history

East meets West

In October 1990 the two Germanies were reunited. East Germany became a part of West Germany. Most of what the East Germans were familiar with disappeared overnight.

Social rules, attitudes and opinions, cultural life, recreational habits, all of these began to change. East Germans had to adapt to a German spoken differently. People greeted each other with a „Hi!“. They ate chicken wings instead of broilers. Pepsi and Coca Cola was substituted for the East German Club-Cola. Colleagues worked in teams instead of in collectives.

East Germans had to quickly adjust. They had to become wary of shifty West German „deal-makers.“ Appliances, machines, automobiles, telephones, etc. worked differently, were confusing. An entire society of over 17 million people had to suddenly adjust to the rules of another society.

The change was difficult and confusing for the East Germans. In every sense of the word they were at a disadvantage over and against their new fellow German citizens. The rules – the processes – were not theirs, not East German. They were West German.

Day planners

Early in American history, it was not uncommon for people to use almanacs as day planners. Many of the founding fathers, including George Washington, would buy almanacs and then add their own blank pages to serve as a diary and record of their daily activities.

The first book that was specifically marketed for use as a day planner was published in Philadelphia in 1773 by Robert Aitken. It was called Aitken’s General American Register, and the Gentleman’s and Tradesman’s Complete Annual Account Book and Calendar, for the Pocket or Desk for the Year of our Lord 1773, and was unsuccessful in the publishing world. Nevertheless, by 1850 day planners and their various incarnations (diaries, scrapbooks, ledgers, account books, etc.) were extremely popular.

In 1900, business innovator John Wanamaker decided to produce day planners with his store catalog and advertisements from other companies. These planners became very widespread and were a contributing factor to Wanamaker’s business success.

Today day planners are still extremely popular. Although sales of paper planners are dropping, sales of electronic planners are strong, and there are still many organizations that successfully market day planners to the American public.

Henry Ford’s Assembly Line

One of the few Americans to focus on processes was Henry Ford. Born in Michigan in 1863 Ford began an apprenticeship as a machinist at the age of 16, and in 1891 he was hired as an engineer for the Edison Illuminating Company. Five years later, he constructed his first model of a horseless carriage, which he called the Ford Quadricycle. In 1903, Henry Ford started the Ford Motor Company, and soon began selling the Model A.

But Ford’s legacy was less in automobile design, and more in his manufacturing processes. Between his assembly line, which allowed cars to be assembled quickly with standardized parts, and his decision to add small amounts of vanadium to his steel, which made the steel production process much easier (not to mention resulted in stronger and more durable steel), Ford revolutionized the way that cars were produced, allowing them to be produced quickly and cheaply – which in turn allowed them to be sold in large numbers at a low price.

Check out the Tesla Giga Factory in Berlin.

Skinning cats and Westward Ho!

There is a popular American phrase which states “there is more than one way to skin a cat.” This phrase is used to express that there are multiple processes which produce the same result, and that as long as the result is achieved, the approach taken does not matter how. 

It was first used in 1840 by American humorist Seba Smith in The Money Diggers, in which Smith wrote: “There are more ways than one to skin a cat, so are there more ways than one of digging for money.”

This phrase was (and still is) so popular that it inspired many variations. In 1855, Charles Kingsley’s Westward Ho! used the phrase “There are more ways of killing a cat than choking it with cream.” Many other popular variations include killing cats (and sometimes dogs) by hanging, choking with butter, and choking with pudding.

The phrase has also appeared in many American books, including Mark Twain’s 1889 book A Connecticut Yankee in King Arthur’s Court, in which the author wrote “she was wise, subtle, and knew more than one way to skin a cat.”

Adam Smith and the division of labor

Adam Smith’s understanding of a process – in the sense of division of labor – can be read in his famous statement about how a pin is producted:

”One man draws out the wire, another straights it, a third cuts it, a fourth points it, a fifth grinds it at the top for receiving the head: to make the head requires two or three distinct operations: to put it on is a particular business, to whiten the pins is another … and the important business of making a pin is, in this manner, divided into about eighteen distinct operations, which in some manufactories are all performed by distinct hands, though in others the same man will sometime perform two or three of them.”

William Edwards Deming

William Edwards Deming (1900-1993) was an American statistician and physicist, as well as a pioneer in the field of quality management. In the 1940’s he developed the process-oriented perspective of business activities, which were later introduced into various tutorials on quality management.

