Hans

"The situation was not entirely easy for Hans and Gad. Both were young, insecure, and inexperienced, and were perceived by the seasoned businessmen that Ruben had previously brought in as “daddy’s boys”. Moreover, they were very strictly held – and dominated – by Ruben. Other employees had first had to prove their competence before they were promoted to leading positions. No one had gotten a job on the basis of their name. And many of them had warned Ruben against placing the boys in leadership positions. These warnings had not primarily come because people wanted to protect their own careers, but rather out of concern for Gad and Hans. It was clear that they would not be taken seriously unless they had first earned their spurs elsewhere. But the stubborn Ruben didn’t want to listen to the advice. For him, it was most important that the boys were quickly schooled so that they later could take over his role. It was also important for him that they got leading positions since the only chance he had to socialize with them was through work. Thus, they constantly talked about various problems and solutions within the business. This would not be possible if the boys were given subordinate positions. Then, other employees would immediately react and probably loudly oppose the fact that their subordinates – Hans and Gad – had greater influence than they did as managers. Therefore, there was only one solution for Ruben: to make the sons CEO and Vice CEO respectively."

"When development had progressed this far, Ruben decided that the milk packaging business should be placed in a separate company. He was well-prepared: as early as 1946, he had applied for the registration of Aktiebolaget Alicante to have on hand in case the tetrahedron became something. Now was the time, and in 1950, on Erik Torudd’s suggestion, the small 10,000-krona company Alicante changed its name to Tetra Pak. It was also decided that the company should be registered in 57 different countries—big plans were being made within the walls of Åkerlund & Rausing’s headquarters. But for now, there was no actual business in Tetra Pak. The development work was still being conducted within the framework of Åkerlund & Rausing. The shares that Ruben had so far been the sole owner of, were transferred after a couple of years to Ruben’s three sons, Gad, Hans, and Sven. They each received 25 percent. The remaining 25 percent went to the partner Holger Crafoord. The sons also took over Ruben’s share in Åkerlund & Rausing. The Rausing share was controlled through AB Vapor."

"After nearly 40 years as leader of the family conglomerate, initially in name only but later undisputed, Hans cut ties with the company in August 1995. In our interview with Hans, a few years after he had sold and left the company, he stated emphatically and with relief in his voice: “The essential thing was that I had either been CEO or chairman of the board for 37 years and that’s enough. I can assure you that’s enough!” In a later interview in DN in 2006, Hans expressed that the reasons for the sale were that he found Tetra Pak to have become a cumbersome large corporation that was increasingly unresponsive to new ideas. He no longer believed in the business future of Tetra Pak. Hans also commented on the Gad family’s takeover with: “It must have been a sudden sentimentality that took over. It was not rational.”"

"Through ingenious solutions, the family, primarily Hans, and its employees, especially Carl Borgström and the administrative head at the headquarters, Ingvar Wenehed, set up a network of companies whose purpose was to keep money outside of Sweden, beyond Swedish taxation, and beyond Swedish currency regulations. In Switzerland, the company Société Outremère (Socomer) was registered, created solely to absorb commission money for all the paper, plastic, paint, and aluminum that Tetra Pak purchased from suppliers. Normally, such purchases go through an agent who receives a commission of 2–5 percent of the invoiced amount. What the agent is paid for is that he formally takes on the credit risk until the goods are paid for by the buyer. If, for example, the buyer goes bankrupt before the payment date, it is the agent who takes the financial hit."

"The system worked better than expected, largely due to the enthusiasm of the employees for being pioneers in a project that they all were convinced would revolutionize the distribution of liquid foods. As long as there was job satisfaction, Hans’s non-leadership worked well. The only major mishap during the first years was the debacle with Gads’ paper department. But there, Hans was hampered by Ruben’s dynasty thoughts and by his absolute unwillingness to openly oppose his older brother."

"In a rare interview in DN in 2006, Hans describes his leadership philosophy: “Define the problems, delegate the decision-making, CEOs should have a helicopter perspective and should not engage in routine work, power is necessary to have but a sign of weakness to need to use.” In the same interview, he mentions that he had a stamp made with the words: “Return to sender. Decide yourself.”"

