Winter 2014 Tomorrow’s Leadership – Creating Shared Value at the Core Peter Brabeck-Letmathe, Chairman, Nestlé S.A. Draghi’s Def lation Dilemma Paul Donovan, Chief Economist & Managing Director, UBS Investment Bank Humanitarian Action in the Next Decade Peter Maurer, ICRC President STRATEGY
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St. Gallen Business Review - Strategy - Winter 2014
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Winter 2014
Tomorrow’s Leadership – Creating Shared Value at the CorePeter Brabeck-Letmathe,Chairman, Nestlé S.A.
Humanitarian Action in the Next DecadePeter Maurer,ICRC President
STRATEG
Y
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Winter 2014 – 3
St. Gallen Business ReviewEditorial
Beloved readers.
Every human being is embedded in a reference system. Within this lie an infinite
number of pursuable paths. But what connects these and the system they are
existent in? They are being encountered proactively, coincidentally or due to
pure passivity. In whatsoever manner they have been sought for, there is always
an underlying decision. Even if this decision implicates not to seek.
Let’s reduce the system of references to the most abstract degree, only allo-
wing for points between utmost activity and the subjection to being driven by
the system’s forces. Here the individual has to ask itself the question: to what
extent do I want to tend towards one of the edges?
This is where strategy comes into place, defining influences, estimating pay-
offs and determining the other players strategy, is something we all do, even if
unconsciously. We all want to optimize our notion of life, no matter by which
benchmarks we measure it.
Teddy Roosevelt once said that there’s only one principle to follow both in life
as in football – “always hit the line hard”. Nevertheless, hitting hard does not
necessarily imply force, much more dosed and coherent effort.
Initiatives such Mr Brabeck’s Creating Shared Value effort, Mr Donovan’s incor-
poration of emotions when analyzing the ECB’s strategy, or the ICRC’s thoughts
on humanitarian aid in the next decade emphasize this notion we just developed.
We hope you will enjoy reading this magazine. It is a summer of passion and
hard work we put into it.
Outlook_Imagine a perfect circle, or the
sectio aurea. Imagine a piece of Caravaggio
in all its beauty, with its perfectly accen-
tuated shadows and lights accompanied by
his utmost attention to the most minuscule
details as soon as it comes to proportions.
These constructs of human minds and the
human being itself, they both st r ive for
per fect ion and beaut y, one might say for
harmony. With the next issue we aim to en-
counter less obvious facets of daily business
life, less obvious facets of how we shape our
societ y and decisions are made. We want
to examine the underlying pursuit for har-
mony, may it be in design, supply chains,
organizational structures or stock markets.
Jonas Gartenmeier and Henry Galis,Editors-in-chief
Chief Economist & Managing Director, UBS Investment Bank
Paul Donovan
At the US Federal Reserve‘s Jackson Hole Symposium, Pre-
sident Draghi of the European Central Bank indicated a
growing concern about the threat of deflation within the
Euro area. He identified market measures as signalling falling infla-
tion expectations. This concern has also been voiced by investors
in more general terms, with a fear that the Euro area start to
resemble the Japanese experience of the past quarter century (a
persistent deflation bias interspersed with episodes of outright
deflation). The focus on market expectations as a lead indicator
for inflation is problematic, because
However, inflation expectations can have important economic
consequences, even if they turn out to be wrong, and no doubt
this has influenced the views of the ECB president. Indeed, some
areas of the Euro area are already experiencing deflation, with
prices falling for at least some part of 2014 in Cyprus, Estonia,
Greece, Portugal, Slovakia, Spain and Italy. So how big a threat is
deflation in the Euro area, and what are the problems the European
Central Bank might face in responding to that threat?
The Euro area has if not a deflation bias (negative inflation),
then certainty a disinflation bias (falling inflation) in its structure.
In economic terms the economies are too disparate, there is no
credible banking union to smooth the operation of monetary policy,
and there is no fiscal union or fiscal confederation to blunt the
damage that the wrong monetary policy can do in a dysfunctio-
nal monetary area. This means that at any given moment some
countries will be experiencing weak growth with too restrictive a
monetary policy, and some countries will be experiencing strong
growth with too loose a monetary policy.
financial markets are not very good at forecasting
inf lation.
The Euro, as a monetary union,
does not work.
Unfortunately, the weak growth countries are also likely to ex-
perience poor fiscal balances, constraining their ability to grow.
The structure of the Euro resembles that of Bretton Woods, in that
and not the stronger economies. While Germany may be urged
to stimulate its economy for the greater good of the Euro area,
there is no mechanism by which Germany can be compelled to
stimulate its economy. The bond market cannot punish Germany
for not spending enough money. The political structure of the
Euro was set up to impose fiscal deficit limits, not government
spending targets. In contrast a weak economy with a fiscal deficit
is at risk of bond market weakness on concerns about government
debt. It is also subject to sanctions, or at the very least political
disapproval from its peers in the Euro area. The unbalanced nature
the pressure for correction is dispro-portionately applied to the weaker, deficit
economies
Winter 2014 – 7
St. Gallen Business ReviewGentechnologie stillt den Hunger nicht – Tina Goethe
of growth in the Euro area therefore puts the burden
of correction on the weaker economies, which must
reduce government deficits and therefore contribute
to deflation risks.
The structural bias for disinflation is, however,
partially countered by two key points with regards
to the current Euro area inflation outlook. The first
is that domestic unit labour costs in the Euro area as
a whole continue to rise. This is extremely important
in considering the risks of Euro area deflation, as
While it is not impossible to have deflation with a
rising unit labour cost environment, sustained defla-
tion with rising unit labour costs would be considered
very peculiar. Some countries within the Euro area,
like Spain, have falling unit labour costs. As a rule
it is these countries that are subject to deflation
pressures. For now, however, the Euro aggregate
measure of unit labour costs is rising, and the Euro
aggregate is supposedly what the ECB is looking at.
Second, when Euro CPI is broken down into dif-
ferent categories it is clear that
The prices that economists with their characteristic
precision call „sticky“ prices are not changing very
much. Volatile prices are things like food bought in
supermarkets, clothing, and fuel for the car. Sticky
prices are things like housing costs, utility bills and
food bought from restaurants. Sticky prices amount
to roughly sixty percent of the overall inflation bas-
ket. For there to be a sustained deflation threat,
economists would expect sticky prices to be very
low, and in all probability falling. Where deflation
is the result of variable prices, as at the moment,
there is always the possibility that the causes of
disinflation will reverse quickly; volatile prices have
a habit of reversing quickly, which is why economists
call them „volatile“. The current very low inflation
rate in the Euro area therefore has something of a
temporary feel about it.
While structural deflation seems a relatively remo-
te prospect for the Euro area, the bias to disinflation
that is built into the Euro‘s structure accompanied
by below trend economic growth and a low overall
inflation rate has spurred the ECB into action.
(a territory previously dominated by the Swiss Nati-
onal Bank in splendid isolation). The ECB has taken
the discount rate negative – the rate charged by
the ECB to banks that keep excess deposits with the
central bank. The idea is that by imposing a cost on
banks for holding too much cash, the banks have an
incentive to lend some of the money to companies
just under two thirds of the Euro area‘s in-
f lation is derived from domestic labour costs.
President Draghi has boldly begun to splash his way across the monetary
policy Rubicon, taking the Euro area into the territory
of negative interest rates
nearly all the def lation pressures are occurring in
volatile prices.
St. Gallen Business Review
8 – Winter 2014
Draghi’s Deflation Dilemma – Paul Donovan
and consumers. In fact the tendency
of banks has been to buy short term
government bonds with the money in-
stead, which has helped governments
rather than the private sector.
The ECB has also pledged to increase
the amount of liquidity in the financial
system, but not through quantitative
policy. Quantitative policy implies an
open ended commitment to print mo-
ney until an external policy objective
is met: „We will print until inflation
hits 2%“ for example. This is unlikely
to be credible in the Euro area, as any
attempt at quantitative policy would
almost certainly result in a legal chal-
lenge, raising doubts about how open
ended the „open ended“ commitment
could actually be. Instead the ECB has
been less dramatic, with a promise to
buy a wider range of assets, but up to
a predetermined amount.
This additional liquidity may pre-
vent things from getting worse in the
Euro area, but it is unlikely to act as a
strong stimulus for growth – at least
not yet. The advent of the ECB as a
single bank regulator for the Euro area
means that there should a more har-
monised approach towards Euro area
bank regulation. Associated with that,
Euro area banks assume that there will
be an increase in the capital require-
ments that Euro area banks are likely
to face. This means that
banks are reluctant to lend out money – not
because there is a lack of cash to lend, but because there is a concern about future regulatory risk.
Winter 2014 – 9
St. Gallen Business ReviewDraghi’s Deflation Dilemma – Paul Donovan
In fact the increase in liquidity and
negative discount rate could add a
further strain within the Euro area.
ECB may coincide with an increase
in inflation in the German economy.
Germany has less spare capacity than
other economies in the Euro area. The
introduction of a minimum wage is
likely to raise labour costs in lower
skilled sectors of the economy. Finally
volatile prices will be volatile – and
with a weaker Euro pushing up the
price of imported commodities, a po-
tentially difficult situation may arise.
Consumers, as a rule, are not very
perceptive about inflation.
– everyone remembers the price in-
crease of a chocolate bar, because it
is a regular purchase and therefore
the price increase is constantly pre-
sented to the consumer; the price of
a television is not often remembered.
The problem is that high frequency
purchases tend to be flexible prices
rather than sticky prices; they tend
to have a higher import content (food
and fuel are high frequency purchases;
they tend to have a high low-paid la-
bour content (food, again). Therefore
an economy like Germany runs the
risk of experiencing a faster level of
inflation for high frequency purchases
than for the average inflation rate in
the coming year.
If high frequency purchases have
higher price increases, consumers
will believe, entirely wrongly, that
inflation is higher than it is in reality.
It is perfectly possible that German
consumers will believe that inflation
is running at 4% or more, even if it is
running at a rate below 2%. (In 2001
Italian consumers believed inflation in
Italy was running at around 18%. It
was around 2%).
It is not hard to see why the German
middle class may be especially con-
cerned by that. Germany had two
hyperinflation episodes in the twen-
tieth century, and the economic scars
of those experiences have lingered on
society.
The ECB‘s risk is that German sup-
port for the Euro ebbs further in the
face of the combination of perceived
inflation and actual liquidity injec-
tions. There is little that the Germ-
ans can do directly with regard to the
ECB – the Bundesbank can object to
policy stimulus, and may very well be
objecting to policy stimulus already,
but it cannot singlehandedly veto po-
licy. Rather the risk is that the German
government exerts restraint in those
areas where it does still have influen-
ce. Those areas include fiscal policy
(refusing to countenance a relaxation
of fiscal rules) and further banking
union (specifically giving the ECB ad-
ditional authority so as to be able to
bail out or close Euro area banks).
The ECB therefore faces a difficult
problem. There is a structural deflation
problem in parts of the Euro area, but
not in the Euro area as a whole. ECB
attempts to stimulate the Euro area
economy risk alienating the voters
of the largest economy in the Euro
area. Deflation may actually be the
least concerning challenge that the
ECB faces today.
Paul Donovan joined UBS in 1992. He is respon-
sible for formulat ing and present ing the UBS
Invest ment Research global economic vie w.
Mr. Donovan co-authors the Global Economic
Perspectives publication and writes Global Eco-
nomic Specials. He regularly appears on CNN,
Bloomberg TV, and CNBC television stations.
Mr. Donovan took a degree and was a scholar
in Philosophy, Politics and Economics at Oxford
University. He holds an MSc in Financial Econo-
mics from the University of London. Mr. Donovan
is a co-founder of the Peter Culverhouse Memo-
rial Trust, a charitable f und that raises money
for cancer research, and an economic adviser to
the East London Business Alliance.
Paul Donovan,Chief Economist &
Managing Director,UBS Investment Bank
Consumers tend to rely on the price of the
things that they buy frequently to judge
inf lation
This creates a potentially
toxic situation for the ECB.
The central bank is visibly
printing money with negati-
ve rates. German inf lation is
rising. German consumers
believe inf lation is rising far
faster than it actually is.
St. Gallen Business Review
10 – Winter 2014
Gentechnologie stillt den Hunger nicht – Tina Goethe„Wenn Par spielen nicht mehr ausreicht...“
www.espritsg.ch
Esprit St.Gallen, Ihre studentische Unter-nehmensberatung an der HSG
Winter 2014 – 11
Tomorrow’s Leadership – Creating Shared Value at the Core
Chairman, Nestlé S.A.
Peter Brabeck-Letmathe
In a medium-horizon future where over 9 billion people could be making greater demands on finite resources, business leaders must resist the temptation to sacrifice long-term success and value creation for short-term gains, warns Nestlé Chairman, Peter Brabeck-Letmathe.
Corporate Social Responsibility has now moved from being
a hot topic to a globally accepted business practice. This
is very positive. But, if we are honest, I don’t think there
are many businesses out there that are really delivering the scale
of returns for society that they have the potential to. And I think
there are two main reasons for this: the prevalence of short-ter-
mism, and the fact that few companies have taken engagement
with the societies they serve deep enough into their organisations.
We have done things a little differently at Nestlé and, while we
still have a long way to go until we achieve the impact on society
that I believe we can have, we have made a very positive start by
making these topics integral to our global business strategy th-
rough an approach to business called Creating Shared Value (CSV).
Creating Shared Value, not giving back
I remember not so long ago becoming involved in a discussion
about corporate social responsibility at the World Economic Forum.
Over a number of days I heard pleas from CEOs and prominent
movie stars to “give back to society”. This frustrated me. I kept
thinking: “Why should I give back? – I haven’t stolen anything!”
When I stood up at the end of the forum and stated this, the
St. Gallen Business Review
12 – Winter 2014
Tomorrow’s Leadership - Creating Shared Value at the Core – Peter Brabeck-Letmathe
audience fell silent. But I was convinced that many businesses
were looking at CSR in a rather superficial way, and a more robust
approach was needed, one that is in tune with the way business
can and should really work.
Not long afterwards, I had the opportunity to speak with Mi-
chael Porter and Mark Kramer from Harvard Business School about
this idea and how I firmly believe that it is only by integrating
societal objectives into your business strategy that you can have
the level of impact that society needs, because then responsibility
becomes sustainable and scalable –and not just a one-off project
funding approach.
For example, we have been working for decades with rural
communities to help them improve the quality and yield of their
produce and adopt sustainable farming methods. This means that
farmers can enjoy higher and more sustainable incomes and, if the
farmers choose to supply to us (which they are not obliged to,
even if they accept our technical assistance and support), then
it means that we have sustainable access to better quality raw
produce, which is key to our long term business success. It’s hard
to see how philanthropic contributions could continually support
more than 690,000 farmers a year in this way – which is the
number of farmers who supply Nestlé directly.