However, for many years Deming’s discoveries received very little attention in the U.S. Not so in Japan. There his insights were of great interest to leading industry managers. Why? The explanation given is that in the U.S. a maximization of production volume was the primary focus of industry following the worldwide reduction of production capacity following WWII.

This was possible to do without problem in the un-damaged USA. War-torn Japan, however, had limited resources for production, which pulled the optimization of processes into the foreground.

Deming’s story is initially a comparison between the U.S. and Japan. Yet the reasons why Japan’s industries became so process-oriented surely provide insight as to how Germany became to be so process-focused as well.

Listen to the first 3.5 minutes of Steve Jobs:

Craftsmanship

America history is made up of waves of immigration, the earliest ones bringing with them and maintaining the deep European tradition of craftsmanship. That focus on how the work is done – imbedded in what later became processes and procedures – gave way, however, to Taylorism, mechanization, mass production, and eventually to the outsourcing of manufacturing to low-wage countries.

That tradition – the European medieval guilds – craftsmanship, caring about how the work is done – is being reintroduced to the United States via its current reindustrialization. German companies, for example, are not only increasing manufacturing capacity in the U.S., they are importing their methods for training skilled workers. European, more precisely, German craftsmanship is returning to America.

Importance of price: No business culture gladly admits that price is a critical success factor. The U.S. business and consumer sectors are both strongly influenced by price. Americans buy and sell more on price than on craftsmanship.

Made in Germany

England in 1887 required all products imported from Germany to be labeled „Made in Germany.“ At the time German products were considered to be of substandard quality. Germany was a late-comer to the industrial revolution, much later than England. A famous German engineer admitted that German products were „cheap and nasty.“

Many were enraged, but it led to a national discussion and a quality offensive. At the beginning of the 20th Century, and especially in the post-World War II era, „Made in Germany“ took on a new meaning: high quality, newest technology. It became synonymous with West Germany‘s economic miracle of the 1950s.

The Germans recognized the importance of such a label, of the reputation of their products. They became particularly proud of their technical and economic achievements. Germans continue to view their products as having high quality, often as being the best in the world. From the early 1980s until recently Germany was the world‘s leading exporter.

The label “Made in Germany” is used less today than in the past, however. A minimum amount of a product’s parts must be produced in Germany before it can boast “Made in Germany.”

Modern German industrial and technology companies, however, have segmented their supply chains to include manufacturing sites and suppliers in many parts of the world. Nonetheless, the label “Made in Germany” remains a key, positive element in the self-understanding of every German.

Prussian Reforms

Much of what is Germany has its roots in the Prussian reforms of the early 19th Century. Napoleon‘s rapid defeat of Prussia in 1806/07 led to a deep-dive analysis of what went wrong, of what required reform. The Germans radically changed their agricultural system, their business laws, their military training, and most importantly their system of education.

Public eduction for all was introduced. The universities adopted the Humboldt education philosophy, which stressed free and independent inquiry and teaching. Knowledge quickly became the foundation of a modern Prussian economy and state, in many ways for contemporary Germany.

The Prussian Reforms also addressed state institutions. A system of professional civil servants and a bureaucracy was instituted. Bureaucracy then stood for efficiency and professionalism. The tax laws were simplified and made transparent. The state should function more efficiently and become a motor for positive change.

Germany today remains a rather bureaucratic country, with its scores of civil servants, rules and laws. It is a country where one simply cannot do as one pleases. From the perspective of other societies this is a limitation on freedom. Germans, though, view it as a sign of security and stability. Doing things the right way, punctuality, reliability, predictability, following the rules, bureaucracy. Germany has a 200 year history of these. They are who the Germans are as a people.

Crisis and insecurity

The experiences during, between and after the two world wars continue to exert great influence on German thinking. During both wars the economy was geared fully towards producing armaments. There was little material, money and manpower to supply everyday consumer goods.

The years between the wars were filled with civil war type unrest, weak governments, and several phases of inflation including a dramatic hyper-inflation. The years after the Second World War were marked by hunger, lack of housing, severe winters, high unemployment and a fear of what the future would bring.

The entire West German economy had to be rebuilt. This was achieved surprisingly fast due to the generous and far-sighted help of the Western allies and on the production of high-quality technical products. After nearly thirty years of instability, unpredictability and hardship, there was a strong demand among the German people for reliable, durable, high quality products. The Germans wanted security and predictability.

The German product philosophy has not changed, even though there are few alive who experienced the war years. The experiences were so dramatic that they have been passed on to the younger generations. German products which carry the name Bosch, Siemens or Volkswagen speak to the experiences of both earlier and current generations.