Heinz Siebenbrock - Fair Management

Bruno Wagner even gives many examples of how not only the choice of words, but also managers’ actions are reminiscent of warfare.27 The book by Matthias Weik and Marc Friedrich, in which they lambast the conduct of politics and the world of finance, bears the telling title ‘The Greatest Plundering in History’ (Der größte Raubzug der Geschichte28).

In any case, competition is combat; competition pits one party against another. The actual job of companies, however, is to do business with each other and with consumers. Companies have customers, so they do not primarily work against others, but for someone or for something. They only work against competitors secondarily. It is therefore quite astounding that focusing on competition is so highly regarded, while focusing on the customers themselves is very frequently treated with disdain, even by responsible companies. The lack of service culture in Germany is lamented on a regular basis and demonstrated by various studies, but there seem to be no long-term improvements on the horizon.

Competition is combat.

With a nod to sport, managers are fond of describing themselves as a team. There is a massive difference between a sports team and a company, however. Unlike companies, most sports teams are actually fundamentally competitive: football or handball or hockey teams are out to beat their opponents. They need an opponent for their sport to make sense.

Only a few sports, such as sailing or mountain climbing, don’t require any opponent at all, even if the occasional competition gives them an extra kick. In these sports, as in individualistic sports like running and swimming, there is a goal which has to be reached by effort. The first priority is to work towards this goal. If you are a runner or part of a sailing crew, constantly keeping an eye on your opponent requires too much energy, which could be more usefully utilised elsewhere. It’s the goal alone that matters; the opponents become a focus of attention at most only once the goal has been reached.

A company’s central goal is not to defeat others or knock them out of the race. If a runner were to knock someone out of the race in the literal sense of the word, they would be disqualified for unsporting conduct. Against this backdrop, it seems compelling to consider the fighting and attacking of competitors that is considered necessary and still widespread in many companies today as dubious. The idea of using aggressive competitive behaviour as a tactical or strategic alternative should in my opinion be consigned to the junkpile of management literature.

Above all, business activities should be characterised by the central goal of satisfying the customer.

An exaggerated focus on competition ties up resources which could be used more appropriately. Furthermore, an excessive focus on competition also blinds us to the needs of the customer.

The fact that competition turns out to be an unsuitable guiding principle for business is ultimately backed up by the findings of psychology. Psychologist and Nobel Prize winner Daniel Kahnemann refers to an interesting experiment in which two groups of test subjects played a game. The first group was told it was a ‘team game’; the second, that it was a ‘game of competition’. In the first case, the players were ready to help each other; in the second, they were selfish – even though both times they played the same game.29

2.4 Growth

‘Pure monetary growth is questionable.

This kind of growth is paid for by a crack through society.’

Friedhelm Hengsbach30, German Jesuit and social ethicist

The Limits to Growth is a much respected study, published in 1972, on the future of the world economy. The study was commissioned by the Club of Rome. Donella and Dennis Meadows and their collaborators at Jay Forrester’s institute for system dynamics conducted investigations and computer simulations using various scenarios.

The limits to growth

The central conclusion of the study is that if the present growth in the world population, industrialisation, environmental pollution, food production and exploitation of natural raw materials continues at its current rate, the absolute limits to growth on earth will be reached within the next hundred years.

The study was published nearly 50 years ago. Its central conclusion is still widely controversial today. The Meadows’ book has sold over 30 million copies and been translated into 30 languages. In 1973, the Club of Rome was awarded the Friedenspreis des Deutschen Buchhandels (the peace prize of the German publishing association) for its study.

So it is indeed surprising that business and politics today, too, are still counting on unbounded, even exponential, growth today. The ambition to grow has been taken for granted to such an extent that it is often futile to look for reasons for growth. But, there again, a reason for the ‘growth addiction’ could be hidden in the contents and structure of business studies. Business studies provides a number of ‘strategic instruments’ with which a company’s direction can be set and controlled. Hardly any of these instruments can do without the aspect of growth. Whether it is the SWOT analysis or the portfolio matrix, the balanced scorecard or the life cycle analysis, a company’s future success is predicted quite lopsidedly on the basis of quantitative potentials for growth. The result is that the company, together with purported experts who know how to skillfully visualise the ‘strategic instruments’ with colourful charts, is streamlined for the growth in volume.

The alternatives to this, on the other hand, such as consolidating or even consciously contracting, are given a passing mention in the business literature at most; in practical consulting, these alternatives often do not even crop up. These topics are obviously not ‘sexy’ enough to warrant mentioning. It is precisely these topics, however, that future managers increasingly need to think about. Recognising the limits to growth especially means making companies manoeuvrable and agile. This depends particularly on recognising – together with your employees – what opportunities are open to you, instead of following the opinions of so-called experts which always sound the same.

Alternatives to growth

With regard to growth, it is also worth bearing in mind that not every business graduate will be able to work in companies that grow. Even if the economy is growing or has to grow, as many politicians would have us believe, there will always be companies with above-average growth, companies with below-average growth and even contracting companies, that nevertheless still desire to provide quality services to their customers. If business studies with its contents and case studies lopsidedly counts on growing companies, it will produce ‘fair-weather sailors’ at best. In view of the difficult periods which companies are seen to pass through repeatedly and which affect the entire economy from time to time, educating managers in crisis management seems to be virtually indispensable. It is no coincidence that, in practice, this field tends to be left to the lawyers rather than to economists. For example, most insolvency administrators started off as lawyers.

The desire for growth is absolutely understandable if it means making higher profits or that employees can even be given a pay rise. The state profits not least from the additional tax revenue with which it can cover its continually increasing spending.

In accord with this, the demand for growth is generally and unthinkingly seen by politicians, economists, managers and businesspeople as a positive development. The limits to growth are consciously ignored and there is no regard given to the risks of growth. We already know from medicine, however, that accelerated growth usually results in death: that’s the definition of cancer.