Gustaf Douglas

"Melker Schörling and Gustaf Douglas became a dynamic duo, and their approach to driving development in companies left a mark on Swedish business. In many ways, they are contrasts as individuals. Douglas is impulsive and has strong opinions that he readily expresses. Schörling is calm and thoughtful. But not when it comes to business, where they strive in the same direction. Their contrasting personalities provided dynamic collaboration that led to one of the major stock market successes of the 1990s when Securitas conquered the world. This is how Bengt Ericson describes Schörling’s and Douglas’s collaboration in the book The New Upper Class from 2010."

"In the business press, Melker Schörling is most often described as a major shareholder and investor with a focus on large wealth. It is easy to forget that he had nearly two decades of operational experience in Swedish industry and service behind him when the main owner Gustaf Douglas wanted to engage him as CEO of the troubled security company Securitas. He was a sought-after CEO at that time.”"

"Gustaf Douglas only wanted to part with 10 percent of the shares, but Melker Schörling wanted 25. They met halfway. After a well-conducted negotiation, Schörling paid 25 million SEK for 17.5 percent of the company’s share capital. Schörling had some money after a few successful stock investments, but he borrowed most of the purchase price for the shares in Securitas from the bank."

"Everyday life as a farmer’s son ended already at the age of 15. The father thought that the brother was more suitable as a farmer and handed over the farm to him. Melker Schörling became an economist at the School of Business, Economics, and Law in Gothenburg instead, after a technical high school in Örebro. He started by acquiring solid industrial experience before making the deal of his life with Gustaf Douglas during the crisis years following the prosperous 1980s. Schörling entered at the right level when he became both CEO and owner of Securitas—and that was something he had consciously aimed for. The investment in Securitas, and several successful deals that followed the first in 1987, meant that the goal of becoming financially independent was realized faster than planned."

"In 1988, financier Gustaf Douglas and then-CEO of Securitas, later billionaire Melker Schörling, secured the first private contract in elderly care with their newly founded Svensk Hemservice. During the 1990s, the company went through several mergers and was eventually sold to become part of the healthcare group Attendo, which in 2013 was owned by IK. For a few years, Uppsala economist Peter Weiderman was CEO of Svensk Hemservice, and he then caught wind of the opportunities the care market offered. In 1996, with a total investment of SEK 15 million from Björn Savén, Harald Mix, and Kim Wahl, all at IK at the time, he started the healthcare company Carema. They could not let any of IK’s funds buy the company—it was too small an investment—but neither could they turn down what they perceived as a fantastic opportunity. And it was."

"In the group “owners of flesh and blood” are also included others with inherited fortunes, the heavyweight Fredrik Lundberg, as well as a number of medium-sized, more unknown families whose main wealth consists of the family company. To these is added a handful of new active capitalists such as Gustaf Douglas, Melker Schörling, Rune Andersson, and Carl Bennet. They have built their corporate groups themselves and became rich in connection with the historic stock market boom of the 1980s and the later part of the 1990s. Bennet bought Getinge from Electrolux and listed it on the stock exchange, Schörling laid the foundation for his corporate group when, as CEO, he was allowed to buy 20 percent of Securitas before it was listed. Securitas also helped make Douglas rich, and Rune Andersson, as CEO of the listed company Trelleborg, bought shares there. With luck, skill, timing, and some loans, they have built their empires. Each of them constitutes a force in Swedish business, with their opinions and their capital. Carl Bennet has good contacts in politics, mainly with the Social Democrats, and Gustaf Douglas sits on the Moderate Party’s executive committee."

"In 1950, my father became Sweden's first envoy to the independent Indonesia, and together with a couple of colleagues, he established diplomatic relations under rather primitive conditions. For two years, my mother lived half the year in Sweden and half in Indonesia. I was informed that I would start the third grade at the Sigtuna Foundation’s Humanistic Gymnasium (SHL), which today corresponds to seventh grade, and live in the dormitory Kvarnbranten. It was terrible news."

"As we eventually entered the English Channel, we were struck by the horrors of war. Those sights came to balance my boyish interest in military achievements and warlike heroes for the rest of my life. M/S Industria frequently changed course between various shipwrecks where masts and smokestacks stuck up from the sea. We saw the white cliffs of Dover, though without the significance they would later hold for me as a symbol of freedom for Britain's decisive contribution where tyranny faltered."