So, in fact, Creating Shared Value behaviours had already been
practiced for some time in our company before the CSV theory
and terminology were articulated. After our discussions, Michael
and Mark agreed to work with Nestlé to determine how we could
create mutual benefit for our company and for the societies it
serves part of the way we did business…and Creating Shared
Value at Nestlé was born.
Winter 2014 – 13
St. Gallen Business ReviewTomorrow’s Leadership - Creating Shared Value at the Core – Peter Brabeck-Letmathe
Making strong values last
Henri Nestlé founded our company in 1867, when he developed
a life-saving infant cereal.
He gave our company a vision about the importance of good
nutrition and a set of values that still guide us today. These were
based on respect: respect for people, respect for cultures, respect
for the environment and respect for the future of the world we
live in.
In the recent past, companies have had a tendency under pres-
sure from the financial markets to focus on maximising sharehol-
der value, but what this really means, if you analyse it well, is
short-termism. And using tools like quarterly share price targets to
drive growth only serves to destroy long-term value and weaken
the company’s chances of continued success into the future. That
is why Nestlé does not offer quarterly reports – and protects our
creating shared value focus, proving that working to longer-term
targets can be a better alternative.
Creating Shared Value at Nestlé
At the heart of Creating Shared Value is the belief that as a
company, we have a clear responsibility to deliver value for our
shareholders over the long-term by conducting our business in a
way that creates sustainable value for the society in which we
operate and which we serve.
To ensure that Creating Shared Value could be fully integrated
across our organization, we conducted an analysis of our core activi-
ties and identified where the future needs of society intersect with
the future needs of our operations and where we could, therefore,
have the most impact on society while building a strong business
for the future to deliver superior shareholder value.
We identified three areas of focus: offering products and services
that help people improve their nutrition, health and wellness becau-
se we believe that good nutrition will play an ever more important
role in the health and wellness of individuals and society. Next, we
focus on water, not only because water is a human right, because
water scarcity is a very serious issue in many parts of the world
and water is quite simply the linchpin of food security. Finally,
we prioritize rural development, because the overall well-being
of farmers, rural communities, small entrepreneurs and suppliers
is intrinsic to the raw material supply and thus to the long-term
success of our business.
CSV provides us a clear framework on which to determine how
to focus our investments to secure benefits to society that make
a lasting difference and help create the conditions necessary to
sustain and expand our business,
to develop products and distribution systems which help im-
prove the lives of consumers, and to run our business in a way
that also benefits the communities in which we operate. It also,
crucially, ensures that we use resources efficiently and contribute
to preserving the environment.
Creating Shared Value has a natural fit within Nestlé as it echoes
the values our company was built on nearly 150 years ago. This
has been demonstrated by the speed at which our decentralized
businesses around the world have not only taken CSV on board,
but made it their own, giving it strength and making it an indelible
part of our current and future business strategies.
Creating Shared Value – the tip of the iceberg
We recognise that our position in society brings both oppor-
tunities and responsibilities: to do business in compliance with
national laws and international standards as well as our own values
and principles, as expressed in our Code of Business Conduct,
Corporate Business Principles and Management and Leadership
Principles. These principles have been enriched through our in-
volvement in the United Nations Global Compact in many ways,
including alignment on human rights, labour rights, environmental
sustainability and corruption.
For a company like ours to prosper, we must take a long-term
view, framed in a robust set of principles and values with respect at
their core. We must go beyond mere compliance and live the values
that form the foundation of our actions in Creating Shared Value.
St. Gallen Business Review
14 – Winter 2014
Tomorrow’s Leadership - Creating Shared Value at the Core – Peter Brabeck-Letmathe
Seek answers widely
While Creating Shared Value is proving to be an
excellent articulation of our strategy to create value
for society and shareholders simultaneously, it does
not provide us with all the answers.
Being serious about CSV means that we have
to tackle some extremely difficult issues that we
cannot hope to address alone. We have also made
many commitments to society that extend beyond
our own factory gates and beyond the reaches of
our own influence. To help us address some of the
more perplexing challenges, we are engaging with
a wide range of stakeholders with specific experti-
se and local networks, understanding or influence.
Together, we are starting to make a real difference.
Communicate transparently
To support our engagement with partners and
other external stakeholders, we are making our com-
munications ever more transparent and responding
to stakeholder encouragement to take leadership
positions on key issues.
Our latest Nestlé in Society report, released in
March 2014, is a good example of the progress we
are making in this respect. The document shares 35
forward-looking commitments that we have made
to ourselves and to external audiences. In so doing,
it provides a clear sense of the strategic direction in
which we are heading and the standards to which
we hold ourselves accountable. It reports on our
achievements, as well as where there is more work to
be done and where real and potential challenges lie.
By openly sharing information, we of course leave
ourselves open to criticism.
I see strength in such transparency; this allows us
to get feedback and build on it. This is an important
part of Creating Shared Value and an important part
of our journey. It gives our stakeholders a chance
to hold us accountable for our actions, to offer us
guidance and even to join us in our journey.
Making CSV happen
To align the organisation to the idea of Creating
Shared Value we started at the top. Engaging the
Winter 2014 – 15
St. Gallen Business ReviewTomorrow’s Leadership - Creating Shared Value at the Core – Peter Brabeck-Letmathe
Board of Directors and the Executive Board in the concept was
key; they had to embrace it before they were willing to support
its integration into our business strategy. We then shared this
new idea with managers, and then with the whole organisation. It
took time, conviction, a lot of communication and finally, we had
to deliver concrete, demonstrable actions in the three focus areas
in order to provide the proof of concept and to set the example
for our own people.
To continue engaging people in the concept over time and con-
firm that CSV is the right approach to take, we have had to put
clear measures in place. This is key for any new idea; you have to
prove it to move people from having a passive understanding to
being a passionate advocate. That is one of the reasons why we
are a partner of the Shared Value Initiative, a global community
of practice committed to driving adoption and implementation of
shared value strategies among leading companies, civil society, and
government organisations.
And while it is far from over, our journey is well underway. As I
mentioned earlier, in just five short years CSV has been enthusia-
stically adopted across all our markets and while nutrition health
and wellness is ‘what’ we do, CSV is ‘how’ we do it.
Every market has looked for the areas where they can optimise
CSV within the local context, and they are building stronger more
vibrant businesses as a result. This penetration is important. Sit-
ting at the top of the company, the Chairman and the CEO must
continuously drive to ensure that CSV becomes part of the DNA
of the company and is integrated in our business strategies. The
real value creation however happens in the factories in all our daily
operations in every part of the world by our more than 330000
people, willingly embracing the opportunity to make a difference
for the communities around them, and creating long term value for
our shareholders. And for nearly 150 years we leave been able to
do so and our legacy is to continue to do so for the next 150 years.
Peter Brabeck-Letmathe started his career with
Nestlé in 1968 and has held various roles inclu-
ding Salesman, National Sales Manager, CEO of
Nestlé Ecuador and Venezuela. In 1987 he joined
the headquarters as Senior Vice President, then
was appointed Executive Vice President, and in
1997 Chief Execut ive Of f icer of Nestlé S.A. In
2001 he was elected Vice Chairman of the Board.
Mr. Brabeck-Letmathe is Vice Chairman of the
Foundation Board of the World Economic Forum.
He holds a degree in Economics f rom the Uni-
versit y of World Trade in Vienna. In 2012 he
received an Honorary Degree of Doctor of Laws
f rom the University of Alberta in Canada.
Peter Brabeck-Letmathe,Chairman,Nestlé S.A.
16 – Winter 2014
The Chief Strategy Officer as the Master of Paradoxes
Dr. Tim Zimmermann and Prof. Dr. Markus Menz
This article is based on the study report „Menz, M., Scheef, C., Müller-Stewens, G., Zimmermann, T., Lattwein, C., & Lang, A. 2013. Masters of Paradoxes, Key Findings of the Chief Strategy Officer Survey 2013. St. Gallen/Munich. University of St. Gallen/Roland Berger Strategy Consultants.
The CSO – Chief Strategy Officer – is a relative newcomer to the C-suite. The role has quickly established itself as a formal member of the top management team or head of the central strategy department. Alongside the COO, CFO, CIO and CMO, the CSO now has a secure place among the top functions in firms across Europe.
Winter 2014 – 17
St. Gallen Business ReviewThe Chief Strategy Officer as the Master of Paradoxes – Tim Zimmermann & Markus Menz
In our extensive annual study, in cooperation with the University of St. Gallen, we examine
the role of the Chief Strategy Officer in European firms. For this year’s CSO survey, we
contacted the chief strategists of the 500 biggest firms in Europe. Of these, 156 agreed
to take part in our survey – a response rate of 31%. Among those are CSOs from firms in Ger-
man-speaking countries (Germany, Austria, Switzerland), Benelux (Belgium, the Netherlands,
Luxembourg), the Nordic countries (Norway, Sweden, Finland, Denmark) and Latin Europe
(France, Italy, Spain, Portugal). The participating firms have an average headcount of 25,000
and most are listed on the stock exchange. This sample was then subdivided by industry, region
and KPI-based performance which revealed some surprisingly clear differences with regard to
strategic topics and approaches. The data we were able to gather allowed us to identify a
number of success factors which form the basis for our seven statements below.
Statement 1 – The Bar has been raised
In last year’s survey, we noted that the relevance of CSOs grows in times
of uncertainty, but the size of their strategy department does not grow to
the same extent. Our forecast was correct: Compared to 2011, the median number
of employees in the strategy department of firms in German-speaking countries
(DACH) remained 7 full-time equivalents (FTE). For firms in Europe as a whole, this
median was 5 FTE. If requirements are growing faster than resources, then the bar
has been raised. The strategy process therefore needs to be highly efficient. CSOs
must now achieve more with the same resources. This varies depending on industry
and region. CSOs working for financial services companies and in the Nordic coun-
tries, for example, have seen above-average growth in both their importance and
the resources at their disposal. CSOs working in retail and in the Benelux countries,
by contrast, are a long way behind.
The CSO must now
achieve more with the same
resources.
61%
16%
15%
8%41%
10%
13%25%
11%
PARTICIPANTS PER INDUSTRY PARTICIPANTS PER REGION
Life sciences
Services
Financial services
Retail
Industrial Sector
DACH
Latin Europe
Nordic countries
Benelux
St. Gallen Business Review
18 – Winter 2014
The Chief Strategy Officer as the Master of Paradoxes – Tim Zimmermann & Markus Menz
Statement 2 – Knowledge and networks are key
What qualifies a CSO for his position? When it comes to personal back-
ground, CSOs have a number of things in common: They are typically
younger than 50 (four out of five respondents), have a degree and a disproportiona-
tely large number of them studies at a top international university. It is clear what
companies are looking for in a CSO: They want someone who is a breath of fresh
air but not inexperienced. Six out of ten CSOs have gained expertise in strategy
or general management in previous positions. Firms appoint people already in the
firm (“insider”) and newcomers (“outsider”) in roughly equal proportions. Broadly
speaking, in many industries and regions the job of CSO is a springboard for highly
qualified, ambitious professionals with strong process and methodological skills. But
the door is not closed to well-connected insiders. Two types of CSOs thus exist: young
dynamos and seasoned old hands. Both types can be successful, but both need the
right education and a good network behind them.
Statement 3 – Good strategists act as mediators
The traditional field of strategy formulation remains high on the CSO’s
agenda, as does acting as a sounding board for the CEO or board of direc-
tors. But the clearest gains in importance in German speaking-countries, compared
to the previous year, are in M&A and synergy management – areas where close
cooperation with other functions is called for. Across Europe, realizing synergies is
even more important. More and more, a priority task for CSOs is to create a corporate
business model, leverage synergies at the firm level and optimize cross-functional
processes. CSOs have the chance to become the central coordinator in the corporate
headquarter, working closely with other corporate functions and operating units.
CSOs appear to be in a good position to perform this coordinating, interactive role.
They already see themselves as playing a leading role not just with regard to the
key strategic decisions in their firm, but also in areas such as M&A and expansion
into new markets. They say that they work closely and on an equal footing with the
finance, marketing & sales and operations functions. Not surprising that CSOs have
to continually come up with convincing arguments and demonstrate these requi-
rements becomes a mediator between corporate functions and protector of higher
interests – and thus a true strategic leader.
Two types of CSOs thus exist: young dynamos an seasoned old
hands.
Winter 2014 – 19
St. Gallen Business ReviewThe Chief Strategy Officer as the Master of Paradoxes – Tim Zimmermann & Markus Menz
Statement 4 – Growth is not enough
Our results show that the most important strategic decision of the past
year was mainly in portfolio management (41%), followed by growth
(22%), costs (19%) and strategy implementation (16%). Once again there are inte-
resting differences between industries and regions. Portfolio management is by far
the most important topic for financial services, the industrial sector and services,
while growth issues are high on the agenda for firms in retail and the life sciences.
Not surprisingly, growth is also (once again this year) an important topic for firms
in German-speaking Europe and the Nordic countries, as well as for high-performing
firms, while it has almost no importance at all in Latin Europe. New this year is the
fact that growth and efficiency topics overall rank about the same. In other words,
the traditional cycle of phases of growth followed by phases of consolidation no lon-
ger applies. The current concept is one of profitable growth through smart portfolio
management and maximum efficiency gains. The new core challenge for successful
organizations is ambidexterity: the ability to combine contradictory characteristics.
This is perhaps the most serious conflict of objectives that today’s CSOs must manage.
Successful firms act from a long-term perspectiveLength of strategy cycle, high vs. low performers
1 YEAR
2–3 YEARS
4–5 YEARS
TRIGGERED BY FUNDAMENTAL
CHANGE
St. Gallen Business Review
20 – Winter 2014
The Chief Strategy Officer as the Master of Paradoxes – Tim Zimmermann & Markus Menz
Statement 5 – Pacemaking pays off
The CSOs are in agreement that time pressure is growing and uncertainty
continues unabated. That means it’s a good time for strategy – but is
it a good time for CSOs too? Chief strategists have always had to be two things at
once: able to take fast and decisive action while being thoughtful and aware of the
risks. What is particularly important today, however, becomes clear when we compare
high-performing with low-performing firms. Successful firms make bold strategic
decisions from a long-term perspective. Speed is important, but is not the be-all
and end-all. Most CSOs, especially those in successful firms, say that they act (and
react) faster than the competition. But three out of four firms take at least three
months over their most important strategic decisions. Financial services companies are
above-average in terms of the speed of their decision making, while firms in the life
sciences and services industry and in the consensus-oriented Nordic countries weigh
up strategic decisions particularly carefully. Surprisingly, high-performing firms take
longer on average to make decisions than less successful firms. Despite increasing time
pressure, high performers are not so much faster when it comes to implementation
as more comprehensive. Typically, a strategy cycle lasts two to three years – rather
less in the industrial sector and for retailers, and rather more in the financial sector
and life sciences. Low performers are more than twice as likely to have strategy
cycles of less than a year – a further indication that taking a perspective of longer
than a year pays off. Clearly, today’s CSOs find speed important but the avoid taking
action for action’s sake.
