#19 "Family entrepreneurs need more freedom for new ideas"
Family businesses face major challenges, particularly in the context of generational change. Old and new managing directors meet and have different views and experiences in their lives. This results in different perspectives for the future, where everyone assumes they know what will happen in the future. In addition, all employees need to be brought on board and convinced of new approaches. The right mix of tradition and innovation is required here.
In a world full of change and innovation, it is no longer enough to rest on your laurels and stick to the old ways. If you want a secure future for your company, you need further development, diversification and, above all, openness and freedom for new ideas. However, this freedom is often sorely lacking in day-to-day operations.
In the strategy interview, Christian Underwood and Lars Fiele, Managing Partner at STREMMER Sand + Kies GmbH, talk about how he is driving forward the digital future viability of the company in its core business, but also in new innovative business models and business areas, both organizationally and strategically, after joining the family business. In the new episode "Hope is not a strategy", you can find out how this can be achieved, why apps and technology play an important role in a traditional industry and how, despite entrepreneurial activities, you can manage to give yourself freedom and discover new subject areas.
SHOWNOTES:
Bernd's riding surface systems
Detailed episode description:
Information about the company
STREMMER Sand + Kies GmbH is a family business that was founded in Bottrop Kirchhellen in 1938 and is now managed by Lars Fiele in the third generation. With the STRESAN brand, STREMMER Sand + Kies GmbH is the leading supplier of equestrian sand in continental Europe.
Lars Fiele - Personal information
Mr. Fiele completed his MBA at WHU. Prior to this, he studied business administration at the ISM in Dortmund. He worked in change management at E.ON Ruhrgas AG and, as Director Consulting at netStart, manages the ventures and consulting activities of the company of Professor Kollmann, one of the co-founders of Autoscout24 and one of Germany's leading digital minds.
Since 2013, Mr. Fiele has been a member of the management board of the family-owned company STREMMER Sand + Kies, where he has been a managing partner since 2017. He is also co-founder of ABOUT my Horse, a social commerce platform for equestrian fashion, as well as a partner at Bernds Reitbodensysteme and a partner at the innovation consultancy for start-ups, scaling and technology platforms 1stMOVER Management in Düsseldorf. In addition to his political involvement, he is also a successful start-up investor and is active in STARTUP TEENS, among others.
Tradition meets innovation
STREMMER Sand + Kies was founded in 1938 by Mr. Fiele's grandfather Franz Stremmer as a small company with just one truck. Since then, the company has grown steadily, the strategic focus has been changed and the company has moved away from some of its former business areas, such as civil engineering and earthmoving.
In the 1990s, the demand for high-quality riding sand rose sharply, partly due to increasing information about horse health. Hermann Duckek, the riding arena builder for the German Olympic Committee at the time, was enthusiastic about the sand from STREMMER. Mr. Fiele reports that probably every successful company had a little moment of luck and that was the little bit of luck for STREMMER, which enabled the company to grow very strongly in the equestrian sand niche. STREMMER now supplies equestrian sand particularly strongly to Western Europe and the niche makes up an important part of the company as a whole.
STREMMER is characterized in particular by its combination of tradition and innovation. The somewhat traditional industry has long ignored the topic of innovation because until then it was not necessary to become active in this area.
However, they are now faced with the challenge that many things are changing, particularly at a political and social level. There is an increased need for demand and at the same time limited availability. That's why the company now has to ask itself what should happen in the next 80 years. Accordingly, Mr. Fiele started thinking early on about what alternatives a family business could do that were also close to its core business. That is why innovation plays a very important role here in order to show future prospects.
Mr. Fiele's path into the family business
It was not Mr. Fiele's plan to join the family business right from the start. He has traveled abroad a lot, worked in various companies, including large corporations and consulting firms, where he was able to gain a lot of knowledge, meet great people and experience a lot. With the experience he has gained, he has also learned to appreciate the opportunity to join a well-running family business. Here, too, Mr. Fiele makes it clear that this opportunity also has a luck factor that not everyone has.