"When I begin my life in Sweden, I am eight years old and naturally a child. But it can be said that for those who had responsibility, I am a child more as an object for upbringing. In my childhood and youth world, my father will be absent for long periods due to travels and long-term foreign postings. My mother will occasionally be with him in a foreign land. Therefore, other people and their values came to play a significant role in my life."

"My life, on the whole, was beginning to shape up really well. I was a privileged upper-class boy in materially acceptable condition, on my way through good schools towards a good life, although the emotional quality of the care provided by the upbringing council was second-rate. There was a lack of normal, close, warm, and loving relationships in what children usually call home. The upbringing council's efforts also included keeping me occupied in the summers, not in the way of children, but more as part of my upbringing. During the 1950s, the solution was to send me to Germany for stays with various relatives."

"One memorable summer, I visited my mother's side of the family, the von Bülows in Düsseldorf-Lohausen. Uncle Niels was the manager of the Gerresheim glassworks, and he and Aunt Lily took care of me with friendly attention. One day he took me to a coal mine with the words: "There are so many firm opinions about miners being overpaid troublemakers. It's good for you to see how they work." We went down a couple of hundred meters in the mine and crawled through the galleries to a place where the coal seam and ceiling height were not even a meter. There, a machine moved back and forth, tearing down coal. Where the machine couldn't reach, half-naked men lay hacking away in the heat, blackened by coal dust. I received a thorough presentation of the entire technical system for extraction and transportation, but what has never left my memory are those blackened half-naked men. It was a sudden and impactful experience for a schoolboy who had hitherto gotten his images of real life from the sheltered world of books and home."

"At Broms School on Sturegatan, I found companionship and openings towards another and more tolerant adult world. My best friends became Gustaf Lindencrona, Gustaf Qvennerstedt, and Magnus af Ugglas. I spent a lot of time after school at the homes of both Gustafs. There, one could be in peace while the parents were positively engaged and encouraged their children. I discovered that my defense of corporal punishment was the defense of a bird in its cage. I promised myself never to lay a hand on my children if I were to have any. For me, it was a joy to be at home with these families. What I saw and felt had a significant influence on how my life and values would turn out to be. However, the company did not make life easier at home, as I began to strongly doubt authority of a violent kind."

"When I begin my life in Sweden, I am eight years old and naturally a child. But it can be said that for those who had responsibility, I am a child more as an object for upbringing. In my childhood and youth world, my father will be absent for long periods due to travels and long-term foreign postings. My mother will occasionally be with him in a foreign land. Therefore, other people and their values came to play a significant role in my life."

"Peer upbringing occurred, also in its form of bullying. I have never been able to understand how adults can believe that children in puberty, filled with their own problems, could develop any talents for raising other children. Many of the teachers at SHL were among Sweden's best in their subjects, but they lived in a bright world of classical educational ideals and idealistic humanism. They rarely saw what happened beyond the classrooms, on the schoolyard, in the corridors, at night, out in the woods, or at the quick moments when unnoticed pinches, hits, or insults could be delivered. For many of us, this was part of everyday life and left its marks."

"When I begin my life in Sweden, I am eight years old and naturally a child. But it can be said that for those who had responsibility, I am a child more as an object for upbringing. In my childhood and youth world, my father will be absent for long periods due to travels and long-term foreign postings. My mother will occasionally be with him in a foreign land. Therefore, other people and their values came to play a significant role in my life."

"My breach of the family-founded authority naturally reached my grandmother and grandfather, and I was called down to Stjärnorp for reckoning. My grandmother began with strictness and one-sidedness, it was law without gospel. Every attempt to lay the responsibility for the bad relationship on both of us was completely in vain. It was I who had to conform and obey. It was that simple. We went on for a long time without my grandfather saying many words. Then he asked to speak with me alone, and we went into his study. I was upset and in despair. "Why do I always have to back down, why is it always me who has to crawl to the cross?" I wondered. Then something happened that became one of the most emotionally charged memories of my life. My grandfather turned to me with tears streaming down his face: "Because you are the stronger one." The aggression drained from me, and I found the strength to take the first step."

"It was never entirely good with my father, but we found a modus vivendi that was civilized. The incident and grandfather's words shattered the last shackle to parental authority and became the final step towards a life of my own in freedom, a memory my thoughts touch upon in contemplative moments. I can only marvel at grandfather's empathy in his son and grandson's relationship. That I would have been the stronger was unthinkable, but it naturally reveals a wisdom that comes to the old about how generations follow generations, take over, and succeed—not without sacrifice. I have often wondered how our relationship would have developed if my father had lived longer, had successes as an ambassador in Brazil, and ended his diplomatic career in Spain, as he dreamed of. Perhaps his negative outlook on life would have changed then, and he would have dared to show that he liked me."

