Product

We all know of the magic triangle: quality, schedule, budget. We also all know how difficult it is to deliver a product, a service or internal work results which meet each of the three criteria. Seldom does a team deliver high quality results, within schedule, and within budget.

The question in the German-American context is which of the three is allowed to slide (have lower priority) than the other two. For if there are differences between the two cultures on this point then there are certain to be points of misunderstanding in that collaboration.

Germans will almost always allow schedule (speed) to suffer before threatening the quality of the final product, whether an actual physical product or a service. They are careful in their decision making, thus taking more time. Germans define precisely what they want, order, buy.

Speed is key.

Since they think longer-term than Americans the Germans are more willing to make a significant investment. This all adds up to a willingness to wait longer for delivery. In fact, delays are anything but uncommon in Germany, in both business-to-business and business-to-consumer areas.

And, since the Germans focus on high-tech, -engineering, -science products and services quality (in the sense of sophistication, technology, innovation) is in the end what their customers buy. To deliver more quickly, or at a lower price, is seldom a strategic advantage. People, and companies, who buy German products have made a commitment to do so. They are willing to wait. Especially Germans are willing to wait for German solutions, as long as they know that they will receive the quality they ordered.

Americans are different. Speed to market is one of the most critical success factors, whether the company is in retail or business-to-business. Americans decide quickly, and need the solution (product or service) quickly. Because speed (maintaining schedule) is so fundemental in the American economy, everyone contributes to it remaining important.

Less quality-oriented. Lower expectations.

Price is equally important as speed in the U.S. economy. Although many Americans would not admit it, they often make purchase decisions based primarily on price. This is also the case in the business-to-business context. American companies – including departments within those companies – focus strongly on profit. Publicly-traded companies need to produce profitability each quarter.

Speed and price are very high priority in the U.S. It is quality which then has to take a back seat if either or both of those two are threatened. Americans, too, value quality. They are more likely, however, to accept lower quality if the price is right and delivery is fast. In comparison to Germans, the Americans are simply less quality-oriented. Their expectations are lower. They are willing neither to wait nor to pay for technology or features or engineering which in their mind do not add enough value to justify a higher price and/or a longer wait.

Therein lies the potential for misunderstanding between the two business cultures. Often Americans are willing to „meet the requirements“ of the customer, whereas the Germans will rarely settle for anything less than „going beyond customer requirements.“ Americans find the Germans to be too slow. The Germans see the Americans as too impatient.

Speed and price are of lower priority.

I have experienced this many times with my German customers. We meet, get to know each other, discuss their situation. I feel that it is clear to both sides how I can and should support them. I then suggest that we get started. The German customer, however, is not ready to move as quickly.

This is the German signaling to the American that there is no urgency. They want to think things through, consider all of the ramifications of the actions we make take together. Even price is less important to them. My German clients focus on the problem, its solution, on the optimal approach. Speed and price are of lower priority. Starting a month or two later is insignificant.

Quality. Schedule. Budget. Which has priority?

One can see this logic at play in many German restaurants where the food is fresh and prepared skillfully. The customers have to wait longer than in an American restaurant, but the result (the meal) is often quite different in quality.

This is the case, also, with skilled plumbers, electricians, roofers and builders. Quality always comes first. Germans will wait much longer than Americans to receive the car they have ordered. They‘ll wait longer for the master tailor to make alterations to clothing or for the master shoemaker to repair fine leather shoes. The teenage son‘s bicycle, dropped off on a Saturday morning, will be fixed, but it may take a few days longer than stated. Quality. Schedule. Budget.

„Made in Germany“ continues to stand for very high-quality products, if not for all German product. The German people have every reason to be self-confident and proud. But for how long? Are there not other peoples who are also capable of producing great products, and offering them at lower prices? 

The German media raises this question time and again: if German quality unanfechtbar, unchallengeable? Several years back a German study on quality ranked Chrysler automobiles higher than those from Mercedes Benz.

That must have been a real shock – challenge – to the Germans and their self-identification with the quality of their products, especially automobiles. A shock similar to the Pisa study of a decade or so ago, in which German schools were rated far lower than the Germans had expected.

Processes, the one side of the coin. Yes. But German Prozessverständnis – process philosophy – is at play in non-technical areas, also. My experience is that Germans apply process thinking in all areas, such as decision making, conflict resolution, leadership, and relationship management. 

Perfectionism is a method. One cannot understand a method without first understanding the Problemverständnis – problem understanding or comprehension of problem or problem definition – which the method is addressing. The German understanding or comprehension of a product and of its production is rooted in the European tradition of craftsmanship.

