Published on 24 August 2019 Tweet
The key personal learning from the Germany trip is anti-fragile. Travelling involves many uncertainty and randomness. Despite my flight was delayed in Helsinki at Finland and I was suffering from the stressful presentation with jet lag, the journey is worth it as I learned a lot beyond the classroom for my career in terms of management skills. The trip was full of insightful and informative lectures, with topics ranging from macroeconomy of Germany, European Unions, hidden champions, industry 4.0 and artificial intelligence. Our visit to deep tech venture, Wattx, and Daimler AG factory with BMW cars enlightened me. The history of Germany used to be fragile during the world war, but the prosperity of the countries these days is anti-fragile.
We learned from the trip that Germany has the largest number of hidden champions, which are either top three of the world or number one on the continent, yearly revenue over 5 million euros and low level of public awareness. The economy of Germany is mainly based on export as well as characteristics with many Small to Medium Enterprise (SME) that are specialized in deep technology. Among the 1307 hidden champions, these family businesses are clustered and decentralized in different areas in Germany instead of all focusing in Berlin.
In my opinion, this start-up scene and decentralization in Germany makes the country anti-fragile. Big corporations are robust with hierarchical structure and many rules to monitor staffs, but it is fragile with a higher turn over rate and slower adaption to change in the market with less flexibility. Meanwhile, SMEs have a lean structure to drive higher performance culture, higher staffs engagement and more people-oriented. It is anti-fragile for business to have staffs to be able to multifunctionality with more frequently transfer of personnel between functions than in large business. The SMEs’ employee can also have more regular customer contact than in large corporations, so they can have a better understand of the customers and react to the market changes more quickly. It is particularly important for the SMEs to treat the employee as a human instead of regarding as just a replaceable piece of resource in big cooperations. The design of a lean structure and decentralization system makes the business anti-fragile and with long term perspective in mind to keep the best talent.
Something that is important for us to learn is the way these hidden champion in Germany are able to survive in the market with resilience. They are focused in particular segments and do one thing better than others in the niche market. They have a global reach, such as the early entrance of the Asia countries and China market. They have a deep portfolio with no outsourcing of core competence and produce all parts with quality up to their high standards. They have a positioning of premium quality products, such as expensive Yachts. Last but not least, they have continuous innovation driven by customers and top managers. As a result of a high proportion of revenue spending in Research and Development (R&D), they have a higher amount of patients per thousands employee compared to large corporate. All these factors are anti-fragile and make them thrive and grow even with the exposure of volatility and uncertainty in the global market.
As a reflection, I notice a difference in mindset between Germany and Hong Kong. In Hong Kong, most students have narrowed options to work in the same kind of sales-oriented job in banking and finance industry, instead of choosing to study in science and engineering. In contracts, due to the historical and geographical reasons, Germany has more sectors to work on, such as steel, iron, machinery, chemical industry, locomotives, cars, and electronics. The young generation has more options like vocational training for technical skills other than going to university as the only preferable career path. The diversity of career choices, the craftsmanship in manufacturing and innovation in technology makes the countries less fragile to risks.
Germany has economic stability with a low inflation rate, stable growth, trade surplus, and high employment. This is particularly important not to repeat the same mistakes for the economic crisis, great depression, and hyperinflation, contributing to the rise of Nazi in Germany with political instability during World War II and genocide. It is hard to imagine history before transformation to nowadays with social and political peace, democracy, no extremism, and weak military power. History matters for us to understand where do we come from, understanding the present and future challenges in order to have better risk management skills in chaos.
For me, one of the main reasons to study MBA is to seek an answer for my career in terms of management skills in the global economy. I was fascinated by how the huge gap between different countries’ wealth level. For example, after my study trip, I was travelling to Switzerland for leisure with the most expensive McDonald’s big mac meal I ever eat. It cost me 12 Swiss Franc, which is about $93 Hong Kong dollar! In Germany, the exact same quality big mac meal costs 7 Euro, which is about $62 Hong Kong dollar. Meanwhile, the world seems really unfair if you were born in a poorer economy within same Eurozone, such as Romania rural poverty with people suffering in horrors from human trafficking. During my visit to Berlin, Hamburg, Munich, and Frankfurt on this trip, I witness the success factors of Germany with anti-fragile.
In my career as in management level, I can apply what I learned to build an anti-fragile workplace. We need to build a company that is able to deal with randomness and uncertainty going beyond resilience or robustness in this digital changing world as we have seen in Germany. Small flat teams tend to be anti-fragile, large hierarchy structure tends to be fragile. Managers should worry about centralized power, leaders should give trusts to team members to solve complex problems and decision-making should be decentralized. Antifragile company is fostered in thinking that embrace experimenting yet avoids too-big-to-fail.
It is an exciting time to live in the age of artificial intelligence and automation. We witness our industry facing a fantastic mutation with the new frontier of unexplored opportunities, more connected hardware and more real-world data. I have gained the benefit with a different perspective from international experiences in Germany and continue to pursue my answer after graduating from my MBA study to be more anti-fragile in this rapidly changing world.