Comment by joe_mamba
9 hours 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.
I 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.
I 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.
Wow. 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".
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“ 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.
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To be fair, the cycle of adding overhead until efficiency improves is the norm in American companies, too. There are a handful of companies which do better but don’t make the mistake of assuming even a majority do.
> 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.
That's what you do if your goal is to blame developers for the project failing, and you double-down on management to underline the root cause as developers going off rails and thus the fix is to reign them in with management. The managers jumping on board have no downside as the project was either doomed or they flexed their superior management skills to revive the project.
> 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.
> 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".
> 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?
Thanks 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.
It's certainly been interesting to watch over the span of my career so far.
It's really quite interesting thinking back to that time for me in University, every few years something happens that sparks a memory; right now, it's that roughly 2007-2008 my professor was telling me about this "rollable" screen technology that was going to enable rolling/folding phones at some point in the future; a little earlier he'd been telling me about this funky new thing called 'Organic LED' that was going to enable "printing" flexible circuits
He's an FREng (Fellow of the Royal Academy of Engineering) and was one of the people involved in the invention of the silicon chip.
Had a Gandalf look to him and was a real fountain of knowledge, I lucked out to get the guy as my professor.
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Say what you want about China's monoparty system, but it enables planning that spans decades.
Our 4 years terms is short slighted by design.
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I'm glad the EU isn't subsidising European DRAM and NAND. Those are typically very low margin business. It's unlikely the EU could have competed with China because of labour costs/rights.
Today we have a shortage in this sector and margins are good so it seems like a good idea. But it's likely a European company would have regularly lost money over the last 20 years and become an unpopular drain on EU finances.
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It seems to me (and maybe I'm wrong), but it seems to me that "a lack of IP" increasingly means "we have no leverage to get the licences that we need" in China, and "we have no idea how they used to do it" in the west.
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Same as it ever was.
China is going through the burgeoning phase previous countries have gone through. Although China’s scale is far larger, once there’s a couple of economic troughs things will be different.
Can you name these two manufacturers?
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> 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. :)
The problem now seems to be that that kind of management is in charge in the government...
The 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.
Siemens 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.
As 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.
It 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.
How is stock performance any indication of a company having too many managers.
It 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.
It means their financials improved
My guess is German labor laws do not allow hustling. Progress will be slow if everyone kinda just coast on cruise control.
Labour 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.
>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.
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"Law of Jante" (jantelagen) is a double edged sword and can work in favour of innovation. In good cases, it means both subordinates and bosses intuitively understand that titles are theatre, and anyone can present new ideas and challenge old ideas.
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German people have strict laws but, especially hackers, they do not always follow them.