Statement 6 – Conflicts are useful
The openness with which strategic discussions are carried out today, ac-
cording to many CSOs, can lead to conflict or in the worst-case scenario
even split the top management team. Once again, the chief strategists of financial
services companies appear to be particularly active in discussing while the CSOs of
retail firms and companies in the Nordic countries are more consensus-oriented. Con-
flicts can help expand one’s field of perception and boost creativity. However – and
this seems to be the secret of success of high-performing firms – rational disputes
should not be allowed to tip over into emotional conflicts or interpersonal problems.
Our evaluation shows that firms which make high-quality decisions are particularly
good at solving conflicts in a matter-of-fact manner, without people taking things
personally. Conflict management is thus another hot-button issue where CSOs must
increasingly prove their worth.
Most CSOs, especially
those in suc-cessful firms, say that they
act faster than the com-
petition.
UPCOMING TOPICS
Dr. Tim Zimmermann,Senior Partner, Roland Berger
INNOVATIONMANAGEMENT
CSR
Winter 2014 – 21
St. Gallen Business Review
UPCOMING TOPICS
The Chief Strategy Officer as the Master of Paradoxes – Tim Zimmermann & Markus Menz
The seven statements above show that today’s
firms need a new type of strategic leadership.
This is the core message of our study in 2013.
The informal, get-up-and-go CSO of yesterday no
longer fits the bill: What firms need is a careful-
ly calculating, thoughtful, mediating CSO with a
cross-functional, interdisciplinary mindset who ne-
vertheless can make decisions fast and implement
them effectively. As the title of our study puts it:
CSOs have to be the “Masters of paradoxes”.
Statement 7 – Business agility is critical
The CSOs in our survey are clear Business agility will shape their agenda
most going forward, meaning the ability to adapt quickly to changes in the
business environment. Innovation, business model design and fast execution are also
at the top of their list of priorities. At the bottom of the list come three topics that
are paradoxically receiving great media attention at the moment: big data, real-time
strategy and corporate social responsibility (CSR). Despite this strong move in the
direction of business agility, the strategy of most CSOs is very risk-aware and rather
careful. There is no clear appetite for risk except in the financial sector. Indeed, quite
the opposite: CSOs prefer to act slowly and approve project step-by-step. The bottom
line is that strategy must strengthen business agility without taking unnecessary risks.
Here, again, CSOs must resolve a conflict of objectives and achieve the right balance.
Dr. Tim Zimmermann is a lic. oec. of the year
1988 of the HSG. He received his Doctorate also
f rom HSG for his studies on strategic early war-
ning systems. As a research fellow he worked with
Prof. Bleicher and Prof. Gomez on the new edition
of the St. Galler Management model. Since 1991
he is Senior Partner in the strategy consulting
business at Roland Berger Strategy Consultants.
His special expert ise is focusing on corporate
headquarters, f unctional leadership issues and
overhead ef f iciency as well as corporate trans-
formation programs.
Dr. Tim Zimmermann,Senior Partner, Roland Berger
Prof. Dr. Markus Menz is an Assistant
Professor of Strategic Management and the
Executive Director of the Master ’s Program
in Business Management at the University
of St. Gallen. Before, he spent a year as a
Visiting Fellow at Har vard University. He
received a Ph.D. in Strategic Management
and an M. A . in Banking & Finance f rom
the University of St. Gallen. His research
focuses on strategic leadership and corpo-
rate strategy. His work has been published
in leading academic and practitioner jour-
nals, such as Strategic Management Jour-
nal, Journal of Management, The European
Business Review, and Har vard Business
Manager.
Prof. Dr. Markus Menz,Assistant Professor of
Strategic Management & Executive Director
Business Management, University of St. Gallen
FastEXECUTION
BUSINESSMODEL
DESIGN
DYNAMICCAPABILITIES
BIGDATA
LEARNING ORGANIZATION
REALTIME
NETWORKERS AND
COOPERATION
22 – Winter 2014
any established early-warning process. The proximity and inter-
connectivity of social networks coupled with the use of information
technology also is already reshaping the way humanitarian response
is planned and implemented, and casts doubts on the relevance of
traditional coordination and mobilization mechanisms.
Challenges ahead
Humanitarian assistance has seen continuous, significant ex-
pansion over the last decade. The global budget reached USD 22
billion in 2013- up from approx. USD 5 billion in 1993 (an increase
of over 400% in the last 20 years). Despite a decreasing frequency
of conflicts, humanitarian needs remain high. The world may have
enjoyed relative stability over the last four decades, but the policy
of containing rather than solving emerging or protracted crises will
likely remain the Leitmotiv of the international community‘s crisis
management and hence perpetuate needs for humanitarian action.
Simultaneously, governments may be less and less inclined to em-
bark on large-scale, risky peacekeeping or stabilization operations.
The assumption that demand for humanitarian aid will continue to
grow for years to come is unfortunately quite realistic.
Humanitarian Action in the Next Decade
ICRC President
D ie Zukunft ist ein ungeschriebenes Blatt says the popular wis-
dom. Imagining the state of the humanitarian landscape in
10 years’ time is a hazardous exercise even for practitioners
directly witnessing its transformation. From our vantage point
we nevertheless anticipate that the power shifts challenging the
current world order will deeply influence the way humanitarian
action is conceived and delivered.
Three key areas point to lasting changes of humanitarian action:
First, the development of new weapons and weapon technology
will inevitably change warfare, and therefore change how com-
munities will be affected. Second, the emergence of new huma-
nitarian actors and new technologies will have an impact on both
the reasons and means with which the sector operates. Finally,
diminishing support among both States and armed groups for in-
dependent and neutral humanitarian action means less stability for
the functioning of the humanitarian system and more insecurity
for humanitarian workers.
All of these developments are taking place in an environment
where information about humanitarian suffering moves faster than
Peter Maurer
Winter 2014 – 23
St. Gallen Business ReviewHumanitarian Action in the Next Decade – Peter Maurer
In the face of global trends and changes the current
humanitarian system is likely to become increasingly
fragmented. The coexistence of more and more diverse
actors and forms of aid seems likely, including initiati-
ves led by the private sector, deployment of military
assets, bilateral State aid, UN-designed comprehensive
operations, and neutral and impartial humanitarian ac-
tion as provided by the ICRC. Fragmentation could also
occur between Northern and Southern organizations,
between emergency and development actors, between
secular and faith-based organizations, between charity
and business-oriented aid, between civil society initia-
tives and State-supported action. Western States may
well lose their monopoly on humanitarian funding, and
emerging competitors will propose or impose their own
agendas. States that until recently were aid recipients are
becoming aid providers. We must seek to build bridges
between all different actors, as chaos will only serve those
violating the law and increase vulnerabilities.
Pressures to control or direct humanitarian aid as a
conduit for political crisis management are unlikely to
disappear. Issues such as sovereignty of States, regional
stability, the importance of local responses and equal
partnerships must be balanced against the duty to take
humanitarian action in conflict and disaster situations.
Economic inequalities play at least some role in the
development of conflicts, as well as the factor of State
fragility. Today, one third of people surviving on less than
USD 1.25 per day live in States classified as fragile. In
only three years’ time, the majority of the world’s poor
will be living in fragile States.
Furthermore, the outlook for aid providers is daunting:
the largest crises today, from Syria and the Democratic
Republic of the Congo to Somalia and the Central Afri-
can Republic, all feature poorly trained armies, militias,
paramilitaries, gangs and loosely organized rebel groups
rather than organized armies which used to be bound
to recognize the mandate and guarantee the safety of
humanitarian organizations.
Regional power shifts, climate change, domestic or po-
pular discontent, social and economic problems or sectari-
an strife will continue to breed tension and violence. The
volume of assistance and protection needs generated by
armed conflict and other situations of violence, the rising
incidence and risk of disasters and crises linked to extreme
climatic events, increased competition over scarce natu-
ral resources, and economic and political instability will
likely put increasing pressure on humanitarian operators.
Paradoxically, these situations are far from new; many of
today’s major conflict situations have been at the very
least simmering for several decades. Generations of men,
women and children have lived under recurring threats
from armed hostilities in Afghanistan, the Democratic
Republic of the Congo, Sudan, Columbia, Israel and the
occupied territories or Iraq, to name just a few places.
Populations have faced types of abuse that are centuries
old, such as direct targeting, forced displacement or rec-
ruitment, extortion, arbitrary arrest, sexual violence or,
sometimes, summary execution. While new challenges
are arising in terms of the globalization of armed groups
and hostilities, or the development of technologies such
as drones, the core problem remains largely the same:
the lack of security and safety of people not or no longer
participating in hostilities.
Although the principles of international humanitarian
law apply universally, constant efforts are necessary to
ensure that they continue to be upheld. If a principle is
regularly violated without consequence, it is likely to
lose its status as a principle over time, with incalculable
effects for victims of armed conflict. This is why the
ICRC and Switzerland in 2012 launched talks with all
States on the best ways to strengthen compliance with
international humanitarian law.
St. Gallen Business Review
24 – Winter 2014
Humanitarian Action in the Next Decade – Peter Maurer
The future of humanitarian response
Over the past decade, we have witnessed a rise of emerging powers
as humanitarian donors, seeking to influence global humanitarian issues.
Some may wish to demonstrate that they are responsible regional and
global leaders and naturally want a greater say in shaping humanitari-
an policy and practice. With new actors come new approaches, often
pitted against what is perceived as traditional Western models. Besides
differing approaches, different security and economic interests can
affect perspectives of humanitarian issues.
The humanitarian sector’s number one challenge is to obtain access to
people in need and it is likely to become greater in the future. Looking
ahead, the ICRC estimates that it will have to be equipped to deploy in
large-scale emergencies while simultaneously having the know-how to
address the recurring needs of populations caught up in low intensity
conflict. We aim to design smart programmes for upcoming crises and
to link emergency action with development policies, to prevent the
re-occurrence of crises and make local communities more resilient.
There will not be one recipe but many: like most other humanitarian
organisations, the ICRC will continue to develop contextualized actions
rather than impose pre-designed responses and, given the unpredic-
tability of many contexts, to adopt a capacity-based rather than a
scenario-based response.
The potential role of the private sector
According to the latest Global Humanitarian Assistant Report, cont-
ributions from individuals, trusts, foundations and corporations rose to
an estimated USD 5.6 billion in 2013 (35% increase from 2012 levels) in
comparison with the USD 16.3 billion of public funding. Over the past
five years, assistance from such private sources has accounted for more
than one-quarter (26%) of the international humanitarian response,
with a rising tendency.
In addition to increasing financial contributions, the
trend of leveraging companies’ expertise, innovation ca-
pacity and networks to help advance humanitarian objec-
tives could fundamentally alter humanitarian functioning.
The involvement of business actors takes the shape of
partnership ventures, whereby solutions to specific hu-
manitarian challenges are designed through joint projects
involving a humanitarian actor and a business company.
This type of partnership can bring added value and sus-
tainability compared to mere donations, but also carries
some risks notably in terms of perception.
Seeking to absorb best practices from the corporate
world, the use of sophisticated financial instruments
(such as impact investing) or methods as a way to develop
new sources of financial support for mid- to long-term
humanitarian projects could broaden the scope of action.
Some reasons to be optimistic
The expanding humanitarian sector has brought more
actors and a greater diversity in humanitarian response.
Although some approaches have effects that are detri-
mental to the acceptance and perception of humanitarian
actors, we consider diversity an opportunity, not a curse.
Diversity and complementary roles are probably the best
response to the complexity we will have to deal with in
the future. The ICRC is confident that emerging actors
will be the drivers of a new consensus in aid architecture
and ethical frameworks. The ICRC is ready to listen, to
learn, and to build cooperative relationships, based on
solid foundations and on respect for existing law and
principles.
Working together in a spirit of complementary part-
nership and with respect for existing mandates and com-
petences is the best guarantee for aid effectiveness. The
risk remains that competition and contradiction between
aid operators will prevail. Each organization has received
or developed its own mission or mandate. We follow diffe-
rent models, different objectives, different priorities and
strategies. Financial resources are scarce by nature and
our sector is constantly trying to boost its effectiveness
and relevance. This creates frictions and duplications, and
also serious gaps leaving sometimes many people without
the support they need.
Programmes that perform poorly and wasted resources
continue to be closely scrutinised, publicly and internally.
From an ethical point of view, refraining from counter-pro-
Winter 2014 – 25
ductive competition when the survival or protection of
civilian populations is at stake is a categorical imperative.
In order to respond to growing needs, achieving optimal
synergies between local and international actors will be of
paramount importance. We are convinced that solutions
to this challenge have to be crafted through open dialo-
gue, creative initiatives, meaningful consultations and
good will from all parties involved. It is our duty to build
a common language and design a response that meets
the needs of the people we are trying to help and that
also corresponds more closely to what they themselves
want. To this end it is indispensable to retain proximity to
the victims. While outsourcing to third parties (“remote
control” operations) can help circumvent problems of ac-
cess, it can by no means obviate the need for established
presence based on local acceptance.
In an unpredictable environment, aid providers can no
longer work in isolation. New, more effective ways of
tackling humanitarian challenges and development issues
will inevitably transcend traditional sector boundaries. To
achieve this, aid actors will not only have to innovate in
order to adapt successfully but also make sure that their
new practices and techniques fit into a robust ethical
framework. In this environment, the International Red
Cross and Red Crescent Movement, acting in accordance
with its Fundamental Principles (including in particular
humanity, impartiality, neutrality and independence) and
connecting international response to local capacity, will
play a major role in maximizing the delivery and impact
of humanitarian assistance.
If you cannot predict, be prepared
History teaches us that trends predicted by experts
do not necessarily materialize. Surprises and unexpected
developments will continue to shape the international
order, just as they have in recent decades. This conclusion
is also valid for the humanitarian sector. The aftershocks
of the fall of the Berlin Wall, the long-term impact of the
so-called war on terror or the current meltdown in the
Middle East were hardly predictable. At the same time,
organized violence engendered by political ambitions,
ethnic rivalries, radical ideologies, greed or grievances
will persist under various forms and will necessarily bring
new humanitarian emergencies. Aid operators will have
to respond to the pleas of the people affected from new
angles. The test for organizations like ours will be to find
new solutions to old problems. To this end, we have to
improve our political reading, our understanding of arms
carriers on all sides, and our ability to forge relationships
with them in order to influence their behaviour to gain
support for our presence.
