We are friends
"One must keep a sense of proportion."
Martin Wittig is the new CEO and his predecessor Burkhard Schwenker is taking over from Roland Berger at the top of the Supervisory Board. Axel Höpner and Katrin Terpitz conducted the first interview since the elections.
The two of you are sitting here so peacefully, but word has it that there was a power struggle between you.
Schwenker: Nonsense there was never any power struggle between us. Our friendship has intensified over the years and has become very strong.
But it seems that you, Mr. Wittig, already had your eyes on the top seat in 2003?
Wittig: One must keep a sense of proportion. Consultants do indeed tend to be ambitious individuals, but at 38 years old, I didn't imagine that I could lead this company. Roland Berger would have had to punish me for that kind of hubris.
Speaking of Roland Berger: He is now stepping down as Chairman of the Supervisory Board earlier than planned. Was that really voluntary?
Schwenker: The four-year cycle of our Global Executive Committee is coming to a close and we didn't want to wait another four years to bring in a new generation. Furthermore, business is good and everything is on track. We are both very pleased with the clear vote by the Partners.
The two of you are sitting here so peacefully, but word has it that there was a power struggle between you.
Schwenker: Nonsense there was never any power struggle between us. Our friendship has intensified over the years and has become very strong.
But it seems that you, Mr. Wittig, already had your eyes on the top seat in 2003?
Wittig: One must keep a sense of proportion. Consultants do indeed tend to be ambitious individuals, but at 38 years old, I didn't imagine that I could lead this company. Roland Berger would have had to punish me for that kind of hubris.
Speaking of Roland Berger: He is now stepping down as Chairman of the Supervisory Board earlier than planned. Was that really voluntary?
Schwenker: The four-year cycle of our Global Executive Committee is coming to a close and we didn't want to wait another four years to bring in a new generation. Furthermore, business is good and everything is on track. We are both very pleased with the clear vote by the Partners.
"But there's one thing we can learn from Mr. Berger: To establish trust with people"
But what about the rumors about Roland Berger and his potential conflicts of interest: Berger, as a representative of the German government in the effort to save Opel, sat on the Supervisory Board of Fiat, a prospective buyer. His consultancy advised Opel's parent company, GM.
Wittig: We heard the rumors, but they were really exaggerated. Our governance was in place at all times. And the German government's supposed mandate for Roland Berger in the Opel matter never existed in that form.
Since you mention governance: In a listed company, Mr. Schwenker's move to Chairman of the Supervisory Board would go against good corporate governance.
Schwenker: There is a strong case for the principle of not allowing the former CEO to become head of the Supervisory Board. But a partnership is subject to a different set of rules.
Those being?
Wittig: For example, there are no external shareholders. Furthermore, in a cooling-off phase, we would lose many of our long-established networks.
What is the new role of the once so dominant founding father Roland Berger?
Wittig: He himself said that he is one of 180 Partners, and they are subject to "one man, one vote". That's a pretty clear statement! But we would be foolish to do without his experience and contacts.
Wittig: We heard the rumors, but they were really exaggerated. Our governance was in place at all times. And the German government's supposed mandate for Roland Berger in the Opel matter never existed in that form.
Since you mention governance: In a listed company, Mr. Schwenker's move to Chairman of the Supervisory Board would go against good corporate governance.
Schwenker: There is a strong case for the principle of not allowing the former CEO to become head of the Supervisory Board. But a partnership is subject to a different set of rules.
Those being?
Wittig: For example, there are no external shareholders. Furthermore, in a cooling-off phase, we would lose many of our long-established networks.
What is the new role of the once so dominant founding father Roland Berger?
Wittig: He himself said that he is one of 180 Partners, and they are subject to "one man, one vote". That's a pretty clear statement! But we would be foolish to do without his experience and contacts.
"We must start to think differently, say, in scenarios."
Roland Berger is considered to be a networking genius. It is said that he writes some 2,500 Christmas cards each year. How many do you write?
