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Interview with Stefan Messer (May 2008) ”Profits are important for us, but they aren‘t everything. It is just as important that we remain independent and develop our own ideas.“ Interview with Stefan Messer, Owner and CEO of the Messer Group The return of Messer to the German industrial gases market after a contractual ban on the use of our trade name represents a major milestone in the history of our company. We aim to invest in Germany and to establish ourselves as a specialist provider in the industrial gases market. In our business dealings, we pride ourselves on upholding traditional values, on possessing soundly based expertise and on understanding the needs of our customers. Mr. Messer, you made a successful return to the German market on 7th May with Messer Industriegase GmbH. How did you manage this? With a pioneering approach...and a certain amount of luck. After the sale of Messer Griesheim, it was clear to me that the four-year mandatory hiatus was an ideal time frame for planning our return to the German market. Freed from the burden of the past, we could completely concentrate on our business in our core regions of Europe and China and, at the same time, plan a new company in Germany from the ground up. Our modest aim was firstly to position ourselves as regional gas suppliers to small and medium-sized enterprises in the west and south-west of the country, in contrast to the Messer Griesheim days when, thanks to an extensive production network, we could deliver all over Germany. Today, we are concentrating on the growth of small and medium-sized and, above all, privately owned and operated companies in the evolving German market. We share with them common values such as trust and credibility, and such common characteristics as courage and flexibility. Exactly how have you gone about this? Once the competition moratorium expired in May 2007, we moved from the drawing board to the market, under the name Gase.de Vertriebs-GmbH. We chose this name, as the prohibition on the use of our trademark still had another year to run after the competition prohibition expired. But building up any business is diffi cult without production facilities and customers whose names we can give as references since, in the industrial gases sector, guaranteed delivery is the top priority. We looked for a partner to work with and found one in Deutsche Edelstahlwerke, or DEW for short, who are based in Siegen and part of the Schmolz + Bickenbach Group. We are building an air separation plant on the DEW site which will go into operation in 2009. This has sent out a clear message both internally and externally that we wish to invest in Germany. It has also helped to motivate our new members of staff, and has led to further success in that we are also going to build another air separation plant at Salzgitter AG in Salzgitter, allowing us to expand our business in Central and Eastern Germany. Mr. Messer, what is your vision for the future? With our new German company, renamed Messer Industriegase GmbH on 7th May 2008, we want to become a big fish amongst the minnows, not the other way round. We have the benefit of our experience as a major industrial gas specialist. At the same time, our customers can profit from the flexibility and proximity of a supplier working at the same level as them. We are not concerned purely with ourselves and our shareholders but, as a family concern, we can also understand and respond to the needs of our customers. Why do you believe that the family-run company model still has a future? Even in the phrase “family-run business”, the word ‚family‘ still has very special connotations. It’s not just that a family-run concern belongs to one set of people related by blood; in most cases, it is also run like one big happy family where traditional values such as trust, bonding, security and loyalty combine and can give you an edge in the market as well as specifi cally enhancing staff motivation and performance. The anonymity of the rat race, where staff can only be motivated to do their jobs with a stick and carrot, is no basis for sustained success. In that sort of environment, you miss out on the human relationships that give workers a true sense of pride in what they are doing as well as helping them to identify with the company ethos. Of course, even when working for a family-run business, pay is going to play an important role. After all, everyone has to fi nance their lifestyle out of their salary. But it‘s only the ‚emotional dividend‘ on top in the shape of a shared set of values that is able to promote solidarity and a willingness to strive for a common goal. Is a family-run company able to serve as a role model for German business? In order to answer this question, I‘d like to refer you to the now famous ten propositions put forward by academics at the University of Witten/Herdecke. These assert that family-run companies are different, more successful, more at risk but more intelligent; they have a different fi nancial structure, a longerterm focus, more tradition, more enterprise, are more resistant to external advisers and are more durable. The ten propositions go on to demonstrate that there are a number of advantages and disadvantages to this particular company model which is so widespread in Germany: Different, because by defi nition the family exerts the decisive influence on how the company is run. More successful, because family companies are backed up by the trust, bonding and loyalty that is inherent in the nature of family relationships. More at risk, because in a family of entrepreneurs, you will often see disputes, loss of confidence or other clashes of interest that can impact on a company, sometimes with destructive force. More intelligent, because family-run businesses are not dependent on volatile capital markets. They can pursue long-term strategies. Different financial structure, because family-run concerns are always aiming to maintain their financial independence, although in the case of rapid expansion that can obviously be a disadvantage. Longer-term focus, because family companies stick with tried and tested business principles, customer and supplier relationships that have grown over time and, above all, with their established workforce. More tradition, because family companies pass on traditional values and patterns of working to management and workforce which leads to a more pronounced sense of identification with the company. More enterprise, because family companies are characterised by the will to shape their own destiny, by the urge to create something of lasting value, by their customer focus and by their willingness to take risks. More resistant to external advisers, because a family-run business is less likely to go along with fashionable management theory and will tend to rely on tried and tested methods. More durable, because it is not dependent on shareholder value considerations prevalent in the capital market. Having said that, it is necessary to deal properly with the paradoxes that arise from linking family with business by means of good management. On balance, though, I feel able to say that well managed family concerns – ones where the owners put the interests of the company first – can be very successful indeed and that the ten propositions outlined above suggest that such companies have a certain competitive edge on large corporations.