Interview with management thinker Professor Hermann Simon

“Without our exports, we would be a much poorer country.”

No one knows the hidden champions of this world and their success stories better than management thinker Professor Hermann Simon, who celebrated his 70th birthday in February 2017. High time, therefore, to discover something about his own success story “Made in Eifel”. In an interview with European Business, Professor Simon talks about his own, sometimes challenging, path to success. He also discusses how hidden champions can stay on top, even in times of major geopolitical upheaval.

Interview: Dr. Tanja Glootz and Manfred Josef Brinkmann

European Business: Professor Simon, can you tell us the secret to your successful career?

Hermann Simon: You cannot boil success down to a hard and fast formula. I always warn young people against claims that success is to be had by following a fixed set of rules. I borrowed my motto, “per aspera ad astra” (through hardships to the stars), from the Roman philosopher Seneca. It doesn’t mean there is a recipe for success; it just says that nothing ever goes smoothly or to plan, and that you must work hard and still overcome setbacks on the way. The exact what, where, and how you achieve your goal are things you have to find out for yourself. This search is not easy and can take a long time. For example, I decided at the age of 47 to give up my tenured professorship and head up my own consultancy firm. Why didn’t I take this step earlier? Clearly I needed that much time to find out what it was I wanted.

“You cannot boil success down to a hard and fast formula.”

Hermann Simon

European Business: Are there moments or events in your life that you look back on with pride?

Hermann Simon: Again here, I cannot refer to a single turning point. I think that my skills as a leader matured in two key phases of my personal development. On the one hand, in the small town where I grew up, I was the oldest of a group of six boys. The role as leader of the group therefore fell to me quite naturally. Then, during my service with the German Air Force as a young man in my early 20s, I was confronted with quite challenging leadership situations, particularly in 1968 when the Russians invaded Czechoslovakia. I was serving with Air Defense Squadron 33, which had been entrusted with an extremely sensitive and very special mission. For civilians, it’s unusual to encounter this level of responsibility at such a young age. And my stays in America and Japan were also very important to me. They helped broaden my horizons enormously.

European Business: Let’s look at the future: Are you excited about any new projects or plans?

Hermann Simon: Since I gave up my responsibilities as the operational head of Simon-Kucher & Partners, I’ve had a great deal of more free time. I use this both to give lectures worldwide, and to write. My writing is not just limited to textbooks. I recently wrote a book about my childhood and upbringing in Eifeldorf called Die Gärten der verlorenen Erinnerung (The Gardens of Lost Memories) which became an immediate regional bestseller (see amazon.de). That was a lot of fun and is an encouragement to pursue similar projects in the future.

European Business: Let us take a short detour and talk about the current debate in Germany surrounding growing poverty, child poverty, and inequity. Politicians, amongst them the newly elected Federal President Frank-Walter Steinmeier, lay the blame on increasing globalisation rather than on ill-judged policies. What is your viewpoint?

Hermann Simon: Globalisation has brought incredible prosperity. This is true for the whole world, but even more so for Germany because Germany is the country that is profiting most from globalisation. Without our exports, we would be a much poorer country. The problem lies in the unequal distribution of the fruits of globalisation. Nevertheless, I believe that the extent of this inequity is exaggerated and wrongly blamed on globalisation. The only tool that is effective in combatting this inequity in the long term is not taxation, but education. The losers of economic change are always the uneducated or those with the wrong qualifications. The problems caused by a lack of educational opportunities do not need explaining. People with the wrong qualifications have learned skills for which the market has no use. This problem affects even the highest academic circles. At the same time, I do not believe that the guaranteed income that is being widely touted as a solution to this problem is the way to go. It is based on assumptions about human behaviour that are not borne out by reality.

“The problem lies in the unequal distribution of the fruits of globalisation.”

Hermann Simon

European Business: Are political failures therefore partly to blame for the rising levels of inequity?

Hermann Simon: When it comes to topics such as investment in education and maintaining educational standards to name just two, then the government certainly has a case to answer; although the blame lies more with the regional parliaments than with the federal government. Excessive salaries for top managers also feed into perceptions of inequity, even if their scale is small in relation to the turnover or costs of the companies involved.

European Business: Brexit and Donald Trump: Are you worried about the hidden champions in Germany considering the geopolitical changes happening in the world?

Hermann Simon: The hidden champions have the great advantage that they are already represented in most markets through subsidiary companies and many of these are also manufacturing subsidiaries. If the protectionist walls in America are built higher, then it would be advisable to continue to expand manufacturing capacity there. German companies in Brazil have already done this with considerable success. They have made themselves into insiders. Many of the biggest companies are already insiders in the USA. For example, Daimler has 26,000 employees in America. In the case of hidden champions such as Kärcher, they account for 10 to 20% of the workforce.

“If the protectionist walls in America are built higher, then it would be advisable to continue to expand manufacturing capacity there.”

Hermann Simon

European Business: Should we also be looking to open new markets in Asia?

Hermann Simon: If sales were to collapse in America, then it would of course be beneficial to have a presence in the Asian markets and build up sales there. The same phenomenon could be observed during the 2008 crisis. Companies with a strong presence in both the West and Asia saw their sales fall by 20 to 30%, while companies that only sold in European markets had to deal with drops in their sales between 50 and 70%. An example is Schmitz Cargobull, the European market leader for semitrailers. This hidden champion only operated in Europe at the time. Since then, Schmitz Cargobull has learned from its experience and has built a manufacturing facility in China. That’s exactly the right thing to do.

Focus on people

Prof. Hermann Simon

Motto “per aspera ad astra” (through hardships to the stars)

CV in numbers

Born: 1947, Hasborn/Eifel

Academic: Until 1979, Prof. Simon lectured at various universities at home and abroad, including guest professorships at Harvard and in London.

Entrepreneur: Prof. Simon founded the consultancy firm Simon-Kucher & Partners in 1985 and managed it as CEO until 2009. Today he is Honorary Chairman

Author: Prof. Simon has written 35 books which have been translated into 26 different languages. He is also known for writing a column for manager magazin.

Company in focus

Simon-Kucher & Partners

Core business

Management consultancy with a focus on marketing, sales, and pricing strategies. Simon-Kucher & Partners is regarded as the world’s leading expert in pricing.

Key figures

Founded: 1985

Structure: Head office in Bonn, 33 offices in 24 countries

Employees: 1,010 (2017)

Turnover: approx. 240 million euros (2016)


Italy 2017

In this issue: Grey Mer S.r.l. - Luxury at your feet / Selle Royal Group Head Office - Facilitating the cycling lifestyle / Ospedale Pederzoli SpA - From nursing home to hospital / Foruminvest Italia Srl - Investing in Italian shopping

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