The full cost calculation

German business education teaches Vollkostenrechnung — costing that carries every overhead through to the product, rather than looking only at the additional cost of one more unit. A decision taken on marginal cost looks better than it is. The German training insists on seeing what the thing actually consumes.

Nothing is thrown away twice

German waste law runs on a hierarchy written into statute: avoidance first, then preparation for reuse, then recycling, then other recovery including energy, and disposal last.

Disposal is the fifth of five options, and the order is the law rather than guidance. A German organisation deciding what to do with anything starts at the top of that list.

BER

The Berlin-Brandenburg Airport is a topic surrounded by discord. There is no end in sight for this odyssey. The costs just continue to rise into incalculable sums. This caused the association of taxpayers to heavily criticize the politicians responsible for it in 2012.

The airport was a “manifest of poor planning, mismanagement, incomplete construction plans, and expenses beyond the budget“. The association of taxpayers blacklisted the overseeing committee of high-ranking representatives from Berlin and Brandenburg and the federal government, accusing them of “political failure” and “blind trust” in the underqualified management” of the airport.

Should one have checked the project’s progress more rigorously? Perhaps through frequent feedbback?

Geduld

Hastig: hasty, impatient: To act rashly without having considered the consequences; unsettled, jumpy, nervous.

Eile mit Weile translates roughly “take your time when moving quickly”. The Germans believe that good work can be completed sooner by taking your time, working thoroughly, avoiding mistakes whose correction will require more time. ‘Eile mit Weile’ is for the Germans not a contradiction in terms but a proven approach.

Another common figure of speech in German is ‘mit dem Kopf durch die Wand’, literally to try to go through the wall with your head. It signals a lack of sophistication, of imagination, of the ability to navigate around barriers. Those who attempt ‘mit dem Kopf durch die Wand’ are seen as stubborn, unreflective, rough, intellectually lazy. These are not compliments in the German culture.

Geduld: patience; to bear, to carry; calm and self-controlled acceptance of something which is uncomfortable or could take a long time. Geduld – patience – is required especially in professions whose results come at a much later time. Geduld is also required when work involves much trial and error.

Vorbereiten: to prepare: to orient oneself to something; to make oneself capable; to complete necessary work ahead of time, in anticipation of; to prepare or develop oneself.

Germans plan. They place great value on preparation. ‘Was man im Kopf nicht hat, muss man in den Füssen haben’ translates roughly as “What one doesn‘t have in their head, they need to have in their feet”, meaning those who are unprepared have to hustle here and there in order to complete their tasks.

Being unprepared slows down the work of the other colleagues, threatens the execution of the overall plan, forces a rescheduling of work results. Germans feel very uncomfortable when a plan is poorly executed.

Before a German begins a specific task the tools have been laid out, the job description and requirements have been thoroughly read, all the necessary pieces have been assembled, the work plan is pinned on the wall above the workbench, so to speak. The work is then completed in a timely fashion and with an eye on quality.

This is the approach of a master artisan in his shop, of a German Hausfrau in the kitchen, of a German professor at the university. Rarely does that professor need to scurry back to his office in order to get a certain book or paper.

Disorganization is a sign of being unzuverläßig, unreliable. What was he thinking that he forgot the book? Is he really serious about his work? How reliable is someone who doesn’t prepare their work?

Resource Comparison

If America represents a society of excess, then Germany can be viewed as representing one which may not have deficits, but knows its limits. 

The U.S. has 15x as much natural gas, 5x as much crude oil, 4x as much coal, and 5x as many renewable water resources. And the list goes on. 

In the year 2000, the annual use of gasoline per capita in the USA was 1,633 liters versus just 450 in Germany, electricity use was 13,672 versus 6,680 kwh.

As far as space is concerned, the numbers grow incomperable. With its 9.63 million km², the U.S. is 27x larger than Germany with its 357,000 km². 

The state of Texas alone is nearly twice as large, having 678,000 km², California with 411,000 km² and Montana 381,000 km². My home state of Pennsylvania is already 1/3 the size of Germany with its 117,000 km².

All of this impacts the population density. In Germany, an average population density per km² is 231, in Northrhine-Westphalia, the most populous state, that number more than doubles to 530. 

In the U.S., the figure lies at a mere 31. But let us examine the development o fthis number over the past 200 years: in 1800, there were 2.5 people per km², in 1850 3,5/km², 1900 8,0/km², and by 1950 still only 17 persons per km².

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

Frugal

Germans are very conservative with their resources. Waste is proof of poor and improper work, which has lost sight of what is important. This is why decision-making processes should incorporate a clear and well-defined plan for resource management.

The process of making a decision requires its own resources as well, (work, materials, time, etc.) and takes place in a context which is very much confined by the resources available, resources which must also be calculated into the process implementing the decision.

The German figure of speech ‘Not macht erfinderisch‘ – need makes one inventive – is a fitting: Being in need may lead one to become more creative and discover hidden connections, but it also enforces disciplined and effective use of available resources. These frugal tendencies strongly complement a process-oriented approach; both tendencies are different sides of the same coin.

A further important point of contrast becomes clear, when considering that the conservative use of resources also reflects a desire to keep things in balance. One doesn’t want to go rushing off in the wrong direction, ‘alles auf eine Karte setzen‘ – to bet it all on one card.

Rather, one should always view important decisions within the economical context of labor and resources in its entirety. He or she who can ‘make more from less’ has successfully internalized this defensive principle.

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.

Wirkung

Effizient. Latin efficiens, efficient; a large effect based on little effort; to achieve much with less; economic, economical.

Wirkung. Effect, output, results; a change realized by energy, effort, input; infuence; a sustained, positive effect.

Wirtschaftlich. Economical; concerning the economy; monetary, financial; to work intelligently; to be frugal, to save money; to achieve the maximum based on available resources.

Weniger ist mehr. Less is more. To focus on the essence, on the core. Functionality trumps design, thus saving time, resources, money. Often heard in the fields of design and architecture.

Effizient, nicht effektiv arbeiten. Work efficiently, not just effectively. A figure of speech often heard in the German workplace, meaning to do more than reach your goals by doing it efficiently.

Kleine Ursache, große Wirkung. Literally small cause, large effect. A figure of speech pointing out how small things – good and bad – can lead to very significant outcomes. In the German context it is a warning to pay close attention to the details of one‘s work.

Was nicht in die Masse dringt, ist unwirksam. What doesn‘t reach the masses, is ineffective. A quote attributed to Karl Jaspers, one of Germany‘s most influential philosophers of the post-War era. It is often used in discussions about the effectiveness of advertisement.

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