In conclusion, normative adaptations, dynamic ope-
rational strategies and technical innovations and new
alliances will be key to the continued relevance of hu-
manitarian endeavour. Our new institutional strategy
adopted this year is aimed at exactly that: preparing
the ICRC to carry out its mission in an uncertain future.
Peter Maurer was born in Thun, Switzerland,
in 1956. He studied histor y and internat ional
law in Bern, where he was awarded a doctorate.
In 1987 he entered the Swiss diplomatic ser vice,
where he held various positions in Bern and Pre-
tor ia before being t ransferred to New York in
1996 as deputy permanent obser ver at the Swiss
mission to the United Nations. In 2000 he was
appointed ambassador and head of the human
securit y division in the polit ical directorate of
the Swiss Department of Foreign Af fairs in Bern.
Peter Maurer,ICRC President
26 – Winter 2014
Please explain in three sentences, what the Business Model Canvas is.
The Business Modell Canvas is, simply said, a way of visually depicting business models. It is a broad
tool that can also be used for already existing business models. The interesting thing about this too is its
applicability both for startups and major enterprises like GE, Gazprom or P&G. This offers a broad range of
possibilities. In In the beginning it was intended to facilitate drafting new business ideas. Nowadays, its
mainly used to evaluate already existing business models of corporations. It is crucial to understand the
difference between a framework, respectively a concept, and a tool. We consider the Business Model Canvas
as a tool, since it can be directly implemented in a meeting or a working session. The „Tool-Aspect“ here is
extremely important, because it directly increases the efficiency of a meeting, conference or conversation.
What triggered the development of the Business Model Canvas and the Business Model Innovation?
The journey started with my PhD thesis. My thesis supervisor Yves Pigneur also coauthored “Business
Model Generation“. He asked himself how a business model could be simplified to fit one page. We didn’t
pursue coming up with a business plan. The actual question was rather how to model a business model.
Further, we asked ourselves whether we could make it a computer-aided designed, if we were able to model
it. So basically, our vision was to conceptualize computer-aided designs for business models, like an architect
so to say. After publishing my thesis in 2004, we made a book out of it. In the end our vision came true:
today we use our company “Strategyzer” to develop those computer-aided designs.
Interview with
Alexander Osterwalder is an entrepreneur,
speaker and business model innovator. Together
with Professor Yves Pigneur he co-authored Busi-
ness Model Generation, a global bestseller on the
topic of business model innovation. His Business
Model Canvas is used by leading organizations
around the world, like GE, P& G and Ericsson.
Alexander is a f requent keynote speaker and has
held guest lectures in top universities around the
world, including Stanford, Berkeley, MIT, IESE
and IMD. Alexander holds a PhD f rom HEC
Lausanne, Switzerland. He is recipient of the
Innovation Luminary Award 2013. He is also a
founding member of The Constellation, a global
not-for-prof it organization aiming to make HIV/
AIDS and Malaria history.
Alexander Osterwalder,Business Model Innovator
Winter 2014 – 27
St. Gallen Business ReviewInterview with – Alexander Osterwalder
What is the BMC’s main value? Do you see any threats that it might over simplify and suggest too much line-arity?
We did some research and asked ourselves: „Why is the Business Model Canvas so successful?“. We weren’t
the first ones elaborating ideas on that topic developing such a model. However, no single model has had
the same reach as the Business Model Canvas. More than one million books in thirty languages have been
sold. The question is, why? We conducted a survey with more than 3000 participants and interviewed
businesses and managers. It was surprising that the answers were quite simple and straightforward. The
difference to other models was the component on drawing it onto a sheet of paper, not simply talking
about it.
The Business Model Canvas allows us to quickly communicate the idea behind a business model. If that
only happens in words, it is rather difficult to understand the different links and correlations. One will most
likely talk about the product, notify it and think about how to get money out of it. But the fundamentals
of business models are much broader than that, which the BMC tries to explain with its nine building bo-
xes. The Business Model Canvas helps people to better lead strategic conversations about existing business
models and to implement new ones. People also mentioned that ideas could be implemented better via
the BMC because they become more tangible.
A person works way more efficient when using a tool. I always do the analogy: If I gave you a nail and
told you to hammer it into the wall with your bare hand, you would realize right away that this doesn’t
St. Gallen Business Review
28 – Winter 2014
Interview with – Alexander Osterwalder
make any sense. In business it is the same thing. We don’t use tools, but rather try again and again to
hammer this nail into the wall with our bare hands. The BMC is a tool, which is supposed to help in these
situations. In general, when tools are needed, one most likely won’t cut it. Many people like to say “the
BMC doesn’t do this and that“. But the BMC only has one goal: Sketching business models. If you want to
do other things such as formulating a Value Proposition, another tool has to be used. This is one reason
why we also invented the “Value Proposition Canvas” (VPC). In the future we will have many more tools,
for instance a tool for corporate culture. Today there is none, but sooner or later there will be a tool that
enables us to work on corporate culture, to draw an outline for it and to change it.
Considering the question whether it is too simple: I don‘t think so. If it was too complicated, people would
not use it anymore. We have tried to make the notion of the business model as simple as possible, but not
too simple. A well-known adage by Albert Einstein says: “Make it as simple as possible but not simpler.”
That‘s what we tried and I think we succeeded, taking the amount of people using this tool into account.
At the moment it seems linear only creating a picture; but that‘s as linear as a business plan. It always
depends upon how tools are being used. For instance, launching a new idea or a startup like Strategyzer,
I start with a model. I test different aspects of this model in order to see what works and what doesn‘t
work. Then I adapt my model. That means that I have a series of different BMCs and continue testing.
Especially at university, students are being taught that there are different models. But only all methods
and processes together have the potential to develop better business models. An example: when giving
a workshop people often ask me “Where is the competition?” But this is not the goal of the model. The
goal is to depict the business model. The competition is part of the business model environments (BME),
another tool. The BME and the VPC, as a second tool. That allows us to zoom into blocks and define more
precisely how to create customer value. For different processes different tools are needed.
Winter 2014 – 29
St. Gallen Business ReviewInterview with – Alexander Osterwalder
How can findings of the BMC be implemented afterwards?
There are different opportunities. In the past you had to write a business plan. Today there are existing
teams that think about business models, integrate and immediately test them in a real market environment.
This is one way to apply the BMC. The other way of application is, for instance, seen at Mastercard. They
use the BMC for a coherent language in teams developing new products. This means you don’t draft new
business models, but at the launch of a new product you outline how the adding value appears within the
business model. It needs a coherent language to approach the topic. There are companies that draft every
single “business unit” in order to have
prospect about different types of business models. At a workshop, which I was guiding, people needed a
model for M&A transactions. Reasonable as well as the BMCs’ target is to make a business model clear. If I
pursue M&A activities, I have to evaluate whether those two models fit together to an extent which would
justify a dea. In return, the BMC creates clarity. So there are many different possibilities how the BMC can
be implemented. SAP, for example, needs the BMC to draft the business model of their clients. Why? After
understanding how the business model of their clients works, they can explain them how SAP products can
help them with their business model. This was an interesting assignment, because the BMC wasn’t used to
picture their own business model, but rather to reproduce the business model of their own B2B customer.
Speaking of M&A: For years the internet has taken the center stage when it comes to new business ideas and startups. Do you see a danger of engorgement or a se-cond dot com bubble?
The internet has given us countless opportunities to create value
and the market is far from being satisfied. Quite to the contrary,
I think we are only at the beginning. Yet, acquisitions of a num-
ber of companies have been rather highly valuated. Just think
of Facebook’s acquisition of WhatsApp for 19 Billion $ – that’s a
staggering price. It is interesting to think about alternatives: How
much would it have cost Facebook if a competitor had undermined
its business model? It’s always difficult to measure the exact value,
which is why many investors get a nasty surprise nowadays. Take
Zynga as an example. Very few people actually thought through
their business model which had only very few entry barriers leaving
them vulnerable to competitors. Apple’s business model also has
only very few entry barriers, yet it is robust: Even if they didn’t
innovate their products over the next few years they’d still be
rather successful. That being said, I expect Apple to surprise us
with a new business model: their project “Carplay” for example
sounds interesting and visionary.
St. Gallen Business Review
30 – Winter 2014
Interview with – Alexander Osterwalder
Do the rules of Business Model Innovation also apply for online companies as they do for corporations in estab-lished industries?
There are profound differences. Therefore, I wouldn’t differentiate between Online- and Non-Online
companies, but between companies with new ideas and more established ones. Imagine a company with a
successful business model. It will try to realize profitability by further improving efficiency. These companies
grew considerably and introduced some new products that had been compatible with their existing business
models. These companies have become averse to bearing the risk of revolutionary ideas. In other words, it
is much more difficult to launch new ideas in a corporate environment than in a startup. The latter is easier
to handle as it suffers less constraints than established corporations. Big companies will have to adapt to
this way of thinking, as the life cycle of a business model today is shorter. Kodak is virtually non-existent
at this point, Alcatel-Lucent is barely surviving and Nokia has also seen better days. They are all examples
of established companies who failed to proactively innovate themselves while being successful. Right now,
the whole pharmaceutical industry is experiencing what I described. The life cycle of their business model
already ended some years ago: Many important patents are about to expire and the industry is struggling
to find potent replacements. This will cut heavily into their revenues and threaten the existence of some.
Which industry do you think needs a basic innovation at most?
Basically, all industries are desperately trying to innovate themselves at the moment. Almost all major
companies increase their R&D budget. However, many of them still have to become aware of the fact that
R&D, in terms of new products, will not be enough, but the best business model will win. They are struggling
to successfully combine both – a new business model and existing products, which I partially account to
the structure of these companies. In this context, some industries, the telecom industry for example, are
further than others, but still not quick enough. Just think about how WhatsApp and Skype have damaged
their previous business model. This has taught them to handle innovation better than the banking industry
for instance. Banks have not been able to introduce effective processes to build new business models and
value propositions as they are lacking a tradition of innovation.
St. Gallen Business ReviewInterview with – Alexander Osterwalder
Winter 2014 – 31
You gained experiences with startups in Europe and the U.S.A. What distinguishes these enterprises and the people standing behind them?
It is always very dangerous to generalize such questions. I recognized that a global culture of startups
seems to be evolving. I met a lot of different people that want to execute new tools to be able to develop
new ideas. A ‘global movement’ exists. However, we have to draw a general difference between the Silicon
Valley and the rest of the world. The Silicon Valley is interesting to look at, because you find many young
people who act naive and think they can change the world with really fatuous ideas. If hundreds of people
pursue this behavior and only one of them succeeds, it always seems like everyone were to succeed. Those
people exist and they don’t have any qualm to continue their dream. The fear of standing there with egg
on one’s face isn’t around. I partly like the European approach, since people act less greenly. It is important
to find the correct mixture between those two cultures. Fascinating to see - whether it is the US, especially
Silicon Valley, Europa or Asia - is that there is always a small group of people who perform better in certain
things than others. Today you are most likely to find such people in the US though, because there are more
people who try very hard. In Europe you sense and recognize a wave of companies with new startup ideas.
The benefit for these corporations clearly is that new ideas are less naively proceeded which therefore
decreases the risk.
Which advise would you give students interested in founding to take along?
Last year I was in the jury of the “International Business Model Competition”. In this competition the
students do not develop a business plan and present it. No, they show how they started with their business
model and how they have strengthened it. It was impressive for the jury to see how the students went
through their business models in a process after BMC, Business Model Design and Customer Development,
since they have started without any experience from a very naive point. That was eye-opening for the stu-
dents. They are quickly content and think they know how the world works. The winners of the competition,
“Owlet”, showed us how rigorously they tested their ideas and how often they have failed by doing that.
Since they have tested it in a process they haven’t lost money, but time. So my advice is quite simple: we
should use the tools and processes we need in entrepreneurship. Writing business plans is non-sense. It’s
not entrepreneurship. If an investor asks you for your business plan and decides to invest in you based
upon that business plan, I would not choose him as an investor. This investor is investing in a fantasy you
can’t prove. An investor believing in you as a team and your capabilities to spread ideas is likely to be more
successful than an investor blindly investing in absurd numbers. There are still investors that want business
plans. Nevertheless, this process slowly ceases. We all know these business plans are made up. The real
thing is to try out things. My advice to students is: try it out! And then test it, test it, test it! Important
in this case is to slightly fall flat on one’s face. To fall heavily on one’s flat face is easy. Taking small steps
in this case is much more exhausting, but it leads to success. Many young entrepreneurs think they have
succeeded as soon as they have acquired funding. But success determines itself upon how many customers
want to pay me in the long run.
32 – Winter 2014
Innovation Networks: Rethinking the Company
Member of the management board, BMW Group
Peter Schwarzenbauer
1. Introduction: Companies need to rethink themselves
When are large companies formed? Ultimately, whenever there are clear requirements in society,
for which clever people develop appropriate solutions. With these solutions in massive demand,
the organisational units that provide them – companies, in other words – grow.
Companies provide answers to the questions of society. That is undoubtedly an important role. But perhaps
it is also precisely the reason why companies themselves are not particularly good at asking questions. Simon
Sinek sums this up in his book, in which he appeals to companies to “start with why”. What he means by this
is: they should stop taking the status quo as a given, and instead ask themselves, over and over, why they
actually do what they do. Why do we exist as an organisation? What is our “mission”? Why are we needed?
According to Sinek, these questions must be answered first, before addressing secondary questions, such
as: which processes do we need? What kind of product do we want to deliver?
Quoting Sinek at the start of my article doesn’t mean that I advocate a philosophy that does not, or no
longer, values products. On the contrary, great products are important and will be even more so in the
future. It takes a great deal of inspiration and enthusiasm to create products that in turn inspire customers.
However, in order to create those kinds of products we must know the answer to the question “why”. Only
then are we and our customers sure that this is a great product. We can be sure it’s right for the times, we
can be sure it’s of value to society and fulfils a mission.
This article will focus on these missions and how they are formed, showing that we must throw some
of our established operational routines overboard. Businesses must reinvent themselves – because simply
managing routines is no longer enough. Companies must open up and be prepared to acknowledge the in-
novative power sprouting in different areas of society and to connect with it. They must understand that,
in the words of sociologist Manuel Castells, we are living in a network society. For companies, this also
means thinking in networks. And whether they want to or not, it means increasingly transforming into
network-like structures themselves.
