Decision-Making – Page 6 – understand-culture

Better a bird in the hand

“Besser den Spatz in der Hand als die Taube auf dem Dach” – better a sparrow in the hand than a dove on the roof – is a popular German saying expressing the German aversion to risk.

Aversion to risk and conservativeness go hand-in-hand. Never want too much, be satisfied with what you have.“ Den Mund nicht voll nehmen.” – Don’t bite off more than you can chew.

Only 13 percent of Germans invested in stocks and shares during 2014. Despite rock-bottom interest rates, the majority of savers continued putting their money into trusted bank savings accounts and fixed-return financial products.

74 Billion Dollars

On May 7th, 1998 Jürgen Schrempp, CEO of Daimler, and Bob Eaton, CEO of Chrysler appeared together at a press conference in London to announce a merger between the two companies. It was emphasized that this was not a takeover by one company of the other, but rather a fusion between equal parties. Schrempp deemed the merger of Daimler and Chrysler “a match made in heaven”.

After two years, Co-chairman Eaton announced his resignation, leaving Schrempp to be the sole head. In 2006 Schrempp passed this position on to Dieter Zetsche. By March 2007 the first speculations began to emerge that DaimlerChrysler would sell the ChryslerGroup.

Since the merger, Chrysler had reduced its net worth by 35 billion Euros, while the net worth of DaimlerChrysler has been reduced by another 50 billion by the end of Schrempp’s resignation in 2005. On May 14th, 2007 the sale of ChryslerGroup to Cerberus was announced. During a special general assembly on October 4th, 2007 it was officially decided to rename the company Daimler AG.

For Mercedes-Benz this merger to DaimlerChrysler AG seriously damaged the company’s image, which many attribute to quality issues and cost-cutting. The leading role which Daimler-Benz AG once had in the auto industry has still not been completely restored.

A study conducted by the consulting firm McKinsey estimated that the company’s value had dropped during Schrempp’s reign by 74 billion dollars.

“Sitting out“

Former German Chancellor Helmut Kohl was often innaccurately portrayed as the master of Aussitzen (sitting out) by journalists and political elites alike. Instead of approaching a problem directly, it was said that he would wait until it would either resolve itself or people would lose interest in it.

But even with Kohl’s retirement from politics,“sitting out“ political issues supposedly has not gone out of style. At least according to Stern maganzine, which claims that Angela Merkel has become the new representative of this style of governing. As Wochenmagazin wrote in March 2010: “Angela Kohl – wait it out, weigh it out, sit it out. Chancellor Merkel reveals herself ever more strongly to be an adept pupil of the greatest sitter-outer Helmut Kohl”.

More accurate is that Kohl was and Merkel is a master of thinking things through, patience, and building consensus.

Stringency

Analysis. Latin analysis, Greek análysis: to pull apart, dissolve into parts; to study something by taking it apart and considering its individual components; investigation into the particulars of a whole.

Analytical thinking is in those professions critical where a system is understood via its parts. A psychoanalyst pulls apart the patient’s past experiences. The financial analyst considers the entire spectrum of transactions in order to get into the details of specific market movements. Police investigative work, all approaches in medicine, every type of research and development must employ sophisticated methods of analysis.

Stringent. Latin stringens: strict; convincing based on logical arguments; logical, clear, without internal contradiction.

Stringent analytical methods are particularly important in the academic fields, whether the natural sciences, engineering sciences, economics or the humanities. Master’s or Ph.D. theses in Germany are not accepted without meeting high standards of analytical stringency. All professions based on deep analysis depend on stringent methods.

Penetranz. Penetration: Latin penetrare: to place into; to enter into, get into, to move in a certain direction.

To be penetrating has a negative connotation in Germany: overly direct, bearing in on a point, intense. A certain perfume can be too penetrant. A person who dominates a conversation, making long speeches and moralizing is penetrant.

In the positive sense penetrant means dogged, focused, determined, working to understand something at as deep a level as possible. Like an archeologist who digs deeper, forever searching for evidence, for insight into the lives of our human ancestors. The same goes for analysts of any kind, for the medical profession, for linguists, historians and research in all of its forms.

Heinrich Schliemann (1822-1890) comes to mind, the German archeologist who discovered the ancient cities of Troja and Mykenes. Many years of painstaking research led to archeological and historical proof that these two cities had in fact existed.

Rational / Personal

On the one side, the Germans strive hard to be objective, to reduce, even eliminate the subjective.

Rational, logical, scientific. Filtering, screening, separating fact from gut feel, from intuition.

Communication: Say what you mean, mean what you say. Honest. Not meant personally. Persuasion: Separate message and messenger. Take yourself out of the equation. Decision making: Sober, scientific, self-skeptical. Feedback: The focus on weaknesses as authentically constructive input. Processes: Stripping down, compressing to the core, machine-like.

