Hidden champion

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Relatively unknown larger companies (with more than 50 million euros in sales or more than 500 employees) that are market leaders in their industry are referred to as secret winners or unknown world market leaders (English hidden champions ) . In smaller business areas, companies with fewer employees and fewer sales can also be "hidden champions". The term “hidden champions” was first introduced as a research construct in 1990 in a study by Hermann Simon , which was published in the Zeitschrift für Betriebswirtschaft , in the business management discussion. Simon defined the criteria for classifying a company as a hidden champion as follows:

  • They are number 1, 2 or 3 on the world market in their branch, or
  • Number 1 on their home continent.
  • The annual turnover is usually less than 3 billion euros.
  • They are hardly known to the general public, as they are mostly owner-managed , not listed and often serve a niche market.

Concept origin and history

Export figures of major exporting nations 2003–2008, in billion USD

The first monograph on the “Hidden Champions” category is Hermann Simon's publication The Secret Winners: The Success Strategies of Unknown World Market Leaders . Simon wants to explain the reason for the German export success . This success cannot primarily be explained by large German companies, as they differ only slightly from their international competitors. Simon therefore assumed that the export success was due to a larger number of larger medium-sized companies. In contrast to the large, listed companies, these were largely unknown to the public.

Simon found these unknown world market leaders in Germany in large numbers and examined them more closely using a sample of 500 companies. With the help of a classification scheme derived from the sample, he then determined that comparable companies exist all over the world, but are particularly common in Germany . In a follow-up study from 2007, he then developed his theses on the success characteristics of "hidden champions" on the basis of a larger sample of 1316 companies. While the 1996 study focused even more on business “hard facts”, the 2007 study also focused on the areas of leadership, employees and organization.

In some smaller industrialized countries , too , the number of “secret market leaders” is surprisingly high. In 2007, Georg Jungwirth ( FH Campus 02 ) found almost 300 companies for Austria , of which only 58 are well-known large companies . Among the hidden champions, 25% each come from mechanical engineering and electronics / IT and 20% from the metal industry.

Background and characteristics of hidden champions

The unknown world market leaders are described as small and medium-sized companies with often inconspicuous products, but with which they play a leading role in the world market. Mainly, but not only, run as a family business, they make an important contribution to the current account of their country, have a high export share and prove to be able to survive above average. Subsidiaries or relatively independently operating units of groups such as Siemens Audiological Technology can also be hidden champions.

Market leadership is described as more complex than simply counting market shares. “Psychological market leadership”, that is, an internal claim by managers and employees to be or become number one, is also essential. Hidden champions live in narrow market niches - or they create one for themselves. For this, they develop unique products that they in great depth of production create yourself. In doing so, they accept the risk of “putting all your eggs in one basket”.

The narrow specialization often only leads to sustainable quantities when it is marketed globally and is therefore the engine of the international positioning. Hidden champions therefore take care of the globalization of their business in the early stages of development. The hidden champions operate extremely close to the customer, whereby the requirements of the customers, especially the top customers, are also essential drivers of innovation. Conversely, the products of the clandestine market leaders can usually not easily be replaced by the customer. Specialization thus creates a strong mutual dependency, which relativizes the risk of the business model, which is often concentrated on one product.

Specialization and innovation

Many hidden champions have introduced their main product as an innovation themselves and sometimes asserted their position as the only one in the market or transformed it into a long-term superiority - they are characterized by the fact that they have a technical lead over the competitive field. Their markets are largely oligopolistic with intense competition.

The competitive advantages of the hidden champions are therefore seldom based on cost advantages, but mostly on in-house research and innovation, product quality , economic efficiency (“ total cost of ownership ”), delivery reliability , advice and customer proximity and, more recently, system integration. Their usually high vertical range of manufacture with partly self-developed machines and tools makes it difficult for others to imitate their performance. Conversely, business services such as tax or financial advice are often outsourced.

Despite the relative ignorance of the hidden champions, they have recently started to build and communicate their brands. The brand bundles the differentiating competitive advantages of the company even with the hidden champions, thus assuming a sales-supporting function and at the same time contributing to the future success of the company.

In order to maintain leadership, it is obviously also important to largely forego cooperation and also to organize sales abroad yourself. In this way, the core know-how is protected and highly qualified employees are kept on board through the challenges.

