Much has been written about the German Mittelstand [SME] and few understand it so well as Dr. Christoph Muenzer.
With around 1000 members in Southern Germany, the chamber association WVIB (Wirtschaftsverband Industrieller Unternehmen Baden e.V) represents and advises a collective turnover in the region of 40 billion Euros. Many of it’s members are indispensable suppliers to blue-chip organisations around the globe.
Dr. Muenzer works with the owners and leaders of these hidden champions on a daily basis and can look back on his own personal success story since joining and redefining the WVIB itself in 2005.
If you want to understand the German Mittelstand, you need to understand the WVIB and I thank Dr. Muenzer for his candidness in this great interview.
Christoph, thanks for taking the time to talk to us. You have headed up the WVIB since 2005. What makes this association different?
The WVIB was founded 70 years ago and has consistently focussed on connecting people and companies throughout that time. We understand the dynamics of the industrial SME sector better than anyone else.
The member companies in our association drive their achievements, values and destinies jointly, forming the community, which we call the Schwarzwald AG. [Black Forest Inc.]
This community meanwhile consists of over 1000 member companies with a total of around 200 000 employees in our region and a further 32 000 working in international subsidiaries.
In addition to serving your members, you must also manage the Association itself as an entity, and it has made massive progress since you took over the helm. Which strategy have you followed?
To consistently address the problems of the industrial SME, being empathetic to our members’ personal perspective, whilst not forgetting to question ourselves, both as an organisation and as a collective of people.
We were always a friendly and sociable network, one big family, which has grown into the Schwarzwald AG, but much has changed. Whereas relationships had time to mature in the past, people want to get to know each other much quicker and remove boundaries these days. The WVIB acts as a relationship-catalyst.
We constantly re-think which current affairs drive our members and in which communities they can be solved, regardless whether these issues concern the Stores Manager or Company Owner. Everyone who attends our events should go home having learnt something new, a state-of-the art method, but should have also enjoyed the experience. We work hard to bring the right groups of people together. At the end of the day, we want our attendees to say “I’ll come back.”
We are neither know-it-alls nor back-slappers for our members. We strive to stimulate both specialist and inter-personal impulses from within our network. Ultimately, we would like our network to drive itself.
What do the Southern German SMEs have to say about Brexit – a set-back for Europe or a chance for new opportunities?
Ironically, just six weeks after the referendum, we hear very little about Brexit. The German automation sector, in fact most of the members of the Schwarzwald AG regard Brexit to be a minor issue, beyond the decimal point on our balance sheets. The DAX even profited from a minor run following Brexit.
Naturally Brexit is degradation for Great Britain, and to a small extent for continental Europe. Brexit is a mistake, which sooner or later must be corrected. At best, when Europe has re-positioned itself on a market-driven and financially robust foundation.
It is not without reason that the Brits chose to say “goodbye”, even if a part of that choice was based on populist exaggerations. It was indicative to see how quickly after the vote some Brexit-Supporters threw in their towels. It would seem that none of them wants to face the music.
One of your previous job titles whilst living in Berlin was „Head of Political Communication.“ What do you personally expect will be the result of the Brexit decision?
Just like Switzerland, Great Britain cannot defy the historical perspective of a unified Europe.
However, Europe must first do its homework and re-establish itself. It must leave its cornucopian approach behind to become a community of equal partners, working to solve problems, instead of just sharing out resources, provided almost single-handedly by the Germans.
Staying with the challenges of cultural change, your predecessor was also in office for many years. How did you manage to win over his mature and loyal team, getting them to support a new direction?
Of course, this cannot be done in a single Kick-Off meeting, with a single inspirational speech or some other amazing act. One must start by understanding oneself and keeping loyal to who you really are. Think hard about what you can do well, both academically and personally and do exactly that, every single day.
Everyone will watch you at the start. Many will think: “What we did in the past was successful. We have so much experience, why should we change?”
With the support of a few Key-Players, you can enable change and, after a while, everyone will begin to say “It was high-time that something happened. We were almost falling asleep”
To quote a phrase from WVIB’s President, Klaus Endress: “If you want to fell a tree, your axe must keep hitting the same spot!” I couldn’t agree more!
If you believe the British press, many are envious of the German Mittelstand. What makes the German SMEs so successful and do you think it is at all possible for the Brits to copy that recipe?
Not without challenge. Great Britain’s SME history is long. They invented industry 200 years ago, but similar to the USA, changed later to a service sector business model focussing on financial services. That was great for London up until Brexit, but was disadvantageous for the English SMEs.
I recently visited Birmingham, where one finds much more industry than we have in the Black Forest. Our provincial infrastructure is nowhere near as compact. We are manufacturers, but not as market-driven as the Brits.
