business – Page 6 – understand-culture

Independent. Self-managing.

In many job postings German employers promise eigenständiges Arbeiten – literally independent work, meaning the freedom to do the work with little influence from next-level management. Selbständiges Arbeiten – self-managing work without constant status checks, without anyone “looking over your shoulder”, is highly attractive to German employees and job-seekers.

It is a sign of trust in the person’s ability. Constant feedback to the boss on the progress of work is neither necessary nor desired. Too much communication between levels of hierarchy is in the German context a sign of Unselbständigkeit – inability to work independently, self-managing. They need to be “taken by the hand” (hand-holding). And noone in Germany, neither team lead nor member, wants to waste time doing that.

Plumber, Electrician, Banker

In German companies the head of a department or project team assigns tasks to the team and to individual members, who carry them out ideally without any supervision. This logic is also at play in business relationships between customer and supplier.

When a German contracts a craftsman or mechanic – plumber, electrician, handyman – to do a job, he or she does not go beyond explaining the problem which needs to be solved. Everything else is left up to the person contracted to completed the job. The German customer expects the job to get done without any more input or oversight from them.

It‘s the same approach when one goes to the bank. The customer explains their financial situation, states their goals and then expects the financial advisor to do the rest, meaning come up with a financial plan. The bank employee, like the plumber, only contacts the customer if it is absolutely necessary.

Deviation from mission

In the German military context, independent deviation from the Auftrag – mission – is permitted and expected, if the situation on the ground has changed, demands a rapid response, and the commanding officer cannot be reached.

The overall mission, however, may not be re-interpreted. The tactical approach is always subject to modification. This presupposes that the junior officers and their troops are fully informed of the overall strategy which the mission serves, allowing them to choose the best path to the goal.

Those considering deviation need to ask themselves: „How would I as the commanding officer react to the changes on the ground?“ Critical is acting in accordance to the spirit of the Auftrag, the mission.

Signs That You’re a Micromanager

“Signs That You’re a Micromanager.” Muriel Wilkins. November 2014. Harvard Business Review.

“Absolutely no one likes to be micromanaged. It’s frustrating, demoralizing, and demotivating. Yet, some managers can’t seem to help themselves. The signs are clear:

You’re never quite satisfied with deliverables. You’re often frustrated because you would’ve gone about the task differently. You laser in on the details and take great pride in making corrections. You constantly want to know where all your team members are and what they’re working on. You ask for frequent updates on where things stand. You prefer to be cc’d on emails.

Wilkins suggest four things to reduce micromanaging:

Get over yourself. We can all rationalize why we do what we do and the same holds true for micromanagers.

Let it go. The difference between managing and micromanaging is the focus on the micro. Let go of the minutia.

Give the what, not the how. There’s a difference between sharing that expectation and dictating how to get to that result.

Expect to win. Be clear on what success looks like. Provide the resources, information, and support needed to meet those conditions. Give credit where credit is due.

How a society feeds itself

How a society fundamentally defines the everyday working relationship between leader and led – between two levels of hierarchy – is imbedded in how that society feeds itself. In companies engaged in commerce.

If that working relationship does not function well, if it fails, not only is the respective project in jeopardy, the ability of companies to meet the needs of their customers is at risk. Defining and managing the line between strategy and tactics is in the business context critical to the profitability of every team within every commercial enterprise.

The American business tradition in practice involves a close working relationship between leader and led, between team lead and team.

The Chief Executive Officer (CEO) of an American company, for example, is the leader of the company. He or she manages directly the other managing board members, such as the Chief Financial Officer (CFO), the Chief Operations Officer (COO).

“… 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 Form of Risk Management

Breaking down complexity into its component parts, a common theme in American thinking, is also at play in American decision making. Individual decisions are always a part of larger decisions. They can be either grouped or isolated. Because Americans value focus and execution, they tend towards isolating decisions.

The more clearly defined the decision to be made, the more limited its scope, the greater the chances that it will be made intelligently and implemented effectively. Limited scope decisions are also a form of risk management. Their results can be evaluated quickly. They allow for flexibility and rapid reaction to changing parameters.

And if human action influences the very context in which one is operating, there is a point beyond which grouping decisions increases risk. From the American perspective systems are inherently risky. For if just a few key elements of a system are wrong, the entire system is wrong.

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.

All the way or not at all

The appreciation that Germans have for individual competence and their aversion towards incalculable risks sometimes set the condition of a certain degree of caution used when working with innovations.

Therefore, it fits the bill that German companies always approach the execution of updates and improvements in a cautious and well thought-out manner. All of the pros and cons must be carefully weighed, and all influential factors taken into consideration before a critical decision is made.

In this case, a qualified expert will often be called in to assist. “Professional quality management is often the condition for the commissioning of tasks. This is often bound together with unnecessary effort, especially in the case of small businesses; often the incorporation of external consultants is better”, explained an expert from the Chamber of Crafts in an article.

And so there exist a plethora of external experts, consultants, institutions, and established norms for German business owners to turn to in case they should lose perspective in the tangle of modern innovation.

These exist to help to make well-founded and analytically grounded decisions. It has even developed into its own field of study at many technical and business colleges: studies to the systematic approach of solving problems and to the development of complete solutions have begun to fill textbooks and lesson plans.

These approaches help to calculate multiple types of risk in advance, thereby countering the deeply rooted nervousness that comes together with risks and unforeseen situations.

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.