"Nils Andersson and Gad enthusiastically took on the new project. But despite both of them constantly disparaging Americans and Frenchmen, who were already using the method successfully, their own results were poor. And both Gad and Andersson refused to consult anyone who already mastered the method. Quite soon, people began to wonder what was happening with the project. The reports gave clear signs that something was not right. And they never managed to show any paper where the plastic really stuck. “It’s damn strange that the paper department can’t make paper in the Eagan machine when everyone else apparently can,” Hans commented irritably on the missed development. “It’s not strange at all; they insist on doing everything themselves and refuse to learn from others’ experiences,” Erik Torudd replied. It was not until a year after the construction started that they figured out the temperature required for the plastic to really adhere. And that was due to an accident at work. A temperature regulator had malfunctioned, and the temperature of the extruder had begun to rise uncontrollably. Only then did the plastic adhere. The accident taught the Tetra Pak team something that the French and Americans had known for a long time. Only another year later would the method work well enough that it could be reliably used in production. But then, on the other hand, there were problems with Dupont, who was the rightful patent holder. “There is undoubtedly a patent infringement,” the company’s own patent engineer Tage Norberg also stated when the matter was discussed. However, Tetra Pak was saved by the fact that Erik Torudd had been shown the method already in 1951, and at that time there was no patent. Thus, Dupont had no legal ground against Tetra Pak. For the second time, Tetra Pak had cunningly appropriated a machine design."

"When Finn, due to his high level of ambition and initial self-overestimation, tried to outmaneuver the skilled financial director Lennart Ohlsson to take over the position himself, Hans had had enough. Ohlsson’s closest man, the Swiss Felix Seiler, immediately announced that if Finn took over, he intended to leave with immediate effect. Based on Hans’ experiences as CEO and the leadership style he had developed, he was aware that an owning family to an innovative global conglomerate is utterly dependent on various key personnel. Hans fired Finn, but did it without first speaking with Gad, which did not exactly facilitate their relationship. Between 1990 and 1993, Finn instead worked as a controller in the company Atlas Copco."

"The situation was not entirely easy for Hans and Gad. Both were young, insecure, and inexperienced, and were perceived by the seasoned businessmen that Ruben had previously brought in as “daddy’s boys”. Moreover, they were very strictly held – and dominated – by Ruben. Other employees had first had to prove their competence before they were promoted to leading positions. No one had gotten a job on the basis of their name. And many of them had warned Ruben against placing the boys in leadership positions. These warnings had not primarily come because people wanted to protect their own careers, but rather out of concern for Gad and Hans. It was clear that they would not be taken seriously unless they had first earned their spurs elsewhere. But the stubborn Ruben didn’t want to listen to the advice. For him, it was most important that the boys were quickly schooled so that they later could take over his role. It was also important for him that they got leading positions since the only chance he had to socialize with them was through work. Thus, they constantly talked about various problems and solutions within the business. This would not be possible if the boys were given subordinate positions. Then, other employees would immediately react and probably loudly oppose the fact that their subordinates – Hans and Gad – had greater influence than they did as managers. Therefore, there was only one solution for Ruben: to make the sons CEO and Vice CEO respectively."

"In the rapid international expansion, Hans gave significant responsibilities to relatively young managers. These were managers who later made careers not only within the group but also attained top positions in large Swedish companies. There are those who argue that Hans’s leadership style spread and became formative in Swedish business life and contributed to what has been called “Swedish Management” in academic circles."

"Meanwhile, Hans had to deal with his father, who was the working chairman of the board for both Tetra Pak and Åkerlund & Rausing. He had great respect for both him and Holger, but most of all for his very determined father. Hans did nothing without first getting his father’s approval. In fact, both he and Gad were much more dominated by Ruben than any outsider could guess. Neither of them made any decisions without first consulting Ruben’s opinion."

"After the meeting in Rome, a solution to the financing problem was finally found: the small subsidiary Purac, which developed water purification technology. The company had great potential, but had not been managed properly. Gad, who had been appointed CEO, thought it was something he could handle with his left hand, but soon had to realize that it was not that simple. However, he was not the man to solve the problems, but since the company had great development potential, Tetra Pak still managed to sell it for a reasonable price, about 15 million kronor, to American Hercules Powder. That was money that was really needed to be able to continue driving the Tetraproject forward. Ruben and Gad were totally against the sale. Gad because he had planned to keep the company as his own little territory - a way to get revenge for the previous defeats within Tetra Pak. Ruben’s opposition was due to the fact that Purac’s water purification technology, a method that had been discovered by chance when there was a need to purify the water for Östanåbruket, could become a global product if the company was managed correctly. Ruben was against all sales of ideas that could develop into something big. But the sale was pushed through by Hans, Ingvar Wenehed, and Erik Torudd."

"Ruben was relieved when he left the Grand. He had gotten Torudd to promise support for Hans. Perhaps it meant that Hans was saved. Inside, he was sure that Hans was the right person as CEO. Only if he matured before Holger decided to definitively remove him. It was crucial that he got a chance to show his qualities."