I would like to explore the consequences of this shift for a company like the BMW Group. I will demons-
trate that we are no longer at the very beginning of the process of becoming a network. Specifically, I’ll
discuss the many networks we as a company are currently forming with small, innovative start-ups all over
the world. I will look at why they can be beneficial for both sides, and I will argue that they show the way
for the reinvention of the company I call for in this article.
Winter 2014 – 33
St. Gallen Business ReviewInnovation Networks: Rethinking the Company – Peter Schwarzenbauer
2. The BMW Group start-up offensive: the company as network
As a company, we regard networking with small, smart inno-
vators as part of our corporate strategy. This is not actually a new
approach, but our active involvement in innovation networks has
intensified significantly in recent years. And we also consider that
large cooperations can also set up small operations, projects or
indeed business units that act as startups. Today, our network is
based on three pillars.
First, our three Tech Offices worldwide: Since 1998, the BMW
Group Technology Office USA has been an established location in
Silicon Valley – where many of the trends of tomorrow originate.
The main function of this location is to identify the latest relevant
technologies and trends for the BMW Group at an early stage and
translate them to products as quickly as possible. Researchers
here benefit from the unique Silicon Valley environment. Where
else can you find market leaders from all different industries, out-
standing universities, innovative start-ups, venture capitalists and
business analysts all in such close proximity? The team is currently
conducting research in the following five areas: trend-scouting and
management – are physical. A revolution in hardware
creates an opportunity to alter our built environment
and change our fundamental experience of cities.
And as something of a hardware expert, we believe
the BMW Group is well positioned to play a role in
this trend – and eventually extend our reach and
relevance to both start-ups and customers.
3. Networks and the ideal company: three essential features
What do these points tell us about a successful com-
pany today? To what extent can they be applied to
other industries? And to what extent can engagements such as
these contribute to a new understanding of what a company is? I
would like to discuss what defines the ideal company of the future
for me, with reference to three key concepts: “high speed”, “high
profit” and “high relevance”. This is where I believe competitive
success will be decided in the next 20 years and beyond.
3.1 High Speed_It may be something of a cliché, but there
is one particularly crucial development in the automotive sector
currently: The economic world we live in is moving faster all the
time, creating a new culture of speed that we as companies must
accept. This requires us to abandon our long-established habits.
We see this with innovation cycles in particular, as they become
shorter and more numerous, forcing companies like the BMW Group
to innovate on a permanent basis. This demands a culture of speed,
especially in the field of innovation. In other words: We need a
culture of innovation – under rapidly changing market conditions.
Here, in particular, we can learn from the start-ups we work with.
Start-ups are ultimately force fields, whose very existence depends
on their speed of innovation. They came into being because they
were able to transform vague basic ideas into market products
quickly. With a partner like the BMW Group at their side, they
also have access to the necessary process expertise and – there
is no reason to deny it – the funding they need. In return, we at
our company can emulate their culture of innovation – as long as
we allow this to happen. As a result this requires a company like
the BMW Group to be willing to constantly evolve and challenge
the status quo.
Risk is another important concept in this context. Almost 30
years ago, sociologist Ulrich Beck noted that we live in a risk
society. However, his meaning has often been narrowed down to
the idea that risk is an aspect of capitalist culture we should be
critical of. But Beck never intended the term to be reduced to
this. He regards risk as a basic element of modern society – which
consequently makes the idea of risk-taking sound very modern:
That was true 30 years ago, and even more so today.
When we talk about operating in conditions requiring speed,
a risk-taking culture becomes an important success factor. Swift
and consistent action requires tolerance of certain risks. This has
nothing to do with a gambling mentality. It is about consciously
taking controlled risks, charting new territory and viewing what
initially appears unfamiliar not as something dangerous, but as
an opportunity to create something new – new ideas, services
or products.
St. Gallen Business Review
36 – Winter 2014
Innovation Networks: Rethinking the Company – Peter Schwarzenbauer
Once more, we can learn from the world of venture
capital, which already contains the idea of risk in the
word “venture”. Here, capital is invested in exciting, but
ultimately uncertain, ventures – ventures that are them-
selves highly risk-tolerant. In many cases, it is precisely
this basic attitude that generates new ideas for products
or previously unthought-of solutions to problems. This
would appear to me to be a very appropriate and modern
attitude – particularly in the context of mobility, itself
an inherently volatile field. (Mobility is, after all, the
complete opposite of standing still.)
3.2 High profit_There is one area where all of these
considerations, possibly contrary to popular belief, do not
require any kind of change, and that is in companies’ need
to remain profitable in order to grow. The new type of
business described in this article is no less geared towards
generating profit. In fact, profits are necessary. Profits
finance new products, create new jobs and contribute
to positive change in society.
But how do companies remain profitable? I believe
that one of the key answers is to dare and see the world
through the eyes of our customers in all areas of the
company. Of course, that is easier said than done. And
of course, there are many other factors that affect a
company’s profitability. Why the customer? We know that
classic segmentation models no longer apply to the extent
they used to. Who is this mythical creature that goes by
the name of “customer”? To generate profit means also
to know what the customers want before they do. That
means to anticipate their expectations and figure out
how a company can constantly exceed them. Moreover,
we must always be accessible towards having an open
dialogue with customers, and we must create new plat-
forms for exchange with them. Through such endeavours
we can offer products and services that are meaningful
and valuable to our customers’ personal experience and
lives. And we must give our customers the opportunity
to interact with us wherever they choose to do so –not
just where we feel it suits our internal processes.
At the same time, we must respond to the real-life
issues our customers face. We must discover or, even
better, anticipate, where challenges lie. This is another
area in which trail-blazing start-ups are ahead of large
corporations, since they themselves are usually founded
in response to a very specific everyday issue – often one
the entrepreneurs have encountered themselves. That
is what makes their products so marketable. Companies
like the BMW Group also need the kind of marketability
that comes from consistent customer focus. We believe
we are on the right track, but complacency and standing
still are fatal, and are rightly punished by customers and
can result in destroying the value of a company instead
of creating more of it.
3.3 High relevance_That final point brings me to the
third element of a new understanding of companies: the
aspect of “high relevance”. Businesses and brands can only
thrive today if they do more than just make functional
products and indifferently satisfy clearly defined material
needs. They need to create added value for society by
being relevant. I call that “human emotional branding”
instead of “product branding”. That is the only way to
answer Sinek’s opening question of “why?”
This involves an expanded concept of the company
that goes far beyond what is generally understood as
Corporate Social Responsibility. Rethinking the company
above all means identifying social challenges and sup-
plying the appropriate solutions – independent of purely
commercial goals. Corporations must therefore make their
expertise, infrastructure and resources available to serve
a meaningful purpose and make a valuable contribution
to the public good.
In her speech on “Continuity in change – corporate
values in the 21st century”, Susanne Klatten talked about
people and the common good as the focus of a higher
form of economy. She advocates “a common position”
of economy and society to “direct their efforts to serve
a meaningful purpose and achieve the satisfaction of
worthwhile pursuits.” The only way to make the eco-
nomy important and relevant to each and every person
is through the enhanced understanding of companies
discussed here – in the sense of the cooperative culture
described in part 2 as a network culture. Only then will
society be pleased to have companies at its heart.
Winter 2014 – 37
St. Gallen Business ReviewInnovation Networks: Rethinking the Company – Peter Schwarzenbauer
4. Start-up campaign and open innovation
When all these considerations are correct, it becomes clear that
people play a crucial role in the innovation process. Traditionally,
marketing theory believes consumers are easy to influence. But
this thinking – along with traditional marketing – is changing.
It is no longer enough for companies to innovate quietly behind
closed doors and then suddenly emerge onto an unprepared market
with new products. Instead, they must open up their innovation
process – to partner companies, as described above in the BMW
start-up campaign. Or to the people who buy their products and
will ultimately shape their lives with them.
The academic community refers to this as “open innovation”
(Reichwald and Piller 2009), a form of interactive value creation. It
is no longer the brilliant single developer who lays the foundations
for innovation at a company. Rather innovation – and therefore
value creation – occurs in a collaborative process between company,
institutional partners (such as start-ups) and customers.
That is why it is so important to create the right culture within
the company. The work it takes to achieve this should not be
underestimated. For companies used to a closed-door policy on in-
novation, “open innovation” represents a major cultural revolution.
However, if a company succeeds in integrating its customers into
the value creation process, it can tap directly into a social trend
that is gaining more and more ground, referred to in the U.S. as
a “makers’ culture”. This is based on the simple truth that people
want to do more and more things for themselves (Dougherty 2012).
It is not necessarily opposed to the role of companies, but rather
to them telling customers what to do. People want to shape their
lifestyle for themselves – and they want to be involved in creating,
refining and individualising products. Smart companies give them
the opportunity to do so.
5. Concluding remarks
I have argued that companies must totally rethink who they are.
They must think of themselves as a network and pursue networking
strategies to share their expertise in collaboration with start-ups.
They should include the aspect of relevance in their target system,
which may have been geared towards profit and speed in the past.
They should acknowledge their responsibility as a “good corporate
citizen” within civil society and make their expertise available. And
they should open up their innovation process to external input.
All of these aspects are an extension of our classic understan-
ding of companies. In the automotive industry, rethinking also
means that the quantitative parameter used almost exclusively
in the past – namely, volumes in the sense of sales volumes – is
no longer sustainable as the sole criterion for success. Up until
now, a smooth process that sells as many cars as possible has
been the predominant measure of success. But a business that
defines itself as a partner in the process of individual mobility, as
outlined here, thinks beyond that. It regards the selling of vehicles
as one factor in an encompassing strategy that contains societal
as well as economic elements. Its target system focuses on the
individual and his or her need for mobility. Clearly, the vehicle is
no longer the sole solution here. However, as a key element in a
comprehensive strategy for a mobile future, it will continue to play
a pivotal role in promoting economic development and growth in
society going forward. .
Literature
Castells, M. (2011)_The rise of the network society: The information
age: Economy, society, and culture (Vol. 1).John Wiley & Sons.
Chesbrough, H. W. (2006)_The era of open innovation. Managing
innovation and change, 127(3), 34-41.
Dougherty, D. (2012)_The maker movement. innovations, 7(3), 11-14.
MacInnis, D. J. (2012)_“Brands as Intentional Agents”: Questions and
extensions. Journal of Consumer Psychology, 22(2), 195-198.
Klatten, S. (2013)_Kontinuität im Wandel – die Werte des Unterneh-
mens im 21. Jahrhundert. Rede im Rahmen des Neujahrsempfangs der
Evangelischen Akademie Tutzing am 16.01.2013.
Reichwald, R., & Piller, F. (2009)_Interaktive Wertschöpfung: Open
innovation, Individualisierung und neue Formen der Arbeitsteilung.
Springer DE.
Sinek, S. (2009)_Start with why: How great leaders inspire everyone
to take action. Penguin.
38 – Winter 2014
Making Deals Successfull
Partner at PwC
Thomas Menzler
We found some bad news and some good news. The good news
first: Our survey demonstrates that acquirers usually have
a clear vision for the merged companies. Another positive
finding: Value-creation methods in transactions are constantly evolving.
Now to the bad news: In practice, many deal-makers still underestimate
the time and effort a synergy-offering integration process will take.
Laying the foundations for a successful deal
Why do companies decide to buy a competitor or merge with another
firm? The participants in our survey stated strategic, financial and syn-
ergy objectives as their most important success factors. When it comes
to strategic objectives our survey results are encouraging: Those goals
are often achieved. When it comes to generating synergies, however,
many companies have room for improvement.
Buyers generally focus on “external growth” as their main strategic
transaction objective. The prospect of integrating new products into
their portfolios and the desire for new customers are the main strategic
drivers for deals. And in many cases, deal-makers achieve those objecti-
ves. This is hardly surprising, as strategic objectives are often met the
moment the deal is closed and do not need further integration efforts.
To reach new levels of strategic and operational excellence, however,
buyers need to undertake distinct actions post-deal.
Achieving financial objectives seems a lot harder than meeting strate-
gic goals. According to our survey, the most important financial success
factors are sales and profitability. More than half of all respondents
indicated that they only partially achieved set targets or did not achie-
ve them at all. This finding shows that building a combined company
alone does not increase profitability – one has to change and optimize
processes, systems and structures. In order to boost sales, one needs
to be aware of cannibalization effects within the newly-combined pro-
duct portfolios and increased needs to achieve cross-selling potential.
The path to success: Detailed planning, stringent execution and constant monitoring
Many integration activities are planned pre-deal
but are not actually approached during the integ-
ration. Our survey results show that management
commitment and sponsorship are planned initial-
ly, but are often not fully implemented. The same
holds true for a clear project structure or setup,
responsibilities and governance. In order to make a
deal successful it is very important to focus on your
individual value-drivers.
The vast majority of deal-makers start their integ-
ration planning before signing during due diligence,
allowing them to thoroughly plan and prepare all of
the integration activities necessary to perform a
transition. However, most companies underestimate
the overall time needed for integration with a delay
of approximately six months. For the majority of
managers we spoke with, it took between seven and
18 months post-closing to complete their integration
activities.
Why do certain transactions pay off and others don’t? Is integration success blind luck or a manageable and transparent process? These were the questions we wanted to answer when we launched the 3rd edition of our survey on M&A integration. We interviewed M&A experts who realized deals from a wide range of industries in order to explore the trends, challenges and triggers of M&A integration in a rapidly changing deals environment.
“In order to make a deal
successful, it is vital to focus on your indivi-
dual value drivers.”
Winter 2014 – 39
St. Gallen Business Review
Understanding the complexity of integration
So what is it that makes integration so complex? Two-thirds of respondents
(67%) report that the greatest complexity stems from “complex (legal) struc-
tures”. 64% mention “cross-border integration” as the most complex hurdle,
followed by “complex business models of the integration parties” (58%) and
“cultural differences” (56%) as more and more deals are completed on the Asian
market. Multinational teams of experts are required to successfully overcome
these challenges.
What gets measured gets done
Every deal-maker should use ongoing and frequent tracking to measure success
during integration. The most commonly used financial-based metrics are profi-
tability, revenue development and one-off integration process costs. I recom-
mend that companies also use non-financial success metrics such as employee
satisfaction and fluctuation or customer satisfaction to measure the success
of their integration. Our survey shows that the best-performing deal-makers
concentrate more on the “people-side” of the deal and focus on customer and
employee satisfaction rather than on financial-based factors.
Another important issue to consider is whether it makes sense to use external
consultants to support integration. Only a small minority of deal-makers plan for
professional support upfront. From my experience, however, companies that do
not rely on external advisors often face problems during the integration process
due to a lack of experience with deals and integration. Among the most-requested
consultancy services are professional integration management and support with
finance and accounting functions, operating models and IT.