"We liked to spend our free time sitting on the floor with games and play, especially at Gustaf's home. We combined his impressive collection of ship models into fleets that fought for or against various political alliances, invented by us to balance the power relations. The Swedish Fleet Association had developed bases for naval war games in different tables for the ships' firepower, speed, and protection, so it was just a matter of setting up movements, firing, and measuring damage for us. This was determined using dice rolls. Extensive records were made of the damage and the effects on the remaining ships' firepower and speed. The games contained a considered balance between luck and skill, making it quite realistic, except for the fact that we did not include the decisive importance of aircraft carriers and aviation for the outcomes of modern naval warfare. Today, some ship models are in my study, and I easily recall the fervor and seriousness of our play."

"How else could I have ended up in the media world where I started as a freelance stock columnist, took on leading tasks in the development of TV2, and was the CEO of the Dagens Nyheter group—nearly ten years of dramatic and engaging operational work in total. Many years later, in 1988, I was trusted to be a board member and vice chairman of Sveriges Television."

"I really enjoyed writing and the columnist role I had from 1963–64. Having opinions and arguing was something I was trained in, not least from Harvard, and it has always been important for me to test the boundaries of my own thoughts and to try them out in encounters with others' views and experiences. It was also interesting and educational to see how I became profiled on journalism's own commercial terms. When I later became chairman of the Swedish Shareholders' Association for a couple of years, I fit well into the metaphor of David and Goliath, with my timely image of us shareholders forming "village assemblies" and starting a grassroots movement against concentration of power in business. It made for good headlines."

"If Abbe got a stage to perform on, preferably in front of a large audience, he was very troublesome. The role – living the myth – became the main focus at the expense of content."

"Our acquisition of Skrinet in March 1985 was my best deal—and my most challenging. It provided me with serious resources to build my business sphere, but with a level of drama I could have done without. From the joy of having completed the purchase, I was thrown into a total crisis two weeks later. It wasn't that I was about to go bankrupt, it was worse—I had absolutely nothing left. I have described the solution in some context as: "The speed saved me. If you are sailing with ice skates at a hundred kilometers per hour, the ice doesn't need to be so thick. If I had stopped, I would have gone through the ice.""

"I had come to the conclusion that real estate could be a good alternative for building a longer-term stronger balance sheet for the DN group. They provided a secure return and there were attractive financing opportunities in the prevailing high inflation environment. The board shared this view and during 1979, which became my last year as CEO of the DN group, we came to make a major investment in the development of Marievik, a real estate area south of Söder in Stockholm, together with Hufvudstaden. The project became more expensive than estimated and the leasing was sluggish for many years, but it eventually turned out to be a good deal when the complex was sold in the 1980s."

"However, there were two important positive effects of this ice bath. I learned exactly how not to get rid of people – creating illusions and own alibis instead of coming to a quick and honest conclusion. I got a reminder of life's priorities. After the dismissal, when the family is in the car on the way to some relatives in Sörmland, I muster up the courage to tell the boys what happened to dad. From the back seat came a cheer: “Great! Then you can be home a little more often!” I sat quietly for a long time with a lump in my throat and still remember how the evening light filtered through the pines."

"Quite a way into my tenure as CEO at DN, during a trip in the USA, I received a thorough and well-deserved round from my colleagues when my expeditionary ability began to resemble a runaway lawn mower. To my own horror, I noticed myself increasingly often "disappearing" in the middle of a briefing. Suddenly, I was just gone, closed off, finished with the surroundings. Arms and legs crossed and glances wandered off in pursuit of the daily dispatching. To the deformation of judgment in the crowned one was added a growing inability to listen and function in community."

"In an interview in Damernas Värld in 1972—on the somewhat silly theme of a Young Lion Taking the CEO Position in the DN Group—I was asked, "What are your ambitions? Are you seeking power or money?" I replied, "I've opted out of money. I've decided not to become immensely rich." The question about power was left to its silent fate. It was an honest answer and at the same time a light-hearted attempt to accommodate the journalist. But the result has surpassed both ambition and expectation: I have become very rich. That was not quite what I had in mind. As for power, I can say that I have pursued it as a tool in situations where I've been responsible for owning and leading companies to value creation for their stakeholders. Power in itself does not interest me."

