Reinhard Mohn: Entrepreneur Par Excellence - Bertelsmann SE & Co. KGaA

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Reinhard Mohn

Reinhard Mohn: Entrepreneur Par Excellence

"You have to persuade people.” For Reinhard Mohn, this was one of the powerful maxims he lived his life by. He used it in reference to his wartime experiences as a young officer, and, as one of the most successful entrepreneurs of the 20th century, he also used it in reference to his work.

When he was just 16, Mohn had promised, in a school essay, to “accomplish as much as I possibly can” in his later career. He said he wanted to be responsible for building something, was prepared to continually make adjustments and learn, and saw his commitment to accomplishment as being in part a commitment to society, for whose wellbeing he also bore responsibility. Impressive words for a 16-year-old.

In fact, it was not originally his intent to achieve these aspirations at Bertelsmann – as a young man gifted in the natural sciences, he had entirely different plans. Returning from an American POW camp to his destroyed hometown of Gütersloh at 24, he wanted to become an engineer. But it wasn’t to be.

The war had reduced practically everything to ashes and ruin. Business at the Bertelsmann publishing company had ground to a halt, its workshops and machinery largely destroyed. Operations had been shut down in 1944 for illegal paper purchasing, and as the biggest supplier of “Feldpostliteratur” (armed forces literary editions) to the “Wehrmacht” during the Second World War, Bertelsmann labored under an added political burden. Of its former 400 employees, only around 150 were left. Conditions in those post-war days were grim indeed, and young Reinhard Mohn faced the death of his family firm. Instead, he turned it into a global corporation.

A passionate walker, who would easily hike 30 km on the weekends as he mulled over the challenges at hand, Mohn sensed what the people in Gütersloh expected from him. His eldest brother was killed in the war; the second brother was missing in action, his father Heinrich Mohn seriously ill. He never forgot the fact that the employees in Gütersloh worked side by side with him in the cold and the wreckage, clearing the rubble to get the business up and running again. The leadership experiences he was forced to gain as a young officer during the Second World War helped him deal with the many challenges of managing the business. Even in his first speech to the company’s remaining employees in the winter of 1946/47, he was guided by a clear directive: “You have to persuade people.”

Employees as partners

From the beginning, he saw himself as a partner to everyone who worked with him for Bertelsmann. The great ideas underpinning its corporate culture have their roots here. Like none other, Reinhard Mohn understood how to motivate people by granting them the freedom to act on their own responsibility. He wasn’t fond of rigid hierarchies. As a young man under the Nazis, he had seen where blind obedience to authority could lead. He wanted to do things better. He gave employees the freedom needed to take responsibility for their tasks. He gave the growing company a decentralized structure and delegated responsibility to many competent minds. He saw himself as a partner to his employees and made a point of speaking to one another as equals. And he always remained true to his belief that ownership comes with obligations. Together with his wife Liz Mohn, he worked untiringly to ensure that “making a contribution to society” was an inalienable part of the corporate mission.

Reinhard Mohn’s lifetime achievement as an entrepreneur is one of the most impressive in the history of the Federal Republic of Germany. Mohn laid the foundation that made it possible for the Christian publishing company in Gütersloh to grow, over six decades, into the Bertelsmann group as it stands today: Europe’s largest media enterprise. A global player with more than 100,000 employees. The corporate home of Europe’s leading entertainment network RTL Group, Penguin Random House, the world’s biggest trade book publisher, and of Gruner + Jahr, Europe’s largest magazine company. The original printing business subsequently evolved into its services division, Arvato. The book clubs set up by Reinhard Mohn in his early years as an entrepreneur are still in business. And throughout the Bertelsmann group, a company culture continues to thrive that was built on Reinhard Mohn’s personal convictions and beliefs: Partnership, entrepreneurship, creativity, and citizenship form the heart of today’s “Bertelsmann Essentials.”

The overwhelming pace of growth during the early years initially meant many sleepless nights for the young entrepreneur. At first, the company’s rapid expansion consumed more money than the skeptical banks were willing to give him. People who knew Mohn at the time later said that like all entrepreneurs, he “suffered like a dog at the hands of the banks”. And so Reinhard Mohn turned to the only people left to turn to: his employees. Mohn appealed to their entrepreneurial spirit while demonstrating his own. He asked them to invest their labor in rebuilding the publishing company. In return, they would share in the company’s profits – a partnership still practiced at Bertelsmann today.

Reconciling business and culture

What may appear visionary in hindsight was perfectly natural for the dedicated entrepreneur: “I asked myself what I needed to do in order for people to join me in rebuilding the company. They all wanted a roof over their heads, and they wanted secure jobs.“ It didn’t bother him that his early advocacy of employee participation earned him the label “Red Mohn” (editor's note: Mohn is German for "poppy") in some circles.

Mohn was ahead of his time in many things, and experienced what many who have the courage to break new ground do. Often ridiculed, eventually admired and finally respected and honored. He himself didn’t view his treatment of employees as partners as an expression of political leanings. It was part of an entrepreneurial culture. And it was an expression of his own citizenship, his responsibility to society.

Former German President Johannes Rau once called Reinhard Mohn’s vision of people at work as “a perfect example for the successful reconciliation of business and culture.”

