The Leadership Secrets Of The Hidden Champions - Forbes

Professor Hermann Simon coined the term “hidden champions” almost thirty years ago: “Many extremely successful companies escape the attention of ... BETAThisisaBETAexperience.Youmayopt-outby clickinghereMoreFromForbesDec9,2021,11:38amESTFormstackInnovatesNo-CodeDigitalFormsMarketsDec9,2021,11:00amESTClimateTechForAll,NotTheFewDec9,2021,10:00amESTBrands,PersonalizationAndTheFutureOfCross-ChannelMarketingDec9,2021,09:00amESTCultureIsMoreImportantThanStrategy,Here’sWhyDec9,2021,09:00amESTSupplyChainCrisisCreatesNewCustomerServiceIssuesForManyBusinessesDec9,2021,05:52amESTTheTop5FamilyOfficeTechnologyChallengesAndHowToOvercomeThemDec9,2021,12:18amESTH-1BVisaRuleAboutToDieForGoodDec8,2021,03:13pmESTHow26-Year-OldSamiHellerLeighEngagedACityDuringThePandemicDec8,2021,11:33amESTDetroitLionsChangeTheirGamePlanInResponseToTheOxfordShootingsEditStoryJul15,2019,07:00amEDT|TheLeadershipSecretsOfTheHiddenChampionsRainerZitelmannFormerContributorOpinionsexpressedbyForbesContributorsaretheirown.LeadershipStrategyThepsychologyofsuccessandwealthandthepowerofcapitalism.SharetoFacebookSharetoTwitterSharetoLinkedin RenownedleadershipexpertsHermannSimonandBillClintonbothspokeataneventinGermany HermannSimon Thereareabout2,700extremelysuccessfulcompaniesaroundtheworldthatarereferredtoas“hiddenchampions”androughlyhalfofthemareGerman.Incontrasttolarge,publiclylistedcompanies,mostpeoplehaveneverevenheardtheirnames.Withintheirownindustries,theyareknown,admiredorevenfeared,buttheyarerarelythesubjectofmediareports.Nevertheless,theyoftenhaveglobalmarketsharesofover50%.Inordertoqualifyasahiddenchampion,amidsizecompanyneedstobeamongthetopthreeinitsglobalmarketornumberoneonitscontinent. Hiddenchampionsbycountry SimonKucher&Partners TheSecretsofGermany’sMostSuccessfulExporters ProfessorHermannSimoncoinedtheterm“hiddenchampions”almostthirtyyearsago:“Manyextremelysuccessfulcompaniesescapetheattentionofthosewhosebusinessitistoknoweverything(media),understandeverything(scientists)orimproveeverything(consultants).Thisisthesphereoftheworld’sbestmidsizecompanies,theworldofthe‘hiddenchampions.’Deeplyhiddenundertheheadlinesofsensationalbusinesssuccessesliesacompletelyunnoticedsourceofleadershipwisdom.” ProfessorSimonisGermany’sleadingmanagementexpertandisoneofthetwodozenleadingmanagementthinkersintheworld.HewasattemptingtoexplainGermany’ssuccessasoneoftheworld’sleadingexportnationsandstumbledacrossthesehiddenchampions.Lookingatachartoften-yearpercapitaexports(2009–2018),Germanyranksfirst($163,519),aheadofSouthKorea($108,702);bycomparison,theUnitedStatesrankseighth($40,483).Germanyalsohasmorehiddenchampioncompaniesthananyothercountryintheworld.Germanyleadsthewaywith16hiddenchampionspermillioninhabitants,followedbyJapan’s1.6.TheUnitedStatesisinfourthplacewith1.2. Ten-yearpercapitaexports(2009-2018) stats.oecd.org TheMindsetOfTheHiddenChampionLeaders WheneverProfessorSimonisaskedaboutthesecretsofthesecompanies’success,heanswerswithoneword:leadership.Onthebasisofhisresearch,hehasdefinedfiveleadershipcharacteristicsthatdistinguishtheleadersofsuccessfulhiddenchampions: UnityofPersonandPurpose SingleMindedness Fearlessness StaminaandPerseverance InspirationofOthers Ofcourse,it’salsopossibletosingleouttheleadersoflargecompanieswhocombineallthesequalities.Overwhelmingly,thesearethefoundersandownersofmassivelysuccessfulcompanies,exceptionalindividualssuchasSteveJobs,BillGates,JeffBezosandMarkZuckerberg.ButwhenitcomestotheCEOsofmajorcorporations—mostofwhomarenotthefoundersormajorshareholdersoftheircompanies,butareemployedassalariedmanagersonbehalfoftheshareholders—thesefivecharacteristicsare,onaverage,rarerandlesspronouncedthaninthecaseofthehiddenchampionleaders. Monomania UnityofPersonandPurpose:TheCEOsoflargecorporationsarerarelysodeeplyandpersonallyintertwinedwiththeircompaniesastheleadersofthehiddenchampionsdescribedbyProfessorSimon.WhiletheCEOsoflargecorporationsremainloyaltotheircompaniesforanaverageofjustsixyears,theleadershipcontinuityofhiddenchampionsismuchstronger,withleadersstayingatthehelmfor20yearsormore.Thisisalsowhy“singlemindedness”isfarmorepronouncedamongtheleadersofhiddenchampions.Theyareabsolutelycommittedtotheirmission,visionandcompanies.Inthisrespect,theyare“monomaniacs,”leaderswhowouldprobablynotbeabletoidentifywithor“burn”sointenselyforanyothercompany.Andbecausetheleadersofthesehiddenchampionshaveweddedthemselvestotheircompanies,mergingwiththeircompaniestoformsingle,inseparableunits,theyhavemoreincommonwithmissionariesthantheydowithdispassionate,objectiveandrationalCEOs. Inspiration Withtheir100%enthusiasm,theyinspiretheirfollowers—justlikeSteveJobsdid.