German Engineering - Success Patterns and Challenges

  • German Engineering – an even stronger brand than “made in Germany“?
  • Doesn’t the success pattern “German Engineering” mean much more than “Engineering”?
  • How international is German Engineering?
  • Where is it heading to?

In 2007 the 5th Starnberg Management Days were themed “German Engineering – Success Patterns and Challenges”. On the occasion of this small jubilee eight top-class speakers and 130 participants got together in Starnberg to sharpen their opinions and impressions of German Engineering, to get new ideas for their companies, to discuss them and to delve into them in numerous one-on-one-discussions.

Over the past years German Engineering has become a success term. The core of a brand has been developed that supports German companies in their world wide activities in the industrial goods and consumer goods market by being a value increasing attribute.

At the beginning of the event, Werner Seidenschwarz, Chairman of the Board of Seidenschwarz & Comp. GmbH Starnberg/Shanghai, looked into the origin of the brand core “German Engineering”. Emerging from the workings of German entrepreneur personalities and German companies recurrently technology forming products emerged. Over the years these have led to a kind of national uniqueness in the international everyday life. However, the typical high-end focus of these activities as well as the strong concentration on the mid-tech sector, have led to fundamental challenges. These Multi-Nationals, originating in Germany, have found answers to the international competition that can’t singularly be attributed to the traditional “German” characteristic any more. Strong brands, acting confidently on international markets, powerful sales activities as well as a newly found self confidence paired with an increasing hint of self reflection and diplomacy complete the traditional picture of discipline, diligence, assertiveness, stamina and technologic intelligence. To join tradition and modernity is also important for German companies all in terms of “Tradition is not keeping the ashes but poking the fire”. Especially Asian competitors challenge established players, even with their own weapons: For example the ball bearings produced in the Asian market by the Indian corporation Bharat Forge wear the sign “comparable to made in Germany”. Bharat Forge is said to be one of the newly developing 50 world corporations. Werner Seidenschwarz went into the central challenges and the respective methods or resolution that can also be found in the “Fitness program for companies of German Engineering” recently published by Seidenschwarz & Comp.

German Engineering also means: Confessing to the location Germany and taking responsibility. Wolfgang Dürheimer, Research and Development Director at Porsche, did that: In the development centre in Weissach all functions from idea over innovation up to the prototype ready for driving are located. After all the technological core of the brand “Porsche” with the label “made in Germany” and the “German Engineering” behind it are the key to success. Not for nothing the R&D part with 8-12% of sales is much higher than usual in this industry.
The development of digital prototypes as a pre-step to fine-tuning with the real models is gaining an outstanding role in the meantime. To become the most profitable automotive company worldwide they have also learned from others, especially from Toyota. “We didn’t stop after we just about cheated death in the nineties.” Continuous improvements, highest demands on quality in all steps of the process as well as highest flexibility with the respective possibilities of individualization of products form the company up to today. To generally improve the force of innovation up to 30% of development projects are developed for external companies (but not for competitors). This gives engineers the possibility to look beyond their own noses, ensures permanent advancement of engineers and fortifies the success of Porsche.

Dr. Udo Helmbrecht, President of the Federal Office for Security in Information Technologies, illuminates the topic “German Engineering” from the view of Information Technology and the corresponding security mechanisms. “In 2000 the Internet was a goldfish bowl; today the internet is a shark tank.” Criminality goes where money is earned. The protection from espionage from the internet and therefore the spying out of company information and brands is indispensable. In this sense he focused on “socialization in dealing with IT-security” and stressed the necessity of a basic IT-protection in companies. In this context he explained the security mechanisms within companies as well as between companies and supporting institutions such as the BSI. Especially in the area of collaboration between public institutions and private companies (so called public private partnerships) there is still a wide area of strengthening IT-security for companies with the seal “German Engineering”.

The evening of the first day was toped of by a greeting of the mayor of the “1.3 million tourist per year magnet” Andechs as well as deputy head of the district authority Starnberg, Karl Roth. This was supplemented by an entertaining discussion between the German Olympic champion and world champion in bobsleigh, Sandra Kiriasis, Uwe Häberer from Siemens Motion Control and Werner Seidenschwarz. With the support of German Engineering and her skills Sandra Kiriasis regularly reached fabulous times in the ladies two-man bobsleigh. The quick-wittedness of the interviewees has increased the sympathy for ladies bobsleigh and for Siemens Motion Control even further. Next to this it also gave a deep insight into the growing together of Eastern and Western Germany as well as the growing together of sports and
technology.