The decision was ultimately made after many discussions within his family. After all, a decision like this always involves other people - especially the family in the case of a family business - must fit in with the life concept and entails a great deal of responsibility.
The transition between two generations and the human factor
Succession is always a challenging topic. Two generations come together who have different views and different experiences, resulting in different knowledge of the future. Everyone believes they know what could happen in the future and this differs from generation to generation.
When Mr. Fiele took over the company from his father and uncle, he faced two major challenges.
On the one hand, to see where the company currently stands and what possible future prospects there are and, on the other hand, how he can take the employees with him on this journey.
The human factor in particular plays an important role in company succession. This does not only refer to the strategic orientation. Rather, you have to find the time during your own induction to get the existing employees excited about your path and at the same time announce new paths that you can only achieve together with the employees and their know-how. The first step here is to build trust through many discussions, as the employees do not yet know the new managing director and do not know at this point whether and what skills he or she will bring to the table.
Modern corporate communication
Various tools have been introduced at STREMMER to make communication better and more interesting and to make it accessible to all areas of the company.
The company has a decentralized structure and most of the operational employees do not work on site. They need to be contacted, sometimes at very short notice. An email conversation is not a suitable solution here. The company has therefore introduced various apps to enable quick and uncomplicated communication. Overall, digitalization plays a very important role for STREMMER.
Process optimization and innovation
At STREMMER, all processes - whether analogue or digital - were first examined closely for optimization potential, as a poor analogue process would usually also be a poor digital process. Then it was checked whether necessary analog processes could be implemented more easily digitally. Initially, he made the mistake of wanting to digitize processes that did not necessarily have to be digitized. Over time, however, he learned which analogue processes are easier to digitize and which are not. The important thing here is to continue optimizing processes.
This is not just about digitalization, such as the introduction of apps, communication, simplification of forms, etc., but is also subject to strict health and safety conditions that need to be communicated and checked.
For example, the company has introduced digital, online and multilingual training. This ensures, through various programs, that all employees understand what is being done in the company and what their personal tasks are.
STREMMER has set itself the premise of continuously reviewing processes beyond the transformation phase. In some cases, it is very easy to optimize processes, but so far no one has bothered to do so. In the future, there should be no processes that show undiscovered potential for optimization.
In addition to process optimization and further development, innovation plays a major role in the company. Although the industry is continuing to develop, including technologically, it faces major challenges overall. The topic of energy in particular plays a major role, which Mr. Fiele cannot influence directly. Even when working with large solar systems, the mining fields, which are not always connected to the power grid, cannot be operated with solar systems alone. Electricity must always be laid, which is drawn from "normal" sources and therefore also causes high energy prices. At first it is difficult to change this, even if you say you want to rely on renewable energies.
Sustainability
Sustainability is particularly important at STREMMER due to its direct work with, in and on nature. The company tries to minimize the CO2 emissions of its truck fleet. This is measured, digitally recorded and evaluated on a monthly and daily basis and then published internally. There is not yet any external interest in this data, but it is assumed that this will change in the future. STREMMER is working hard to reduce CO2 emissions and improve the company's ecological footprint. Employees are also being made aware of this.
At some point, there will be no more sand available in the extraction area. This is why the company is focusing on diversification and very early preparation for the future. But you can only diversify if you know what is possible. You only know what is possible if you get out and look at things. This includes a wide range of sources, such as trade fairs and discussions with potential customers of the future, where Lars Fiele gathers new ideas for innovation and the future of the company. He also encourages his team to spend as much time as possible talking to other people and collecting ideas.
Finding new topics
Three pillars are particularly important for Mr. Fiele when it comes to finding new subject areas.
