UPDATE: Since 2020 Lely has a new CEO – Andre van Troost.
How a family business became a global pioneer and tech giant in dairy farming
Every family is unique – but some families are more unique than others. This is certainly true for the Van der Lely family who started their family business as a ‘studio for invention’ in 1948. It took only two generations to turn a small family business into a global pioneer and leading supplier of robotics and farm management data in dairy farming. Currently, Lely holds 1.600 active patents protecting their inventions; they have around 57.000 active robots for multiple applications; and farmers in (over) 40 countries work with Lely solutions in the barn, on a daily basis.
How did they do it? Is there something in their DNA? Or can the success be attributed to family values? Or perhaps, it was a marriage of both? We sat down with Lely’s CEO Alexander van der Lely to talk about these questions and the ‘Feed the Future’ challenge that Lely initiated in collaboration with Rockstart.
Necessity is the Mother of Invention
“It all started on my grandfather’s dairy farm,” says Alexander. “My father (Cornelis van der Lely) saw that life on a dairy farm can be hard and the income generated often low. That imbalance is difficult to sustain. In addition, after the Second World War, farmers had to feed the world. So, there was a real need for innovation in farming. My father was very creative and found ways to do it better.”
Shortly after the War, Cornelis and Arij van der Lely introduced the Finger Wheel Rake to the market. It was one of Lely’s first inventions that made a substantial change in the traditional way of farming. “After 70 years, it’s still the standard product in agriculture. The second big invention was the Power Harrow,” Alexander adds. “It helped to prepare seed beds which resulted in a significant increase in efficiency. The Power Harrow also marked a real breakthrough and internationalisation of Lely as a company, not to mention an unprecedented growth in sales. Lely’s big invention for the dairy farm was the Milking Robot. That’s when the era of dairy automation truly took off,” he explains. “We changed the process from mechanisation to robotisation on a dairy farm. It was also a big step forward in terms of sustainability because robotic milking is better for the animal. There were many innovations that followed, and they all had a common purpose: making agricultural life easier for farmers worldwide.”
These days, the dairy industry’s main challenges are sustainability and labour according to Alexander. Less people are drawn to farm life because of the aforementioned circumstances. In addition, the world population is growing and therefore the demand for food. By acknowledging that technology is vital to making dairy farming more efficient and sustainable, and by continuously searching for new solutions, Lely hopes to make dairy farming more enjoyable for younger generations. And, in doing so, safeguard the future of agriculture.
When asked if it had always been his dream to step into his father’s footsteps, Alexander admits that it’s hard to not get infused in the business, being raised by the family who runs it: “From a very early age I understood that being part of a family business, allows for very interesting ways to make a career.”
It seemed like a natural fit. Perhaps it’s inevitable when you’re always surrounded by it, but Alexander argues that it’s more than that: “I’m an engineer by origin and it makes me happy to be active in technology and help farmers provide food to people on this planet in a sustainable way. I think it’s a beautiful combination.” That’s why, in 1995, Alexander decided to join the family business.
Another upside of working in a family business, is that it allows for long term visions when working on new innovations. Alexander points out: “As a family owned company, you don’t have to report the financial figures to the stock exchange every month or reveal quarterly figures. We can focus on long term targets and believe in something, put all our energy to it, be driven by it. That’s how innovation really can take place.”
It’s Lely’s mission to provide a sustainable, profitable and enjoyable future in farming and when asked how they aim to realise that, Alexander explains that Lely is guided by five core values: innovation, passion, progress, respect and honesty. For example, the value ‘respect’ stands for: Wellbeing of man and animal as well as the environment are at the heart of our company. We are constantly seeking more sustainable alternatives. “From the start these core values have been serving as the company’s compass; they also reflect the values of the family,” he adds.
Power to the People
One of Lely’s other core values is ‘progress,’ which, in their case, is not only related to progress in technical or business terms but to people: we realise that our business can only grow if our people grow; we encourage our people to go that extra mile supporting them with professional and personal development – as stated on the Lely website. Alexander’s answer to the question on what he is most proud of in his career echoes that: “It makes me proud to support people to be successful. For example, we facilitate our innovations team to work remotely and we take away any border or limitation so they have every opportunity to be fully creative and disruptive in innovation.”
Those ‘disruptive innovators’ have their own site away from the Lely campus and are given all the time they need to develop and test their ideas. Lely believes in the importance of a culture of trust; one in which its people are allowed to fail. When a disruptive innovation is put on the market, Lely calls it a ‘Yellow Revolution’. Thus far, Lely has produced 10 ‘Yellow Revolutions’. This might be the reason why Lely’s R&D departments devotes 6% of Lely’s revenue to product development.
So why did Lely initiate ‘Feed the Future’ if they already have a large team working on innovation processes? Alexanders reveals: “There’s so much going on in the world, so much new technology coming out every day – we cannot do it all by ourselves. That’s why we really want to find the right startups and combine our creative energy with theirs so we can find new ingenious solutions for dairy farming together. In turn, we can provide them with investment, business knowhow and support. Lely has a unique distribution network that gives access to at least 70% of the professional dairy farmers around the globe. In addition, we can help them answer questions such as: how do you develop your idea? How do you create the business? How do you distribute your tech solution to the market? How will you be successful in the future?
After all, we have been answering these types of questions for over 70 years and, therefore, have a lot of experience that we would like to share with them!”