If you lived in Germany in the early 1980's and wanted to buy a new Mercedes-Benz automobile, you first had to sign a contract to buy another new Mercedes three or four years down the road. Incredibly, demand for Mercedes vehicles was so strong that the “right” to purchase one today was contingent upon your agreement to buy a future model – years in advance and sight unseen.
Why was the Mercedes brand so intensely coveted? Because the company’s famous three-pointed star had been an icon of excellence since the 1926 merger of Daimler Motoren Gesellschaft and Benz & Cie. Rheinische Gasmotoren-Fabrik. For three-quarters of a century the reputation of Mercedes-Benz was – like its logo – stellar, and the automaker continued to set world standards for quality and performance.
In fact, the pursuit of perfection was so ingrained at Mercedes that it even affected the way people spoke inside the company. When resolving a problem, for example, it was considered shameful to use the phrase “Wir haben es hin gebogen” – literally “We bent it,” but translated in Benz-speak as “We found only a make-do solution.” No one would settle for anything less than “Wir haben es hin ge-Daimlert,” a company-born phrase that meant “We found a Daimler-like solution” – that is, a corrective that was nothing short of flawless.
And so it was until the 1990's – when, suddenly, everything went kaputt.
Cost-cutting measures and clumsily implemented changes in manufacturing processes resulted in quality issues and customer complaints that were a new phenomenon for the Rootin’ Teutons in Stuttgart. Sales fell, and every corner of the organization seemed enshrouded in a fog of indecision.
Perhaps the biggest problem Mercedes faced at the time was that its own success over decades had effectively eliminated the need for internal communication. Everyone knew his role in the Perfection Machine, so what was there to talk about?
When the machine faltered, however, confusion reigned. So the company called in fresh eyes to look for new paths out of the darkness. And among the business consultants who rummaged through the works at Mercedes in the 1990s was one of a different stripe.
Erich Hartmann is the managing partner of Professio GmbH, a small firm located in the Bavarian city of Ansbach. Hartmann is a degreed psychologist, and he and his colleagues specialize in what they call the “soft skills” of human interaction. When they looked under the hood of Mercedes, they knew their job was not to impose or even suggest wholesale changes. Rather, the task was to get Mercedes managers and employees thinking differently, so they could find and work out solutions on their own.
The Professio team asked hundreds of questions, encouraged Mercedes personnel to discuss problems openly and gently suggested new ways of identifying difficulties. One example of the Professio approach involved a regular machine-tool changeover that consumed a disproportionate and costly eight hours. Simply by quizzing employees and their supervisors, the consultants allowed workers and managers to discover on their own what Hartmann calls “the time-eaters” in the process. After a bit of tinkering, the eight-hour procedure was being finished in just two.
On the service side, Mercedes found it was spending inordinate sums on the administrative costs attendant to selling customers minor replacement parts like bolts or screws. Facilitated by Professio, managers gave service chiefs a new degree of flexibility by setting a monetary-limit guideline – not a rule – which allowed the chiefs to decide for themselves if charging a customer for a part were actually cost-effective.
This initiative was such a radical departure from the norm at Mercedes that many workers were frozen into inaction. Yet when they finally got rolling, good things began to happen. In the end, a card bearing a German-language phrase equivalent to “This replacement part is a gift from Mercedes. Enjoy your car.” would accompany every service item for which customers were not charged. The approach resulted in enormous annual cost savings for the company and generated substantial goodwill among customers.
In this instance, the earth-shaking innovation was not the idea of the card but the way the solution was arrived at. Questions, answers and new lines of communication proved their value to the staid burghers of Benzland, and other Professio-facilitated changes would accelerate decision-making, enhance cost reductions and speed up responses to changes in market conditions. Ultimately, the work of Hartmann and his team also helped to dissipate the funk of self-doubt that had begun to permeate various corners of the company.
Who would have thought that simple inquiries, gentle prodding and consistent encouragement might prove to be viable solutions to seemingly intractable problems?
Wir haben es hin ge-Daimlert, indeed.
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