A small company invests in leadership – Part 1

Last week I had the opportunity to meet with a small to medium sized company in the precision instruments business.  With manufacturing in Europe and the US and the opening of distribution centers in China and Brazil, it has become in the past few years a truly global enterprise.

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I have known the director of the German operations for many years.  Over that time we have had interesting conversations on leadership, culture and high performance teams.  The conversations usually ended with her telling me that I should help her with her business, but nothing concrete materialized.  I always told her that when the time was right, she would know.  Over the years, she has had a lot on her plate to put the house in order.  There were two changes in ownership of the organization.  This disruption was accompanied by operations running in the red for a few years.  Re-organizing production and distrubution were top priorities.

When I took a tour of the facilities last week, I was impressed with what had been achieved.  They have a catalogue of approximately 12.000 items – most of which can be assembled and shipped within twenty-four hours of receiving an order.  They are able to do this even though most products have to be assembled before being shipped.  Approximately 180 orders go out a day.

They have also done an admirable job in attending to the culture of the organization.  When a new employee comes into the organization, they have a one-on-one session with the director and talk about the values of the company.  Absolute priority is given to customer orientation.  As proof of that commitment, an extensive feedback system has been developed in which scientists who use the instruments are in constant dialogue with the company’s management.  The company’s CEO takes pride in being part of those conversations.

After reading the feedback from her employees from a 360° feedback instrument, the director of the German operations decided that it was time to invest in leadership.  Despite or perhaps because of all of the success that had been achieved, there was a limit as to how much further she could take the company, based on her leadership capabilities alone.  She realized that the time had come for an increase in the level of leadership within the organization.

Last week we had a discussion on what it would take for her team to begin to take more ownership for the direction in which the organization is developing and more accountability for the alignment and commitment of its employees.

I will be putting a proposal together in the next two weeks and hope through this blog to keep you informed on the way the  leadership consulting process unfolds through this most interesting case study.

“I have been impressed with the urgency of doing. Knowing is not enough; we must apply. Being willing is not enough; we must do.”                                                                                                                                 – Johann Wolfgang von Goethe

“If you’re walking down the right path and you’re willing to keep walking, eventually you’ll make progress.”                – Barack Obama

Over 200 leaders explore growth in family owned businesses

This past week I attended the 14th Annual Conference for Family Businesses hosted by the University of Witten/Herdecke on February 10th and 11th. Approximately 250 people were present representing some of the most powerful family businesses in the German speaking world. Not only was I able to attend, but I had the privilege to facilitate a dialogue session that included all conference participants.

Family businesses form the backbone of the German economy. The top 500 owned family businesses employ 4.5 Million people in Germany and have a  total sales volume  of 900 billion Euros. These family companies have done considerably better than publicly traded companies. During the period of 2006 to 2010, they increased employment by 11% while the DAX publicly traded companies only added 2%.

Family-owned businesses answer to a different rhythym than publicly traded companies. They are often not under the pressure to produce quarterly results, but can take a longer term perspective. They also tend to pay more attention to issues such as values and organizational culture.

Some of these family-owned businesses have been around for a long time. In 1668 Friederich Jacob Merck began a pharmacy in the city of Darmstadt.  These were the beginnings of what is now a multibillion Euro pharmaceutical company – Merck KGaA – the oldest pharmaceutical company in the world. It is still owned by the family.  The US company with the name Merck, Sharpe and Dohme – one of the largest pharmaceutical companies in the world – was once the US subsidiary of Merck KGaA but became an independent entity during World War I.

The dialogue I facilitated included all 250 participants at the conference. It brought participants in conversation around the key questions surrounding the theme of the conference – “Growth”. What does it mean to grow sustainably? How do you know when growth represents a danger to the company? Can growth affect the nature of the family business? How does the family need to grow to keep up with the growth of the business? What internal organizational growth is necessary in order to take advantage of new markets? Where does personal growth fit in this overall picture?

To prepare for this dialogue, I had interviews with Professor Dr. Rudolf Wimmer who gave the initial keynote address as well as interviews with several CEOs running family businesses – including Jon Baumhauer, the current CEO of Merck KGaA. The dialogue ran for three hours and was rated one of the highlights of the conference.

The University of Witten/Herdecke invited Jeffrey Beeson to hold a World Café about growth and Leadership

Leadership Catalyst Jeffrey Beeson and Caroline Schürenkrämer – memeber of the organizational team of "Faszination Wachstum", 14. congress for family businessJeffrey Beeson from Entheos hosted the 14. issue of the congress "Faszination Wachstum"

 

 

 

 

 

 

 

 

 

 

 

 

 

“Without continual growth and progress, such words as improvement,

achievement, and success have no meaning.”

  Benjamin Franklin