«Think long-term and act quickly»

Descended from a famous German industrial dynasty, she is a family businesswoman with heart and soul. Bianca Braun, co-owner of maxon motor in Sachseln and member of the Board of Directors at Ferrum. A conversation about opportunities and risks for family-owned companies.

Ms Braun, you were appointed to the Board of Directors of Ferrum AG in 2014 at the age of 36 – how did this come about?

I met Beat Bühlmann, the current President of the Board of Directors at Ferrum, while skiing in Davos. We became acquaintances, and started to discuss our professions. We noticed that maxon and Ferrum faced similar issues: High pressure to innovate, large export business, Switzerland as a location and the role family plays within the company. When Beat Bühlmann became President of the BoD at Ferrum, he asked me whether I’d be interested in a seat on the Board of Directors myself. I was surprised, as I was under the impression that 40 was the minimum age for such an appointment.

Why did you agree anyway?

I was attracted by the opportunity to gain insights into another industrial firm which was similar to maxon motor. And, during my interview, it transpired that Ferrum and maxon could learn a great deal from one another, and an exchange could prove fruitful to both parties.

How can Ferrum learn from maxon?

At maxon motor, we are a step ahead in terms of the establishment of production locations and distribution companies abroad. We owe the fact that we have avoided letting any employees go in recent years in Switzerland, despite the massive appreciation of the franc, to our early expansion overseas. Not only do we manufacture in Sachseln, but in Germany, Hungary and Korea since 1989, 2004 and 2013 respectively. I believe that international production locations are strategically decisive for firms which generate over 80% of their turnover in foreign currency – particularly to protect Switzerland as a location. With its establishment of sites in China and India, Ferrum is now on the right track in this respect.

With a turnover of over 400 million francs, maxon is more than twice as large as Ferrum. Can large also learn from small?

Of course! I am always amazed, for instance, by how quickly strategies and decisions are implemented at Ferrum. The management team is smaller, and everything can be decided in one place. All participants are involved in important projects, and great attention is paid to the costs and benefits. And it shouldn’t be forgotten that Ferrum has 100 years’ experience against our «mere» 55.

You gained your Ph.D. from the University of St. Gallen in 2008 with a dissertation entitled «Success beyond the stock exchange». What inspired you to choose this subject?

During the new economy boom in the 1990s, a banker called up my father each week to try and persuade him to list maxon on the stock exchange. My father wanted nothing to do with it. He gave me the idea to systematically examine the success factors of family-owned companies above and beyond the stock market.

And what do family-owned companies do better than listed firms?

Interestingly, the success factors of the family-owned companies I analyzed, such as Hilti, Bühler, B. Braun and Trumpf, tallied, to a large extent, with those of maxon motor and Ferrum. The brief formula for success is as follows: «Think long term, decide quickly.» In listed firms, the opposite is frequently the case. Family-owned companies are characterized by long-term strategies and patience – in contrast to short-term shareholder thinking. A further factor is organic growth, of which, by the way, the history of Ferrum AG is a prime example. Additionally, family-owned companies have a stronger tendency to invest more in research and development – the figure devoted by maxon to this area, for example, is eight percent of its turnover. Another benefit is quick, direct decision paths. «Time to market» constitutes a competitive advantage on the world market. In the past, we’ve won major contracts solely on the grounds that we were good to go a few months before the competition.

In your dissertation, you write that the largest risk for family-owned businesses is conflict. Why?

Even in a normal family, money is probably the most frequent reason for discord – particularly when it comes to inheritance. The situation in family-owned companies is even more complex: Who receives which post? Which family members are actually involved in operative business? How much of the profits should be distributed, and how much reinvested? Each family member has his or her personal interests, as well as a very individual attachment to the company. A particular challenge is also corporate handover in the event that the succession planning is unclear. In order to prevent risks like these, a policy of family governance is important: Regular meetings in order to balance out the mutual and different interests from the start, and to maintain a sense of unity which is as strong as possible.

Today, you’re completely committed to maxon motor. How did this happen?

Our parents were good role models – including in a professional sense; both my father, and my mother with her real estate firm. My sister and I always had the sense that our parents’ jobs were exciting. If we wanted to, we were always welcome to get involved in the company, but it was never an obligation. And I worked for maxon in the Production Department when I was a schoolgirl in order to learn an allowance. Later on, it seemed to me entirely natural to get on board.