Isn’t it gratifying when the present connects with the past and takes a new, energetic conversation forward. That’s exactly what happened at Sunderland University Business School last week. The North East Initiative on Business Ethics (NIBE) had its first iteration in Sunderland more than 20 years ago (when I was running The Common Purpose leadership programme in the city)! Last week saw us re-open the conversation with new energy thanks to thought-provoking presentations on the importance of values-led business by Ralph Salzer, MD of Liebherr Works Ltd; Rob Sisson, the MD of Cbalance an ethical bio-tech startup, and Professor Lawrence Bellamy the academic dean of the Business School.
It’s always ‘them that come that make it’ and the NIBE directors were really pleased to welcome a diverse group of students, businesses and academics all keen either to make values-led business a differentiator, or, even more significantly use a ‘win-win’ business philosophy for competitive market advantage – just like the family-owned Liebherr Group has done. As Ralph said: business isn’t about charity – you need to make money, but as the Liebherr Group’s annual growth from 1949 demonstrates – values and profit are anything but mutually exclusive.
Lawrence reminded us that responsible business practice has a long-tail, but as we all know, greed overtook (particularly) the financial services industry in 2007/8. The collapse of Lehman Brothers and the shock-wave that followed has meant that Business Schools generally have revised their provision. Sunderland in particular is focusing on embedding the importance of responsible business leadership and producing global citizens who know about and have the confidence and capability to build businesses that deliver on the triple bottom line.
Rob Sisson is one of those: he recently graduated with a 1st in Business Management! During his studies he absorbed all the responsible business teaching that Sunderland could give him and was full or praise for course-content that really made him think around business issues. Rob’s also been part of the ‘Drivers for Change’ programme and travelled around the UK investigating the connection between social problems and business impact. Rob’s learning journey has now taken tangible shape as Cbalance: a company that’s focused on reducing the prevalence of diabetes and obesity in developing economies. He asked Ralph for advice on what to do next and the ‘real-world’ input from the MD of Sunderland’s last remaining heavy engineering company stayed with us all: ‘stick to your beliefs and see it through, but also look at your balance sheet! Be tough and take tough decisions but remain humane.’
Ralph Salzer is in prime position to give values-led business advice. The Liebherr Group business story is remarkable. The Group has been growing steadily since its formation in 1949 (it currently has a 10.6 billion euro turnover and 46,200 employees around the world) and the third generation of family members has formulated a set of core values that every new staff-member signs up to and which will keep the Group growing. The group’s core values are:
- Trustworthy partner status
- Recognition of employees as a key success factor
- Highest quality in all service and product areas
- Accepting responsibility
With 200 people, the Sunderland site is one of the smallest manufacturing sites in the Liebherr Group (there used to be 3000 employed when shipbuilding was carried out) but and it’s a big but, the Liebherr family still visit twice a year and have vowed never to close a factory and never have.
Claiming core-values as crucial to commercial success and the ability that family ownership provides to withstand economic downturns in the Group’s operating areas has established Liebherr as a formidable ‘mittelstand’ player that is building a business for the long term. Satisfied customers generate a lot of repeat business; because suppliers are paid on time they stick with the company when trading conditions are difficult; and employees want to stay loyal to a company where training and development is given such a high priority.
Of course there are challenges, Ralph is forecasting a global downturn perhaps similar to 2008, but the Liebherr Group structure means that work can continue to be passed to subcontractors and relationships maintained. If his prediction is accurate and there is a serious downturn in the northeast he knows that his full-time Sunderland employees will be given opportunities elsewhere in Liebherr’s sister companies in Europe. He knows that many shareholder-owned companies might not look to the long term, but the proof of the commercial validity of that approach is in Liebherr’s latest figures. Local directors are not allowed to make people redundant because of a downturn or to shut a factory. They never have and the Liebherr family has reassured Ralph and his colleagues that they never will and the Group keeps growing. This year Liebherr is on target to produce revenues of 11.3 billion; the headcount is also up and re-investment continues too.
At NIBE we’re focusing on the future and building a movement that helps the north east know itself as a place where good business is done. Liebherr is a great example of a business can be good for all its stakeholders and its really encouraging that young business owners are wanting to follow that lead thanks in part to the education they receive at the region’s business schools.
Caroline Theobald – Director NIBE