Dr. Thomas Wittig, Head of Corporate Accounting of the BMW Group stressed the importance of a frictionless communication between business people and engineers within a company to increase efficiency of a brand. Especially for the “most northern automobile manufacturer of Italy” the individual worlds of technology, emotion and business management have to be interlinked. Despite the profoundly different views, resulting from natural and educational differences of the disciplines, it is a permanently value-increasing task to develop and deepen a common understanding: Planning and controlling are not supposed to constrain the technical specialist departments, but should support them with regards to the overall result. Otherwise the specialist departments are very resourceful in annulling the controlling department. Therefore he advised the business people in an engineering environment to a fact oriented argumentation, an emotionless approach as well as to concentrate more on value to the customer than on technical innovation. Business people are frequently forced to resume a franctireur way of acting in order to accurately and substantially make their voice heard within a high technology corporation.

Dr. Wolfgang Ziebart, Chief Executive Officer of Infineon, showed what “German Engineering” means in the extremely globalized market of semiconductors.  “The semiconductor market optimizes globally. There are no borders known.” “If you can’t cope with that and the highly volatile fluctuations in prices and results then you are not suited to this industry.” Semiconductor companies whose technologies are the basis for the economic power of its customers and who are therefore enablers of complete industries hence have to be more dynamic and more innovative than it is necessary in other industries. Therefore it is indispensable that semiconductor companies are globally present in the leading markets and that together with their customer they develop a feeling for trends in order to contain their innovative leadership. To develop leading markets in Germany is essentially for innovative engineering in Germany. This has to be achieved also with the help of politics and corresponding innovation friendly regulations and deregulations as well as through the build up of innovation clusters. And: In the semiconductor market factory innovations follow factory subsidies. The result is 40 new emerging factories at the moment in Asia confronting only five in America together with Europe.

Helmut Gierse, Head of Siemens Automation & Drives with 86.000 employees worldwide and 23.000 employees in Germany, showed how German Engineering can be brought worldwide to the customer with the help of an excellent sales force. He clarified this on the example of a company that in its industry grows quickest on the world market. The “most exclusive task of engineering” is to create sustainable customer value and to serve customers of different industries and regions with the right products. Only the one who understands the customer better than the competition does and who can translate this understanding in superior solutions can have long-lasting success. Therefore the mastery of all sales channels is of central importance. At the core of sales it is not “one face to the customer” that counts but “one story to the customer”. The big challenges for the future lie in the trend of individualized mass products with an unchanged price pressure. As Helmut Gierse ironically said: “For such products the customer is prepared to pay no more than before.” The biggest and most sustainable strength of German Engineering companies lies in the complete picture of the nevertheless German engineers, in whose nature it is to have “the ability to think and act in complete systems”. With this, German companies of Automisation will also be trendsetters in future if they just as systematically know the customer better than the rest of the world and if they act more global than they do so far.

Especially this way of complete thinking was conveyed by Bora Ipek, one of the outstanding leaders of international large projects at BASF AG. He explained on the concrete example of a 1 billion US-$ investment of BASF in the Shanghai industry park, how German Engineering can be evolved and implemented in Asia. He substantiated his declaration “In Asia any kind of quality can be created” by explaining the incorporation of the international context and the cultural conditions as additional success factors in the management of projects. However adherence to contracts and delivery dates are the biggest problems in the settlement of projects in China. To master the Project controlling of contractors is seen by Bora Ipek as the central success factor to reach the corresponding project goals in such large projects. Therefore a heavy-weight project leader also has to learn how to master unusual communication mechanisms, for example a “common” dinner with all project collaborators spread over different restaurants at which the project leader had to turn up on one evening: In total 3.000 collaborators. “Think global, eat local.“ Simultaneously there is always the danger of the typical German tendency to over-engineering and over-perfection. Although he is not born in Germany, Bora Ipek is a typical representative of German Engineering as it is lived globally: He is of Turkish origin and therefore predestined to act personally winning and he speaks six languages fluently.

There remains one of the German sports heroes of the recent past: Heiner Brand, trainer of the current German world champion team in handball. He experienced a lot in his successful sports career, but so far never had been in a circle of top-class managers, coming from high technology corporations. But who can explain better, how to form success teams? Next to all the positive characteristics like setting clear goals, the willingness to perform, motivation, integrity that should be fostered by a team it was impressive to see how Heiner Brand talked about his own mistakes, especially the ones he made in the beginning after the transition from player to trainer. Mistakes that happen to every executive that also cost authority for a while, but that can be mended by acting authentically and consequently working on oneself. If the respect is not lost even when hard decisions have to be made for or against a player then a pool is created from which one can scoop in difficult situations and success can be gained in unusual ways. His explicit example was the canvass of Christian Schwarzer on short notice. He had already been sorted out but then became one of the key players in the course of the tournament. Heiner Brand won over the audience with his unagitated and un-capricious way in presentation and discussion. Great personalities don’t need a lot of fuss.

The 5th Starnberg Management Days gave a lot of answers to any kind of open questions and challenges. For the questions that have not been dealt with explicitly the fitness program for companies of German Engineering by Seidenschwarz & Comp. offers a broad specter of solutions. We are looking forward to meet again!