If one were to ascribe every single success, every single step taken by Bertelsmann on its way to becoming a global corporation, solely to the genius of Reinhard Mohn, one would not only be obscuring history. One would also again be imposing a label, which he would have rejected. And one would be overlooking a crucial part of the corporate philosophy shaped by Mohn. He gave responsibility to executives at a very early stage. Whether in print, bookbinding or sales – Mohn delegated responsibility and quickly turned lines of business into independent units.

The managers of these units were expected to operate as independent entrepreneurs – Reinhard Mohn trusted them and gave them the requisite freedom to do so. To this day, operational decisions at Bertelsmann are in the hands of the people who run the day-to-day business – diversity thrives through decentralization. This allowed Mohn, the thinker and strategist, to focus on the overall picture and fundamental issues from an early stage. He brought this approach to all the challenges that today have become part of Bertelsmann’s vibrant company history.

Always looking for new ideas

When business was going so badly towards the end of 1949 that the company’s very existence was threatened, Reinhard Mohn trusted the instincts of his sales director, who said: if the people refused to come to the books, then books would have to be brought to the people. A brilliant idea was born, which was embraced by Mohn with inexhaustible elan.

On June 1, 1950 the Bertelsmann Lesering book club was founded. The idea was an instant hit with customers, and a year later the club had 100,000 members. Another four years on, it was one million strong. Bertelsmann’s Lesering quickly became an icon of Germany’s Wirtschaftswunder, or post-war economic miracle.

Mohn countered any difficulties with new ideas. “Some people reach for a beer, others like to lie in the sun – I like to think.” When others, satisfied, leaned back to relax, he would keep asking himself: How can we improve on this?

The relentless search for new paths and solutions was part of his nature. Mohn demanded a great deal from his executives and employees, for he himself was prepared to give everything. People at Bertelsmann knew that Mohn would have done anything for them – and this spirit was felt throughout the company.

When Germany’s encyclopedia publishers refused to grant the Bertelsmann book club a license, Mohn promptly set up an editorial department for lexicons and a cartographic institute. When record labels denied Bertelsmann licenses for a record club, he set up Ariola. With the likes of Heintje, Udo Jürgens, Peter Alexander and Robert Stolz on its artist roster, it quickly became one of Germany’s most successful record labels.

As the range of Bertelsmann’s business grew, the book club itself expanded geographically, first to Spain in 1962, then seven years later across the Atlantic to South America. The French book club France Loisirs was set up in 1970 and soon became the largest club outside Germany.

The rise of Bertelsmann is a corporate success story which doubtless could have led to its becoming one of the world’s major blue-chip stocks. But Reinhard Mohn never saw this as inevitable or the only way, let alone the best way, to advance the business.

Practical, down-to-earth and rational

In the early 1990s, Mohn transferred the majority of his shares in the Group to the Bertelsmann Stiftung foundation, which had been set up in 1977. This, too, was typical of the entrepreneur Reinhard Mohn. The foundation reflected his conviction that ownership comes with obligations, in the best spirit of the German constitution. It is also independent of any political platforms.

He brought this same pragmatic, matter-of-fact and rational approach to all of his major and fundamental decisions for the company. They included stepping down as Executive Board Chairman and becoming Supervisory Board Chairman at the age of 60, when he reached the self-imposed age limit for managers; his resignation from the Chair of the Supervisory Board ten years later; his work with the foundation; and the transfer of ownership interest and voting rights. Reinhard Mohn did not see his claim to leadership as a privilege – he saw it as an obligation to the company and its employees. And to society as a whole.

Tthe Bertelsmann Stiftung foundation, as an independent research institute and instigator of reformation, works to apply Mohn’s ideas – born from a business environment – to the social realm. Describing the aim of its efforts, Mohn once said: “I hope that at some point technocrats will comprehend the power people have within them. Success and partnership are mutually dependent on one another.”

Despite his gradual withdrawal from the day-to-day business, Reinhard Mohn remained a source of ideas until the end, an asker of uncomfortable questions, and always on the lookout for new answers. He wrote numerous essays and books elaborating on his ideas about being an entrepreneur, his management conduct and his responsibility to society.

One subject that preoccupied him in the later years of his life was spiritual orientation. As a man who had repeatedly developed and tested organizational structures and management techniques, he was deeply interested in how other institutions dealt with this issue.

His sources of inspiration, like his thinking, knew no bounds. Outsiders often felt that Reinhard Mohn was thinking in other dimensions.

And yet, even at the age of 88, he would regularly have lunch at the Gütersloh Corporate Center canteen, as part of his daily routine. Anyone who witnessed how he personally greeted each employee on his daily walks from the Bertelsmann Stiftung to Bertelsmann AG’s Corporate Center, joking and talking even with the younger ones, could see very clearly that Bertelsmann was his life. For the employees, all this served as a daily reminder that Bertelsmann differs fundamentally from other companies of its size. Here was a person who embraced the role of role model. And who, like none other, embodied this attitude in his spirit of shared responsibility and partnership.

Reinhard Mohn was a recipient of the Order of Merit of the Federal Republic of Germany and numerous other awards and prizes. He held an honorary doctorate from the University of Münster and honorary membership in the Club of Rome. He received awards for his achievements as a thinker, a philanthropist, a citizen, and a company founder. And in 1998, he was named Entrepreneur of the Century.