3 questions to smart minds

Changing values and culture in German SMEs

For this 3 questions to Nicholas Zumbusch

Photo: Nicho­las Zumbusch
16. March 2017

Sustainable struc­tures, relia­bi­lity, long-term thin­king, trust, fair­ness and willing­ness to perform — these are values that are elemen­tary in medium-sized compa­nies. They form the basis for the inno­va­tive strength of our compa­nies and their adap­ta­bi­lity to the market. Medium-sized compa­nies take on holi­stic respon­si­bi­lity. For their employees, produc­tion and services. — Are the values of the middle class universal?

For this 3 ques­ti­ons to Commu­ni­ca­ti­ons Consul­tant at BRAND CONTRAST in Frank­furt am Main

1. What signi­fi­cance do the old entre­pre­neu­rial values still have today?

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.

Die 12 wichtigsten Werte in Deutschen Unternehmen (Quelle: SCOPAR)
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.

2. What values can be iden­ti­fied in networks?

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.

3. How can poli­cy­ma­kers learn from the atti­tude and respon­si­bi­lity of SMEs in order to make effec­tive and respon­si­ble policy?

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.

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