Diligence makes the difference
Clients sometimes ask me: What is the first thing to be completed during
the transaction process? The answer is simple- a thorough due diligence. Future
success depends on getting a comprehensive picture of what you are buying.
Most deal-makers are aware of this. More than 90% of respondents either ex-
tensively or selectively used the results of the due diligence post-closing. Four
in five respondents started to develop integration and synergy plans during the
due diligence process.
Making Deals Successfull – Thomas Menzler
“Building a com-bined company alone does not
increase profitabi-lity or boost sales.”
“A thorough due diligence is key: Future success
depends on getting a comprehensive
picture of what you are buying.”
“Every deal-maker should use
on-going and frequent
tracking to measure suc-
cess during in-tegration.”
St. Gallen Business Review
40 – Winter 2014
Making Deals Successfull – Thomas Menzler
Customized approaches are required to integrate different functions
Deal-makers often focus on support and administrative functions, such as
finance and IT, when conducting integration activities. Support functions ge-
nerally require shorter timeframes for integration. It is far more challenging,
however, to integrate value-adding processes that cause fundamental structural
changes within the organization. Integrating core processes such as research
and development, sales, and production will also require more time. When it
comes to integrating different functions, deal-makers have to be aware that a
“one-size-fits-all” approach does not lead to ideal results.
IT presents a particular integration challenge. Harmonizing and integrating the
IT infrastructure and landscape can take longer than any other business process.
In my experience, it can require a company several years to fully harmonize the
IT functions of two merged companies.
Patience will pay off
We find deal-makers to be far too optimistic in estimating when synergies
will take effect. A time delay of six months in synergy realization is the rule.
Most respondents are able to realize their planned synergies between 13 and 18
months post-closing.
Also, it takes many organizational and structural changes to achieve positive
effects and even longer until these are reflected in the company’s finances. Our
survey indicates that synergies are usually strongest in core processes such as
sales, procurement and production. In these functions it is more difficult to
realize ‘quick wins’, but once synergies are achieved, they have the greatest
financial impact.
The rocky road to synergy realization
Our study reveals a discrepancy between the relevance of synergies as a success factor for
transactions and the actual achievement of the desired synergies. More than three-quarters
of respondents say synergies are a success factor, yet less than half claim they achieved them.
The vast majority of acquirers – 96% of the deal-makers we interviewed – even pay a premium
for target companies because they expect synergies.
In practice, however, many companies not only fail to obtain the synergies they had in mind,
in the worst-case scenario they even suffer from dissynergies, with costs increasing instead
of falling. Employees are dissatisfied with the working atmosphere and leave the company,
rather than being motivated by new opportunities and challenges.
So why is it that so many deal-makers fail to reach planned synergies? Is it poor planning or
inappropriate measures? Slow execution or frictional losses? I think it is probably a mixture of
all of these factors. Synergies usually don’t just happen. Their achievement has to be planned
thoroughly in advance, ideally during the pre-deal phase and certainly before signing. The
way synergies are planned in the pre-deal phase is crucial to the extent to which they are
achieved afterwards.
“We find deal-makers to be far too opti-mistic in esti-mating when synergies will
take effect.”
Synergies as a success factor
76%
24%
0%
40%
20%
30%
10%
1– 6months
7–12months
19 –24months
13–18months
Winter 2014 – 41
St. Gallen Business Review
>36months
31–36months
25–30months
19 –24months
PLANNED TIMEACHIEVED TIME
Making Deals Successfull – Thomas Menzler
Synergies achieved
There is a discrepancy between the importance of synergies over the course of an integration and the actual achievement.
Deal makers are too optimistic in assessing the timing when synergies become effectiveWhat was your planned timeline to realise the full synergy effects and how long did it actually take?
54%46%
Thomas Menzler is Par t ner at Pr iceWater-
houseCoopers (PwC). He is responsible for M&A
integration. In addition to M&A, he also is in-
volved in Car ve-out issues.
Before joining PWC, Mr Menzler was MD of a
mid-sized company in the medical sector. He
started his career in management consulting.
Thomas Menzler,Partner at PwC
PEOPLE• Involve your employees in the integration process and keep
them informed during the transitional period.• Ensure that key employees are retained and that there is
a high level of employee satisfaction.• Establish a structured change management process.
VALUE• Enhance the value of your integration by focusing on
the success factors that matter most to your individual transaction.
• Apply customized integration approaches for different business processes.
• Actively manage the synergy process from due diligence to post-closing.
RISK• Align your integration strategy and choose sound guiding
principles.• Constantly monitor your integration process even after
returning to your normal day-to-day business.• Install efficient metrics and key performance indicators
to measure your integration performance.
42 – Winter 2014
Persönlichkeiten fördern
Generalsekretärin der Studienstiftung des deutschen Volkes
Dr. Annette Julius
1. Begabten- und Exzellenzförderung: eine Positionsbestimmung
D ie nach dem Zweiten Weltkrieg gegründeten (oder, wie im
Fall der Studienstiftung des deutschen Volkes: wiederge-
gründeten) Begabtenförderungswerke verbindet, dass sie
kompetenz- und persönlichkeitsbezogene Kriterien gleichermaßen
in ihre Auswahl- und Förderarbeit einbeziehen: gefördert wird,
wer eine herausragende wissenschaftliche oder künstlerische Be-
gabung im Bereich des eigenen Studienfaches mit der Motivation
verbindet, diese Begabung auch wirksam werden zu lassen – im
eigenen Fach und über die Grenzen des eigenen Faches und des
persönlichen Lebensumfeldes hinaus. Aufgabe der Förderung selbst
ist es, die im Auswahlprozess identifizierten Potentiale und An-
lagen bestmöglich weiterzuentwickeln – durch Anregungen und
Vertiefungsmöglichkeiten auf fachlicher Ebene ebenso wie durch
die Stärkung der allgemeinen Urteils- und Entscheidungskompetenz
und Verantwortungsbereitschaft der Geförderten.
Wesentlich für Begabtenförderung ist dabei erstens eine explizite
Orientierung an einem demokratisch fundierten, wertegebunden
Pluralismus, ihr ideelles Ziel ist somit die „Bildung zur Pluralität“
– durch die Konfrontation mit konträren Perspektiven, konkur-
rierenden Wertehaltungen und unterschiedlichen Biografien und
Lebensentwürfen. Diese Zielrichtung spiegelt sich auch in der plu-
ralen, nicht-staatlichen Trägerschaft der unterschiedlichen Begab-
tenförderungswerke selbst und ist letztendlich ein Gegenentwurf zu
den „gleichgeschalteten Eliten“ in der Zeit des Nationalsozialismus,
als Deutschlands Intellektuelle und Führungspersönlichkeiten dem
Totalitarismus nicht nur (zu) wenig entgegengesetzt haben, son-
dern ihn fast flächendeckend begrüßten.
Zweitens und hiermit zusammenhängend ist Begabtenförderung
wesentlich auf einzelne Personen und deren Entwicklung ausge-
richtet: Schon in der Aufnahme in ein Begabtenförderungswerk
steckt die Aufforderung und Ermutigung, sich der eigenen Poten-
tiale bewusst zu werden und sie zur Entfaltung zu bringen, aber
auch das eigene Verhältnis zu Leistungsorientierung als Teil der
Persönlichkeit kritisch und realistisch zu reflektieren. Die Förderung
bestärkt und unterstützt Stipendiaten darin, sich Ziele zu stecken,
die über den Tag und über die eigenen persönlichen Belange hinaus
reichen, und diese Ziele dann auch engagiert zu verfolgen. Bestärkt
werden Stipendiaten und Stipendiatinnen zudem darin, ihre eigene
Urteilskraft zu entwickeln und am Ende eigenständige,
von der Förderorganisation nicht vorgegebene, (selbst)
kritische Urteile zu fällen. Anders als in vielen anderen
Ländern, ist Begabtenförderung daher auch nicht mit
bestimmten Hochschulen oder gar Ausbildungsgängen
verknüpft und orientiert auch nicht einseitig auf einge-
spielte Aufstiegsmuster oder Karrierewege.
Begabtenförderung unterscheidet sich daher auch sub-
stantiell von neueren Ansätzen in der Forschungs- und
Bildungspolitik wie etwa der Exzellenzinitiative: So hat
die „Exzellenzinitiative des Bundes und der Länder zur
Förderung von Wissenschaft und Forschung an deutschen
Hochschulen“ ebenso wie die seit ca. zehn Jahren geführte
Diskussion über „Brain Drain“ in der Öffentlichkeit zwar
eine gewisse Akzeptanz dafür geschaffen, dass Förderung
und dauerhafte Bindung von Nachwuchstalenten von ho-
hem öffentlichen Interesse ist – eine Akzeptanz, von der
auch die Begabtenförderung profitiert. Auf der anderen
Seite ist die Exzellenzinitiative aber auf den Wirkungsbe-
reich der Forschung beschränkt, für den sich in der Regel
auch leichter überprüfbare Ziele definieren lassen als für
eine auf das Individuum und seine Potentiale orientierte,
ergebnisoffene Begabtenförderung. Vor allem aber geht
es in der Exzellenzinitiative eben nicht in erster Linie um
die Förderung von Personen, sondern vor allem um die
strukturelle Stärkung und Profilierung von Institutionen
sowie die Bündelung von Ressourcen zur Erforschung
und Bearbeitung als relevant erkannter, übergreifender
Fragestellungen.
Mit der hier vorgenommenen Abgrenzung soll weder
Notwendigkeit und Wirksamkeit dieser Art von Ressour-
cenbündelung in Zweifel gezogen noch die prinzipielle
Unvereinbarkeit der beiden Fördersysteme postuliert
werden. Natürlich studieren zahlreiche Geförderte, etwa
der Studienstiftung, an DFG-geförderten und -ausgezeich-
neten Hochschulen oder Fachbereichen, während andere
Stipendiatinnen und Stipendiaten sich aus ebenfalls guten
Gründen für Fächer oder Fachbereiche entscheiden, die
Winter 2014 – 43
St. Gallen Business ReviewPersönlichkeiten fördern – Annette Julius
sich nicht in den neu entstandenen Strukturen staat-
lich-institutioneller Förderung wiederfinden, sei es, weil
sie schlicht zu klein sind, sei es, weil sie Fragestellungen
nachgehen, die (noch) nicht im Mainstream der Forschung
angekommen sind oder weil sie besondere Stärken in
der Lehre oder ihrer internationalen Vernetzung auf-
weisen – Stärken also, die für die forschungsbezogenen
Wettbewerbe keine Rolle spielen. Ausdrücklich gefördert
wird mithin ein interessengeleitetes, autonom gestaltetes
breites Studium.
Eine auf einem umfassenden Bildungsbegriff aufbauen-
de Begabtenförderung ist mithin weitaus mehr als eine
bloße Komplementärstrategie zu den projekt- und institu-
des Bundes. Insofern kann sie auch nicht darauf zählen,
dass ihre eigene Rolle und Relevanz, gewissermaßen im
Windschatten von Exzellenzinitiative und Forschungsför-
derung, bereits hinreichend plausibilisiert ist. Vielmehr
muss sie ihre eigenen, übergreifenderen Ziele – mit Blick
auf das Gemeinwohl und eine lebendige, leistungsfähige
Demokratie – klar formulieren und sich an ihnen messen
lassen. Erste Schritte in diese Richtung hat die Studi-
enstiftung mit der von ihr in Auftrag gegebenen Evaluati-
on ihrer Auswahlverfahren gemacht, die u.a. Studien- und
Abschlussnoten, Qualität des Berufseinstiegs, Häufigkeit
von sozialem Engagement u.a.m. von Geförderten und
Alumni der Studienstiftung mit denen abgelehn-
ter Bewerber und der Gesamtheit der Studie-
renden vergleicht.
Gerade weil Begabtenförderung aber so
zentral auf die einzelne Person und deren in-
dividuelle Gestaltungsfähigkeit setzt, sind No-
tenstatistiken, Promotionsquoten, Preise und
Auszeichnungen sowie weitere quantitativ zu
erfassende Daten immer nur Teil-Indikatoren
für die Validität der Auswahl und die Wirk-
samkeit der Förderung. Wichtig sind darüber
hinaus überzeugende und vielfältige Werde-
gänge von Geförderten und Alumni, die den
oben genannten Ansprüchen nachvollziehbar
gerecht werden. Wer Pluralität und die indi-
viduelle Persönlichkeit in den Mittelpunkt des
Förderhandelns stellt, dessen Glaubwürdigkeit
hängt nicht zuletzt davon ab, dass die eigenen
Auswahlverfahren fair und offen für Talente und
Begabungen aus allen Teilen der Bevölkerung
sind. Ob die Studienstiftung des deutschen Vol-
kes diesem Anspruch gerecht wird oder auch nur
gerecht werden kann, hat in den vergangenen
rund fünf Jahren wie wenige andere Fragen die
Debatte über Anspruch und Voraussetzungen
der eigenen Arbeit bestimmt.
St. Gallen Business Review
44 – Winter 2014
Persönlichkeiten fördern – Annette Julius
2. Begabtenförderung und Chancengerechtigkeit
Den Zusammenhang zwischen der sozio-öko-
nomischen Herkunft von Studierenden und
den Chancen für ihre Aufnahme in die eigene Förde-
rung hat die Studienstiftung 2007/2008 mit einer
Analyse zum sozialen Profil der Stipendiaten erstmals
systematisch untersucht. Diese ergab u.a., dass 79%
der Geförderten mindestens ein Elternteil mit einem
akademischen Abschluss hatten, wodurch sich die
Stipendiatinnen und Stipendiaten der Studienstif-
tung deutlich vom Durchschnitt der Studierenden
an deutschen Hochschulen unterscheiden, von de-
nen lediglich 49% aus einem „Akademikerhaushalt“
stammen.
2009 legte das Hochschulinformationssystem
(HIS) im Auftrag des Bundesministeriums für Bildung
und Forschung eine Analyse des sozialen Profils aller
Begabtenförderungswerke vor, aus der hervorging,
dass einerseits auch in den anderen Werken mit im
Mittel 66% ein überdurchschnittlich hoher Anteil der
Geförderten aus Akademikerelternhäusern stammt,
von dem wiederum u.a. die Studienstiftung mit dem
oben zitierten Anteil von 80% Akademikerkindern
noch einmal besonders deutlich abwich.