Corporate culture

The corporate culture is patriarchal in the strategic , team-oriented in the operational , performance-oriented and intolerant of "slackers". Your acceptance is the basis for the motivation and identification of the employees with the company ( corporate identity ). For this reason, fluctuation is usually high among young employees who have been with the company for less than two years, after which it is only minimal.

The managers are characterized by a high level of identification with the company and are focused on the product. They are also characterized by fearlessness, vitality and perseverance and can inspire others. They often find their position at a young age and stay there longer on average than at other companies. Continuity is an important aspect in leadership.

In general, like medium-sized companies, hidden champions have difficulties in finding personnel . Hidden champions need people who accept a life in often rural areas, where the content of the work and less the career is at the center of thought and are therefore not adversely impressed by less formally identified career opportunities. The low level of awareness is therefore a handicap in the national search for personnel. They recruit commercial employees from the area and train them to a large extent themselves. It is more difficult to attract university graduates, who are often impressed by the big names and the supposedly secure jobs of large corporations.

Meaning and Conclusions

Hidden champions form an elite among companies. Small and medium-sized enterprises (SMEs) in particular can pick up something instructive, as many markets are local or regional in which one can strive to become number one. But even large companies can learn a lot from the hidden champions for managing their business units. Simon vehemently contradicts the thesis that good corporate governance can only be learned from large companies. For investors, companies like these must be determined, clearly focused and maintain continuity.

Hidden champions are more and more often a serious alternative as an employer to large corporations. Both university graduates and skilled workers often prefer hidden champions compared to large corporations. The reasons are often flatter hierarchies, decentralized organizational structures and good opportunities for advancement. Due to the increasing presence at career fairs and recruiting events, the "secret winners" are already serious competition for large corporations, at least when it comes to recruiting staff. The Mannheim University Group of the bdvb e. V. organized a "Hidden Champions Day" at the University of Mannheim in 2011 , which exclusively deals with the possibilities and advantages of a professional career with hidden champions.

Situation in Germany

The exact number of hidden champions in Germany is unknown, but the various surveys (including Simon (2007) with 1174 companies and Rammer & Spielkamp (2015) with 1583 companies) allow the conclusion that there are consistently over 1000 companies. According to the Center for European Economic Research (ZEW) (or its authors Rammer and Spielkamp), the majority of the hidden champions can be assigned to industrial sectors (including mechanical engineering, electronics, medical technology and the metal industry). However, the proportion of hidden champions among all companies in a branch is highest in the pharmaceutical, R&D services, paper and chemical sectors . The highest proportion of hidden champions in the company portfolio is found in medium-sized companies in the group of companies with 500 to 999 employees (7.6%).

Geographically, the picture is different in that the world market leaders are not to be found in a few centers or individual large cities, but rather in more rural regions and in small to medium-sized cities. In North Rhine-Westphalia, the most urbanized federal state in Germany, there are on the one hand the most hidden champions (293), on the other hand, over half (150) are in cities in South Westphalia , of which Iserlohn is the largest city with its 93,537 inhabitants .

reception

After a short study of his own, Simon comes to the following statement: "The subject of 'world market leadership' is ... far more widespread in German-speaking countries than in the rest of the world". Companies advertise with the term, also advertise with the mention in Simon's book or with working for "hidden champions" and use the term in the search for personnel. Spiegel Online had a series of articles on the hidden champions and Spiegel published a special on the subject. The Financial Times Deutschland presented six schools under the heading "Hidden Champions" in a series.

The term and the thesis were used in internet blogs. Ex-Chancellor Schröder praised them and universities emphasize that they train for and with hidden champions. There have been and still are press articles on the idea. Since the term is used in a very flexible way, not all companies that advertise with it correspond to the original definition. “Hidden Champions” was the cover story of the European edition of Businessweek on January 26, 2004 . The Hidden Champion medium- sized business award launched by the news broadcaster n-tv has been awarding a competition since 2011 to companies that are little known to the general public but are very successful economically. The winner bears the title "Hidden Champion" in connection with the respective year.

