman of the Supervisory Board was verysupportive, and also encouraged me to develop our own unique time:matters style.The benefit of this approach was confirmed early on: for example, a hire whowas let go by us went to corporate (Lufthansa) HR to complain. We had to explainto HR that we let him go because the person didn’t fit our culture, and no, wecouldn’t find them a different role. The Chairman stood by us through situationslike this and it helped us to signal to everyone that we were sincere aboutbuilding a distinct and separate time:matters culture.
What did you do in the early days to build theright culture?
I brought in a lot of learningsfrom my previous roles as an entrepreneur and as European director for salesand marketing at Jamba, a high-growth German startup founded by the Samwerbrothers. At Jamba our values rotated around speed, execution, commitment andpassion. When I spun out time:matters we were an initial team of five and we startedoff by defining ten mantras of how we wanted to do business, which I wrote upona wall. We had an open and controversial discussion about what was important tous as individuals and what the business would need, which went back and forthover a number of weeks.
My focus was to always betransparent about what we did and also be open about the business numbers fromthe beginning. It was very important to me that we create not only a start-upculture, but also a profit culture from the beginning. In that respect, Ibelieve that if you inform people, set clear goals and treat them like yourpartners, they will take responsibility and act like they are part owners ofthe business. We would get together every day for lunch and, although not adeliberate strategy, it was definitely one of the reasons we became such a close-knitteam. We spent a lot of time getting to know one another on ski trips and otheroutings and aside from working long hours, we just had a lot of fun. To behonest time:matters never really felt like work, it was almost as if we leftour first family in the morning to go and spend time with our second family atthe office.
How did you come to be known as the “time:mattersfreaks”?
We had a conversation about howwe wanted to be perceived culturally; basically how we wanted to define anddifferentiate ourselves, and we all agreed that in one way or another we were, indeed,freaks. We had many discussions about the positive and negative connotations ofthe word “freaks” but we decided that if you are truly and deeply passionateabout something then the word has a positive connotation. The time:mattersfreaks are fascinated and excited by the opportunity of finding solutions toclient’s problems and challenges. And a freak has a clear passion and values,we like this kind of self-confidence and conviction in our team members.
What did your hiring process look like in the veryearly days?
In the early days our cultureprocesses were pretty rudimentary, but from the beginning we understood theimportance of the right attitude and culture fit. When candidates came in forinterviews we would ask them why they wanted to work at time:matters. If theysaid that it had anything to do with Lufthansa, it was the wrong answer, andthey self-selected out. We didn’t want people who were joining us for thecorporate flight benefits. We were looking to hire people who were trulyfascinated by what time:matters was doing and we believed that passion anddiscipline will always beat experience.
Which was your most important hire as thebusiness started to develop?
I was lucky that I had twovery passionate ladies managing operations from day one, where one was takingcare of partners, the other one was doing sales contacts. They both acted as ifit were their company and that was a huge support for our initial growth andhelped craft the culture. I’m very happy and proud, that both are stillintegral fully committed members of the company today.
My key hire was the CFO (Dr.Arne Schulke), as I needed someone who I could trust to take care of numbersand represent the culture, and I looked for a sparring partner. I interviewed 10candidates who all looked great on paper, but there was one candidate who wasdifferent from the rest. He was what we would later qualify as a real freak,truly passionate and not afraid to be direct and move me out of my comfortzone. I could see that aside from his intelligence, we would have a lot of funworking together and just had a feeling that I wanted to work with this guy. I feltso convinced that he was a fit during the interview that 20 minutes after heleft I decided to call him up, told him that I wanted to work with him andoffered him the job. His immediate response was “FJ, I am in”. I asked him ifhe was sure and if he didn’t want to discuss it with his wife. He said “Wellyou’re obviously absolutely sure and didn’t discuss your decision with anyone,so since I really enjoyed our talk, I’ll just do the same and decide right away.”It was my quickest and probably best hiring decision.
How did the hiring process change over time?
