Hermann Simon wrote one of the most definitive books on privately held growth firms called Hidden Champions of the 21st Century. He studied thousands of little known mid-market firms that dominate their niches globally. There are over 2700 of these companies worldwide, and almost half are from Germany. The Hidden Champions concept attracts attention worldwide. In the last ten years, the 1300+ German Hidden Champions have created one million new jobs.
A Hidden Champion is a company that:
- Belongs to the top three in its global market or is number 1 on its continent
- Has less than $5 billion in revenue
- Is little known to the general public
What surprises me is that we would not recognize most of these company names, yet they account for about one third of their respective worldwide market shares!
What can we learn from these Hidden Champions? What are they doing differently from large corporations and many privately held companies? The answer is “Almost Everything!”
Here is a great summary by the Whiteboard blog on what these Hidden Champions can teach us – seven important lessons from which any company – large or small – can benefit.
1. Extremely ambitious targets
The targets of Hidden Champions are aimed at growth and market leadership.
2. Focus and depth
Hidden Champions define their markets narrowly and work deep into the value chain.
Focus makes a market small, globalization makes it large.
The effectiveness of the Hidden Champions’ innovation and R&D activities beats that of large corporations.
5. Closeness to customer and competitive advantages
Closeness to customer is the biggest strength of the Hidden Champions, even ahead of technology.
6. Loyalty and highly-qualified employees
The Hidden Champions have “more work than heads” and high performance cultures.
7. Strong leadership
The leadership is authoritarian in the principles, but flexible in the details.
“The ultimate lesson: The Hidden Champions of the 21st Century go their own ways, more decisively and successfully than ever. They do most things differently from the teachings of management gurus, from modern management fads, from large corporations.”
One of my favorites is the “be narrow, go deep” concept. I see so many companies trying to do way too many things and not doing anything well!
This can be a great topic for your Leadership Team meetings, as well as a major focus at your upcoming quarterly and annual planning sessions. I want to emphasize again that these lessons do apply to businesses of all sizes and shapes!
This is a key formula for out performing your competition. Is there one lesson you can apply right now?
Contact me to discuss how you can apply these lessons to your business.
Source: Hidden Champions: what German companies can teach you about innovation, Whiteboardmag.com
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