Mainz to Munich

Today was a day of travel between Mainz and Munich and we are riding the train at the moment, so I thought I’d tell you about one of our “cultural fieldtrips”. I don’t think it’s a stretch to imagine this but traveling to Europe with a group of students may include an occasional sampling of local food and beverage.

After wrapping up a great stay at the European Business School and finishing up our presentations on Grohe we spent our last night heading to one of the regions oldest breweries in Mainz. We took the train back to Wiesbaden that night and in the morning we headed to Munich for the next part of our European Business Tour.

In Mainz, we discovered that the brewery is in fact a family business, one that has lasted a few generations. This is pretty typical throughout the wine and beer region and it has its roots in the church. For example, the monks of Kloster Eberbach started producing wine and beer because the water couldn’t be trusted at that time. Even in Roman times, when soldiers were posted in the region in early 400 AD, centurions were paid with three litres of wine each day. It makes you wonder how they could stand up let alone soldier but I’ve been told the alcohol content was fairly low. But we were there not to discuss Romans, but to sample a traditional German feast and to enjoy two traditional beer experiences: the “Yard” and the “Tower”.

I can tell you that the food was delicious and it is truly a wonder that the Germans are not the largest people on the planet. The “Pigs Knuckles” sound revolting but in fact this is a translational issue more than anything. The “knuckle” is more like a leg shank and in order to finish this gastronomic platter you have to have skipped a few meals first and bypass the salad bar. I had traditional schnitzel whereas others sampled the goulash and bratwurst.

We took a tour of the brewery, learned about the process of fermentation and then got back to sample the Yard. This is actually 8 little glasses of beer where your table could sample the different types of flavours. The other thing that I hadn’t seen before is the Tower – a giant tube of beer with a spigot on the bottom where a table can share a glass. I liked them both very much. Others liked them even more.

I’m hesitant to speak further about the evening except to say this was a wonderful team building exercise. We learned a little German – Du ist wundeshien – you are beautiful – and the younger guys in our group were encouraged to practice on the local students to see if it helped in “building cultural bridges”. I can say unequivocally that it didn’t work that well, but it might have been the accent they used. Still, they will undoubtedly keep trying with these new experiences under their belt. ~ MH

When Family Business Gets Personal

The past three days I haven’t been able to get much down on the blog but I have a good reason – we’ve been in class. Yes, in fact, traveling to Europe includes two visits to two different universities, 40 some hours of lectures and case-based discussions and presentations. Sure, you get to see the Rhine River while you are studying, and the lilac scent wafts in the air, but it is studying nonetheless. We’ve been at the European Business School (“EBS”) just outside Wiesbaden where we were surrounded by southern facing vineyards and buildings dating back to the 18th century.

We worked on two cases including one on the Wella Family and had to prepare a presentation on the Grohe Family. Grohe is a very successful German based bathroom fixture manufacturer that was forced into a sale by an American Private Equity firm. Once the Americans took control, the company faced several issues related to local labour issues as jobs were transferred to Thailand. What was interesting about this case was that it was quite influential over national German politics and the debate over foreign investment of large, faceless private equity firms ultimately became a campaign issue. But it wasn’t all work, as we managed to squeeze in a tour of the European Business School’s wine cellar in the evening. I have to say the U of A could benefit from some sort of cellar/seller of wine arrangement. (The Assistant Dean, Development should look into this more!)

In attending the lectures, you see how complex and important family businesses are to the overall economy. You can also apply what you learn to your own situation even if you don’t have a family business. Who among us won’t face a potential sibling, cousin rivalry over the family farm, or a house, or the family candlesticks? Multiply that on a scale of millions and the gap between “complex family enterprises” and your potential family issues narrow rapidly because families really do face the same issues. But hammer home the point, Dr. Sabine Klein, Chair for Strategy and Family Business at EBS gave her lecture. And this is when family business really got personal for me.

Sabine generously offered up her own story, both good and bad parts including how her family dynamics worked. Her family business could be considered an iconic German success: the family empire specialized in the production of margarines, oils and fats, and frozen foods throughout Europe. Her grandfather started the business in the early 1900’s and by the time it came for her and her brothers to determine succession, it was the second largest producer of its kind in Europe.

I’ve met lots of CEOs and it is always impressive to them talk about the latest company profits. However, it is an entirely different and intensely vivid experience to hear from a member of the controlling family. Sabine showed us the skeletons in the closet, describing how politics between generations, brothers, mothers and fathers can influence and impact succession of an international firm. As Sabine said, family business is more intense because you can’t quit your family and you can’t divorce your mom or brothers.

The expectations on what happens when a succession issue can be emotionally raw, intensely sensitive and bring back elements of past interactions that at the time were harmless and even loving. Once succession is triggered however the jealousies, the rivalries, and the unique personalities rule much of what happens next. Sabine’s most vivid point for me was that the health and happiness of a family is dependent on every member being happy, and that when one member is hurting all members hurt. The impact of ignoring this can tear families and businesses apart and once successful legacies can evaporate in short order.

I can’t really describe this lecture fairly. I can say I felt very privileged that Sabine was willing to share her tale, and to use it as a backdrop to apply what we’ve been learning over the past few days. I also look forward to hearing her lecture again and she will be at the U of A in the fall so I won’t have to wait too long. In the meantime, I may send my brother and sister an email – just to let them know I was thinking of them. Seems like a good thing to do in the context of the past few days. ~ MH