We started focusing much moreon the culture piece of the interview process by asking ourselves whether wereally wanted to spend time with the candidate, regardless of their skills andexperience. When we made hiring mistakes we realized that it was because thecandidate’s CV impressed us, or we were star-struck by the companies that theyhad worked at, and forgot to ask ourselves that key question. We made a lot ofour bigger hiring mistakes when pressured to hire quickly. All in all, weprobably made ten hiring mistakes over the years that we really regretted. Lookingback, we were able to see the pattern in the process of making a bad hire; we basicallyfound that we, the hiring team, were not secure in our decision-making, and theprocess would drag out and we would take a long time to eventually make thehiring decision. At the time of the hire we didn’t realize where the delay wascoming from, we just felt that something wasn’t right. Common sense was tellingus not to hire the person but we didn’t spot it and couldn’t tell why.
It took us a while to get thecultural part of the interview right and it really started to come togetherafter we defined our values. We created a three-stage interview process where wehave the first two interviews with the candidate discussing theirskills/experience, the company and the role. The third interview is where oneof the senior management team or one of our people who has been trained to dointerviews will evaluate the culture match.
When did you actually define the company’svalues?
We wrote up our core valuesafter we bought the company from Lufthansa. We were around sixty or seventypeople and we asked all of the team to answer the same question – when you goto the bar with your friends, what do you tell them are the reasons you workfor time:matters? The amazing thing is we got more than two hundred answers butfour of them were pretty consistent:
· We are passionate about what we do
· We are given responsibility for what we do andwe like that
· We are very straightforward in how wecommunicate and talk to one another
· We have a lot of fun
Once we had defined thesevalues, we included them in our hiring process and would check candidatesagainst these four questions:
· Is there something that they do that they are reallypassionate about?
· Are they looking for and willing to acceptresponsibility or are they just looking for another job?
· Can they stand their ground and bestraightforward if you call them out, or do they become defensive?
· Can I go out and have a beer with them?
And we changed the way wecame to the hiring decision: in the pastif, one person started out saying that they thought this person was right forthe job then the rest of the hiring team would kind of go along with that, evenif they weren’t sure.
We now have at least sixpeople as part of the interview process and everyone actively has to say “Iwant this person”. It’s okay if one person says they are not 100% sure, but iftwo say they are not sure, then that candidate is out. If one of the six says “definitelynot,” then that candidate is out as well. Basically, we now require a specific positivehiring decision again improved the process from the passive “I could veto”.
Using this three-stageinterview system with six interviewers has made it easier to hire because thehiring team feels responsible for the hire and each person has to commit to agreeingto bring that person on board.
How has the business developed since you were ateam of four?
We’ve created a very scalableand profitable business model which has made us quite successful over the past sixteenyears. We grew the business from 4 to 30 people and to €18m in revenues in thefirst five years when we did the MBO. Since then we have grown the business to200 staff and will achieve more than €75m in revenues this year.
An interesting cultureshakeout happened when we did the MBO, as we had a chance to see which membersof the team were truly committed to the company and who wasn’t. There was atransition period after we had completed the MBO during which time people wereoffered the chance to stay with time:matters or transfer to a role back to Lufthansa.If they stayed with time:matters, they would lose their corporate privilegesthough (e.g. stand-by flights, travel benefits etc.). The vast majority ofpeople did not think twice and stayed, but few people did transfer back and theywere the ones who probably fit better to the more corporate culture.
How do you know when the values are being livedinside the company?
The best proof of peopleliving the values is when I go around the company and hear people talking inmeetings and naturally referring to our core values. It demonstrates that thevalues are really in the DNA of the company. Our people will naturally refer tothe values when discussing the business, asking “Is this us, should we reallybe doing this?” I have worked with the belief that if our people see theleaders of the company living the values, they in turn will live the values. Wehave our values written up on the wall and the really nice thing is that ourvisitors, customers or suppliers tell us that they can see and feel the culturein the office because the way our people treat them is exactly the same aswhat’s written on the wall. As the founder and CEO that’s an awesome thing tohear.
Have you had any difficult business decisionsthat have come from not doing what’s right for the business?
Indeed: an existing customeroffered us a new business opportunity, requiring a new service. I thought itwas an interesting opportunity and that we should go ahead and try it. One ofour team members said, “FJ, it sounds interesting but it’s not us.” He referredto our strategy, which is a precise strategy of the things we want to do and hesaid “This isn’t in line with our strategy and I don’t think we should be doingit.” One of the greatest moments for me as a leader is when you get someone inthe company challenging the senior management.
How else has the culture differentiated thecompany in your business dealing?