In that centuries-old European tradition the prototype of all production processes was nature itself, created by God, perfect in every way. Artisans, since the Renaissance, viewed themselves as imitating nature. In the Modern Era this tradition has been continued by mechanical-mathematical technology (engineering) and the natural sciences (for example, chemistry).

Nature is the perfect process which man attempts to reconstruct. Technical progress, which has always been understood as progress in production methods and work processes, sees itself as the mental-intellectual penetration of the processes and laws of nature.

And because nature knows but only one process in order to reach optimal results (Einstein: “God does not throw dice.”), which man calls natural law or laws of nature, man is forever in search of that one, right, correct, optimal process.

So, whenever Germans speak of quality, they do so in the sense of its original meaning: workmanship, the way in which something has been worked, created. In this sense, the quality of a product is one and the same with its work process, how it was worked.

The work process determines the workmanship of an object. It is the way in which the material is formed, pressed, engraved. To orient workmanship on the perfection of objects created by nature, is to be a perfectionist.

Germans continue to be process-oriented perfectionists. Not so much because they believe in the God-given natural order of things, as all Europeans did back in the Middle Ages and in the Early Modern Era.

But because the way of thinking back then has over the centuries formed, shaped, oriented the Germans, has engraved in them how to think, organize themselves, and to work in this way.

Denk mit. Think with. From the German verb mitdenken. Germans expect this of team members. They expect it, also, of the products they develop.

A friend describes the technology built into his new high end German sedan. He was in a rush. Found a parking spot. Hopped out. Grabbed a few things out of the trunk. Walked a few steps and the trunk popped back open. He goes back and reshuts the trunk. A few more steps and it pops open again. Strange. He moves some things around in the trunk only to discover that he had left his car keys in the trunk the first time. Mitdenken. Nice.

Another friend flies over to Germany. A German colleague picks him up at Frankfurt Airport. They hop in a rental car. Another high end German sedan. A couple of turns and they’re on the autobahn. His colleague looks over at him with a grin on his face then presses the gas pedal to the floor. Soon they’re up to 180 km per hour, over 100 mph.

Mitdenken. About maintain control.

Traffic is only mildly heavy, but they’re quickly approaching a truck. In fact, they’re right in line to ram the truck from behind. The still-grinning German colleague keeps “the pedal to the metal.” My friend in the passenger seat – at this point pale in the face, sporting a few new gray hairs, and clutching tightly to his seat belt – mentions nervously, that the truck seems to be coming closer. Grin. The powerful German luxury sedan comes within a certain, safe distance of the truck, but no closer, even though the gas pedal remains all the way down. Mitdenken. A little scary.

Then there is the highly sophisticated German control system which makes manned monitoring of the most sensitive, and dangerous, parts of a complex manufacturing site no longer necessary. “The controls system will do the work better than people.” Although understood, trusted and implemented in Germany, the Americans feel wary of handing over final decisions and judgement to a machine. It reminded them of the computer-driven, automated trading systems once used on Wall Street which had led to some rather irrational market fluctuations. Mitdenken. More than a little scary.

Americans like intelligent products. Intelligent means keeping the user in control while making everything easier, faster, less expensive. Over-engineering is technology with questionable added value. It is technology which goes beyond the needs and desires of the customer. It is technology which is often not robust.

Quality can be defined in so many ways. It could be seen as the summation, or combination, of efficiency, intelligence, reliability, durability, and several other characteristics.

Yes, Americans value quality. But value overrides, is more important, than quality. Americans define value as the relation between price and product. Product in the sense of quality and the other critical product characterics. In fact, Americans rarely define (judge or value) a product separate from its price. Products of low quality (efficiency, intelligence, etc.) can be considered of high value, however, if their price is low and/or service of them high.

In Germany, quality is king. Even greater. If there were such a thing as the Pantheon of product characteristic gods, quality would be Zeus. The head god, the top dog, the queen bee, the boss.

Value: decisions large and small 

Quality is for the German also a multifaceted term, both specific and complex. It is not easily put into a box. And because quality is such a revered god, the Germans are very reluctant to soil it, insult it, pull it down, by placing it in relation to price. Germans would not define value so pragmatically, so price-driven as Americans.

I think of my mother and her siblings (most of whom have passed away) and their generation. Born in the 1930s in the United States, raised during the Great Depression, struggled through the Second World War, only then to live in prosperity in the post-war era.

She and her sisters, despite their financial security as wives and mothers, were geniuses when it came to recognizing value and basing their purchasing decisions – large and small – on value. They knew which coupons to clip out of the weekend newspaper, where the best sales where, how to size up a product based on its most important features and charactertics.