literature

  • Audretsch, David B., Lehmann, Erik E., & Schenkenhofer, Julian (2018). Internationalization strategies of hidden champions: lessons from Germany. Multinational Business Review, 26 (1), 2–24.
  • Hermann Simon: Hidden Champions of the 21st Century: The Success Strategies of Unknown World Market Leaders . Campus, Frankfurt a. M. 2007. ISBN 978-3-593-38380-4 .
    Updated and revised English version: Hermann Simon: Hidden Champions of the 21st Century: Success Strategies of unknown World Market Leaders . Springer, London 2009, ISBN 978-0-387-98147-5 .
  • Hermann Simon: The secret winners: the success strategies of unknown world market leaders . Campus Frankfurt a. M. 1996, ISBN 3-593-35460-8 .
    English: Hermann Simon: Hidden champions: lessons from 500 of the world's best unknown companies . Harvard Business School Press, Boston (Mass.) 1996, ISBN 0-87584-652-1 .
  • Jan-Philipp Büchler: Case Study Compendium Hidden Champions - Innovations for the World Market . Springer Gabler 2018, ISBN 978-3-658-17829-1 . ( Online )
  • Achim Bachem, Florian Dähne: A breath of fresh air for hidden champions: Promotion of research and innovation from the perspective of medium-sized companies. (PDF; 242 kB) Friedrich-Ebert-Stiftung, Berlin 2007, ISBN 978-3-89892-678-2 .
  • Dietmar Fink: The Hidden Champions of the Consulting Market: Volume of Results 2003 - General Results. IMCS, Bonn 2003.
  • Rainer Fretschner, Anja Hartmann: The health sector: stepchild or hidden champion of the service society ? In: Anja Hartman, Eva Bertram: Services in the new economy: structure, growth and employment. Friedrich Ebert Foundation, Berlin 2002, ISBN 3-89892-067-4 . Pp. 99-116.
  • Helmut Fryges: Hidden champions: how young and small technology oriented firms can attain high export sales ratios. Center for Europ. Economic research, Mannheim 2006.
  • Katrin Meyer: Secret heroes: "Hidden champions" make sales instead of headlines. In: Hamburger Wirtschaft 63 (2008) No. 1, pp. 12–15.
  • Martin Münzel: Knowledge Germany: "Hidden Champions" - the hidden power of the German economy. Friedrich-Ebert-Stiftung, Berlin 2005, ISBN 3-89892-380-0 .
  • Regina Neubauer: Business models in the area of ​​logistics: in search of hidden champions, their business principles and common industry misperceptions . Gabler, Wiesbaden 2010, ISBN 978-3-8349-2526-8
  • Christoph Rasche: What distinguishes the “hidden champions”? : theoretical foundation of a practical phenomenon. In: College for Leadership and Management . (2003) No. 1, pp. 217-237.
  • Hermann Simon: Lessons from the hidden champions of the 21st century. In: Arnold Weissman: Successful with the greats of management . Campus, Frankfurt a. M. 2008, ISBN 3-593-38634-8 . Pp. 109-147.
  • Bernd Venohr, Klaus E. Meyer: The German Miracle Keeps Running: How Germany's Hidden Champions Stay Ahead in the Global Economy Working Paper No. 30, Institute of Management Berlin, Berlin School of Economics, Berlin 2007.
  • Markus Voeth, Uta Herbst, Sina Barisch: Hidden Champion Region Stuttgart: Results of an empirical study. Promotion association for marketing at the University of Hohenheim, Stuttgart 2008.
  • Alessa Witt: Internationalization of hidden champions: market entry and timing strategies with international management and business ethics cases . Management Laboratory, Hamburg 2010, ISBN 978-3-9812162-4-0 .

Web links

  • Hermann Simon: Hidden Champions of the 21st Century: The Success Strategies of Unknown World Market Leaders . Campus Verlag, 2007, ISBN 978-3-593-38380-4 ( limited preview in Google book search).