Die Interpretation dieser Ergebnisse sorgte sowohl
studienstiftungsintern wie in der Öffentlichkeit für
Kontroversen: Die ungleichgewichtige Repräsentanz
unterschiedlicher sozio-ökonomischer Gruppen in der
Studienstiftung sei (ausschließlich) ein Resultat von
Selektions- und Benachteiligungsprozessen in viel
früheren Bildungsstadien, für die die Studienstiftung
nicht verantwortlich gemacht werden und die sie
auch nicht ausgleichen könne – argumentierten die
einen. Das Auswahl- und Vorschlagssystem der Stu-
dienstiftung selbst und insbesondere die Tatsache,
dass „weiche“, persönlichkeitsbezogene Kriterien in
den Auswahlverfahren eine Rolle spielen, verstär-
ke die ohnehin herrschenden Ungerechtigkeiten im
Bildungssystem und sorge dafür, dass „das deutsche
Bildungsbürgertum sich selbst reproduziere“ – so die
anderen. „Je mehr Persönlichkeit einfließt, desto un-
gerechter wird das Verfahren“ fasste der Soziologe
Michael Hartmann diese Position zuletzt kurz und
knapp zusammen.
Träfe dieser Vorwurf in der hier for-
mulierten Absolutheit zu, wäre der die
Studienstiftung seit ihrer Gründung
prägende Anspruch in Frage gestellt,
Individualförderung mit Werte- und
Gemeinwohlorientierung zu verbin-
den. Eben weil nicht nur Leistung,
sondern auch „Initiative“ und „Ver-
antwortung“ explizite Erwartungen an
die Geförderten sind, nennt schon das
Ergebnisprotokoll des „Zentralen Ar-
beitsausschusses“ der Studienstiftung
von 1925 als zentrale Auswahlkriterien
sowohl die „Tatsache ausnahmswei-
ser wissenschaftlicher Begabung und
Tüchtigkeit“ als auch „menschliche
Bewährung sowie charakterliche Eig-
nung“. Und in der aktuellen Satzung
der Studienstiftung heißt es: „Die
Studienstiftung fördert die Hochschul-
bildung junger Menschen, deren hohe
wissenschaftliche oder künstlerische
Begabung und deren Persönlichkeit
besondere Leistungen im Dienste der
Allgemeinheit erwarten lassen.“
Für die Studienstiftung war es mit-
hin keine Alternative, ihre Ansprüche
an Persönlichkeit und Engagement ih-
rer Stipendiaten aufzugeben. Sie hat
sich stattdessen in den vergangenen
Jahren intensiv mit der Frage der Chan-
cengerechtigkeit auseinandersetzt und
dieses Anliegen systematisch in die
eigene Arbeit integriert: Neu einge-
führt wurden u.a. die Möglichkeit der
Selbstbewerbung, ein stipendiatisches
„Botschafterprogramm“ ins Leben ge-
rufen und die vorschlagsberechtigten
Schulen und Hochschulen ebenso wie
ihre Kommissionsmitglieder intensiv
auf Grenzen und Möglichkeiten so-
zialer Herkunft sensibilisiert. Heute
liegt der Anteil von Erstakademikern
in der Studienstiftung bei knapp 30%,
Stipendiatinnen und Stipendiaten mit
Migrationshintergrund machen rund
15% der Geförderten aus, womit die-
ser Anteil in beiden Fällen inzwischen
höher ist als derjenige unter den Ab-
iturbesten. Auch die o.a. umfassen-
Winter 2014 – 45
St. Gallen Business ReviewPersönlichkeiten fördern – Annette Julius
de Evaluation von 2012 bestätigte in
eindrucksvoller Weise die Validität,
Reliabilität und Fairness der Auswahl-
verfahren.
All dies bedeutet ausdrücklich nicht,
dass die Studienstiftung ihre Ansprü-
che an das Kriterium „Leistung“ rela-
tiviert hat. Im Gegenteil: Erst indem
zusätzlich zum aktuellen Leistungs-
stand die Wegstrecke berücksichtigt
wird, die zum Erreichen desselben
zurückgelegt wurde, können Potenti-
ale realistisch eingeschätzt und so der
Auftrag erfüllt werden, Menschen zu
entdecken und zu fördern, die einen
herausragenden Beitrag für unsere Ge-
sellschaft zu leisten versprechen.
Trotz dieser Erfolge bleibt noch viel
zu tun: Dass Begabtenförderungswer-
ke existieren und welche Chancen sie
jungen Menschen bieten, ist noch zu
vielen Menschen unbekannt – daran
können und sollten wir etwas än-
dern. Den oben aufgezeigten engen
Zusammenhang zwischen Elternhaus
und Bildungserfolg in Deutschland
aufzubrechen, ist nicht zuletzt eine
Aufgabe, die Begabtenförderung ihren
eigenen Geförderten antragen kann
und sollte: Als langfristige Zukunfts-
aufgabe, die es an unterschiedlichsten
Stellen in der Gesellschaft zu gestalten
und voranzubringen gilt, aber auch als
unmittelbares Handlungsfeld während
der Förderzeit.
Ein bislang noch vernachlässig-
tes Potential für Begabtenförderung
in Deutschland stellt schließlich die
Gruppe der „Bildungsausländer“ dar,
also derjenigen ausländischen Studie-
renden, die erst zum Studium nach
Deutschland kommen. Ihr Anteil an
deutschen Hochschulen hat sich seit
Anfang der neunziger Jahre von rund
4% auf ca. 8% mehr als verdoppelt,
einen weiteren Anstieg auf mindes-
tens 20% innerhalb der nächsten fünf
Jahre forderte kürzlich der „Aktions-
rat Bildung“. Diesen Studierenden,
auch wenn sie von außerhalb der EU
kommen, formal den Zugang zu den
3. Fazit
Herausragend begabte junge Menschen zu Eigensinnigkeit und Gemeinsinn
zu ermutigen und dabei ihre Offenheit auch für alternative Lebensentwürfe
und Denkmodelle zu fördern – das sind Kernziele von Begabtenförderung, die
damit über die Lösung konkreter Problem- und Fragestellungen hinaus auf
die Zukunftsfähigkeit und Festigung einer solidarisch und plural verfassten
Demokratie zielt. Um selbst zukunfts- und in dieser Demokratie zustim-
mungsfähig zu bleiben, sind faire, auf Diversität ausgerichtete Zugangswege
ein Schlüssel. Nicht zuletzt müssen wir auf die Geförderten selbst setzen,
darauf, dass sie sich auf dem Gebiet der Bildungs- und Zugangsgerechtigkeit
nicht mit dem Status quo abfinden, sondern sich auf die ihnen eigene Weise
für eine nächste Generation engagieren.
A nnet te Julius i st seit September 2012 Ge-
neralsekretärin der Studienstif tung des Deut-
schen Volkes. Zuvor war sie 12 Jahre lang f ür
den Deutschen Akademischen Austauschdienst
(DA AD) tätig. Ihr Lehramtsstudium in den Fä-
chern Russisch, Englisch und Deutsch hat sie
an der Universität zu Köln, der Universit y of
Dundee sowie am Puschkin-Institut in Moskau
absolviert und anschließend promoviert. Nach
Abschluss der Promotion war sie 6 Jahre lang
wissenschaftliche Referentin beim Cusanuswerk,
dem Begabtenförderungswerk der katholischen
Kirche. Annet te Julius ist Herausgeber in der
zehnbändigen DA AD-Reihe „Die internationale
Hochschule“ und Mitherausgeberin und -über-
setzer in der Anthologie „Nur Sterne des Alls.
Zeitgenössische russische Lyrik“.
Dr. Annette Julius,Generalsekretärin
der Studienstiftung des Deutschen Volkes
Begabtenförderungswerken
zu eröffnen, wäre ein wich-
tiges Willkommenssignal für
die jungen Menschen selbst
und dürfte ihre Bindung an
Deutschland verstärken; um-
gekehrt trüge diese Gruppe
dazu bei, dass sich die Be-
gabtenförderungswerke und
deren Bildungsarbeit auch im
Inland internationalisieren.
46 – Winter 2014
Father and Daughter: A Good Team for a Company SuccessionThe company succession process at Rullko Großeinkauf GmbH & Co. KG
Managing Shareholder, Rullko Großeinkauf and Supervisory Board of Fielmann AG
Marie-Christine Ostermann
According to the IfM Bonn [German institute for research into
SMUs] between 2014 and 2018 approx. 27,000 companies
will be looking for a successor in Germany every year. Only
just over a half (54%) of owners hand their companies on to their
own children or other family members. A further 29% of companies
are handed on to external managers or other interested parties.
Approx 17% of family businesses hand on the business internally
to members of staff. However, over a third of entrepreneurs have
problems finding a suitable successor.
There are numerous reasons why only about a half of family
businesses continue to be run by the family. Some children do
not have enough interest in the company, they lack the skills to
lead a company or their parents cannot let go of their leadership
responsibilities in the company. It is sometimes the case that the
parents do not have enough confidence in their children or that
family quarrels endanger the survival of the company. Nevertheless
a corporate succession can also work very well as can be seen from
our family business Rullko.
In 1923 Carl Rullkötter, a trained trader, opened a grocery who-
lesalers in Hamm together with his wife Elly. In 1973 his grandson
Carl-Dieter Ostermann joined the family business and took over the
management a few years later. Today Rullko is among the leading
companies in North Rhine-Westphalia and is specialized in sup-
plying food to nursing homes and hospitals. In 2006 I, Carl-Dieter
Ostermann‘s eldest daughter Marie-Christine, joined the company
as managing partner. Since then my father and I have managed the
company together: a company which today has an annual turnover
of approx. 75 million euros and a staff of approx. 150.
Voluntary succession without pressure from parents
When I was only 16, I told my father that I wanted to be the
fourth generation to run our company. The company fascinated
me even then probably because my parents never put pressure on
Winter 2014 – 47
St. Gallen Business ReviewFather and Daughter: A Good Team for a Company Succession – Marie-Christine Ostermann
me to force me to take over the company later. Instead,
they told me that I should do what I was interested in
and what made me happy.
I was able to fulfil my childhood wish at an early age
and joined Rullko as managing partner at the relatively
young age of 28. As my father called me into management
from the very beginning and also made me a partner im-
mediately, a clear signal was given to staff and business
partners that I am not a colleague but the boss who will
run the company in future. This clear message facilitated
my appointment within the company even though it is
often a challenge to change old established procedures
and to convince the senior partner of new ideas. I reach
my targets not only by being patient and having a lot of
empathy but also thanks to my tenacity, drive and deter-
mination. For example, it took several years of hard work
to persuade my father that our fresh meat division, which
had been leased out for decades, would be better run
by ourselves. Eventually I was able to convince him and
today’s figures show that my decision was the right one.
It is gratifying that my father, looking back, is pleased to
openly admit that the changes were necessary and that
today we are well-positioned in the fresh meat sector.
Systematic preparation for a fu-ture role in the company
All in all the succession process in our company has
been very harmonious. One reason for this is that, since
my Abitur [university-entrance qualification], I have been
systematically preparing for my future role. I trained as
a banker at the Commerzbank and then went on to stu-
dy Business Administration at St. Gallen University. My
studies, of course, also included periods of time abroad
and placements. After that I worked for the discount su-
permarket Aldi Süd as divisional manager. The theoretical
and practical experience I gained during my time at Aldi
gave me the best background for my new job as managing
partner as I really got to know all processes in the food
business from scratch. When I first joined the family busi-
ness, I followed an induction plan which I tailor-made for
myself based on the Aldi induction plan. This plan took
me through all departments where I worked everywhere
including in logistics and in freezing temperatures in the
frozen-food department. At the same time this process
enabled all members of staff to build up trust in me and
to see that my training had made me very well qualified
for the job. My father, who was delighted that his
daughter had joined the family business, allowed
me as much free hand as possible during this time.
At the beginning I had to rely on myself very much.
However my father was and still is there for me when
I have questions and would like to discuss something
with him. I can always speak to him about every
topic openly and without reservations.
Management experience out-side the family business
However, the reason that the succession process
ran smoothly from the beginning was that I had had
management experience outside the family business:
as divisional manager responsible for the organiza-
tion of branches for Aldi Süd I was responsible for
the management of 6 to 7 Aldi branches with a
total of approx. 70 employees. This meant that I
had to take on a lot of management responsibility
from the very start. It was very important for me
to gain management experience in an external com-
pany where, as I was not the boss’s daughter, I was
not inevitably in the spotlight and could therefore
work more anonymously and even make the odd
mistake. After joining Rullko I was actively involved
with “DIE JUNGEN UNTERNEHMER BJU” [the Federal
Association of young Entrepreneurs] and president
of this association for three years. This enabled me
St. Gallen Business Review
48 – Winter 2014
Father and Daughter: A Good Team for a Company Succession – Marie-Christine Ostermann
to develop my own public profile independently
from my father and during my presidency I was
able to put my own mark on this association.
The network and respect for my work which I
built up during this time are still very useful
for me today in dealing with customers and
business partners.
Harmonious cooperation between father and daugh-ter
I have no problems with my father and only
occasionally do I have a slight feeling of infe-
riority. When there are differences of opinion,
we discuss these privately with each other. We
always put on a united front in public in order
to be credible and to act with authority. Never-
theless my management style is very different
to that of my father. I pass on more informati-
on, include our employees more in important
decisions and delegate more responsibility. This
motivates the staff and relieves me.
Ultimately it is my father who has the majori-
ty shareholding and who can therefore overrule
me in important decisions. At the moment I
have one third of the shares. It is not quite
certain when I will take over the majority of
company shares. I am patient in this res-
pect and am not putting any pressure on
my father as I am very satisfied with one-
third shares. It is important in our compa-
ny that one family member has the main
decision-making power. This organization
helped Rullko once in the past when, after
insurmountable differences of opinion with
his former co-managing director, my father
was able to dissociate himself very quickly
from him as the second managing director
owned only 10% of company shares. Pro-
tracted court battles would have seriously
damaged our company. Therefore in future
I shall have the majority shareholding in
the company and the main decision-making
power. My younger sister, who is a doctor
and is not interested in the operative ma-
nagement of Rullko, shall receive a minority
share-holding without being included in
the company’s management decisions.
Smooth transition
The transition is now proceeding “piece-
meal”. At the moment there is no fixed date
when Carl-Dieter Ostermann, who is now
Winter 2014 – 49
St. Gallen Business ReviewFather and Daughter: A Good Team for a Company Succession – Marie-Christine Ostermann
66, will finally leave the company. But he
is successively withdrawing from the busi-
ness. It is often the case that he does not
spend the whole day in the company and
does not take part in all decisions. I have
already taken over many responsibilities
such as finances, controlling, personnel and
training. However some areas overlap with
those of my father and important decisions
such as on new investments are still taken
together. I like having my father by my side
because I benefit from his experience. So-
metimes, however, there are also situations
where I would like to take decisions on
my own - then some things would happen
a little quicker and there would be more
changes. However the bottom line is that
we have the same or similar opinions on
most things. All in all I feel that I am well
prepared for a complete takeover which I
anticipate with respect but without fear.