Wittig: (laughing) I write a lot, too, but certainly not 2,500. But there's one thing we can learn from Mr. Berger: To establish trust with people, you have to approach them openly and individually. This is and will continue to be the foundation of our business.
Schwenker: The number of Christmas cards has little to do with the depth of the network. But that is probably also a generational issue.
So the two of you will manage the strategy consultancy for the next few years. How would each of you describe the other?
Wittig: (pausing for thought) Above all else, Burkhard Schwenker is authentic. He never pretends to be something he's not. He thinks really fast and is an incredibly loyal and reliable partner. He has never cheated in his life.
And how do you view the new CEO, Mr. Schwenker?
Schwenker: (teasing) I wouldn't have needed any time to think about it. Martin Wittig is an outstanding consultant. He knows how to spot problem areas and how to tackle them. And he's a good manager. That's pretty rare among consultants. He's persistent. And he's open and honest, which is indispensable in a partnership. He says what he thinks.
What is your track record as CEO, Mr. Schwenker?
Schwenker: My track record is our track record – we're a partnership! And we've shown that we can develop very positively even without Roland Berger heading up operations.
Was it always that smooth?
Sure, the first one or two years back then weren't easy – neither for him nor for me. But we became a very good team. That's a good track record.
But as restructuring experts, one might have expected that you would have done particularly well in the crisis. But you didn't. Your archrival Boston Consulting even managed a slight gain in Germany. Does that bother you?
Wittig: We don't comment on our competitors as a matter of principle. But our restructuring business did very well particularly in Germany.
As the economy begins to recover, the time for large turnaround projects seems to be drawing to a close.
Schwenker: Not really, because large firms today restructure and simultaneously focus on growth. And this is what's needed to be fit for the recovery. Our restructuring business has therefore become a lot more strategic, also in Germany.
What kind of advice are companies currently asking you for?
Schwenker: Amid growing complexity, especially in the political arena, corporations must develop new strategies. And the traditional planning tools we grew up with no longer work.
So what does work?
We must start to think differently, say, in scenarios. And it is important for us to integrate economic and political developments a lot more closely into business strategies.
How difficult is it for a German management consultancy to hold its own internationally?
Wittig: In many new markets and in large parts of Asia, European management culture and German technologies have an excellent reputation. That helps us a lot.
Schwenker: What's more, there is bitter disappointment with American management principles. And I think it is justified. Europe has a lot of answers.
Wittig: (laughing) I write a lot, too, but certainly not 2,500. But there's one thing we can learn from Mr. Berger: To establish trust with people, you have to approach them openly and individually. This is and will continue to be the foundation of our business.
Schwenker: The number of Christmas cards has little to do with the depth of the network. But that is probably also a generational issue.
So the two of you will manage the strategy consultancy for the next few years. How would each of you describe the other?
Wittig: (pausing for thought) Above all else, Burkhard Schwenker is authentic. He never pretends to be something he's not. He thinks really fast and is an incredibly loyal and reliable partner. He has never cheated in his life.
And how do you view the new CEO, Mr. Schwenker?
Schwenker: (teasing) I wouldn't have needed any time to think about it. Martin Wittig is an outstanding consultant. He knows how to spot problem areas and how to tackle them. And he's a good manager. That's pretty rare among consultants. He's persistent. And he's open and honest, which is indispensable in a partnership. He says what he thinks.
What is your track record as CEO, Mr. Schwenker?
Schwenker: My track record is our track record – we're a partnership! And we've shown that we can develop very positively even without Roland Berger heading up operations.
Was it always that smooth?
Sure, the first one or two years back then weren't easy – neither for him nor for me. But we became a very good team. That's a good track record.
But as restructuring experts, one might have expected that you would have done particularly well in the crisis. But you didn't. Your archrival Boston Consulting even managed a slight gain in Germany. Does that bother you?
Wittig: We don't comment on our competitors as a matter of principle. But our restructuring business did very well particularly in Germany.
As the economy begins to recover, the time for large turnaround projects seems to be drawing to a close.
