Changing values and culture in German SMEs
According to the German philosopher of the Enlightenment Immanuel Kant, values are “specific qualities that make them worthy of high esteem; specific positive qualities that have the character of norms and ought”. Put simply, values are characteristics consciously chosen by a company that are important, valuable and desirable to the company and serve as a benchmark for its actions.
In some cases, the medium-sized entrepreneur has been living out in his company for generations how to behave towards his shareholders, partners, employees, suppliers or customers, without the need for a formulated and implemented set of values. However, the value-oriented entrepreneur does not define his ethical behavior only when he might reach the limits of legality, but already from the beginning of his enterprise! I think that in this context the honorable merchant with his “Hanseatic customs” must be brought into the field as a good example. With them, word and handshake count without ifs and buts.
If the defined and implemented guiding values are really taken seriously and lived, the entire orientation of the company is in line with the values, which is reflected in all actions. These corporate values are intended to provide orientation both internally and externally. Looking at the 12 most important values in German companies (see graphic SCOPAR study “The most important values”), the TOP 3 are honesty, reliability and respect.
The 12 most important values in German companies (Source: SCOPAR)
Regardless of company size and industry, most companies now have some form of description of their corporate values. There seems to be a renaissance of values in these “troubled times.” The global competitive environment has become tougher for international SMEs. More and more companies are therefore discovering value-based brand management as a strategic response to this. Despite the interchangeability of service offerings, corporate and brand values play an increasingly decisive role in brand management in order to differentiate from the competition.
A look at the websites of the market participants in the FYB is quite inspiring. There you will find the whole range: from serious and authentic to what could sound good to nothing at all. One of the positive examples I noticed there was the investment company ALLISTRO, with its guiding principle “Create values — preserve values” and the management’s clear commitment to the values of SMEs and their entrepreneurial tradition. Also of interest is the realignment of Südwestbank after the financial crisis, which has successfully aligned its private banking advisory services consistently with new high quality standards and “enforceable” values.
On the other hand, I find it alarming that, for example, the search term “company values” displays “0” search results on the Bitkom homepage. I find this astonishing if only because Bitkom, as the mouthpiece of the IT industry in Germany, represents more than 2,400 innovative medium-sized companies in the digital economy, which with their approximately 700,000 employees generate annual domestic sales of 140 billion euros and stand for exports worth another 50 billion euros. I hope that despite all the euphoria for Industry 4.0 and digital transformation, corporate values will not be “digitized away”.
Other associations of small and medium-sized businesses, such as the BVMW, have better hit rates, but their contributions are often not convincing in terms of content, even if the value orientation of the member companies is often used as a rallying cry.
In my opinion, the companies and foundations of the world’s leading SMEs or the hidden champions of the German SME sector are really well positioned and authentic. These traditionally stand for honestly meant and lived values. Their values are part of the concept for success. You can learn a lot from them in this respect.
In this context, I find the handling of excessive bonus payments very questionable. Politicians are calling for more justice after all the revelations. But unfortunately, they too are seen as untrustworthy by the population because their own behavior contradicts their publicly proclaimed values.
Against the backdrop of permanent change in our globalized world, reflection on virtues and the renaissance of values as success-supporting visual and action instructions have fortunately returned to the agenda.
With a focus on the investment industry, it is worth taking a brief analytical look at an unusual example of a network: the start-up fund “La Famiglia”, founded last December, in which members of German entrepreneurial families have joined forces to form an international venture capital fund and network. This illustrates quite well how networks in the SME sector can also function beyond national borders. The fund is intended to invest money in start-ups and promote exchanges between industry and young companies. Compared to countries such as the USA, there are very few venture capital funds in Germany and Europe that support start-ups. Thus, La Famiglia is not only about the simple investment form of “venture capital” or early-stage financing, but also about better integrating the topic of digitalization in the future. Values that are lived in this collaboration are the basis for the emergence of such vehicles in the first place, as is the case with La Famiglia. This is not just a matter of simple cooperation, but of trust that develops over time through joint, long-term cooperative behavior.
However, I doubt whether the choice of the name “La Familia” is so happily chosen and reflects the business idea behind it with its defined values. In an article in the Süddeutsche Zeitung, the company name “La Famiglia” is thoughtfully and amusingly associated with the “Mafia”. “Famiglia” is also a card game set in the gangster milieu. Could this analogy have been intentional when the name was chosen? We may find out one day.
This is a very difficult and complex issue. I think in our society people should slowly wake up.
The return to corporate values, such as the “Hanseatic customs” already cited, may once again create a new quality and awareness in business collaboration, in public discussions — whether on talk shows, in so-called expert panels or on the political stage — or within virtual communities on the platforms and channels of social networks. By this I also mean the attitude towards the irresponsible use of deliberately spread “fake news” or “alternative facts” in order to take advantage of them.
At the latest since the regular spread of Trump’s 140 characters on Twitter and the vilification of the media as the “lying press” by right-wing populists, there has been public and prominent protest for adherence to values and against a disrespectful culture of behavior and communication. That brings us back to the values of honesty, reliability and respect. Many U.S. companies have banded together in protest.
There should and must be different positions and opinions on all the social, entrepreneurial or political issues. Diversity has always helped to find the best way. It is purposeful to be controversial about which path or response is appropriate when you have a different point of view. But please, with style and attitude and based on real (not alternative) facts. When you consider that trust in the profession of firefighter, paramedic or pilot is well over 90% but in politicians only 15%, in insurance agents 19%, in journalists 37%, in bankers 39% or in entrepreneurs 51% in Germany (according to GfK Compact survey), then this is no coincidence. Politicians (not only in Germany) can therefore learn a thing or two from everyone. Would be about time and worth a try.
We should take a stand on values, call for honesty, reliability and respect, exemplify the values as the middle class does, and do it as often as possible with intelligent messages. In the future, SMEs and politics should once again go hand in hand. Because the path to sustainable and successful solutions requires the interaction of all parties involved. At the top of my wish list is less political influence in company-specific decisions.
About Nikolaus Zumbusch:
Nikolaus Zumbusch (born 1963) founded the communications consultancy BRAND CONTRAST, based in Frankfurt am Main, in 2010. BRAND CONTRAST supports its clients in formulating and implementing their goals with initiative, ideas and professional communication management and communication controlling.
Nikolaus Zumbusch has extensive experience in the areas of value creation through communication, communication strategy, brand communication, CEO positioning, online communication and social media. Customers include companies and organizations from the telecommunications, technology, IT, energy, financial services, private equity, mechanical and plant engineering, logistics and architecture/construction sectors.
As Managing Director, he headed the Technology Practice of Burson-Marsteller Germany in Frankfurt. As a member of the management team of the globally active agency for public relations and public affairs and developed the areas of Media Intelligence and Evidenced Based Communications on an international level in a leading role, I support nationally and internationally active organizations and companies.