In future I will strive to continue to focus
Rullko on supplying nursing homes and to
establish ourselves more nationally. Future
changes will in no way be carried out with
a sledgehammer. When I joined the compa-
ny, a member of staff said to me: “Please
don’t immediately turn the whole place
inside out!” Until now I have not turned
the whole place inside out. Nevertheless
Rullko is continuing to develop consistently
so that we have extended our profile as
purely a food supplier to being a provider of
integrated solutions to our customers’ pro-
blems thanks to innovative EDP services:
from clearly structured online ordering
systems to an inventory service and menu
planning, nutritional value calculations and
cost transparency for canteen kitchens. The
corporate succession process works well in
that all participants treat each other openly
and respectfully and always keep an eye on
what is the most important thing: to assure
a long-term future for our family business.
Marie-Christine Ostermann, 36, has been the
Federal Chairperson of the German Association
of Young Entrepreneurs f rom 2009 to 2012. In
2006 she joined the foodstuf fs wholesaler Rullko
Grosseinkauf GmbH & Co. KG as a managing
shareholder. In 2010 she was appointed to the
SME advisory board of the German Federal Mi-
nist r y of Economics and Technology and also
belongs to the super visor y board of Fielmann
AG. Since 2013 she is a member of the executive
committee of the BGA, the Federation of German
Wholesale, Foreign Trade and Services. She also
belongs to the executive committee of the German
Association of Family Entrepreneurs.
Marie-Christine Ostermann,Managing Shareholder,
Rullko Großeinkauf and Supervisory Board of Fielmann AG
50 – Winter 2014
Bei der EZB-Konferenz am 26.05.2014 kündigte Mario Draghi die neue Politik der europäischen Zentralbank an. Unter anderem mit negativen Einlagezinsen. Herr Müller, welcher Gedanke kam Ihnen nach den ersten Minuten in den Sinn?
Mein erster Gedanke war: was soll das bringen? Wir haben bereits jetzt historisch niedrige Leitzinsen.
Es herrscht eine völlige Verzerrung der Zinsniveaus und der volkswirtschaftlichen Naturgesetze vor. Diese
niedrigen Zinsen bringen keine Belebung der Wirtschaft in Südeuropa. Der zur Zeit gestörte Transmissionsme-
chanismus funktioniert in der Theorie so, dass die Zentralbank billiges Geld zur Verfügung stellt, die privaten
Banken sich dieses Geld günstig bei der Zentralbank leihen bzw. als Basis für ihre Geldvergabe nehmen und
damit Kredite an Endverbraucher aufgeben. Je günstiger sich die privaten Banken diese Geldbasis besorgen
können, umso freudiger geben diese Kredite aus und umso niedriger sind die Kredite für die, die sie entgegen
nehmen. Allerdings herrscht das Problem vor, dass in Südeuropa niemand ist, der die Kredite entgegen neh-
men könnte. An wen sollen die privaten Banken also die Kredite vergeben? Die 25% Arbeitslosen bekommen
keine Kredite, weil die Bank bei einer solchen Ungewissheit der Kredittilgung, kein Geld verleiht. Ganz egal
wie billig das Geld der Zentralbank ist, private Banken werden bei derartigen Unsicherheiten das Geld nicht
verleihen. Dies gilt für Arbeitslose, für Arbeitnehmer deren Jobs wackeln und auch für mittelständische
Unternehmen, denen das Wasser bis zum Hals steht bzw. deren Produkte nicht verkauft werden. Folglich
ist niemand da, der die Kredite aufnehmen kann. Den Effekt des Transmissionsmechanismus eliminieren wir
somit auch nicht mit noch niedrigeren Zinsen. Selbst wenn Banken Strafe zahlen müssten, ist es diesen
immer noch lieber die Strafe zu akzeptieren, als Geld an bonitätsschwache Leute zu vergeben.
Interview mit
Dirk Müller i s t Finanzex per te, mehr facher
Spiegel-Bestseller Autor, Vortragsredner, Poli-
tikberater, Gründer des Medienhauses Cashkurs.
com – und gilt als „Dolmetscher zwischen den
Finanzmärkten und den Menschen außerhalb
der Börse“. Sein Weg an der Börse begann 1992,
heute zählt er zu den bekanntesten Gesichtern
des Börsenparketts. Von vielen Medien wird er
daher auch gerne Mr. DAX genannt.
Dirk Müller,Finanzexperte,
Spiegel-Bestseller Autor, Vortragsredner,
Politikberater– Cashkurs
Winter 2014 – 51
St. Gallen Business ReviewInterview mit – Dirk Müller
Nach dieser Argumentation wäre ja die Behauptung, die EZB wolle Inflationstendenzen bekämpfen, quasi invalide?
Richtig, da dieser Mechanismus nicht funktioniert. Er unterstützt natürlich diejenigen, die noch Kredite
aufnehmen können bzw. noch bonitätsstark sind, wie beispielsweise Deutschland. Dort führt das tatsächlich
zu Kreditexistenzen - wie im Immobilienbereich. In den Ländern, in denen das Geld tatsächlich ankommen
sollte, entsteht dieser Effekt jedoch nicht.
Die Aufgabe der EZB ist es, die Banken so aufzustellen, dass diese Kredite auch an schwache Schuldner
vergeben werden können. Hierbei fällt immer wieder der Begriff der „Asset Backed Securities“: Banken
sollen die Kredite an schwache Unternehmen in Südeuropa vergeben und ohne Rücksicht auf Verluste diese
Kredite bündeln und als Kreditpakete bei der EZB abliefern. Am Ende findet eine indirekte Finanzierung der
schwachen Unternehmen Südeuropas durch die EZB statt - behaftet mit dem Risiko für europäische Steu-
erzahler. Die EZB zieht dies momentan offenkundig als letzte Möglichkeit in Betracht. Es könnte durchaus
zu einem Boom in Südeuropa führen, aber um den Preis extrem gefährdeter Kredite und einer möglichen
Kreditblase mit „Schrottkrediten“.
St. Gallen Business Review
52 – Winter 2014
Interview mit – Dirk Müller
Amerika hat sich in einer ähnlichen Situation befunden wie Europa heute, wobei es strukturell gesehen und mit Bezug zum System der Zentralbank natürlich anders ist. Doch wieso haben sich dort die Banken besser erholt?
In den USA wurden die Banken entschuldet, indem ihnen die „faulen“ Kredite abgenommen wurden und
dem Steuerzahler direkt übertragen wurden. Viele Immobilienbesitzer sind schlichtweg durch das Verlas-
sen ihres Hauses von ihren Schulden befreit worden, sodass die amerikanische Notenbank dies mit ihren
Maßnahmen wieder ausgleichen musste. Auf diese Art und Weise wurden die Banken wieder kapitalisiert.
Das hat in den USA zwar funktioniert, dennoch muss in Frage gestellt werden, ob dies dass Richtige war.
Sie werden häufig mit Vollgeldsystemen in Verbindung gebracht. Sehen Sie das tatsächlich als eine umsetzbare Option an?
Absolut. Ich halte es sogar für zwingend notwendig, dem Geldprimat der Banken die Möglichkeit zur
Geldschöpfung zu entziehen. Ein ganz einfaches Beispiel hierzu: im Augenblick verleiht die EZB das Geld
zu null Prozent an die Banken, die dieses Geld für drei bis fünf Prozent an die Staaten weiter verleihen.
Warum können diese Staaten das Geld nicht direkt für jene 0,1% bei der EZB aufnehmen? Weil die Bank
der Gesellschaft erzählt, dass sich dadurch inflationäre Tendenzen entwickeln, wenn die Zentralbank dem
Staat das Geld direkt leiht. Gibt die EZB dieses Geld jedoch an die Bank und die Banken den Staaten, folgt
offensichtlich keine Inflation. Diese Begründung ist somit ausgesprochen „bescheuert“ und dient lediglich
dazu, den Banken die Taschen mit Geld zu füllen. Dieser Prüfmechanismus ist offenkundig nicht standhaft,
da die gesamte Verantwortung und Haftung schon jetzt bei der EZB liegt. Herr Draghi sagt, er kaufe alles
auf. Dies kann er zwar auch direkt machen, jedoch kassieren dann die Banken nicht diese drei bis fünf Pro-
zent. Das von den Banken eingegangene Risiko wird ohnehin auf die Staaten und somit den Steuerzahler
abgewälzt. Letzten Endes macht dieses System also keinen Sinn. An diesem momentanen Beispiel erkennt
man den momentan existierenden Wahnsinn des Geldsystems. Ein besseres Argument für Vollgeldsysteme
als die aktuelle Sachlage, kann nicht gefunden werden.
Historisch betrachtet ist jedes Fiat-System bislang zusammengestürzt. Was bleibt dem Kleinanleger in-nerhalb dieses Rahmens eigentlich übrig? Jeder Wirt-schaftsraum von China bis zu den Vereinigten Staaten und Europa scheint im Moment ja von Blasenbildungen betroffen zu sein.
In China gibt es eine extreme Blasenbildung, ohnehin in den Schwellenländern. Das ist normal, in Boompha-
sen gibt es immer Fehlentwicklungen. Je heftiger ein Boom ist und mit je mehr Geldmitteln er ausgestat-
tet ist, umso extremer werden die Exzesse in der jeweiligen Volkswirtschaft, da diese Geldströme jeden
Schwachsinn ermöglichen und die Probleme überdecken. In dem Moment aber, in dem sich dieses Geld wieder
zurückzieht - wie es momentan in den Schwellenländern passiert - ist es wie bei einer Überflutung. Am
Anfang sieht man diese wunderbare Wasserlandschaft, am Schluss den ganzen hässlichen Schlick, der sich
abgesetzt hat. Diesen gilt es dann von den Straßen zu räumen. Im Moment beginnt sich die Überschwem-
mung langsam zurückziehen, so dass man den Schlick bislang nur erahnen kann. Sobald wir diesen Schlick
in seiner ganzen Ausdehnung sehen, kann das ziemlich bösartig enden. In den letzten Jahren der Flut hat
sich in China ziemlich viel abgesetzt.
Winter 2014 – 53
St. Gallen Business ReviewInterview mit – Dirk Müller
Gibt es im Rahmen dieser Flut dann überhaupt Trends, die sie für nachhaltig halten?
In diesen Phasen wird man kaum etwas finden, womit man vernünftig Geschäfte machen kann. In einer
Landschaft, die von einer Überschwemmung betroffen ist, werden manche Stellen mehr und andere weniger
betroffen sein. Dennoch werden die Aufräumarbeiten deren Geschäftsmodell beeinträchtigen, sodass eine
Investition in Schwellenländern momentan ein absolutes No-Go ist, da das Wasser dort momentan abfließt.
Ich warte ab, bis das Ausmass der Sedimente zu Tage kommt.
Momentan herrscht ein enormes Aufblähen von Schat-tenbanken in den Vereinigten Staaten von Amerika, da ganze Transaktionen per Regulierung verboten sind und dort hin abfliessen. Wie schätzen sie dort die Risiken dieses Systems ein?
Ich erkenne nicht nur in den Vereinigten Staaten von Amerika sondern insbesondere in China ein riesiges
Schattenbankensystem. Vor allem behaftet mit extremen Gefahren, da dort Zinssätze im hohen zweistel-
ligen Bereich vorherrschen. Bei einem jetzigen offiziellen Wirtschaftswachstum von 7% - real sind es wohl
deutlich weniger - und wesentlich höheren Zinssätzen in diesem Schattenbankensystem, ist es nur eine
Frage der Zeit bis das System diese Zinssätze nicht mehr bedienen kann. Das Wirtschaftswachstum kann
diese schlichtweg nicht mehr hergeben. Die Gefahr eines Kollapses dieses Schattenbankensystems wird von
Tag zu Tag größer. In den U.S.A herrscht die gleiche Gefahr, da sich abseits ebenfalls viel getan hat: grosse
Finanzhäuser lagern ihre bisher üblichen Geschäfte aufgrund von Regulierungen aus. Die Bank für internati-
onalen Zahlungsausgleich hat sich zu dieser Situation sehr deutlich geäußert und sagt dass die Finanzwelt
und die Banken weniger stabil sind als vor der Krise und es solch große Gefahren gibt, dass es durchaus
wieder zu starken Verwerfungen der Finanzmärkte kommen kann.
St. Gallen Business Review
54 – Winter 2014
Interview mit – Dirk Müller
Das Gespräch hat viele politische und finanzregulatori-sche Themen angesprochen. Können überhaupt wirklich profunde Einschätzungen gemacht werden oder sind Börsen einfach ein Glücksspiel, das viel zu komplex zu verstehen ist?
Da haben Sie vollkommen Recht. Personen, die wüssten wo der Dax am Ende eines Jahres steht, reden
Scharlatan. Sie werden niemanden auf Gottes Erdboden finden, der in der Lage ist, die gesamte Komplexität
unseres Finanz- und Wirtschaftssystems zu erfassen und zu kalkulieren. Es ist eine unendliche lange Kette
an Variablen. Nur von sehr wenigen dieser Variablen kennen wir eine absolute Zahl und selbst von diesen
Wenigen wissen wir noch nicht einmal, wie belastbar sie sind. Bei vielen Zahlen wissen wir sogar, dass sie
gar nicht stimmen. Ebenso wenig wie ein Bundestrainer sagen kann - obwohl er sich intensiv damit beschäf-
tigt - wie das nächste Spiel ausgeht, da schlichtweg zu viele Variablen im Spiel sind, die man im Vorfeld
nicht kalkulieren kann. Was die volkswirtschaftlichen Abteilungen ausschliesslich machen können, ist zu
versuchen, sich auf Grundlagen von Erfahrungen der Vergangenheit Hilfsbrücken zu bauen. Konstellationen,
die schon einmal miteinander vergleichbar waren, haben in der Vergangenheit dies oder jenes Ergebnis
gebracht. Davon muss abgeleitet werden, ob es diesmal vielleicht ähnlich sein könnte. Natürlich haben
sich in der Zwischenzeit unzählige andere Parameter verändert, so dass man immer nur mit einer grossen
„Demut“ benennen und sagen kann, es gebe eine gewisse Wahrscheinlichkeit dass ein jener Fall eintreten
wird. Behauptet jemand, eine sichere Prognose abzugeben, so ist das Scharlatanerie. Es kann nur versucht
werden, Wahrscheinlichkeiten abzustecken.
Abschlussfrage: Ein Student hat 1000 Franken – was sollte er Ihrer Meinung nach derzeit damit anstellen?