Interview with Lenze AG

Lenze AG employs more than 3000 people around the world. Your company's guideline "The world is our market" is self-explanatory. How much contact with other cultures does your area of responsibility require?

Jendryschik: As Executive Vice President Strategic Markets I am in constant close contact with local Lenze branches, especially in our strategic target markets Asia and Northern America. During the founding and establishing phase of a new subsidiary the contact is especially intense. We supervise the target country from Germany and support company development. Our goal is to build a bridge between our requirements and the idiosyncrasies of the individual country in order to set the subsidiary on the Lenze path regardless of intercultural differences. As a first step we fill all management positions with German managers. Once the subsidiary is established, we follow the 'native principle', meaning we fill management positions with local executives. This has advantages regarding language, understanding of local culture and dealing with social norms and values, since these executives are closer to the employees and are accepted more fully by them.

You mentioned social norms and values. Are these terms even relevant in an international context?

Lenze Ag's values as a family-led company are important to us and aren't limited to our German locations. The individual employee is very important to us, is possibly more of a focal point than in other companies. Every employee, regardless of where they're employed, is encouraged to get involved and participate with his or her ideas and his or her potential. They're equally challenged and supported. Ultimately, values and norms only work when applied to daily life.

Zander: A company model is transported by people. We're currently planning a summer academy to stimulate intercultural exchange in our company, and we're expanding the possibilities for international job rotation as well as international on-the-job training programs. These are important steps towards international personnel development. Admittedly, conducting internationally staffed programs can sometimes be difficult, because two thirds of our employees are employed in Germany and the rest are situated around the globe, some in very small subsidiaries. They work in small, efficient teams where everybody is needed and has multiple tasks, which sometimes makes it difficult to take an employee out of his day job for a lengthy seminar. Investment and gain have to be evaluated on a case-by-case basis.

Where at Lenze do most intercultural contacts take place on a day-to-day basis? Do these contacts take place primary on the executive level or do other contexts present themselves?

Jendryschik: The points of contact between our company headquarters and our 40 subsidiaries are always intercultural. The exchange between executives plays an important role in this context. Much depends on a subsidiary's maturity. Mature subsidiaries have been accepted, contact between them is frequent on an operative level. For example sometimes local branches don't have the know-how to help a specific customer achieve an optimal solution, in this case another branch is called in for support. Customers from all over the world come to our headquarters in Aerzen to receive training. We take special care of them, to show them appreciation and to present our overall competence. The effect on people from different cultural backgrounds varies greatly. A customer from Western Europe or North America will regard the effort we put into the training, our modern training center and our grade of organization as a matter of course, while a customer from an emerging market will maybe think our effort excessive. Or another example: If I visit a customer abroad, he takes an invitation to dinner for granted. If he is here in Germany, and I spend time with him even though my family lives here, he regards it as a sign of special appreciation.

Do you prepare your employees for contacts on an international level, or assignments abroad?

We train the employees on points that are important to us. I'm thinking mainly of natives who work in our international subsidiaries. They need to develop an idea of how we work here in Germany, what defines the company and whom they're dealing with. A visit to the company headquarters is a part of training. Here they get to know the company and other employees personally. Secondly we send employees to support a customer locally during a project, for which case we don't have established trainings, it's more a learning by doing process. If an employee is on his first assignment, problems may arise, which will have to be dealt with. Thirdly we send employees abroad for long-term assignments. In this case we offer intercultural trainings and language courses. To explain this further: We at Lenze talk about long-term assignments when an employee goes abroad for longer than a year. This is a sensible distinction from a taxation point of view alone. Sending somebody abroad for less than a year isn't very sensible in my view. Costs for the trips are very high and the employees are regarded as strangers locally, which puts a very great strain on the employee. Therefore it's customary for us to send an employee abroad for two to three years. We put a lot of effort into preparation and look at the individual employee and consider relevant interests, and we consider whether the employee can and wants to fulfill the assignment. We look closely at motivation. Does somebody want to do the job or is the employee more concerned with visiting China or the USA? If the latter were the case, the employee would lose interest after six months and would become unhappy. We therefore approach decision-making in a very structured and systematic manner. This way we speedily find out whether somebody is driven by a sense of adventure or if somebody says, "Yes, I want to do the job, what kind of support will I get from you?"

Speaking of motivation: What measures do you employ to motivate your employees? Are Human Resources politics organized in a centralized or decentralized fashion?

I assume on principle that employees are self-motivated from the get-go. I don't think it's useful to tell an executive: Come on, motivate your employees. In my opinion the executive's and Human Resources' job is to create an environment that sustains motivation. We mainly deal with the question of existent general framework and whether it generally allows motivation. The job is supposed to be fun and to challenge the employee, so that he can grow with the job - that is true motivation.

Jendryschik: To answer the second part of your question: The top executive positions are assigned from Germany. The decisions about staffing the lower levels then rests in the hands of the local CEO.
Zander: When we lead interviews with top level executives, one needs to keep in mind that one can't talk of a country's "culture". Depending on the country and the job we see many different micro-cultures. Of course local executives have a massive influence on shaping the company, because basic conditions are experienced locally. It's like driving a car: There are rules one has to adhere to, but every person drives differently. When four people drive towards an intersection at the same time, everybody has to react individually. The same is true for us: When we spot a local problem, we watch it carefully to figure out what's going on and then we solve the problem. We have a good feel for how our subsidiaries work. Direct contact is very important to us.

