Why are most German companies "mediocre"? Part 2

The SEViX solution approach:

Value-based Management - Finding the bridge between employee appreciation and value creation and, above all, living it consistently.

Companies that invest in best-in-class value creation and their employees are also more successful economically. SEViX interviews its Senior Executive Partners, Dr. Werther-Halfar and Dr. Forster, Mr. Huber and Mr. Buch, about how profitable sales development and people management work.

SEViX: Is it possible for German companies to learn from countries like Singapore or from the USA, where there is less public support, but many companies generate solutions to problems with a daring spirit?

Dr. Werther-Halfar: As a result of a very strong digitization program or the use of artificial intelligence, many companies in Singapore and the U.S. have eliminated a large number of activities. The proactive companies there have retrained a third of their workforce for other activities within a year and a half. That is still far too seldom the case in Germany. We have industries here that are particularly hard hit by change, automotive suppliers, energy companies - their business models are currently changing. They are only at the beginning of the digital transformation.

SEViX: Is good leadership an essential building block for corporate success?

Dr. Forster: If a company wants to catch up with the top decile of the industry and position itself as a sustainable outperformer, excellent leadership is an essential cornerstone. This means that managers see themselves as supporters and not as command receivers for their employees. Employees can be confident that they can do their jobs as they see fit, when they see fit, and where they see fit. And when problems arise, the manager is always there to work with them to resolve them. In too many companies, we find the following sad reality there. They often say, I'm going to tell you exactly what to do, by when to do it, and how and where to do it.

SEViX: And that generates significantly lower business success?

Huber: This is my somewhat sad experience: most German companies, except for the hidden champions, are actually mediocre in value-based management. Even the listed German companies are only mediocre, which is evident from the development in market capitalization in benchmarking. Mediocre companies are neither particularly well-developed financially nor particularly good in their appreciation of their employees, i. e. in their human dealings.

However, this does not apply to the German hidden champions, which have the following characteristics: Top 3 in the world or No. 1 on their continent, less than 5 billion euros in annual sales and a low level of public awareness.

SEViX: How do you assess the severe workforce downsizing that many companies are doing now?

Buch: Please let me share my experience with you. For the medium and long-term performance of a company, it is usually a bad idea to cut a lot of staff. Very good, ambitious people who leave now must be laboriously and expensively recruited again in a few years, as Lufthansa had to do, for example. And if the management is still lousy, you don't have to be surprised if the specialist you're looking for is gone again after half a year.

SEViX: Thank you very much for the very insightful interview, which is a very good situation analysis of companies in the D-A-CH region and hopefully shakes up the owners of companies.

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