Corona, war, energy price shock: one crisis follows the next – and the German economy is shrinking. What does this mean for the women and men at the top of large corporations? A glimpse into their world.
Managers of German companies have been in constant crisis mode for years. They are all united by the ambition to steer their companies through the crises and make them fit for the future. But what if the conditions for this become increasingly difficult?
In almost all sectors of the economy, corporations are complaining about falling demand. The list of reasons for this is long: the corona pandemic, the war in Ukraine, the climate crisis, rising energy prices, high inflation, the shortage of skilled workers, high bureaucratic hurdles for companies.
“I’ve never experienced anything like this before”
The result: The German economy shrank at the end of 2023. According to the Federal Statistical Office, gross domestic product fell in the fourth quarter compared to the previous quarter. If the economy shrinks again in the current first quarter, Germany will slip into recession.
“The current crisis is significantly different from others. I have never experienced anything like it,” says Martin Brudermüller, CEO of the chemical company BASF, who has been on the board for 17 years. The global weakness in demand, but also the effects of the war against Ukraine and Europe’s dwindling competitiveness caused problems for the group.
Even privately in crisis mode
CEO Brudermüller says he also relates the company’s current balance sheet directly to himself – and asks himself whether he is doing his job well enough or whether he can “go one step further.”
The crises do not stop at the private lives of managers. “I work harder than most people can imagine,” says Leonhard Birnbaum, head of the energy company E.ON. But despite many 70-hour weeks, he continues to enjoy his job.
BASF boss Brudermüller: The chemical company was hit hard by the consequences of the war in Ukraine and the energy crisis last year.
“Fear doesn’t help”
Birnbaum relies on prudence when working in crisis mode, which was brought about by the war in Ukraine in particular, but also the phase-out of nuclear energy: “You should worry, you should be tense, you should be calm also be nervous so that you don’t take things too lightly and really strive to deliver the best,” he says. “But fear doesn’t help.”
Nor is idealism the right way out of crises, says Birnbaum. “Idealism changes little, the possibility of winning changes incredibly much.” That’s why the capitalist economy works, and that, says Birnbaum, could be an opportunity for the future – and an advantage for climate change. “When were wind turbines built? When you could make a lot of money with them,” he says. That is a sign of hope.
Less confrontational today?
In order for the economy to get out of the crisis, politicians also have to do something, the managers agree. Be it tax relief, the further reduction of bureaucracy or the expansion of infrastructure, especially on rail. Investments are necessary for this.
But despite clear demands from business to politics, the way both sides deal with each other has changed in crisis mode. “It used to be very confrontational, but now we have a lot in common and we also know what we have to achieve,” says SPD chairman Lars Klingbeil, who is talking to Audi boss Markus Duesmann at a top meeting of politics and business . He thinks that togetherness has become more humane. Conversely, says Duesmann, the generation of politicians today is also different. The culture of conversation has changed positively as a result.
Signals to employees
Likewise, how board members deal with their own employees can change in crisis mode. Annette Mann is CEO of the Lufthansa subsidiary Austrian Airlines. She emphasizes how important it is to show appreciation to employees in difficult times and not to deepen rifts.
She was supposed to move into a new, large office for her promotion, but didn’t think that was suitable. So she quickly moved into another office among her colleagues: “Unfortunately we didn’t have good equipment, so my husband and I went to Ikea and got a desk and a few plants,” she says. She didn’t want to send the signal that money was being spent on new furniture while employees were still foregoing their salaries because of the pandemic.
Adaptability must be
People almost don’t know their industry without a crisis. This brings with it professionalism in managing crises. She says: “Companies have to manage to become more and more adaptable.”
BASF boss Brudermüller’s conclusion about German corporations in the crisis: “We are a little out of step and we have to be willing to do some things fundamentally differently.” This also includes, for example, not immediately rejecting artificial intelligence. Then the German economy will also have a good future.