Gunter Thielen In “Die Zeit”: ‘Employees Are The Most Important Consideration Of All’

In an article published by the prestigious German weekly paper “Die Zeit,” Gunter Thielen airs his views on the anti-capitalism debate currently raging in  Germany . He makes an appeal for a philosophy of partnership in every single company and assigns employees a key role in the success of the company. In Thielen’s words: “For an entrepreneur, his employees are the most important factor.”

The anti-capitalism debate in  Germany was triggered in mid-April by Franz Müntefering, Chairman of the SPD ruling party, and has dominated headlines ever since. Social Democrat Müntefering had criticized the pervasive dominance of business in our society, the subordination of the state to business and the excesses of a global economy guided by stock-market ideals, as well as the lack of a sense of responsibility felt by business towards people, which it has come to see merely as a factor in a calculation. The SPD party chief insisted that “business is there to serve the people and not vice versa.” In particular, Müntefering’s analogy describing financial investors as hordes of locusts that attack and devour companies had prompted some vehement responses.

Read on for the full transcript of the article by Bertelsmann AG’s Chairman & CEO on this debate:

Gunter Thielen’s Byline Article In “Die Zeit”

„Die Zeit“, May 13, 2005

Success Through Partnership
By Gunter Thielen

Germany is better than its reputation. So much better, in fact, that it neither deserves nor needs a discussion at the level of the ongoing anti-capitalism debate.

Located in the heart of a growing European economy loaded with opportunities, the world’s export champion boasts top-notch entrepreneurs in its ranks, has tremendously well-trained employees with specialized knowledge that is hard to match, and a highly developed infrastructure along with world-class products.  Germany has all the conditions needed for sustained growth, which will continue to guarantee a social security in the future from which all sides of business and society will benefit.

All that describes  Germany ’s potential. Its mood is a different story. The country and its people are disheartened, and lamentation is heard throughout the land. We neither need business or politicians talking this country down, nor do we need people or employees who feel ill-treated in this country. And in its facility as a site for doing business location,  Germany has absolutely no need for a discussion like the current one, which has become a nationwide blame-fest. Given our differentiated global economic conditions, to use the conflict between capital and labor as a central explanation for the problems is further removed from reality than ever.

There’s no denying that the business world has changed radically in a very short time. Its players have lost their old structures and rules, while new rules of the game and mental pictures are still missing. And certainly the cost of labor in  Germany continues to be a big problem - not so much the actual amount, but first and foremost its lack of flexibility. While non-wage labor costs of a certain magnitude may be justified in a given industry or region, elsewhere the same absolute cost may become an oppressive, even existential burden.

However, even then it is socially and economically unacceptable to threaten people with massive layoffs or with moving (their) jobs abroad. Unfortunately, this sort of behavior does happen – but it is not the norm: rather, the vast majority of  Germany ’s entrepreneurs are doing all they can to create or safeguard jobs. To help them stay successful in their efforts, we must enter into a process that would make labor costs in our country more flexible to a reasonable degree – and lower them if appropriate. However, this right and proper degree can be determined and negotiated only in smaller units –in companies, that is.

To spark this process and guide it to success, I propose that a philosophy of partnership be introduced at each and every company.

The two “partners,” or stakeholders, are the business executives on the one hand and the employees on the other. Both enter the partnership from their own separate starting points. On the one side the executives, laboring under a conflict of goals between an unprecedented multitude of diverging interests - owners, shareholders, customers, competitors, politicians and society at large. And on the other, the employees, who have rarely before been so worried about their jobs, the loss of which would them of their means of existence. Both sides are being squeezed by a competition that has been stepped up intensely by globalization. Only companies that assert themselves in this environment can offer employees secure and interesting jobs, investors appropriate returns – and society at large the contributions it expects.

An executive must realize that in the above described conflict of goals, his employees are the most important consideration. They are the underpinnings of entrepreneurial success, they are his crucial stakeholders. But unnerved employees are hardly in a position to do justice to such a role. Indeed we need employees who are motivated and committed, who get involved and are eager to advance the company – their company!

The company itself can do a lot to make this happen. It has to give employees a sense of security and freedom at the same time, and entrust responsibility to them, then they will develop into an inexhaustible source of strength and power. The objective here is not some romantic notion of never-ending harmony, but open, fair competition for the best ideas and innovations.

This forms the basis for employee motivation and hence for the company’s commercial success.  In addition to regular employee surveys, voluntary fringe benefits and guarantees for the security of a business location, it is crucial to let employees participate in the profits. Naturally this partnership principle applies in times of economic strain as well. If the entrepreneur is willing to shoulder the responsibility at such times, employees must be prepared to make sacrifices, to work more, and to take pay cuts. And let’s be honest with ourselves: Given the current economic state of our country, this is urgently called for in many areas. Once sacrifice has led to success again, employees must participate in it, according to previously defined rules that give them the chance to get back even more than they give.

Ultimately this means nothing other than making part of the wage flexible. Bertelsmann has had the best possible experience with this over many years.

A partnership on these terms – which is already being quietly and successfully practiced in some companies – can become a crucial competitive edge for  Germany as a business location in global competition. And perhaps it isn’t just limited to the “business location” factor. The idea of partnerships focused on shared success, and dedicated to a quest for best solutions and best practice, could radiate into politics and society at large.