Decision-Making – Page 11 – understand-culture

Frederick August the Procrastinator

Frederick August, the King of Saxony, was one of history’s great procrastinators. While he began as one of Napoleon’s greatest foes, he soon became his greatest ally. In return, Napoleon elevated him from prince elector to king.

But by 1813, his alliance with Napoleon would cause him to lose the Battle of Leipzig. Though Frederick August was careful in attempting to side himself with the great forces who opposed him, a treaty that he had made with Austria eventually dissolved. Taken into captivity by the Prussians, Frederick August was forced to turn more than half of his territory over to his archrivals.

But why was Frederick August on the losing side of the Battle of Leipzig? Historians consider him to have been incapable of making decisions. He is credited with coining the phrase “no decision is better than a bad decision.”

During the revolt he spent his time sitting almost apathetically in the basement in the city hall of Leipzig. To add to the confusion, Frederick August was an exceptionally unpredictable monarch; very few rulers changed their mind so often.

Not only was he incapable of making decisions, but as soon as a decision was made it essentially would have lost all meaning in the moment of its creation, having already been undermined in significance and seriousness by the probability that Frederick August would again change direction.

Fragestellung

A Fragestellung is literally a question formulation. It is the definition of the question to be addressed. Before Germans make a decision – answer a question – they place great effort into first being sure that they have a common understanding of the decision to be made, of the question to be answered.

From the German point of view it is not enough to be capable of making decisions, to answer complex questions intelligently, if you haven’t first defined accurately the decision to be made, the question to be answered.

Germans engage in a discussion upfront about: What is the nature of the decision we are about to make? What are its implications for other areas of our work? Are we addressing the right question? Are we in agreement about what decision we are making and why?

Schmal (narrow): Old High German smal: small, narrow; narrow in width, as seen in profile; little, few, not enough, bare, barren.

Breit (wide): Of greater length in profile; as in size(s), measurements, a certain width; large, stretched; in large measure.

The German word schmal is often used to describe poor performance, low quality, something deficient. An engineer who does delivers poor results is referred to as a Schmalspuringenieur, literally a narrow lane engineer. A Schmalspurforscher is a scientist who has achieved little professionally. Schmalbrüstig – literally small or narrow in the chest – is someone who is unathletic.

Grundsätzlich: Relating to what is foundational; in accordance with a principle, in principle; actual, fundamentally; in general, as a rule.

The German people are serious. They value principles, deep-felt beliefs. Er hat keine Prinzipien. He has no principles, is a very serious criticism in the German context. To have no principles, to have no values, which guide one in their behavior, is considered to be a sign of weak character. Germans tend to have discussions about bottom-line thinking, beliefs, and principles.

The German political parties have their Grundsatzprogramm, their foundational political principles, which are formulated for the long term. The Grundsatzprogramm encompasses their foundational political beliefs, upon which the specifics of their political platform are formulated. Their election campaigns are closely aligned with these ideas. The Grundsatzprogramm is seldom modified. To go against it, to follow a political course which strays from it, invites internal rebuke and sanction.

Short. Mid. Long.

Germans think mid- to long-term. Short-term thinking and action is almost always viewed negatively. Germans associate short-term with ungrounded, fleeting, incomplete. When they make decisions they want to know, at least anticipate, what the effect (Auswirkungen) will be in other areas, on other processes, on other colleagues. They strive to understand the mid to long term effects.

Middle High German vrist. Old High German frist: what is current, about to occur; time period in which something should happen; to postpone briefly. Kurz- , mittel- , langfristig means short- , mid- , long-term.

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.

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.

Think first. Then act.

Germans often have the impression that their American colleagues gather too little information before making a decision. Valuable information sources are not tapped into. Comparisons are made “on thin ice.” Early indications based on subjective sources are not questioned critically.

All these reservations go against the German belief in erst denken, dann handeln – think first, then act. For richtig denken – literally right or correct thinking, in the German context means holding down (controlling) the natural impulse to act until the situation has been analyzed and the consequences of actions thought through.

It should be of no surprise, therefore, that Germans often see American analysis as insuffiently stringent. They see a narrow and incomplete focus on only certain aspects of the decision to be made. They fear that the Americans overestimate their ability to do a sauber – clean analysis.

This is underlined by what the Germans believe is an American tendancy to take subjective information too strongly into consideration. They are surprised when their counterparts do not use those tools and standards which have proven to be successful.

In the end Germans see their Americans colleagues as too pragmatic, too inaxact. Insufficient results are accepted too quickly. This is very difficult for Germans to accept as a people which places so much emphasis on avoiding errors via accepted tools and standards, errors which could be the source of a Systemzusammenbruch – literally system collapse. Germans see themselves sliding into danger which can only be stopped through analysis performed twice or even three times over.

Founderland

A willingness to take risks and a desire to make decisions are the basic requirements for starting a business. Germany is not a land of entrepreneurs.

According to Global Entrepreneurship Monitor (GEM), an annual joint publication of the University of Hannover and the Institute for Jobmarket and Career Research of the German Federal Agency for Employment, only 2.5% of adults in Germany started a business which they could live from. This placed Germany in spot 10 of the 22 compared.

Rolf Sternberg, an economist, considers one reason for the weak culture of entrepreneurship to be the widespread desire toward security:

“The tendency to strive towards security is much more prevalent in Germany than in Anglo-American countries”. This is the flipside of having a well-developed social security system.

Yvonne Stolpmann of Chamber of Commerce in Nürnberg summarizes the situation as such: “Those who give up a permanent position here stand to lose a lot of security. It’s different in the USA”.

Business failure is Personal Failure

The Handelsblatt Global Edition from April 23, 2015 reported: Philipp Gloeckler’s business idea was a failure, and he doesn’t mind admitting it. He had what he thought was the perfect concept, an impeccable business plan and great press coverage. Yet, his app, Whyownit, was a disaster.

This is how he found himself at the F***UpNight event in Berlin, a get-together where failed start-up entrepreneurs pick through the bones of their mistakes in the hope that they can do better next time.

“Business failure is often equated to personal failure in this country,” said Rolf Sternberg, a researcher at Leibniz University in Hanover, who recently co-authored a study on young entrepreneurs. “We would win a lot if we would accept failure as a new chance,” he added.

Other than SAP, the software giant founded in 1972, no German tech company has made it onto the global stage. Instead German entrepreneurs are better known for their pursuit of perfection, and finding success within established structures, such as the car industry.

“I am convinced we need to talk about mistakes,” said Béa Beste, whose toy app, which allowed users to subscribe to a toy delivery service for kids, collapsed with the loss of all her investor’s capital as well as her own €300,000 ($322,000). “The worst mistake is being afraid of mistakes,” Ms. Beste said.

Venture capital is scarce in Germany’s risk-averse, conservative economy, so entrepreneurs usually turn to bank loans for funding. But if their business fails and debts are called in, they must go through a lengthy insolvency process which can demand up to six years of “good conduct” before the slate is wiped clean.

“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.

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.