17 ms·
> Within a couple of years the Philips people were able to transform the company to be very management/top heavy until nothing worked anymore You see the same
by joe_mamba 9mo ago
> Within a couple of years the Philips people were able to transform the company to be very management/top heavy until nothing worked anymore
You see the same pattern with Siemens and a lot of their spinoffs: Continental(VDO), Infineon, Qimonda, Gigaset, Healthineers (yes, that's a real name that somebody got paid to come up with), etc
THe ones without some major moat like trains or energy, got slowly run into the ground becoming irrelevant or stagnant, or ended up being shuffled between various foreign PE groups as they couldn't make them profitable.
Bizarrely, even Healthineers which should be booming due to healthcare being a super profitable industry with a massive regulatory moat, has hit a 5 year low in its stock price.
Remember how Siemens used to make mobile phones? Yeah, well ironically, Apple's in-house modems are the former cellular modem division of Siemens-Infineon that Intel bought and then sold to Apple.
There's something with the management from these massive German conglomerates that just lacks any sort of vision, and over time end up producing bloat, inefficiency, bureaucracy and stagnation while the same staff ends up flourishing and producing top notch tech when under a US company like Apple. Wondering if it's what they teach in business schools over there or if it's the culture, or both.
- lnsru 9mo agoI work for a small German company. Some time ago the owner sold it to big bloated company. At the time under the owner the management circle was 6 people, now it’s 17!!!!! And the revenue is lower with bigger headcount, because managers manage and do not work. I almost cry at work from sadness. So much potential wasted, the company has great market access and still good name. Polishing old products would make this hockey stick revenue growth. But with management explosion everything is being wasted. Meetings about meetings, no product upgrades and total stagnation. While managers fight over parking spots near front door for VIPs.
- joe_mamba 9mo agoI know. I work for a mid sized German company in the auto industry, and when our SW project was going to shit due to insufficient resources and mismanagement from the start, what they did to address it was not to add more developers, but add two managers from other projects to our daily standup, which became a 45-60 minute daily, and I'll let you guess if that improved the product deliverables and team morale. Germans just don't seem to get that successful SW was built by empowering the geeks working in "the trenches", and not by suits with business degrees in running conveyor belt assembly factories where everyone is a fixed cog that needs to follow a strict process thought out by someone above them.
- vjvjvjvjghv 9mo ago“ which became a 45-60 minute daily” I remember at one company I worked they had figured out how to get a project back on track: standups twice daily and justifying everything you did in the few hours before.
- saidinesh5 9mo agoWow. That reflects my experience with another mid sized German company in a similar industry. Their original roadmap for their next gen products was not good and the product was getting delayed by a few months. They brought in a new manager to fix the timeline. Instead she increased the bureaucracy. OKR tracking every other week. Hired a scrum master. Brought in external "certified code reviewers", delayed the project a little more and ended up cancelling the project within a couple of months. "Hardware products are not as profitable as proprietary cloud software as a service company anyway".
- joe_mamba 9mo ago>external "certified code reviewers" That's another big issue with Germany, is they obsess over certifications when hiring, as if they're some confidence of high quality hiring bar, when a lot of those certifications and degrees in the IT industry are just scams. I think it's caused by the fact that firing a bad hire is super difficult past the probation period, and since HR/recruiters are clueless on screening what makes a good SW dev, so they just go with filtering for credentials to cover their asses, in case of a bad hire they can say they followed the process and screened for the ones with credentials.
- alias_neo 9mo ago> Qimonda Sorry for the tangent, I haven't heard this name in over 15 years, I interviewed with them the summer before the final year of my BEng, and was offered a job in China to allegedly built a real-time voice/video communications system between what they said were their three facilities in beautiful looking part of China I can't remember the name of now. Looking through my Gmail, it was 2008 they offered my the position; and looking at the Wiki page, I'm glad I didn't take the offer, as it appears it didn't last much longer?
- joe_mamba 9mo agoThanks for sharing. You know what's ironic about Qimonda? China bought their IP after they went under, and used it to build two domestic NAND and DRAM manufacturers that are set to become giants. Funny how China has the vision to use, finance and monetize where western governments keep failing. That's what hurts the most to see. EU says they want a strong domestic electronics industry, but with the exception of ASML, they really don't do nearly enough to grow it or even to maintain it.
- tietjens 9mo agoCan you name these two manufacturers?
- yomismoaqui 9mo agoSay what you want about China's monoparty system, but it enables planning that spans decades. Our 4 years terms is short slighted by design.
- jansan 9mo agoSiemens Energy (which meanwhile is completely separated from Siemens) did a massive cleanup of their management overhead two or three years ago. They cut several layers and a lot of managers got downgraded or let go. Looking at their stock performance it seems they did the right thing. I really hope that other German enterprises will use this as an example.
- megablast 9mo agoHow is stock performance any indication of a company having too many managers.
- joe_mamba 9mo agoIt isn't. Stock price just measures investor confidence. Sometimes firing managers leads to more investor confidence. Most of the time it's a crapshoot but it's the best objective indicator we have for comparison.
