Ambitious, creative, visionary, and diligent are terms used to describe Würth Group Chai-rman Professor Reinhold Würth (78). Having taken over the screw wholesale business with just two employees at the age of 19, Würth never imagined the company would grow to become one of the biggest specialists in assembly technology in Germany.
Although always on the lookout for opportunities to expand the company, behind this ‘busy entrepreneur’ façade stands a man who in addition to his work, also loves life, has a sense of humour, and loves to crack jokes.
On a two-week tour around Asia in his private plane, Würth visited Sri Lanka for the first time to celebrate the company’s 15th anniversary. In an interview with the Daily FT, Würth shared the growth story of his business, its humble beginnings, obstacles faced, and the future outlook of the company that has a 68-year history.
Following are the excerpts:
By Shabiya Ali Ahlam
Q: This is your first visit to Sri Lanka, how do you find it?
A: I am here for a short stay. I flew my private plane here, and during the landing I was able to witness the beautiful greenery of the country. I found the landscape spectacular. Sri Lanka is a beautiful country.
Q: Your family-run company has been in operation for about 68 years. Tell me about the growth story?
A: In 1945 my father founded the company. At that time I was a young boy of 10 years. Today, I am the only living person who has seen the progress of the company since its inception. In 1949, four years after the company was set up, I joined as an apprentice and ever since I have been with Würth.
My father gave me excellent training and I believe he was an expert on the subject. I was extremely lucky to be trained under him since a few years later, in 1954, my father passed away. I was 19 years old at the time and had to take over the responsibility of the business with two employees.
It was very small entity back then. Today, we have grown from strength to strength where we have over 64,000 people in our employee base, generating sales of about EUR 10 billion. As a young merchant I didn’t think the company would grow to be this big.
In 1962 we set up our first venture outside Germany. We started with the Netherlands and soon after we opened in Switzerland. Now we are operating in 80 countries where we sell over 100,000 different products.
Q: You mentioned that you took over the company when you were just 19 years old. What was that experience like?
A: Since my father passed away, I was enforced with the responsibility of being the breadwinner of the family. I didn’t think much about strategies and philosophies. My objective was to provide for my family.
However, at that time the war had just ended and Germany was going through massive development phase. The Government was fully focused on rebuilding the country and due to that, the demand for construction materials was high. That helped to grow the company since there was a clear need for the products we had to offer.
I didn’t pursue higher education. My university was my profession, and my trial and error situation which I was facing on a daily basis.
Q: What were the obstacles you faced when growing the company and how did you overcome them?
A: The biggest obstacle for me was the lack of funds. With the increase in demand for construction materials, the company was growing at the rate of about 80% per annum on average. That was too fast for a company that was small.
I had nobody who could give me a loan at the time since the banks were reluctant to lend huge sums to a young entrepreneur. They were unsure of the direction I was taking the company since it was growing very fast within a short period. I remember one of the banks saying that there was something strange going on in the business since they couldn’t believe the rate at which we were growing.
However, there was an event that made me realise the importance of having controlled growth. In the early ’60s, I had taken a loan of about 24,000 Deutsche Marks to invest in a new business. The CEO of that bank warned me about it and even said he would end our business relationship if I continued on that path. With this I learnt to always look to have appropriate profits on sales. This is one of the most common mistakes young entrepreneurs make. They think profits will come by it when a company grows. This is deadly for a business. Growth without profit is fatal.
Q: How is it that Würth managed to remain successful?
A: One has to reinvent his company almost every day. There are lot of interdependencies, interferences, and influence from stakeholders and the economic environment. It is important to be alert at all times, and to be able to analyse the external environment so the company can respond to its changes with minimum impact to the business.
I have not always had only success. In the ’70s I founded a construction company as at that time I thought it would be a good business. What I failed to take into account was the real estate crisis that was prevailing at the time. Having not considered that important information resulted in the company closing down with a loss of 10 million Deutsche Marks.
That was big money for me at the time. More than the money I was worried about the 180 employees who were with the company. More than half we absorbed to other Würth companies and the remaining staff we managed to have them employed at other construction companies.
I worry more about the safety of my contributors than my losses. It is my aim to keep the company healthy and to grow it further. I believe growth is the best defence.
Q: You said you want to grow the company. In the global context, how do you plan on doing this?
A: On principle I am an expansionist. So that means our vision is in a period of time where we can oversee our growth. We want to double our sales in the vicinity of Euro 20 billion. We feel there are many markets that we have yet to tap into.
Expanding business to new areas and beating competition is fun. I think a company should be managed like a sports club.
Regardless of the sport, when you observe the top clubs that are on their way towards championship, they work hard, they are out there, doing what they are best at to win the game. So business is the same. You have to play your role well, fight, compete, and make your profession a hobby.
If you don’t love your profession and walk into your office not wanting to have some fun when doing work, then you will never be champion.
I tell my young employees that if they feel they are not having fun at work and come to office looking forward to going home quickly, they should change their profession.
Q: It’s interesting you brought up having fun while at work. I learnt that Würth has a unique model of mixing culture art with work. Could you share what that is about?
A: Our view is not stupidly focused on sales growth and profit making alone. We have a wider view and want to see many departments of art, music, and literature in our workplace. For this we have an academy where we offer, not only to our employees, but the public as well, lecturers from famous authors. We have for our younger employees rock and pop concerts. For the older ones we have classical music.
We also have a collection of art. That is an area I am passionate about. We have so far over 15,000 pieces in our company collection. This we showcase at different museums and art cabinets. Such activities I believe bring about motivation to my staff.
Q: Focusing on Sri Lanka, Würth just completed 15 years. How has the performance been?
A: The company was always profitable and our team here is doing an excellent job. Someone as old as myself, who is in the business for over 65 years, is quick to note what is going on in a business.
I observe that the employees are happy being with Würth and that is important for me. This, I believe, is a good basis for further growth.
Q: What is unique about the Sri Lankan market?
A: The advantage for us is that we are offering top quality products. We have over 150 engineers in research and development so we are constantly inventing new products. This is well appreciated.
Q: Are there any barriers that you face when catering to the Sri Lankan market?
A: My understanding is that we have no problem when importing our products into the country. When there is an order for a product that is not in stock, Würth makes the product available within seven days. That is not bad when you take into consideration the distance, customs procedure, and other formalities.
Q: Are there any plans for expansion in terms of the product portfolio offered in Sri Lanka?
A: In Sri Lanka we don’t have all the 100,000 products that we offer in other markets. We plan on introducing a few more products to the Sri Lankan market.
Q: What is your message to the entrepreneurs for Sri Lanka?
A: Regardless in which field or country you are in, if you want to be an entrepreneur, it is imperative to be optimistic, diligent, intelligent, and have a realistic view of situations.