Individual evidence

  1. ^ Hermann Simon: "Hidden champions": spearhead of the German economy. In: Zeitschrift für Betriebswirtschaft (ZfB) 60 (1990) 9, pp. 875–890, here p. 876
  2. ↑ Hermann Simon: Hidden Champions of the 21st Century: The Success Strategies of Unknown World Market Leaders. Campus, Frankfurt am Main 2007. ISBN 978-3-593-38380-4 . P. 11 and p. 29.
  3. ^ Hermann Simon: The secret winners: The success strategies of unknown world market leaders. Campus, Frankfurt am Main 1996. ISBN 3-593-35460-8 .
  4. ↑ Hermann Simon: Hidden Champions of the 21st Century: The Success Strategies of Unknown World Market Leaders. Campus, Frankfurt am Main 2007. ISBN 978-3-593-38380-4 . P. 11 and p. 29.
  5. ↑ Andrea Möchel: Unknown world champions . Wiener Zeitung December 9, 2015, p. 12
  6. ↑ Hermann Simon: Hidden Champions of the 21st Century: The Success Strategies of Unknown World Market Leaders. Campus, Frankfurt am Main 2007. ISBN 978-3-593-38380-4 . P. 23.
  7. ↑ Alexander Biesalski: "Awareness alone does not sell!" . wiwo.de. Retrieved March 16, 2012.
  8. ↑ Visible Champ instead of Hidden Champion . www.academicworld.net. Archived from the original on December 6, 2010. Retrieved January 30, 2009.
  9. ↑ Bruch, Heike; Masurat, Silke: Unknown champions. In: Personal (2010) 11, pp. 20f, PDF , accessed on February 26, 2011.
  10. ↑ Yourfirm: The career portal of the hidden champions , accessed on February 26, 2011.
  11. ↑ Schreiber, Jürgen: Family Business Career Day: Hidden champions are looking for young talent. In: MaschinenMarkt - Das Industrieportal , September 29, 2008, accessed on February 26, 2011.
  12. ↑ Reruiting Event: Curtain up for the hidden champions. In: karriere.de, September 6, 2010, accessed on February 26, 2011.
  13. ^ Website of the "Hidden Champions Day" ( Memento from September 29, 2011 in the Internet Archive )
  14. ↑ a b A. Seifert, IHK Region Stuttgart .: Distribution of the "hidden champions" to the federal states. (PDF, 21 kB) Hermann Simon: "Hidden Champions of the 21st Century" (Campus, 2007). Retrieved February 23, 2018 .
  15. ↑ a b Christian Rammer and Alfred Spielkamp: Hidden Champions - Driven by Innovation Empirical findings based on the Mannheim Innovation Panel. (PDF) ZEW, SS 19ff , accessed on February 23, 2018 .
  16. ↑ Südwestfalen-Agentur: "IHK directory of world market leaders and top performances from South Westphalia". Retrieved February 23, 2018 .
  17. ↑ IHK Siegen, Arnsberg and Hagen: World market leader and top performance in industry from South Westphalia. (PDF) Retrieved February 23, 2018 .
  18. ↑ (p. 40)
  19. ^ For example, RUD Ketten Rieger & Dietz GmbH u. Co. KG ( Memento dated February 26, 2009 in the Internet Archive ), Soehnle Professional GmbH & Co. KG ( Memento dated May 31, 2008 in the Internet Archive ), PhotonicNet GmbH ( Memento dated May 2, 2009 in the Internet Archive ), SBS Software GmbH (PDF; 100 kB), Hüthig GmbHl GmbH & Co. KG  ( page no longer available , search in web archives )  Info: The link was automatically marked as defective. Please check the link according to the instructions and then remove this notice.@1@ 2Template: Toter Link / www.ki-portal.de  
  20. ↑ flexi - Bogdahn International GmbH & Co KG ( Memento from March 25, 2008 in the Internet Archive )
  21. ↑ openPR , Landesmesse Stuttgart GmbH ( Memento from November 12, 2008 in the Internet Archive )
  22. ↑ Soehnle Professional GmbH & Co. KG ( Memento from June 1, 2008 in the Internet Archive ), Fuchs & Klemm , "Medium-sized companies have no reason to hide" Interview with Herbert Reiss, managing partner / head of medium-sized companies at Deloitte. ( Memento from July 16, 2008 in the Internet Archive ) (also examples in the first group)
  23. ^ The secret winners , Spiegel Online from August 26, 2008
  24. ↑ The use of the term by the FT is essential here. In the sense of Simon's definition, the schools presented are not hidden champions. Financial Times Deutschland ( Memento of October 3, 2008 in the Internet Archive )
  25. ↑ Bean counter blog ( Memento of the original from June 18, 2009 in the Internet Archive ) Info: The archive link was inserted automatically and not yet checked. Please check the original and archive link according to the instructions and then remove this notice. @1@ 2Template: Webachiv / IABot / bohnenzaehler.blog.de
  26. ↑ Gerhard Schröder on "Hidden Champions"
  27. ^ University of Stuttgart , Provadis School of International Management and Technology AG ( Memento from February 8, 2009 in the Internet Archive )
  28. ↑ Examples: Bonner Wirtschaftsgespächer , Handelsblatt dated November 2, 2006, accessed on November 7, 2019.
  29. ↑ Staufenbiel Media GmbH ( Memento from September 24, 2009 in the Internet Archive )
  30. ^ Businessweek January 26, 2004 , accessed September 5, 2010