"Even though my family has a long history, it has never developed into a dynasty or ownership aristocracy. Ownership has always been linked to land and farms to be responsible for and pass on within the family. This has been done with great feeling, but also with the unimaginative traditionalism that sometimes characterizes the land-owning nobility. For me, the land heritage has been a cornerstone and a driving force for my wealth building. Preserving, caring for, and developing what was given to us was a duty from the very beginning for Elisabeth and me, which I also want to talk about. The chain breaks at its weakest link, something I heard my father speak of in somber moments, and it is a knowledge that has been kept alive and can disturb sleep and deeply worry the soul."

"My exit from the partnership probably looked like a failure. While my former partners could report values in the billion range over a period built up in just half a decade, I left with about thirty million in my pocket. A journalist from Aftonbladet called me then and asked if I wanted to comment on this partnership. I did not want to. “But it's very interesting,” claimed the journalist, “it must be your worst deal.” “No, you are wrong there – I got 30 million SEK and would really be grateful if my worst deal had yielded thirty million.” “You can't think that way – there were three of you and the total profit was two billion, and you only got thirty million while the others got so much more!”"

""It works like a school of sharks; you swim with the other sharks and are a buddy, so to speak. You have fun together, eat the occasional fish that comes your way, and keep swimming. But then someone accidentally injures you and blood starts flowing, and then you notice that those damn friends start eating you instead. For the shark, it's a short experience, but for me, it was drawn out. It's pretty scary to discover at almost fifty years old that you still haven't learned more from life. I had fallen several times before and had rich experience with setbacks, but it was obvious that there were still some things left to learn. That's when an insight is born, which is not particularly pleasant: I myself am a business opportunity. The downfall of G Douglas would open up many business opportunities!""

"From the financial trial by fire and the personal witch hunt during the mid-1980s, I gained important experiences that became fundamental for our investment company Latour, the name our investment operations finally received in 1987. When we reached safe ground in the fall of 1986, I finally had time to focus on long-term work and begin shaping our ownership philosophy, business idea, strategies, and culture. Fundamental was a long-term perspective that would foster loyalty among the management teams, employees, and shareholders in Latour and its portfolio companies. The long-term approach gains credibility from active ownership, where my family and I are firmly committed through our significant ownership and the entire family's participation in corporate governance, along with a strong belief that "our" CEOs, in turn, should be committed through substantial personal shareholdings in their companies."

"Latour – an ownership built on people and principles"

"I understand the outrage people can feel when the CEO's salary skyrockets far beyond worker and employee wages and what shareholders get from their investment, not to mention what happens in the overly rewarded financial sector. These excesses, which we unfortunately see examples of now and then, are a nuisance imported from the USA, where CEOs and management have hijacked power from shareholders in a corporate governance system that differs significantly from the Swedish one. In an increasingly globalized world with an international leadership market, the risk of unreasonable compensation rises here at home, especially since Swedish business leaders often maintain a high international standard."

"However, there are tradable survival values for long-term ownership in the form of feeling and traditions. One such value, which I sometimes describe as "hanging in there," is passion. Our entire family is passionate owners. We live with the companies' fates and adventures through frequent discussions at the kitchen table as part of the family community. And I have not avoided talking about my failures. Better advice, children cannot receive. My wife has been involved from the start, and my sons have known the companies since childhood and are well-prepared to continue the ownership task. We have discussed this a lot in the family. My children naturally sometimes feel a certain trepidation before the task. There is an enormous respect and willingness to do right by the companies, and the concern for not being able to stand up and take ownership responsibility is much greater than the fear of losing the money."

"Napoleon had the requirement to appoint generals himself—to say nothing of marshals—and used to ask the question: "A-t-il de la chance?"—Is he lucky? I am well aware that I am not entirely deserving of everything I own, and it can probably be said that in business, luck is often close to 50 percent of success. The imbalance between what was given to me and what was made available to me makes me inclined to gather wisdom along the way and in my professional practice seek out people with whom I can create value together, preferably those with that little extra Napoleon wanted to see in his leaders. For human creativity is the most"

"Gunnar Ericsson sometimes said: "No one has said that we have to make the things we sell. No one has said that we have to sell the things we make." It became a culture- and strategy-breaking reasoning that clouded focus on the company's own value chain. You have to be a world champion at it, is the conclusion from my own business ownership experiences."