Quality and value

They can – and still do – go to a shopping mall and purchase top-of-the-line men‘s dress shirts for their husbands or sons at Bloomingdale‘s, then head directly to a Filene‘s or Target or TJ Maxx in order to buy athletic or dress socks at a rock-bottom price for their children (or grandchildren), knowing full well that they would have to be replaced rather soon.

Quality: peculiar and essential character; an inherent feature; degree of excellence; superiority in kind; a distinguishing attribute; the attribute of an elementary sensation that makes it fundamentally unlike any other sensation

Value: a fair return or equivalent in goods, services, or money for something exchanged; the monetary worth of something; relative worth, utility, or importance; a numerical quantity that is assigned or is determined by calculation or measurement; the relative duration of a musical note; relative lightness or darkness of a color; the relation of one part in a picture to another with respect to lightness and darkness; something (as a principle or quality) intrinsically valuable or desirable.

Das, was möglich ist, streben wir an.“ Literally: That which is possible we strive for. In a deeper sense: We always strive for the optimum.

„So gut wie möglich, nicht so gut wie nötig.“ Literally: As good as possible, not as good as necessary. In a deeper sense: As good as humanly possible or as good as we can possibly to do it, and never only as good as it needs to be, or not just as good as the customer has ordered it.

I look at my talking points on the topic of product philosophy. German logic: Products have intrinsic functionality. The optimal is oriented (aimed, pointed at) the ideal. American logic: For the buyer, the optimal is the product which offers the best value; for the seller, the optimal is the product which is most profitable. Two different worlds, is my impression. Germans and the ideal. Americans and the transaction.

Technical miracles. Practically no cost.

I think of Skype calls from my computer. On the computer screen I see my mother in suburban Philadelphia, far away from Bonn, Germany. What a technical miracle. In my early years in Germany, 1988 in then West Berlin, we would talk once a month by phone. A collect call via the German telepone operator. Today, any time during our overlapping waking hours from my computer or smartphone, as long as I have access to the web. And at practically no cost.

I see my mother‘s face on the screen. The camera on my laptop is above, at the top. But I can‘t look at her and into the camera at the same time. We can‘t look each other in the eyes. I move my eyes up and down, to look into her eyes, and to allow her to look into mine. Both at the same time is not possible, however. It‘s either or.

That‘s my image for how I believe Germans see the customers. Germans who serve customers, who have customers in the forefront of their minds. Germans in R&D, in product development, in sales or marketing, or Germans in services, or those responsible for strategy.

Germans want to serve the customer.

Yes, they are looking at and listening to the customer. On the screen. Just about fully focused. Taking in, understanding, preparing themselves to respond to the customer‘s needs, problems, wishes, challenges. But they – the Germans – also look time and again upwards, above, beyond, I think towards the ideal.

In other words, they listen not exclusively to the customer, but also, in addition to, the customer, above and beyond, towards the ideal. Yes, Germans want to serve the customer. And the strength of the their economy is proof that the German people knows how to listen to, understand and serve customers.

But they aim higher, strive for further, confident that doing so will guaranty that their customer‘s needs will be satisfied, almost as a byproduct, automatically. In fact, I have always sensed that Germans serving their customers, their markets, resist limiting what they can do by mere customer requirements. They are constantly alternating between looking at the person on the computer screen during the skype talk – as a metaphor – and looking into the camera, above the screen so to speak, and searching for the ideal.

American engineers as problem-solves and businesspeople

And yes, there is the danger that in doing so they do not fully listen to the customer, that their response to the customer is not exactly what the customer wanted or expected, that the customer feels not listened to, not understood, not served. And yes, there is the danger that they over-serve their customers, providing more that was requested or needed, or what the customer is willing to pay for.

And the American approach? Different. Not totally so, but often in a nuanced way. Americans, too, are capable and willing to aim for the ideal, to look beyond the customer. At the same time they feel more comfortable with staying focused on looking at the screen, listening very carefully to how the customer defines their needs and wants, to allowing the customer to define what the ideal is.

Whereas the German is engineer is part inventor and part artist – at it is the German engineer who is at the heart of German products – the American engineer is part pragmatic problem-solver and part businessperson (even salesperson). This difference is true not only for the engineers on both sides of the Atlantic, but for both cultures in general.

Go beyond what I was requesting

Americans fear that their German colleagues don‘t fully focus on the customer. Their German colleagues, in turn, fear that the Americans focus only on the customer. It becomes more complex, and difficult to reconcile and manage, depending on from which business culture the customer comes, whether Germany, the U.S. or another.

