A German Business Concept

Audi quattro concept (Photo credit: Wikipedia)

Is there a German business concept?  Yes, it’s Mittelstand.  It’s believed that the reason Germany’s economy is healthy is due to this concept.  The global company Audi uses this concept.  The reason it’s called Mittelstand is due to the fact that there is no English word for it.  It’s was fascinating, Eric Campbell reported on it for Foreign Correspondent.  So what is the Mittelstand ingredient?

• It’s an ingrained German tradition where family owned businesses make niche products that are export oriented
• They usually have a long history of craftsmanship
• Have long-term business goals
• They don’t spend or invest in what they can’t afford
• They foster staff loyalty by keeping them on during the good and bad times
• Work with the workers and treat them like family
• Work with unions in partnership to create a successful company to keep people there or to increase employees
• Managers are highly motivated by their product’s quality
• Build trust with customers and treat them like friends

Revenue growth and total shareholder return (Photo credit: Wikipedia)

Now most public companies are paying millions of CEO’s to boost quarterly and annual shareholder returns.  In order for the CEO’s to meet shareholder’s returns they need to strip staff, smash unions  and cut costs where possible.  This is a recipe for disaster.  Businesses need to merge some Mittelstand points into their business strategy.  Here is why?

Unions need to work with businesses at the end of the day to help create a successful company so that people have jobs or to increase employees.  The management doesn’t need to have high overheads but do need to work with the employees to foster staff loyalty.  The business products or service quality fosters customer trust.  Then if companies do this, these loyal experienced workers will enable the business to come out faster and stronger after a crisis.  Shareholders need to understand that the business needs to focus on building for the next generation.  Will your government support the Mittelstand concept?  Can you use any of these Mittelstand points in your business?  If you can, which ones?

You can watch the story here:

• “A Bavarian Fairy Tale“, reported by Eric Campbell for the ABC

About Christopher Seeto

A Brand Enhancer in Communications. I fit naturally with technology, curious about science and avid consumer of news to gain insights. You can follow me on Google+ , LinkedIn , Twitter .