Global Fastener News

1999 FIN – Reinhold Würth to NFDA: Future Belongs to the ‘Quick Ones’

May 11, 1999 FIN – The fastener business future belongs to those who gain strategic advantages, Reinhold Würth told the National Fastener Distributors Association.

There is a German saying that “it is not the big ones eating the small ones, but the quick ones eating the slow ones,” Würth said.

Though still in his sixties, Würth has more than 50 years of experience in the fastener business.

Four years ago Forbes magazine named Würth one of the world’s wealthiest people.

Künzelsau, Germany-based Würth Group has cut delivery times 40% in the past four years, and that is one of the company strategic advantages, Würth said.

But there is a limit to speed. “No company can go quicker than light speed,” Würth said. Thus, “we have to search for other fields where we can beat the competition.”

Würth started in the business as a youngster in 1945 when his father, Adolf Würth, founded a fastener distributorship. Young Würth sorted screws and bolts and put them on shelves.

In 1949 his father told Würth to leave school at age of 14 and come to work full time “in case something happens to me.”

“My mother intended for me to be a teacher so I would have holidays off and an easy life,” the fastener billionaire said, setting off laughter in the NFDA audience.

His father’s decision proved to right, because in 1954 the elder Würth died of a heart attack.

Building the Würth Group into a multibillion dollar corporation with companies in ore than 60 countries involved “a big amount of luck,” Würth acknowledged.

Though he prides himself on sales ability, Würth recalled “it was more difficult to purchase fasteners than sell them” in the postwar period.

The German economy at the end of World War II allowed 17% to 18% annual growth rates. Würth sometimes questions his staff why they can’t match those growth rates.

“I was lucky to find good people,” Würth recalled. “The right people are the most important part of your business.”

Keys to success include management tactics and management culture. While the tactics may be calculable, culture is the future. “It is the questions of who will survive and who will get the strategic advantages.”

He cited an example from the automobile industry, where aerodynamics are making cars look more and more alike and thus at-a-glance brand distinctions are blurring. One brand may have a longer guarantee and one better steering, but “all are essentially the same. It is very hard to create strategic advantage. If we want strategic advantage in the future we have to have motivated, highly optimistic people who are well trained.”

Employees must think of their work as more than a job, Würth believes.

“My aim is to offer employees an environment where they feel at home,” Würth said. His headquarters office building, with a broad, bright lobby that has a hint of the design of a ship, exemplifies the goal: “Many employees have a nicer living environment at the office than at home.”

But that may be as it should be, because many employees spend more daylight hours at the office than at home, Würth pointed out.

He also believes in putting trust in employees. “It makes no sense at all to control 160 pounds of flesh and bones,” Würth expounded.

Instead, Würth employees have flexible work schedules and haven’t punched time clocks in a decade.

“In 10 years we have never had one complaint. Employees respect this trust they are getting from management. Many work even longer hours.”

Fundamentals for the Future
• Würth reemphasized his “quality beats price” philosophy and promised to continue “top, top, top level quality.”

• Würth Group has 130 research and development staffers and that has led to many cop nay fastening patents.
“We want to enable our customers to get fastening and fitting problems done quicker than before.”

• Würth considers sales to be 95% of success. All of the traditional internal activities, such as warehousing and bookkeeping, are only 5% of the business.

• “Growth without profit will kill you much earlier than you expect,” Würth reiterated.

• Würth considers long-range planning to be another key. He has always tried to have a vision for 10 to 12 years instead of 12 to 18 months.
In 1978, when Würth Group had revenues of 330 million Deutsche marks, the leader set a goal of tripling sales by the company’s 40th anniversary seven years later.  Such vision becomes “a self-fulfilling prophecy. Everyone knows what the target is,” he explained.

Würth drew laughter when he acknowledged the company needs a big boost from 1997’s DM 7.1 billion to meet his current goal of DM 10 billion by 2000.

“Maybe we’ll have to acquire two to four companies,” Würth said to an audience including management from several of his recent North American acquisitions.

And “if it is 2001 before we reach the goal, the world will not collapse,” he deadpanned.

“We know what we want to do 10 years from now.  If we want to go somewhere we have to have a strategic plan, not just a dream.”

Würth Group may be the market leader in Germany by 15 or more percentage points, but it still has only 4% of the market share. Würth indicated he likes that situation because “96% of the marketplace is waiting for us.”

Business “can only prosper where we have strong, healthy competition.” ©1999/2014 Fastener Industry News.
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