Recently I recognized that my website needed to be modified. I identified those changes through input from users and from a few trusted advisors. I then defined them in terms of scope, budget and schedule. In each of my talks with web agencies here in Bonn the tendancy was strong to go beyond what I was requesting, what I needed. The Germans, all very capable, wanted to go deeper, broader, more systematically. I had to slow them down, remind them of the defined limits.

Perhaps they wanted to convince me to give them a bigger mandate, a bigger contract. Perhaps, but not necessarily. More likely, they were looking beyond me on the computer screen, in the skype call, figuratively speaking. Each time I had to pull them back.

„That‘s too much for now. It exceeds scope and budget, and will take too long.“ But, maybe they‘re right. They‘re the experts. It is I who need them, as much as they need me.

Durable products are those which last a long time. They have longevity. If improved continually they survive in the market. They develop continuity. For Germans continuity is a sign of quality, reliability, durability, in sum excellence.

German advertising, regardless of the form, stresses that continuity. Automobile manufacturers present their newest models as the natural (logical) extension of their predecessors (Vorgänger), the improved version. Rarely do they take leaps of fancy, diverging from what has been. The same goes for many other products, whether household appliances, machine tools, or business-to-business products and systems.

And this thinking is found in German companies, in how they present themselves.

“You can rely on this product.”

Especially the famed German Mittelstand (small- and medium-sized companies) stress time and again with pride that they are an inhabergeführtes (literally owner-run) Familienunternehmen (family company). Invariably this statement is followed by the company‘s year of foundation – gegründet 1905 (founded). On many company websites you can read a chronology of the company (family) history.

The message is clear: you can rely on our product, and rely on us, because we have been working on it for decades, some companies many decades, constantly improving it, incrementally and in a very focused way.

Long-lasting (durability) is a value in and of itself. It signals experience, stamina, focus, survival. Not sentimentality, but real value in dollars and cents, or in Euros and Euro cents. The German logic says that it pays to invest in a long-lasting product, even if the upfront investment is higher than in a less durable product.

Quality and durability

I still take notice of the fact that most taxis in Germany are Mercedes Benz, followed by VW and some Japanese models. Mercedes Benz, top of the line. Every now and then I ask the driver: „Your fares are reasonable. Perhaps a bit higher than in the U.S., but not significantly so. How can you earn a profit if you have to finance this expensive car?“ The answer is always the same: quality and durability of the automobile in general, and of the engine in particular. „I can put well over a couple of hundred thousand kilometers on it, keep my repair costs low, and it still has resale value.“ In dozens of German cities over more than two decades, that is the answer I get each and every time.

Its evident also in how they define competence. Germans tend to work in the same discipline over a long period of time, whether it is engineering, supply chain, manufacturing, or a central functions such as personnel or legal. They believe in developing depth and breadth of expertise, in maintaining continuity in approach.

Continuity and incremental improvement

The Germans as a people seek permanence. Quite literally. They move far less frequently than Americans, for example. They are rooted, strive to maintain those roots, to deepen them, are often resistant to change. They are aware of how mobile American society is, often marvel at it, recognize the advantage of having a high degree of flexibility, but seldom would choose it for themselves. They would not want it for themselves or for Germany.

Continuity. Constant incremental improvement. A focus on the long-term. These are deep-seated German beliefs, therefore characteristics of German products. Can it be any other way? Can the products which a national culture produces be, in their core characteristics, different than the culture itself, the people? German products are German.

When we address the topic of product philosophy in my management seminars I ask the participants – Americans and Germans – to name their business cultures most iconic companies, their products, and the key characteristics of those products. For example: McDonald‘s; burgers and french fries; fast, tasty, consistent (same customer-experience independent of location).

About Germany both sides cite: automobiles (BMW, Audi, Volkswagen, Porsche, Mercedes Benz),  beer, optics (Zeiss), healthcare, precision tools, precision cutlery (Zwillinge), chemicals (BASF), household appliances (Miele), weapons systems (Leopard tanks), athletic shoes (adidas, puma), Aldi, Birkenstock, Boss, pharmaceuticals, SAP, German Fussball, Nivea, Gummibears, Maschinen-/Anlagenbau. The list goes on.

And American: Levi jeans, Coca-Cola, Harley Davidson, Apple Computer products, Ford trucks, Google, Facebook, Boeing, IBM, Exxon, Disney, UPS, Nike, Goldman Sachs, Marlboro, Hollywood films, HP printers, Microsoft, cowboy boots, Gibson guitars, weapons systems, 3M post-its, pharmaceuticals, professional sports (NFL, NBA, MLB). The list goes on, too.

