Hidden champions

As Secret winner or better known by the English term Hidden Champions are relatively unknown small or medium-sized companies, however, are market leaders in their market, understood. The idea to investigate medium-sized businesses, goes back to the U.S. marketing professor Theodore Levitt. The concept of "Hidden Champions" was the first time in 1990 used by Hermann Simon as a title of an article in the Journal of Business. The criteria for classifying a business as a Hidden Champion Simon put as follows:

• They are the market share first, second or third on the world market or the number 1 on their home continent (usually Europe).
• The annual turnover is usually under 3 billion euros.
• In public, they are hardly known.

Term and History

The first monograph on the idea of the secret winner is Hermann Simon's book The Hidden winners: success strategies of unknown world market leaders. This book is not wanted by the readily identifiable cause of the export successes of the Federal Republic of Germany and referenced as the cause of the hidden champions.

Interest in the subject was awakened at Simon to his specifications in 1986, when he debated with Theodore Levitt about the causes of Germany's export success. Because of this success can not be primarily attributed to German large companies because they do not differ greatly from their international competitors, they came to the conclusion that in the SME there must be a greater number of companies with substantial export share.

From Simon derived the presence of a larger number of companies that are on the one hand less known to the general public, on the other hand would have to be successful in their markets around the world. Because these smaller companies, although world market leaders are, but the public are less well known or does not want to be called Simon to "Hidden Champions".

Since the initial hypothesis was that it was a specifically German phenomenon, which is major cause for the German export successes, Simon was looking for this company initially in Germany, found them in large numbers and examined it more closely based on a sample of 500 firms. As he drew a grid description of it, he noted that such companies are to be found everywhere in the world, in Germany, however, very frequently. In a follow-up study, which was published in 2007, it represents the phenomenon of accumulation in German-speaking theses that although reasonable plausible, but not empirically proven.

In addition, Simon differences and similar features of the hidden champions worked out, which he considers the same type as main reasons for their success.

Backgrounds and characteristics of Hidden Champions

The unknown world market leaders are described as small and medium-sized companies, often inconspicuous products with which they, however, play a leading role on the world market. Mostly, but not only run as a family, they make an important contribution to the current account of the country, have a high export share and prove to be above average viable. Also subsidiaries or relatively independently operating units of companies such as Siemens Hearing Instruments can be hidden champions.

Leadership is described as more complex than suggested by the counting of market share. The " psychological leadership ", ie a claim of internal management and staff, to be the number one or to be, is essential. Hidden Champions live in narrow market niche - or they create. For this they develop unique products that they create in great depth of production itself. They accept the risk to "put all your eggs in one basket".

The narrow specialization often results only in global marketing to viable quantities and is therefore driving force in international lineup. Hidden Champions so take care in early stages of development to the globalization of their business. The Hidden Champions operate extremely customer-oriented, with the requirements of the customers, especially the top customers, including major innovation drivers. Conversely, the products of the clandestine market leader in customer can be easily replaced in most cases not. Thus, the specialization creates a strong interdependence that puts the risk of often concentrated on a product business model.

Many Hidden Champions have introduced their main product as an innovation itself, and sometimes maintained its position as the only one in the market or into a long -lasting superiority - they are distinguished in that they hold a technological advantage over the competition field. Your oligopolistic markets are largely dominated by intense competition.

The competitive advantages of the hidden champions therefore often based on cost advantages, but mostly on innovation, product quality, economic efficiency ("Total Cost of Ownership" ), delivery, consulting and customer service, and more recently system integration. Your usual high production depth with partially self-developed machines and tools makes it difficult to imitate the performance by others. Conversely, business services, such as tax or financial advice are often outsourced.

Despite the relative obscurity of the hidden champions have started this reinforced in recent times, build their brand and communicate. The brand also bundles in the hidden champions the differentiating competitive advantages of the company, thus taking a sales support function while contributing to the future success of the company.

Important for the preservation of the leadership is apparently also on cooperation to largely dispense and organize the sales abroad themselves. Thus, the core know -how is protected and highly qualified employees are kept by the challenges on board.

The corporate culture is patriarchal in strategic, team oriented operational, aligned with performance and intolerant of " shirkers ". Your acceptance is based on the motivation and employee identification with the company. That is why in young employees under two years service with the company, the fluctuation usually high, then only minimally.

The managers are characterized by high degree of identification with the company and are focused on the product. In addition, they are characterized by fearlessness, vitality and stamina, and inspire others. They are often at a young age to their position and remain there for much longer than is the case with the section of the company. Continuity is an important aspect of leadership.

Generally have hidden champions, as indeed SMEs, difficulties in recruitment. Hidden Champions need people who accept a life in many rural areas, where the content of the work and less career at the center of thinking is and are therefore not adversely impressed by little formally designated career opportunities. The lack of awareness is thus a handicap on regional recruiting. Industrial workers they recruit from the environment and form a large scale itself. It is more difficult to attract college graduates who are often impressed by the big names and the supposedly secure jobs of large corporations is.

Significance and conclusions

Hidden Champions form an elite group of companies. Instructional can pick up mainly of small and medium-sized enterprises (SMEs ), since many markets are local or regional, where you can strive to be number one. But even large companies can learn some of the hidden champions of managing their business units. Simon vehemently contradicts the hypothesis that one can learn good management only by large companies. For investors that such companies determined, a clear focus and continuity are while.

Hidden Champions are more and more frequently a serious alternative as an employer to large corporations. Both graduates and skilled workers often prefer Hidden Champions in comparison to large corporations. The reasons are often flatter hierarchies, decentralized organizational structures and good career opportunities. By getting stronger presence in career fairs and recruiting events, the "secret winner", at least with respect to the recruitment of staff already a serious competition for major corporations. The university group Mannheim of bdvb eV taught in 2011 "Hidden Champions Day " at the University of Mannheim, in which it only comes to opportunities and benefits of a professional career in hidden champions.

Reception

Simon comes after a short separate study to the following statement: "The issue, global leadership ' is in German-speaking ... much more widespread than in the rest of the world." Companies advertise with the term, also advertise with the mention in Simon's book, or trying to work for "Hidden Champions" and use the term when looking for employees. Spiegel Online had a series of articles about the hidden champions and the mirror brought a mirror Special out on the subject. The Financial Times Germany presented six schools under the term "Hidden Champions" in a series before. The term and the thesis were used in internet blogs. Chancellor Schröder she appreciated and universities emphasize that they train for and with hidden champions. There were and are always press articles on the idea. As the term is used very stretchy, do not comply with all companies that advertise the original definition. "Hidden Champions" was on 26 January 2004 cover story of the European edition of Business Week. The launched by the news channel n- tv Mittelstandspreis Hidden Champion award in a competition since the 2011 companies that are little known to the general public, but are very successful economically. The winner is entitled " Hidden Champion " in conjunction with the respective year.