"The promise to Ruben practically meant that Erik Torudd took on the role of mentoring Hans in business. It also meant that Torudd’s power position within the company was strengthened, as he acted on Ruben’s mandate."

"Bertil Hagman hastily went to London to discuss the matter with Hans and Gad. After the meeting, they agreed that Tetra Pak would make a bid. Through Jacob Palmstierna, who was about to join Tetra Pak’s board, a signal was sent to Investor’s CEO, Claes Dahlbäck, that Tetra was interested in Alfa Laval. But for Tetra Pak, the contact with Investor was not sufficient, there was another major owner in Alfa Laval, namely the financier Fredrik Lundberg. Tetra Pak was not only interested in buying a part but desired complete control over the company."

"Hans and Gad were very different from each other as individuals – although they resembled Ruben in many ways. Forcing Gad into the company was not a successful move. In the interview we conducted before the TV documentary “Dynastin Rausing,” Gad dismissed the question of whether he had been forced into the company by his father with the comment: “The slave trade was abolished in Sweden by Erik Magnusson sometime in the 14th century.”"

"Their conversation became crucial for a very important decision, to move Tetra Pak abroad. The family had long been worried about Sweden’s heavy taxation on profits, capital, and inheritance. Hans had calculated that if he died, the children would be forced to pay an inheritance tax of a total of 350 percent, as the tax would be paid with already taxed funds. If they wanted to keep the company within the family dynasty, staying in Sweden was not an option, he assessed."

"During the summer of 1995, the Swiss Bank Corporation reviewed its operations, and by August their appraisal was complete. According to the Financial Times, it concluded at nearly 81 billion kronor. When the appraisal was presented to the brothers, Gad suddenly said: “Then I’ll buy.” Gad’s three children, Kirsten, Finn, and Jörn, who had been informed about what was happening, had made it clear to their father that they wanted to take over. Hans, who was completely unprepared, was very surprised but said that saying no was impossible according to him. The transaction was relatively simple, the foundation controlled by the Gad branch transferred 40.4 billion kronor to Hans’ foundation."

"If anyone doubted who held the real power in the company, all doubts were dispelled at the board meeting the following month. Although the CEO, Hans, was present, it was Holger who presented the balance sheet and budget. It was a symbolic act whose value should not be underestimated. The business world is filled with symbols intended to mark the status of various individuals in an organization. It can involve the size of the office, whether or not there is a sofa group in the office, leather upholstery in the company car, and so on. But one of the most critical signals is who in the board reports on the financial figures. If someone other than the CEO, who is directly responsible for financial management, does it, it is a way to indicate that the CEO is really just a figurehead. This was now the case within Tetra Pak."

"Since Tetra Pak in recent years was making as much money as it did, they could afford quite wild experimenting before concluding a project. The costs were often allowed to rise to between 50 and 100 million kronor before the brakes were applied. In this way, Tetra Pak continued to be an innovation and entrepreneurship company long after the packaging system was fully functional. When Gad and Hans moved from Lund, in connection with the company’s relocation from Sweden, it was a hard blow for the technicians, who had gotten used to having a direct channel to the owners."

"After returning to Sweden, Erik Torudd continued to advocate for the use of the S-50 and to apply HP Smith’s method to it. Now, it seemed that the winds were changing within the company. The board of Tetra Pak now included Ruben, Gad, Hans, Holger Crafoord, Erik Torudd, and the company’s skilled lawyer, Carl Borgström. When the dark-suited gentlemen gathered for a board meeting on the morning of February 4, 1952, they decided to build a copy of HP Smith’s machine. Erik Torudd and Harry Järund, who was co-opted onto the board, fought hard against the decision. Both thought it was better to either buy a finished machine or drawings. Otherwise, they risked several years being lost to development. Moreover, they thought it was immoral to copy someone else’s work. But they spoke to deaf ears. Tetra would copy the HP Smith machine. Responsible for the project were the technical genius Nils Andersson and Gad. The decision was bold, but entirely legal. Carr Sherman had voluntarily shown them a design that was not yet patented."

"Ruben was not only dominant towards his sons but also towards his grandchildren. It was only after his death that they were free to study or work with whatever they wanted. Until then, even that was within Ruben’s control – hardly surprising considering the importance he placed on the idea of a dynasty. To create a dynasty, heirs must meet certain criteria to be able to contribute to the family business. Thus, the room for individual wills is greatly limited, which both children and grandchildren got to experience. In an innovative company like Tetra Pak, heirs are required to either possess specialized expertise or, like Hans and Gad, be trained in the business over a long time. However, the most important thing of all was that the following generations engaged in the role of owners. Among Hans and Gad’s children, there has been a great variation in the willingness to take on an owner role within the group."