Yet, the Germans are personal, emotional, subjective.

Agreements: Think it through carefully. Your word is your bond.

Leadership: Hire talent. Train and equip. State mission. Then get out of the way. Product: Deep curiosity and concern for the user. Do it right. Customer: Do what is best for the customer, even if it jeopardizes the relationship.

Germans. Objective subjective. Rational personal. Perhaps a false dichotomy.

Avoid gut-based decisions

When it comes to decision making Germans expect one to describe the process, methods and tools employed to do the analysis. Germans seek scientific objectivity and avoid “gut-based” approaches to making decisions. From their point of view, the results of analysis are only as good, as reliable, as convincing, as the process/method/tools you used to arrive at them.

Three inches high

Horst Brandstätter, the founder of Playmobil, dies at 81.

“Although a billionaire by the end of his life, he was a world champion in economizing, the younger Mr. Brandstätter (son Conny) said, citing as an example his father’s insistence on using cheap packs of cards for his favorite card game.

Mindful of his cash flow as the world oil crisis drove up the cost of plastics in the 1970s, Mr. Brandstätter summoned his chief designer and asked him to come up with toys that would use less plastic.

Mr. Beck came up with Playmobil, whose miniature models and environments are said to have been inspired by children’s drawings and the figurines of traditional Christmas crèches. At about 3 inches high, the figures have round faces, movable arms and legs, and hands that can grasp a pirate’s sword, a carpenter’s saw or a firefighter’s hose.”

Source: New York Times, June 11, 2015. By Alison Smale

Ecological Awareness

The Germans think ecologically. They not only draw on their resources sparingly, they also try to limit the negative effects of that use. Although Germany has a high population density, it has managed to declare almost 3% of its land as publicly-protected national parks, far above the average within the EU.

Many laws have been passed to protect the environment, including strict recycling laws for bottles, cans and other packaging material. Those who can afford it choose to buy organic food.

The Germans find more and more ways to save electricity and water, both of which are expensive. As of October 2012 only energy-saving lightbulbs can be sold. The stores offer only energy-saving lamps and lighting fixtures.

German awareness of the environment gave rise to the Green Party in the 1970s, which has developed into a major political force in Germany, and recently was the junior partner in the government with the Social Democrats. Ecological concerns have become common in all German political parties.

More with Less

“Get more done with less.” An intelligent use of resources also aims to maintain balance. Germans try to avoid ‘heading down the wrong path’, especially ‘betting everything on one hand’. Instead, they try to view an individual decision in the broader context of factors and resources. Achieving more with less is a defensive approach.

Decision making latitude. Germans do their best to maintain broad latitude in their decision making, whether it be in companies, families or the government at all levels. They want to make decisions freely, not be forced to make them.

Germans strive to keep as many options open as possible, knowing well that every decision leads to action, which in turn draws on valuable resources: time, budgets, material, manpower. And because revising decisions further depletes resources, Germans try to make the right decision from the start.

Thrifty. The German people are thrifty. The national debt per person is far lower than in Europe’s southern countries and clearly lower than in the U.S.. Private household debt is considered to be a character weakness, of poor planning, an inability to manage a budget. State agencies stand ready at any time to advise German citizens on how to get their personal finances in order.

Exact calculation. Germans are known to calculate ‘with a sharp pencil’. Whether it be the mother of a family, the Chief Financial Officer of a German small-to-medium sized company or a civil servant in the local tax office, the Germans calculate precisely what costs how much, when, with what affect on the overall budget.

Germans speak of the schwäbische Hausfrau, the Swabian mother and head of the household. Swabians are known within German for being especially thrifty. They are the model for financial conservatism, for avoiding non-essentials, for holding on to their money, for saving.

Mother of Invention

‘Not macht erfinderisch’ or “necessity is the mother of invention”. Not – necessity – forces one to become creative, to work in a disciplined way, to draw on resources carefully. Process oriented thinking is the logical response to working with limited resources. One could say “necessity is the mother of processes”.

The most popular kind of food in Germany is the potato. Imported from Latin America at the end of the 1700s in response to severely limited food supplies in Germany, the potato was a perfect fit: has high nutritional content, grows in poor soil, is resilient in erratic climates.

It was the Prussian king who had heard about the oddly shaped vegetable. At first the German people did not respond to the potato, even though hunger had become widespread. The king decided to appeal to the inclination of his subjects to challenge authority.

Fences were built around the potato fields, guards were posted. The people became curious. It didn’t take long for the first thieves to recognize the value and versatility of the potato. Today’s German cuisine could not exist without that once strange object from a far away land.