business – Page 9 – understand-culture

“Cut off at the branch’s roots”

Consumer products giant Procter and Gamble sold its hair products business and its fragrances division, including the struggling German brand Wella.

But some criticism of Wella had been going in the other direction, namely that innovations happen too impatiently, and that Procter and Gamble thinks in the same fast terms as in the drugstore-based consumer products business.

Hairdressers in Germany, however, want to use the products they know over the long term, providing that they have had positive experiences with these products. Too many new things annoy them.

When it acquired Wella, Procter and Gamble bought its way into an unfamiliar field, namely the hair salon business, said a manager with a competitor. Then the company cut off the brand’s roots by closing Wella’s headquarters in Darmstadt, Germany, thereby losing institutional knowledge and the confidence of its vast network of hairdressers.

According to the manager, a former strength of Wella, namely their sales reps’ good relationship with hairdressers, was lost.

Source: Handelsblatt Global Edition. June 10, 2015. “The Great Brand Sell-off.” By Christoph Kapalschiniski.

Between honesty and politeness

There’s a fine line between honesty and politeness and Germans are known abroad for not beating around the bush. Kate Müser and Waslat Hasrat-Nazimi at Deutsche Welle in Bonn explore the rather direct questions they’ve had to answer in Germany.

Note 1: Towards the end Kate states that it is impolite to discuss politics in the German context. This is not correct. In fact, it is just the opposite. Many comments below the video on YouTube are by Germans stating this clearly.

Note 2: Another German commented, and rightfully so, that the opposite of direct is not polite, but instead indirect. The commenter goes on to state that Kate’s ironic winking about how German directness can be impolite is an unfair judgement of the German people.

Germans consult. Americans serve.

A big source of misunderstanding between Americans and Germans, rarely made explicit, is about whether business should inherently be customer-centric, supplier-centric, or somehow balanced, as our fourth column in this series explains.

Germans and Americans alike will of course say they care about their customers. But they associated different meanings with that notion. And that often leads to misunderstandings and frustration. American providers of business services proudly offer exactly that: a service. By contrast, German providers view their proposition less as a service and more as a consultation. The difference is subtle, but consequential.

Steve Ballmer going crazy

Former Microsoft CEO, Steve Ballmer, was famous for displaying his emotions and energy at conferences. The video below from the early 2000s is typical for his exuberance

Ballmer is the owner of the Los Angeles Clippers of the National Basketball Association in the U.S. Here is on an American late-night talk show:

Germans think systematically

Germans think systematically. They formulate their understanding of a decision to be made in a very broad and interconnected context. Therefore Germans do not always consider it helpful to take complexity and, as Americans say, “break it down” into its component parts. They aim to do the opposite, to see particulars in their interrelationships. They look for patterns, strive to understand complexity as a whole, as a system.

Take risks

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

Chief Slowdown Officer

Lex Fridman interviews Jeff Bezos about making decisions:

YouTube comments:

“I think this is very liberating for perfectionists, most decisions are not permanent and you can pick another door if necessary, if they are one way door decisions then you can allow for some perfectionism.”

“I’m the same age as Bezos. Also studied engineering and moved into management. What he’s talking about is, basically, exactly what we were taught in our control systems engineering classes back at university. Almost all engineer managers of our age group say the same thing.”

“I think everyone fails to understand the message of this discussion. It’s not about decision-making mechanisms, it’s about truth-seeking and the idea that no matter what the debate is about the objective should always be to try to get as close as possible to the truth to make the decision that resembles closest to the truth. That’s the whole point of this conversation, to leave the ego aside and search for truth.”

Disagree and commit

Number 25. From 37signals, the company behind the project management software called Basecamp. Classiv American thinking: think, debate, persuade … decide, then commit and support. One of the founders, Jason Fried, is a very interesting person.

25 year career plan

Apple CEO Tim Cook discusses the 25 year plan he developed while a student at Duke University’s Fuqua School of Business and why you should veer away from such plans. Cook spoke as part of his class reunion at the school.

The journey was not predictable. The only thing you can really do is prepare. Ebb and flow. Lots of things change. Have a North Star. Find your journey.

Troubled by supply chain woes, German firms diversify and relocate

November 2021. Reuters. More than half of German companies doing business abroad are suffering severe problems in their supply chains or logistics, pushing them to diversify suppliers, shorten delivery routes and even relocate their own production, a survey showed on Tuesday.

The German economy has boomed on the back of globalisation over the past decade. But pandemic-related disruptions in the worldwide network of supply chains that used to turbo-charge its growth engine are now proving a critical weakness.