"“It’s damn like talking to a fish,” Torudd thought. Although Torudd did not know it, the harsh words took effect. Hans realized that this time it was serious. He contacted Ruben and Holger. In the evening, the three gathered for a dramatic meeting. They agreed that Gad was not up to the role as head of paper production. Ruben, with his dynastic ambitions, was shaken by how serious the situation was. That one of his sons, born with such good prospects, would fail so spectacularly was something he could never have imagined. But there was only one possible decision if they wanted to save Tetra Pak – even Ruben realized this: Gad could no longer be involved with production. Formally, he remained on the board and retained the title of vice CEO."

"But a very important person had not been present at the meeting: Ruben. The recent developments, with both sons away from the real power, had taken too much of a toll on him. He couldn’t bear to also hear Holger identify the Rausing family as one of the scapegoats, but he understood that he had no choice in the current situation. He had to let Holger continue, at least for now. It required someone with more experience and significantly firmer grip than Hans to straighten out the company. But this did not mean that he had to witness the family being publicly disavowed."

"Shortly after the subsidiary directors’ meeting, which ended in a general slashing of Brik, Hans called Åke Gustafson, who was now working on entirely different projects, and asked him to come back and help Tetra Pak. Although he would never have admitted it openly, Hans was desperate; the losses for Brik and the development costs for Rex and Rigello began to devour the capital that had been borrowed and the money that had been freed up with the sale of Åkerlund & Rausing. And the money that could have been used – the commission money that went into the foundations – the company was not allowed to touch by Ruben. If the situation was as bad as the subsidiary directors described, there were only two possibilities to solve the situation. One was to borrow more money to resolve the liquidity crisis that had arisen, but that would, on the other hand, be only artificial respiration. The other possibility was to once and for all get Brik in order so as to avoid this large black hole that just sucked capital."

"The reason Hans wanted to sell simply came from a harsh assessment that the best thing for the future of the Tetra Group was for someone other than the Rausing dynasty to take over the ownership role. At the same time, he considered his age and had long been worried about his health. Both Hans and Gad had a trait – inherited from Ruben – to exaggerate the risks of disease. Even mundane illnesses became for them a reminder of death, which meant that diseases could not be discussed in their presence at all. Employees within Tetra Pak who fell sick and stayed home might very well find themselves reassigned to less important positions when they returned. This was because Gad and Hans considered them too frail to hold important positions. The risk was that they could die. The same applied to themselves; when either of them fell ill, he would hand over important powers, so that everything would be secured if he died. But as soon as it turned out that the illness was not serious, they immediately took back their position."

"It took Hans fifteen years of pondering and preparations, equating to three years in terms of full-time work, before everything was ready for the move. In 1982, they increased the dividends in the Swedish parent company from five million to 79 million kronor, a sum that “coincidentally” matched the very low recorded value of the foreign subsidiaries – the market value amounted to about five billion. But the ingenious part was that the dividend was not paid out in money but in shares of the subsidiaries. Through another Tetra company, the shares were then transferred to Dutch Tetra Pak. In this manner, they very elegantly avoided being stopped by the currency regulations."

"While Hans planned for the move, Ruben stayed in Rome and eagerly tried to get the FAO to continue driving the Rausing plan. Ruben hoped to go down in history, not only as a great industrialist, but also as the man who once and for all solved the hunger problems of the developing world. However, the grand project led to deep disappointment for him."

"Ruben’s patriarchal disposition meant that it was not until the mid-seventies that his son Hans could take over as the real power holder in Tetra Pak and start running the company almost entirely independently. But Ruben still dominated him to some extent – no major decisions were made without consulting Ruben. Until his death, it was Ruben who ultimately decided what applied. His last action within Tetra Pak was to approve the financial statements – this happened the day before he died."

"The new organization would start when Tetra Pak moved into its own premises. This was planned to happen in a few years. For Ruben, it was time to realize his dynasty plans. Even if it meant that two completely inexperienced sons would get top positions in the company. Gad was 30 and had a degree in chemistry and archaeology. Little brother Hans, who would become CEO, was 26 and had studied economics, business administration, and languages at university. Although forming the dynasty was primary for Ruben, there was one thing he was terrified of: that Erik Torudd would see the organizational plan as a provocation and decide to leave the company as the inexperienced Hans became his superior."

