The Bavarian mittelstand philosophy seems to be thriving in spite of the doom and gloom of the greater global economy. Is this a case of the sensible and sustainable “tortoise” winning in the longer term against the attention-deficit and easily fad-distracted hare?
This ABC Foreign Affairs piece on Mittelstand is worth watching (via Jany Chau.)
Mittelstand – literally translated as small and medium sized enterprises – means more than just size alone. It is a whole philosophy of business practice. One that is alien to the currently dominant big corporation values; arguable the very values at the root of the current global economic malaise.
Some of the characteristics of mittelstand:
- Leaders with personal responsibility. “If the company goes bankrupt, I go bankrupt.”
- Social consciousness beyond immediate self interest. Such as paying taxes, and the reinforcement/celebration of what “we” have, instead of what “I” have.
- Real long-term commitment to people. Mittelstand businesses keep employees on in quiet times, and employees end to stay for long periods measured in decades. Businesses hang around for generations; they are real, and not fly-by-night affairs. Unions exist; and they seem to be just another source of valued input without the animosity or enmity commonly seen elsewhere.
- Longer term thinking; where businesses plan for the next generation of leaders and people, and not the next quarterly report.
- No blatant greed in the form of crazily high executive salaries or crazily low employee salaries. There is a recognition of the innate value of a business, which discourages destructive (but selectively profitable) slash-and-burn get-rich-quick schemes
- Healthy disregard for fads such as the shuffle-money-around-to-make-money financial “games” that produces nothing actually tangible.
The proof certain appears to be in the pudding. With mittlestand, entire communities benefit over a longer period of time. Value is built long-term. With the current big business model, a few benefit very significantly in the short term, at the expense of everyone else. Damage is felt long-term.
Can we who live outside of Bavaria learn from this? Individual business can certainly learn more caution, improve their fad filters and hone their focus on who they really are, what they do and what they stand for. On a community or societal level, a cultural revolution of sorts will probably be required to reboot the entrenched systems that value radically different things.