England looks back on a very successful industrial past and forward to an enormous potential. Nevertheless, the political decisions made by the Labour government in the years after the last world war have hindered that potential significantly and it will take a long time to correct their consequences.
The Germans are infatuated by tradition, which is a mixed blessing. On the one side, things move slowly, we are not known for our flexibility. On the other side, we are thorough and are great at finding, defining and serving Niches, especially in the machine automation sector.
Of course, it would be best if we could do both – we’re working on it!
And what advice would you offer to a British company who wants to contact one of the WVIB member companies?
The Brits are known for their „effortlessly being superior“ approach: Everything should come across like a duck above water. “A gentleman would walk but never run.” The German tends at times to act like an eager-beaver, school swot, the Japanese of the Europeans, if you will, always stressed, resulting in a very different dynamic.
Of course globalisation is confronting these generalisations, but the expectations are still there: whilst one expects an Englishman to be relaxed and on top of things, the German is not worth his salt unless he looks tired.
We invite many companies to our events. Why do they come? This brings us back to the subject of Wissen und Wärme. [Knowledge and Compassion]
Our members ask themselves what the person in question represents, what relevant information they could offer. They have high principles, seek to build bonds to nice people with similar expectations. There must at least be a hint that this first contact could lead to something bigger – in the end, it should be more a valuable use of our time than visiting a wine festival!
You have met so many people in your career. Do any stand out in particular, as impressive personalities or even as role models?
I have adopted so many things from so many people, sometimes consciously, sometimes without even noticing at the time. If there is a recurring theme, it has to be based around a strong composure, an experimental element and an openness to carry one’s principles on one’s sleeve.
As I answer, I notice that poor examples and bad experiences have often shaped me more than good ones: secretiveness, deceitfulness, inability to accept criticism, the “behind your back” approach of some bosses and employees can all be found on my “not my style” list.
It all comes down to transparency: I want to be a transparent leader.
I consult both SMEs and Multinational Blue-Chips. Their cultures are quite distinct. What are in your opinion the golden rules of success in a family owned and run business?
Everything – no two are identical. If you join BMW, you join BMW. If you go to an SME, you join Herr Mueller, and if the chemistry works, the partnership will flourish.
A company owner is interested in your personality, your approach, what motivates you as a person? What do you think about the world, how do you attack a problem? They want to be sure that the person sitting opposite is fundamentally stable and that they could develop into something special.
An owner does not want to have to check everything you do. They need someone who comprehends the task at hand and is personally interested in tackling it. If you can make that obvious, you will go far in an SME.
You know “you can hide ignorance for a long time, but you cannot hide wisdom”.
To work in a large conglomerate, you must learn how to navigate its structure and methods. In an SME on the other hand, it is all about helping that company to progress. Your personal career as a gear in a large machine is not so relevant. That’s why so many AGs work hard to establish SME-style departmental cultures.
Not only external applicants can be daunted by the opportunity to join an SME, changes of leadership often happen within the family. What advice do you have for the children of company owners, considering joining, and later taking over the family business?
The first question is “Do you really want to do this, or do you just think it is expected of you?” What are your business strengths? How do you work under pressure and is your partner prepared to support you?
Every predecessor worth his or her salt has achieved, as will every right-minded successor. Each can sit back and relax, there will always be elements of a business which are worth keeping and others which must be torn down and rebuilt.
A binding time plan, which neither party can change is essential when starting off on that journey. There are so many excuses to change that plan: building a new company HQ, a market crisis, unexpected opportunities in new markets, and that is exactly why those dates must be fixed in stone.
The successor must only worry about one thing: that they might be incapable of running the business, whilst their predecessor shares this worry and a second on top: that the successor might do a better job than themselves.
Running a company can be great fun. Whomsoever truly wants to do so should not hesitate in getting started!
Thanks a lot for this interview!
Dr. Christoph Muenzer:
Enabling the Mittelstand
Some words about Dr. Christoph Muenzer:
Dr. Christoph Muenzer, born. 1962 in Gengenbach, Germany studied Political Economics jointly at the Universities of Freiburg and Portland, USA. Thereafter joining the German IHK Chamber in Freiburg and Pfizer in Karlsruhe.
He was Personal Assistant to the President of Federal German Employers (BDA), Dr. Dieter Hundt in Cologne and Berlin from 1996-99 and went on to become Secretary General of the National Chamber of Commerce for Architects (BAK) in Berlin from 1999-2003.
Now based in Freiburg, Dr. Muenzer joined the industrial SME focussed association, WVIB (Wirtschaftsverbands Industrieller Unternehmen in Baden e.V.) in 2003, taking over the helm in 2005.
Dr. Muenzer is married and has two children.