In order to stay on the pulse of what's happening, it's important for headquarters to know the mood in the subsidiaries. How do you know how satisfied your employees are? Do you have structurized tools to find out?

Of course we have structuralized tools that are used by the subsidiary companies as well, like assessments and appraisal interviews. These tools are adapted to local needs, meaning cultural environment, which is necessary to remain authentic and be taken seriously. The processes serving to harmonize cooperation with customers are handled similarly. We implement them in all subsidiaries, but a 1:1 application is rarely possible. One reason for this is that we don't produce the same products everywhere. We continually ask ourselves to what degree we want harmonization of processes, and when is national adaptation sensible. This is why we apply the "native" principle. A local executive has a far better sense of how business will develop locally. In Asia an European will carry a certain air of the exotic for a while, but in the long run communication problems mostly overshadow that. Sooner or later the European reaches his limits, even when he speaks the local language.  That is why, once a subsidiary has reached a certain level of maturity, natives make the best executives. Of course this depends on country and customer structure. If for example we're looking for a top-level executive in India, it's not that out of reach for us, because India is a middle class dominated society like ours. Still, leading a subsidiary is a huge task. We ask ourselves: Can he or she do it? Can we trust this person? When we have to fill a local position, we get support from local headhunters. One thing is certain: There is no unified culture. Culture is made by people and lived by people, and is determined by how people deal with each other. For me personally close examination is the deciding factor: When I accompany sales managers to the customer in Taiwan, I know how the sales employee feels after the drive. We don't conduct employee surveys on as grand a scale or as well structured as we could do yet. It would be interesting to see whether fluctuation is ascribable to a higher power, or whether it's not more attributable to individual job development. In the USA and in China job development is very important.

You mentioned a difference: In working with customers you tend to harmonize processes; cultural differences between employees will always be there. Do you see a connection between customer and employee satisfaction, and if you do, what is the connection?

Unmotivated employees aren't successful. Whether motivation is related to income or other factors depends on the individual. We have employees who genuinely enjoy working with our products. I would say there's a positive connection between employee satisfaction and customer satisfaction. If a team has good leadership and knows what the customer wants, it's definitely positive. The subsidiary's level of maturity factors into that. If a customer buys a product and a problem ensues, local motivation is higher when the subsidiary can solve the problem itself and doesn't have to ask anyone for help. Generally speaking: As soon as a subsidiary has its own warehouse and its own supplies, motivation rises exponentially. Although the subsidiary also has to learn to take responsibility for the warehouse. Typically we can observe three phases of subsidiary development: 1.) We're being trusted, we've got the chance to handle capital-heavy products or materials. 2.) The freedom to decide for oneself which products to offer to customers; this phase mostly goes hand in hand with an exponential rise of motivation. And 3.) When the subsidiary contributes significantly to value creation, when it takes over, for example, the customer-ordered packaging of electronics. That's another big step. The subsidiary interprets this as appreciation and develops a new self-confidence and the ambition to do right and satisfy the customer.

How do you transfer company values abroad with dynamically developing subsidiaries? How does this fit in the subsidiaries' culturally heterogeneous background?

We follow the principle of unifying values. Our company values like reliability and trustworthiness have to be internalized by the executives and lived by example by them. They then get transferred and absorbed into the subsidiaries through the exchange between executives and employees among themselves. The difficulties arise in countries where these values don't have meaning. In these countries conflicts may arise that, if they can't be solved, can lead to us having to shut down the subsidiary in the end. We did make the experience though that generally these typically "German" values are valued highly.

You mentioned how Germans are perceived abroad. Which cultural differences do you personally perceive when you're abroad?

I'll start with India. India is heterogeneous. It's a third world country with enormous income gaps between the extremely rich and the extremely poor. India is like an elephant moving slowly but steadily forward, hardly accelerating, but still coming forward unstoppably. China is like a dragon spewing fire, unsteady. What is important today can be of no consequence tomorrow. Many only care about getting rich quickly. Social accomplishments are brushed aside. For Northern America, meaning the USA and Canada, I have no metaphor. The Americans are the largest economic power and dominate a huge domestic market, therefore they're principally not dependent on imports. They only import to conserve their own resources. They have nobody to fear. South America: Brazil is like a black panther ready to spring into action. From time to time we see great achievements, it's a huge market, but sometimes Brazil falls back into laxness, into doing nothing. It's a great country but it's fluctuating strongly. Argentina stands in a strong European tradition because of its many people with German or Italian ancestors. It's a beautiful country, but very unstable, with very few very rich families. Chile on the other hand is a very middle-class dominated culture. It's also a beautiful country, very stable, but very small. Economically speaking, compared to its big neighbors, Chile is small and unimportant. I haven't been to South Africa myself. The country's important to the automobile industry, though.

Summarizing briefly: What in your view is the most important factor on the subject of  "employee satisfaction in an intercultural environment"?

We treat our employees very well. We think carefully of what requirements we have, and we orient our support and preparation of colleagues who deal with international projects after these requirements. We lend support in difficult situations. We don't leave our employees alone, and people talk about that.

Zander: I personally would like to see more frequent exchanges and more rotation. I'd like it to become the norm that a Frenchman goes to India, an Italian to the USA or a German employee to England. Thus we generate more mobility within structures. Although we Germans do have more contact to the subsidiaries than the subsidiaries have among themselves. It's our goal to enhance cooperation and partnership on projects among the subsidiaries.