"The new organization would start when Tetra Pak moved into its own premises. This was planned to happen in a few years. For Ruben, it was time to realize his dynasty plans. Even if it meant that two completely inexperienced sons would get top positions in the company. Gad was 30 and had a degree in chemistry and archaeology. Little brother Hans, who would become CEO, was 26 and had studied economics, business administration, and languages at university. Although forming the dynasty was primary for Ruben, there was one thing he was terrified of: that Erik Torudd would see the organizational plan as a provocation and decide to leave the company as the inexperienced Hans became his superior."

"It was not until further into the new year that Ruben’s worries were alleviated. After much reflection over the Christmas and New Year holidays, Torudd explained to him that he accepted the new organization, although he had some objections. Among other things, he believed that Hans should have more sales experience before being made CEO. Ruben agreed and added relieved: “I hope that the cooperation between you two really becomes intimate.” “I hope so too. And I also believe it can be – provided that each one is clear about their tasks,” Erik Torudd replied, thereby clarifying that he would not accept Hans interfering in his work."

"At the beginning of August, when Holger gradually took over major parts of the executive power, Ruben began to realize that his dynasty building was seriously cracking at the seams. If Hans disappeared from the CEO position, it also meant that it was the end of Ruben’s real power in Tetra Pak. It was a situation that he could never, not even in his wildest dreams, have imagined. What would remain was the influence in the board, which could be quite important, but would mean that he could no longer interfere in the operational activities. Since Ruben wanted to approve all decisions, big and small, such a development was a pure nightmare for him."

"“Yes, yes. That’s probably the price one has to pay for having and having had a competent CEO,” Ruben said resignedly after the negotiations. However, Ruben recovered relatively quickly from his depression. After just a few months, he began to realize that he didn’t have the money it would cost to buy Holger out of the companies. He thought it was just as well that the agreement looked the way it did. If everything developed as he planned, Tetra Pak would soon start to yield substantial profits and then he would be able to earn enough money to buy Holger’s share. In his very special world of thought, he began to see the agreement as an ideal settlement. He was sure that Holger would voluntarily divest the shares after five years. This would finally allow Hans and Gad to take over the conglomerate completely."

"Without showing it, Hans was shaken by the subsidiary managers’ message. Eventually, he realized that the company could not solve the problems on its own. What was needed was Brik’s chief designer, Åke Gustafson – the man who left Tetra Pak in 1964 after being forced to exaggerate the machines’ excellence and hasten their delivery times. Since his departure, efforts had been made to make the machines and materials work reliably – attempts that were largely fruitless."

"Now Holger could start cleaning up the organization for real. The first action was to put Hans and Gad in their place. “Tetra Pak is bankrupt. It is now under administration. And decisions about expenditures can from now on only be made by me,” he informed them in brusque terms. He was right. The company was ready for bankruptcy if any of the creditors demanded their money back. In fact, since 1956, the company had been obligated to prepare a balance sheet for checking, but they had ignored it so that no outsider would see how badly off it was. “If Hans had not been a son in the house, he would not have stayed another ten minutes,” Holger told Erik Torudd."

"Gustafson succeeded in what few within the company believed he would manage: to produce an aseptic Tetra Brik machine that worked flawlessly. By the spring of 1972, the new, improved design was ready and many within the company management were amazed. Hans, who had led the Brik project, but who had started to doubt it over the last two years, could not believe his eyes. Erik Torudd, who had never believed in Brik, wanted to wait and see until the machine was tested out in the field. Ruben was relieved, although in the long run, he expected Rigello to outdo Brik as the company’s most important product."

"Both Hans and Gad have been involved in a kind of competition with Ruben throughout their adult lives. Since both, like their father, were obsessed with technology and the idea that a company’s success is driven by its technical development, they also wanted to show that they were as great inventors as he was, according to family mythology."

"In our interview with Gad Rausing after the purchase, he highlighted that the aseptic packaging still had great potential in several markets. “It was when we tackled that problem that we suddenly discovered that we were holding a tiger by the tail. And there it matters to hold on!” At the same time, he answered the question of why they took over with the words: “I saw what remained to be done. Or I thought I saw what remained to be done. There is much more than what I see or have seen. And I believed Hans had the same view as me about it. But perhaps he did not.”"

"No one escaped Cavalli's strong voice. The room fell silent. I remember thinking, "God, give me a good answer quickly so this can end." And the reply came lightning-fast: "You're absolutely right, Hans - I'm completely exhausted. Now maybe you can tell the others and me what you think I should do about it." Cavalli was silent, the pause lasted a second, and the murmur returned. Confronted with the story several years later, he only responded weakly: "Did I really say that?" He became intoxicated with pushing people who were defenseless."