“Unlessyou’vegotalotofpassionforthis,you’renotgoingtosurvive.You’regoingtogiveitup.Soyou’vegottohaveanidea,oraproblem,orawrongthatyouwanttorightthatyou’repassionateaboutotherwiseyou’renotgoingtohavetheperseverancetostickitthrough,”saidSteveJobs.Jobswasaprimeexampleofpersistence,somebodywhostubbornlyclungtoaproductforyears,althoughtherewasnoindicationthatitwouldevermakehimanymoney.Ifhe’dbeenmotivatedbymoney,hewouldhavegivenupmuchsooner.Buthewasdrivenbypassion,andsohecarriedoninthefaceofcountlesssetbacksandobstacles.Successisfrequentlyseenasaresultofgreatstamina.Butstaminaitselfisprimarilyaconsequenceofsustainedpassion.Andtheleadersofhiddenchampionshavethischaracteristicinspades. TheCourageToTakeRisks Theleadersofhiddenchampionsarefearless.Asentrepreneurs,theirpersonalfortunesareofteninseparablytiedtothesuccessoftheircompanies:iftheircompaniesfail,theystandtoloseeverything.Clearly,theypossessthecourage,thefearlessness,totakerisks.Entrepreneurialresearchhasshownthatapronouncedwillingnesstotakerisksisoneofthemostimportantcharacteristicsofsuccessfulentrepreneurs.Salariedmanagersdonottakethesamepersonalrisksasentrepreneursand—despiteallthepubliccriticismthatcomestheirway—thatisperfectlyfine.TheCEOsoflargecorporationsmayreceiveenormoussalaries,buttheirremunerationisstillnowherenearashighasthemoneyearnedbythepersonallyliableownersofacompany.Thisisonlylogical.Afterall,salariedCEOsarenotliabletothesameextentasindependententrepreneurs.Itisthereforenotsurprisingthatfearlessnessismorepronouncedamonghiddenchampionleaders. SwimmingAgainstTheCurrent Entrepreneursalsodemonstratetheirfearlessnessbyswimmingagainstthecurrentanddoingthingsinacompletelydifferentwaytotheirpeers.TheAustrianeconomistSchumpeterdescribedthistypeofentrepreneurassomeonewhoswimsagainstthecurrent:“Thefactthatsomethinghasnotyetbeendoneisirrelevanttohimasacounterargument.Hedoesnotfeeltheinhibitionswhichotherwiseconstrainthebehaviorofeconomicagents.”Thistype“drawsotherconclusionsfromthedataoftheworldaroundhimthanthosedrawnbythemassofstaticeconomicagents”andis“quiteindifferent…towhathispeersandsuperiorswouldhavetosayabouthisbusiness.”ThecharacteristicshighlightedbySchumpeter—justlikealloftheothercharacteristicsabove—canofcoursebeexhibitedbytheCEOsoflargecorporationsbuttheyarefarmorefrequentlyfoundintheleadersofhiddenchampions.Anditisclearwhy:“Manyofthemostsuccessfulleadersofhiddenchampionscouldneverhavemadecareersforthemselvesinlargecorporations.Theysimplywouldn’thavebeenabletotoethecorporateline.ToclimbtothetopandbecometheCEOofalargecorporation,youneedtobefarmoreadaptablethantheleadersofmosthiddenchampions,”explainsProfessorSimon. Long-TermPerspectives StaminaandPerseverance:Hiddenchampionleadersoftenspendtheirentirelives,oratleastdecades,withasinglecompany.ThisdistinguishesthemfromtheCEOsoflargecorporations,whotypicallymovefromcompanytocompanyeveryfewyears.Thus,theplansandgoalsimplementedbytheleadersofhiddenchampionsareoftenshapedbyextremelylong-termstrategicthinking.Sincemosthiddenchampionsarenotlistedonthestockexchange,theirleadersdonotchasethekindofshort-termresultsthatstockmarketanalyststendtobesofixatedon.Asaresult,hiddenchampionsspendonaveragetwiceasmuchonresearchanddevelopmentasothercompanies.Thisreflectsthelong-termnatureoftheirthinking. “Theleadersaretheultimatesourceofthesuccessofthehiddenchampions.Theyarecharacterizedbyunityofpersonandpurpose,single-mindedness,fearlessness,stamina,andinspirationtoothers.Notmanypeoplecombinethesepersonalitytraits.Leadersareararebreed,”concludesProfessorSimon. Checkout my website. RainerZitelmannPrintReprints&Permissions