MANAGERS ON MANAGEMENT/PETER CLUSKEY:WHEN GERMAN appliance makers Miele manufactured the first dishwasher in Europe at the start of the Great Depression in 1929 and put it on the market for three times the average annual salary, they were told it would never catch on.
"Everybody thought at the time that the company had gone absolutely crazy," says Markus Miele, whose great-grandfather, Carl Miele, co-founded the company in 1899 with Reinhard Zinkann, whose great-grandson is now also a director.
"In actual fact, what they were seeing was a perfect example of Miele's long-term business strategy - which still guides the company today. We don't take the view that every new project has to generate revenue in the first three months or it's abandoned.
"We are happy to invest in products which, from a stock market perspective, may not always make immediate sense, but which we believe will be successful in four, five or maybe even seven years - and which fit the company strategy."
Dr Markus Miele is the fourth generation to head the family-run company, which has 42 subsidiaries and reported record turnover of € 2.81 billion for the business year 2007/08.
At every level, thousands of employees are in their third and fourth generations with Miele. And of its 250 senior managers, fewer than 10 have left the company since 1992 - a figure that Miele modestly acknowledges may well be unique in modern German industry, if not even throughout Europe.
That commitment, he says, is why Miele was named German Company of the Year in 2007, pushing Google into second place and Porsche into third, in a ranking based on corporate reputation. "For obvious reasons, our history - and of course, our reputation - means a lot to us," he observes. "For example, when Miele made its first washing machine shortly after it opened in 1899, it placed a globe beside the company name, and beneath that globe was written 'an international brand' - even though it had never been heard of more than 10 or 15 kilometres from the factory in Gütersloh.
"That was its vision from the start." It's a vision, says Miele, which runs through the entire company. "I believe it's not too strong to say that in his or her heart and soul and brain, every single person working with Miele identifies with its brand, its philosophy and its products, and that constantly motivates them to ask: what can I do better today?
"That's why our company motto is immer besser - forever better. Our workforce represents a lot of valuable accumulated expertise. So we know that when someone has a new idea, it's not because it occurred to them out of nowhere. It's because they know the business thoroughly and they've thought about it. From the apprentice to the manager, everyone knows the market."
Managers who stay only a year or two with a company, he points out, tend not to see the effects of their decisions; they simply pass those effects on to their successors. "Whereas when managers - and I include myself in this - are with a company for the long-term, the effects of their decisions are there for everyone to see, for better or for worse."
For the past 110 years, Miele has been totally self-financing and its global growth has been wholly organic. "That is how the company started and something we still insist on. It's what gives us the confidence and the strength to think long-term. We talk and think long-term in our relationships with customers as well . . ."
His view of the current economic climate reflects that same thinking: "It's a particular advantage in a family business, but we never react short-term when anything goes wrong in the market. We look for a solution together. So many companies simply change the management and think that is enough. That's short-term. They're wrong."
Next Week: Jason Kennedy, managing director of Manpower Ireland, on why good communication is crucial for company morale.
petercluskey@yahoo.fr
Name:Dr Markus Miele
Company: Miele
www.miele.de
Job:managing director
Management advice: Always take a long-term perspective