This means, above all, networking and open communication, the willingness to break new ground and to include young, creative people in the team, to support them and to devote time to this.STARTUP TEENS provides a good example. STREMMER was approached by a young man who was looking for someone who was familiar with equestrian sports and would support the market launch of his idea for a special girth pad.
Encouraging the proactive expression of ideasIt is important to clearly signal to people who surround you on a daily basis - for example, employees - that they can express their ideas and show a willingness to support them, to give them the freedom to do so and to take away their fear of failure.When ideas were tried out in the past and it was discovered weeks later that they would not work in the future, it was particularly important for Mr. Fiele to signal to the idea provider that although this idea did not work, he was still looking forward to further ideas and impulses.
Creating entrepreneurial freedomLast but not least, Lars Fiele himself, together with his family, plays an important role. As the youngest member of the family team, he is the one responsible for leading the company into the future. He puts a lot of thought into this and tries to keep his head clear for new ideas. As this is difficult in the daily operational business and with the current crises in the world, he advises everyone to find their own way.
Lars Fiele achieves this freedom through sport, going for walks or getting up early, where he takes an hour for himself - without input from others - to think about new, interesting ideas. His best ideas come to him in times of calm.
Entrepreneurial freedom creates new ideas
Creating freedom is particularly important in the development of innovations. This is achieved, among other things, by supporting the resources available in the company. This includes, for example, accounting, infrastructure, both in terms of office space and IT, contact with lawyers, notaries and tax consultants. As a result, the founders can and should concentrate fully on their core business.
For Mr. Fiele, however, the decisive factor is people and their attitude. He has developed a 70/30 rule for himself. 70% is a person's knowledge as a basic requirement. But the person's friendliness, open-mindedness and attitude, not only towards work but also in dealing with other people, is just as important to him as their specialist knowledge.
You need people you can rely on, who work independently and have the desire to become entrepreneurial themselves. It also makes sense to regularly discuss problems with these people.
Find top performers
There are various approaches to attracting good employees to the company. For operational, commercial employees, the classic model is to use social media channels. In addition, the company tries to be known and defend a good reputation, which is generally an important criterion for the corporate brand.
When looking for suitable managing directors, the company primarily relies on its own network, which has always worked well so far. One example of this is Bernds Reitbodensysteme, where the managing director and co-partner Björn Bernds, Mr. Fiele, was already known for years.
Continuously working on your network, building it in the right direction and getting to know people properly over time is therefore very important.
1stMOVER management and the development of hubs
In addition to his work as an entrepreneur, Lars Fiele also works as a consultant at the innovation hub 1stMOVER Management. The company has been around for 15 years. The founding partners have been working in the digital scene for a very long time and are very successful there. 1stMOVER Management is a type of innovation consultancy that specializes in building new business models in addition to digital.
They have used the establishment of the digital hub in Düsseldorf to develop further hub models.
Most recently, the hydrogen start-up hub "H2UB" was set up in Essen together with Open Grid Europe. Here, hydrogen-related start-ups can develop together with various participating partners. One of the aims of this is to grow the topic of hydrogen in Europe as a whole and in the Ruhr region as an industrial location.
In the meantime, the operational business has been completely transferred to the hub and 1stMOVER will only continue to act as a sparring partner for a while.
There are already other hub ideas for all kinds of innovations that are currently on the market, which should be concentrated and where start-ups should be given the opportunity to use existing infrastructures of large companies and where large companies have the chance to get to know the ideas and developments of start-ups. In other words, a win-win situation.
Tips from Lars Fiele on how to create entrepreneurial freedom for new ideas
The most important thing is to have good employees and partners you can rely on. It is important not to have to be on site and still be able to trust that the company is running. This also means investing in people and being an attractive employer.
You also need to create space for yourself, for your family, but also for yourself, to think and tackle new things in order to develop yourself and the company.
Contact:
Do you need help planning your strategy process? Feel free to send an e-mail to christian@underwood.de.
Thank you for your interest and until the next episode...
...because HOPE IS NOT A STRATEGY.