Understand needs and wants

Very generally speaking: Americans value speed, availiability, low price, good service, „newness“, pragmatic solutions, and user-friendliness. Germans look for quality, technological sophistication, depth, durability (long-lasting).

Again a generalizatin: Americans are stronger in business-to-consumer (B2C), while the Germans are stronger in business-to-business (B2B), or at least the respective inclinations are stronger. American firms tend to work from the market and customers backwards into their companies. Listen to customers. Understand their needs and wants. Communicate back to the colleagues, who develop products and solutions. Whereas Germans, generally speaking, work from the product out to the market. Focus on technology. Understand market needs. Go to customers and propose solution (product or service). This is necessarily very simplified, and will be explored at a later time by CI.

Product. Product philosophy. Self.

Time and again when I do this exercise it becomes immediately apparent how much Germans and Americans identify themselves with the companies and products native to their country, native to their culture. No surprise there, for companies and products are an expression of a country‘s, therefore of one‘s own, product philosophy. It is personal, for many deeply so. Seldom are the discussions we then have unemotional, neutral, objective.

But why? Easy. Our product philosophy is a part of our self-understanding. It‘s how we define what makes for a good product and/or service. It‘s what we expect as consumers, and what we actually in our jobs. We all work on providing products and/or services. It‘s what we do for a living. It is a part of who we are, the legitimacy for what and how we do it. It is directly linked to how we „pay the bills.“ To be confronted with a different product philosophy – even if only slightly – and in the same company – can mean a challenge to our self-understanding, possibly to our jobs. It can be unsettling.

Tiled Stoves: in apartments and homes, to burn coal, in order to produce heat.

Use resources respectfully, protect the environment. I recall the debates in Germany years ago about recycling. At that time the Social Democrats and the Greens were in power. Jürgen Trittin was Umweltminister, literally Secretary of the Environment. 

German business was against any recycling laws. It’s been reality for years now, though. How could there have been a debate at all? Quite the contrary. Protecting the environment should be foundational to the politics of the Christian Democratic Party in Germany (CDU). They and their sister party in Bavaria (CSU – Christian Social Union) were clearly on the wrong side of that debate.

I’ll never forget the smell of coal back then in West Berlin. Late Fall of 1988. I live in a boathouse in Konradshöhe, on the Havel River, on the other side the DDR (Deutsche Demokratische Republik, German Democratic Republic). No wall between, just the river. On the other side a strange stillness. Just a road along the bank and streetlights giving off a weak, halfhearted yellow-orange glow. Evenings and mornings the smell was strong. A weird feel to it, somehow historical.

My girlfriend then lived in the Schöneberg section of West Berlin. On the fifth or sixth floor of an apartment house built in the early 1900s. Back then I was reading Sebastian Haffner’s Deutsche Revolution 1918. Dry cold days in Berlin, the smell of coal smoke from the houses ever-present, Rosa Luxemburg murdered and thrown into the Spree River, Stahlhelm, Rätherrepublik in Munich. I think of my grandmother who back then was eighteen years old and living in Cincinnati.

I imagine what Berlin was like in 1918 and 1919. I, the grandson and great-grandson of coal merchants in Philadelphia. Our great-grandfather, Alexander Magee, started out with a horse-pulled wagon, going from house to house. Years later his sons, Frank and Alex, would join the business. I see the images in my mind’s eye. The coalyard in the Kensington section of Philadelphia located right next to the train line.

The war over, but experiences continue to form us.

The coal was delivered from Northeast Pennsylvania. The Allegheny Mountains cut through the state from the northeast to the southwest, continuing into West Virginia. The business grows a bit, two trucks, a handful of employees. They’re not wealthy, will never become so. They pay the bills and have more than enough left over.

After the Second World War they convert to oil. Magee Coal & Oil. During my father’s freshman year at Amherst College in Massachusetts his father dies of a heart attack. His younger brother, Ken, uncle to my father, takes over the business. My father does not go into the heating fuel business, instead becoming a business consultant.

We six children of Frank and Laura Magee growing up in suburban Philadelphia have no connection to Magee Coal & Oil. But the constant coal odor in Berlin during those winter months of 1988-89, the dirt in my nose, cleaning it out a few times a day, brought me back into contact with the days when my recent ancestors lived from coal. And today? I, management consultant, put food on the table by supporting those who build coal-fired power plants.

Use resources respectfully, protect the environment, yes, the Germans do that better than the Americans. The war ended more than seventy years ago, but those experiences continue to inform and form us. During a long walk through Bonn with my son I try to describe to him what the town looked like in 1945. I repeat the stories of his German great-grandmother – my ex-wife’s grandmother. And why we are taking a walking and not driving tour by car or bus. Besides, walking is healthy.