During their four-week stay in Hamburg in September 2017, Russian MP participants learned first-hand what makes German SMEs so strong. The managing director of owner-operated Timm Elektonik described how a company just outside Hamburg with just 25 employees carved out a leading global position in a niche market.
The maker of explosion-proof, electronic measuring and control equipment can rightly be called a hidden champion. In a niche market with about ten globally active companies, Timm Elektronik has successfully positioned itself at the front of the pack. Managing Director Dr Thomas Overbeck provided insight into how.
Overbeck, who took over the company in 2010, outlined the steps that underpinned the firm’s success to an interested audience of Russian executives. In addition to investing heavily in innovation and quality, he pointed to the importance of giving each individual employee responsibility. In many companies, Overbeck said, employees were very anxious to please the boss. He preferred to see himself as more of a service provider, interacting with his employees on a daily basis and offering support as they go about their work. Additionally, there is no hierarchical structure among Timm Elektronik employees. Overbeck said his role in the company was to be, "the only one not working, and instead focusing on guaranteeing and perpetuating a trusting and almost family-like atmosphere." The company culture provides incentive for all employees to take the initiative and increases loyalty and commitment.
MP participants expressed great interest in this leadership style, which Dr Heike Pfitzner covered in her innovation management seminar. One participant asked if the concept could be applied to any company. Dr Overbeck, who previously worked for a large corporation, viewed the management style as unrelated to company size. He advised introducing one hierarchy level for a workforce of around 40 or more employees and another hierarchy level for a workforce of roughly 200 or more, but otherwise the idea of giving employees more personal responsibility and seeing the role of manager as support for the workforce could apply to any company.
Overbeck agreed it was not always easy to win the trust of employees so they are willing to take on more responsibility. It took a lot of persuading when he took the helm of the company and began changing its strictly hierarchical organization. Frequent conversations and modelling values daily led to a gradual change in attitude. A well-developed error management culture is also key. While it is important to clearly name and discuss mistakes made, they should not be viewed in a negative light. Mistakes represent an opportunity for improvement and should not have any adverse consequences for the employee concerned.
Over the past seven years, the company has managed to grow from eight to twenty six employees and is now leading the market. Impressed by this success story, the Russian executives took away many new insights and ideas. Still, they were somewhat sceptical about the model’s transferability to companies in Russia, where the concept of a firm becoming a market leader based on a successful, unique niche product that requires limited investment in marketing is not widespread. The idea that shared activities could provide a sense of purpose and improve the well-being of customers and employees alike, and that business success could be directly derived from this sense of purpose, will occupy participants for a while to come.
by Timo Tekhaus
Akademie International, Hamburg