- legulere 9mo agoIt can also be a measure of other market factors. In the case of Siemens Energy the high demand for electricity generation capacity from AI certainly plays a role.
- cm2012 9mo agoIt means their financials improved
- mns 9mo agoAs I was following Siemens Energy in these years, I remember them getting a huge bailout, or you can call it help or whatever, at one point and from there on the stock price started going up.
- jansan 9mo agoIt was a government guarantee in November 2023, which was never used, but allowed them to borrow money from banks for new projects. Demand was never a problem, but they were on the brink of collapse due to hidden quality problems at their subsidiary Gamesa. Somehow they seem to have solved this.
- vachina 9mo agoMy guess is German labor laws do not allow hustling. Progress will be slow if everyone kinda just coast on cruise control.
- piva00 9mo agoLabour laws have much less of an impact than the work or overall culture. Sweden has quite strong labour protection but can be much more innovative than Germany because there's much less emphasis in respecting titles, seniority, and authority than the Germans. German education has a big emphasis on bowing down to authority from early age, Sweden is much more lax (and even though Jantelagen isn't a big thing in modernity it still can affect modern Scandinavia in general). Blaming labour laws for issues arising from culture is a tired jab, it's not the culprit. You can find that out by working for a German company vs a Swedish one, it's starkly different.
- joe_mamba 9mo ago>German education has a big emphasis on bowing down to authority from early age Ah, good ol' legacy of the education system implemented by Prussia, who wanted an army of conformist soldiers following orders, and not free thinkers risking to upset the apple cart. Great mentality if all you want is waging war though :) And this mentality persist to this day, where given a set of rules, other successful related cultures like Dutch, Brits or Swedes will first use common sense when interpreting and applying them, whereas Germans will tend to blindly follow those rules by the book even if they don't make sense in that specific context. It's difficult to uproot people from their ways, when they've only lived in Plato's cave allegory.
- bandrami 9mo ago> Great mentality if all you want is waging war though Arguably not; in the end it produced a brittle general staff who could not accept that they needed to rethink all their war plans based on the political constraints of time (ironic since Clausewitz came out of that exact tradition).
- 9mo ago
- lonelyasacloud 9mo ago> There's something with the management from these massive German conglomerates that just lacks any sort of vision. It's a universally hard tendency to resist as enterprises grow into big organisations. Company starts small and lean; people involved in making product also do most of everything else. Over time specialist HR, Finance, Legal, Marketing etc functions are added. All try to do their best but all with their own non-product agenda. All usually hired and sitting at or close to the same top table decision making process, all diluting and distracting from the vision/mission of what was important to the organisation in the first place. Eventually, the company's top-level decisions becomes more about that than the product.
- f1shy 9mo agoThe problem now seems to be that that kind of management is in charge in the government...
- Nevermark 9mo agoThe US could certainly use more engineers and less lawyers and financiers in government. Some actual problem solving at the top, communicated in a way that makes sense, instead of waves. To get dangerously close to political topics: I love Pete Buttigieg for being a wonk but likable and understandable. And cool as a cucumber. All that is so rare, when it should be pervasive. (Whatever his other pros or cons - I am not an expert on him.) More of that, please.
- yobbo 9mo ago> bureaucracy and stagnation while the same staff ends up flourishing and producing top notch tech when under a US company like Apple Apple orders a widget from them which can be sold in an established product with existing customers. The magic was creating the Apple brand and iPhone product. I think the problem with old European "conglomerates" is that no one has the mandate/legitimacy to make a multi-year/decade tech investment equivalent to the iphone. "Decision makers" are likely to have been promoted from other professions than engineering/products, and people promoted through management/sales lack competence and legitimacy. Their job is to apply old and approved templates for decision-making, while paying dues and respect to appropriate people. It fails when templates for decision-making don't exist. Spin-offs or acquisitions based on new tech, rather than existing products/markets, can't work with this type of management. I have also gotten the sense that management positions are given as rewards for "long and loyal service". It is effectively an incentives program, with the implicit assumption that management decisions don't really matter. This is not far from the the truth in old industrial companies with few but huge returning "captive" customers, which is typical in Europe eg Siemens, or high value luxury brands in fashion/jewellery/liquor/etc. The meaning of the word "verwaltung" is different from the American "management". Verwaltung implies "preservation of stability" whereas "business management" implies something like "figure out how to sell more stuff".
- alfiedotwtf 9mo ago> It fails when templates for decision-making don't exist. I've noticed a strong signal throughout my career - a sure-fire way to abandon ship - when a company focuses most of its energy on branding and treats selling and building as a nuisance! Pro tip: when a company cares more about changing its company logo rather than finding Product Market Fit, it's time to update your LinkedIn profile and reach out to hiring managers.
- Nevermark 9mo ago> Healthineers I love the name! It makes me laugh! Might not be the branding they were going for, but they should lean in. Lot's of spontaneous singing and dancing. :)