We recently were in an exitprocess and in preparation of our management presentation I decided to add aslide on our corporate culture. The investment bank we were working with saidthat the private equity guys wouldn’t be interested in such soft topics andwouldn’t want to talk about company culture. I told the investment bank that ifthat was the case, then we didn’t want to talk to or do business with those PEfirms. It turns out the PE guys were really fascinated by our conviction andcommitment to the time:matters company culture and they realized that one ofthe main reasons for our success was our culture.
Do you have any examples of your culture inaction with the PE firm after the MBO?
Two years into the MBO, aftertwo acquisitions and the launch of ten international offices, we were hit bythe Lehmann crisis. Our revenues went south and we were running out of cashfast. The PE firm were very supportive, but also pressed us hard to take sincereactions and if need be close down some of the investments we made. But I feltthat we should stick with our strategy.
At that moment I decided toshare our situation with the whole team and ask for their support. The outcomewas amazing in two ways. 1. We suddenly realized that we had always talked withthe team about profits, but we had never shared with them the importance ofcash. 2. The team very quickly understood the challenge and rather than beingshocked, everyone started helping us cut costs and improve cash. We closed downsome of our activities (e.g. the office in Switzerland), but mostly we werereally tough on questioning expenses and re-negotiating contracts. And most ofthose ideas came from the team. Within two months, we were able to cut ouroperating expenses by about 33% and improve cash-flow by more than two millionEUR. It was a huge success, helped smoothen out the crisis and was thefoundation for our growth we’ve had since then.
How difficult is it to get people to live all fourvalues all the time?
Well the first two are prettybinary – you are either “passionate” or not and you are either the type ofperson who likes to “have fun” or you aren’t.
The third, “acceptresponsibility” and fourth, “talk straight” are more difficult to get people tolive. Taking responsibility is easier I believe because if you hire people whodemonstrate a willingness to take responsibility they will in most cases jumpat the chance. Always talk straight is therefore the most difficult becausethere may be a personal reason why someone doesn’t speak out or say somethingor it’s just sometimes to easy to stay in your comfort zone and let things go,even though you feel like you should say something. We are working on embeddingthese on a consistent basis in the company. One tool is our biannual passionscore, in which we ask for feedback from all employees on how well we are doingas an employer and requesting open feedback on where we need to get better.This feedback is invaluable and has really helped us to make improvements.
What is your mission?
It starts with our companyname: time matters! Then it goes on to say “We are the freaks for global specialspeed logistics. With our passion for service and excellence we save butts, bucksand sometimes lives.”
There are some key messagesembedded in this:
1. We’reall about speed! So remember this, not only in dealing with customers, but instrategic decisions in prioritizing, or also in dealing with each other or inselecting suppliers and partners.
2. Weare all about solutions and services to help solve challenges and problems forour customers. Thus, we are not a typical logistics and transportation processbusiness, were customers must follow the system. Our offers are providing aunique customer experience in critical situations.
And that leads to …
3. Whatwe do really can save lives. Thus, quality and performance are not an option,but a must. As an example, we are the largest stem cell transporter in theworld. It is critical to deliver the specimen in the same condition we receivedit in, on time, because when we are transporting the cells the patient is literallybeing prepared to receive them on time. This is a potential life and deathsituation that we can’t fail at.
How do you measure success?
Aside from looking at ourgrowth rate and our profitability, our key focus is on providing the best andeasiest-to-use customer service. For this, we measure our Net Promoter Score,which is above 70. That is comparable to Apple or the Ritz Carlton andabsolutely unique in logistics. We have won numerous awards – Top Innovatorfrom VW, Best Logistics provider by Siemens, John Deere, Texas Instruments andothers. But most of all, we know that we will grow if we keep providing outstandingservice and our customers can trust us.
What perks do you offer?
We offer a really great placeto work at, a fantastic team, a really nice and modern office, frequent supplyof steaks on our roof-top terrace grill-station, and many more of the usualperks that modern businesses offer. But we believe that our biggest perk isthat you get to be part of a success culture and that includes getting real responsibilityto do stuff and create results at time:matters. When people have left us and Icatch up with them a year or two later, they say the thing they miss the mostis the ability to make decisions and be responsible for a specific outcome. Responsibilitymakes people feel proud, valuable and appreciated and this is something you geta lot of at time:matters. And it makes us very successful.