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“… make a comeback“

The New York Times online. May 3, 2015. An interview with Diane von Fürstenberg, Belgian-born American fashion designer best known for her iconic wrap dress.

Interviewer: You’ve had such a roller coaster life of great successes, as well as some pretty dark times. How did you manage through all that?

von Fürstenberg: I’m still managing through it. First of all, let’s talk about success. I lived an American dream. I was very lucky because I was very successful at 25 years old. Now it’s very common for that to happen in Silicon Valley. But at the time, it was not so common, and I was a woman and I was very young.

Now we go to failure. What does failure mean? You didn’t make it? So you didn’t make it. But by not making it, maybe you learned something else. America is a society where you always have a chance and where you can always make a comeback. So I would say that failure sometimes could be your biggest asset.

A subtle difference

Normierung – norm-ing – is defining a unified measurement (dimensions, proportions) for products and processes. Norms are not only practical, they save money. Up to 17 billion Euros per year, according to the German Institut of Norms (DIN).

DIN is well known to all Germans, even if they don’t think about it. DIN-norms were introduced to them as early as grammar school when they began to work with stardardized pape sizes such as the A4.

But what exactly is a norm?

The German Chamber of Commerce writes (loosely translated): “A norm is a rule (regulation, code of practice). It is legally accepted. It was established via a standarized process. It solves a problem, addresses a situation, addresses factual circumstances.”

Manufacturers can invoke or refer to a norm in order to save time and money. However, noone is obligated to follow a norm. They are often, nonetheless, written into production contracts, thus defining measurements and processes.

In that sense production proceeds deductively, base on theory or the norm. Industry norms are more firm, more binding, than industry standards, which are not generally accepted, which can be defined by manufacturer to manufacturer.

Interestingly, the English language does not distinguish between a norm and a standard. Perhaps this gives us deeper insight into German thinking.

Take risks

Jeff Bezos. Founder of Amazon. About being bold: 0:00 to 2:45 minutes.

Every fifth DAX share

German investors have a safety first mentality when it comes to money. Their aversion to risk is often attributed to the economic turmoil of the 20th century. The hyperinflation of the 1920s and the devastation of two world wars have burned themselves into the nation’s psyche.

Since early 2009, the share prices of DAX-listed companies have tripled on average — an increase of €800 billion, or $860 billion. Germans park their money in safe investments like savings deposits or life insurance policies.

54.3 percent of shares in the DAX are held by foreign investors — more than ever before. U.S. investors are the biggest single group of foreign investors. Every fifth DAX share is owned by North American investors.

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

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”.

Insurance protection

Germans love insurance policies. According to the magazine Stern, the average German household paid an average of 2,771 EUR annually for private insurances in 2002, 106 EUR more than in the previous year. They are clearly willing to spend on their security.

However, the avoidance of risks in this way is often not rational. According to Stern, every other German is insured for legal representation, yet only one in ten have disability insurance. Statistically, however, one out of four people will be unable to work for an extended period of time during their lifetime due to illness or an accident.

The investment counseling agency KSK-Südholstein makes a similar attest: “Germans love to be rooted and secure. That is why they are so keen on insurances. For this reason, there is an incredible variety of insurances available on the German insurance market.

Amongst these policies you will find some which are sensible, and others which really are not, because not every value must be insured. Much to the dismay of experts, there is a tendency in Germany to insure small amounts of damage with high initial ventures.”

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.

Process Rhythm

All processes have a rhythm, made up of the individual process steps, their sequence and the time allotted to them. Processes do not exist in a vacuum, however. Every process and its rhythm is subject to external factors.

Germans do their best to prevent external factors from influencing the rhythm of their processes, however. They believe that if a given decision making process has proven to be effective, if it has led to good decisions, it should not be interrupted or distracted.

If the decision is an important one, if the decision making process has proven to be robust, Germans will do their best to shield it from external factors.

External Expertise

Germans often involve external experts, who have a broader Überblick, in a critical decision making process. As a neutral party they can ensure that the most current analytical techniques are employed, thus minimizing the risk of errors causing serious harm. Even those Germans confident in their ability to execute a critical decision making process will refer time and again to the highest standards in their industry.

Expertise. Analysis performed by a neutral expert. Deep subject area knowledge. “She is considered one of the finest experts her field.”

The Germans believe that truly objective criteria and analytical approaches exist, that they can be identified and used. Germans constantly work towards objectivity. For them analysis can only be of value if objective.

Standards. English standard: something which is considered to be the best in its kind, a model, an example; the quality against which all is compared, measured; norm, measure, a plumb line.

Some of the highest standards for hygiene, for example, are found in German hospitals, restaurants and hotels. To receive several stars requires meeting those standards.

There are labels and awards for almost all products in Germany: Fair trade labels for products from the southern hemisphere; ecology labels for organic foods; safety labels for mechanical and electrical products used in the home or the workplace. All are based on norms and guidelines.