Schwenker: Not really, because large firms today restructure and simultaneously focus on growth. And this is what's needed to be fit for the recovery. Our restructuring business has therefore become a lot more strategic, also in Germany.
What kind of advice are companies currently asking you for?
Schwenker: Amid growing complexity, especially in the political arena, corporations must develop new strategies. And the traditional planning tools we grew up with no longer work.
So what does work?
We must start to think differently, say, in scenarios. And it is important for us to integrate economic and political developments a lot more closely into business strategies.
How difficult is it for a German management consultancy to hold its own internationally?
Wittig: In many new markets and in large parts of Asia, European management culture and German technologies have an excellent reputation. That helps us a lot.
Schwenker: What's more, there is bitter disappointment with American management principles. And I think it is justified. Europe has a lot of answers.
"As a European consultancy, we have also learned to embrace diversity."
Which ones specifically?
Schwenker: Continental European managers think longer term and focus more on stakeholder interests. Companies are often more decentralized. This helps them respond quickly to changes. As a European consultancy, we have also learned to embrace diversity.
Wittig: American consultancies all follow the same pattern. They have hardly any lateral hires. At Berger, almost one in three consultants used to be a manager in industry. With hands-on experience.
But are you international enough? In the US, for instance, your presence is still weak.
Wittig: For our large Asian and European clients, we have to be able to deliver the goods in Asia and Europe – and continue to expand our capabilities there in some industries. Apart from that, there are some much more attractive markets.
You are currently working with headhunters to build up new teams in the US.
Wittig: Yes, for financial services. This is also a historical necessity: For legal reasons, it wasn't until we bought back Deutsche Bank's shares in 1998 that we were able to really kick off in the US. Now we are looking for experts in corporate finance, brokerage, investment banking, etc.
Can you see yourself growing through acquisitions?
Schwenker: We would never buy.
Wittig: Those who want to join us as partners are welcome. But we don't buy goodwill.
Schwenker: Exactly, people are important. We used to take over other firms. We stopped that. We learned from our mistakes.
Would it be possible for you to be taken over? Say, by an accounting firm trying to join the consultancy trade? There is some speculation out there.
Schwenker: Of course, we share information with competitors from time to time. But I don't see any need for a merger.
Wittig: I would rule out a real sale. If you sell, you sell your soul. It could only be a partnership. And that is a difficult thing to do with different cultures. And besides, we can grow on our own.
This year too?
Wittig: Right! Sales are currently up about 10% year on year.
Schwenker: Continental European managers think longer term and focus more on stakeholder interests. Companies are often more decentralized. This helps them respond quickly to changes. As a European consultancy, we have also learned to embrace diversity.
Wittig: American consultancies all follow the same pattern. They have hardly any lateral hires. At Berger, almost one in three consultants used to be a manager in industry. With hands-on experience.
But are you international enough? In the US, for instance, your presence is still weak.
Wittig: For our large Asian and European clients, we have to be able to deliver the goods in Asia and Europe – and continue to expand our capabilities there in some industries. Apart from that, there are some much more attractive markets.
You are currently working with headhunters to build up new teams in the US.
Wittig: Yes, for financial services. This is also a historical necessity: For legal reasons, it wasn't until we bought back Deutsche Bank's shares in 1998 that we were able to really kick off in the US. Now we are looking for experts in corporate finance, brokerage, investment banking, etc.
Can you see yourself growing through acquisitions?
Schwenker: We would never buy.
Wittig: Those who want to join us as partners are welcome. But we don't buy goodwill.
Schwenker: Exactly, people are important. We used to take over other firms. We stopped that. We learned from our mistakes.
Would it be possible for you to be taken over? Say, by an accounting firm trying to join the consultancy trade? There is some speculation out there.
Schwenker: Of course, we share information with competitors from time to time. But I don't see any need for a merger.
Wittig: I would rule out a real sale. If you sell, you sell your soul. It could only be a partnership. And that is a difficult thing to do with different cultures. And besides, we can grow on our own.
This year too?
Wittig: Right! Sales are currently up about 10% year on year.
Language
English | German
Original interview
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