An SZ – region Munich – article of June, 24th, 2015 by Stefan Galler shows yet again what state our schools are in these days. And it also shows our mental concept when talking the lives of small persons given into our care.

Why? Here is the background information!

Riemerling – seemingly a harmonic idyll – but that is only how it seems – beware: school!

Riemerling – seemingly a harmonic idyll – but that is only how it seems – beware: school!

Even last year, space became a rare commodity in the Riemerling Primary School (which now also has an all-day sector). For instance, lunch was outsourced to the school building in Hohenbrunn on the Siegertsbrunner Straße.

Riemerling is situated directly in Ottobrunn, but it is part of the Höhenbrunn municipality, which is situated a little less than three kilometres out of Riemerling.

The two schools belong together. They use a bus for transporting the children from Riemerling to Hohenbrunn to have lunch (called: lunch-time supervision). The bus takes around 20 minutes for the drive, because it does some detours. The S-Bahn trains do the same distance in three minutes and you can easily ride your bike there in less than 15 minutes.

What sort of country is this, where young persons – who actually should still be permitted to be children and toy around – are forced to spend their entire days in schools and then transported by busses that take twenty minutes for one way to go and have lunch – with the quality of the meal being something I can only guess at?

Do we have a right to treat the time of our children with so little responsibility?

The parents’ council of Riemerling primary school now started an online petition. Under, you can find the online petition for a referendum. The objective is: “We want a lunch-time supervision for our children that deserves the name, and we also want it back in Riemerling!”

I would gladly agree. Except – when I went to primary school, we all were out of school by midday and could recuperate from the maltreatment we had suffered in the morning in freedom and with fresh air. Consequently, I would recommend to parents: shun all-day schools. And if you believe they are absolutely necessary, then maybe you should take a closer look at your own lives. Perhaps something went wrong with it?!

(Translated by EG)

Six of my seven children went to Riemerling Primary School. Initially, it was still a halfway humane school with a director who understood children and saw himself as a “mild father”. With a new director – a lady who sees herself as a manager – matters deteriorated. Now the motto became: “Nice exterior, evil interior”. Finally – for me nine years ago – the school has turned into a total catastrophe.

On this picture, you can see the school building where my daughter Maresa graduated from high-school after having spent the last two years of her eight-year stunt there. Like all our children, she went to the Ottobrunn Grammar School.

Consequently, between 1990 and 2015, we always had children in our family who attended this grammar school. In one year, we even had one child in every uneven grade (5th, 7th, 9th, 11th, 13th). That means we are a rather experienced “customer” of the educational institution “grammar school”. The same is true for the “primary school” – and I think I have earned the right to actually discuss schools in this country.

We selected Ottobrunn Grammar School because the way from our home in the Waldparkstraße Ottobrunn was only a little less than one kilometre. We had moved there in 1990, early enough for the start of the new school year. Since we did not wish to impose a long daily journey to school on our children, the distance and the way to school were our primary criteria.


The subjects taught in Ottobrunn were also to our liking: they offered languages still spoken today and mathematics. They even had a memorial stone in the schoolyard reminding people of the importance of “Love and Peace”. I rather liked that and found it adequate, because the school building did not really look that old, either.

Entrance to the container school building in Höhenkirchen-Siegertsbrunn..

Entrance to the container school building in Höhenkirchen-Siegertsbrunn.

As time went by, the school expanded in quantity, but not in quality. Like many grammar schools, the development was towards a de-personalized learning factory. But this is for another article.

Today, I would like to discuss the building, which slid deeper and deeper into a state of disrepair. Even worse: they found out that there was contamination by asbestos or other poisonous substances. Consequently, they had to tear down the Ottobrunn school building and build a new one.

What a nice coincidence that they already had a container school in Höhenkirchen-Siegertsbrunn! Originally, it had probably been built as an interim solution for their grammar school. I assumed that it would no longer be needed when the Höhenkirchen-Siegertsbrunn grammar school was finished.

Wrong! Because the Neubiberg (that is a neighbour of Ottobrunn) school had suffered the same destiny as the Ottobrunn school building. Consequently, the children in Neubiberg were the first to be transferred and they had to travel to Höhenkirchen-Siegertsbrunn for quite some time.

As soon as the new Neubiberg Grammar School building was finished, the Neubiberg children were allowed to come back and the Ottobrunn children had to travel. Now they had to move to the interim solution and travel to Höhenkirchen-Siegertsbrunn on all school days. Where they were taught in the container school building.

The Ottobrunn Grammar School building was mostly demolished, because they plan to build a new one at the same location. They said that renovation/restoration work is not economically sensible.

20150619_110503_resizedFor my daughter, this meant that her daily way to school increased from one kilometre to about eight kilometres (or an S-Bahn train travel).

Basically, I find this rather outrageous, because, after all, we had chosen Ottobrunn for the closeness of the school. And then they move Ottobrunn – at least as far as schools are concerned –ten kilometres to the south.

Yet this is not all of it, either! What tops it all is that the children from Ottobrunn were a lot happier with their container interim solution than the children in the pretty and newly finished building in Höhenkirchen-Siegertsbrunn at the opposite side of the street. They will probably still be happier when they move back to their new grammar school buildings in Neubiberg and Ottobrunn.

The reason is that you cannot or must not open the windows in the new building. Because, naturally, this building has been designed according to the latest building-isolation regulations – and the least expensive offer probably again got the contract. However, a good climate in “modern” buildings is an expensive thing. You can easily start getting a headache or worse after two hours spent in the building. Mind you, we are talking this phenomenon in our upcoming age of all-day schools. For me, this would have been a reason to go crazy when I was a child. …

To the right, you see the containers, to the left, you see the new grammar school.

To the right, you see the containers, to the left, you see the new grammar school..

The teachers, too, perceive the building culture in the new building as rather inconvenient. They are happy about every single lesson they can teach in the container school. I wanted to test it myself and also went to the new building. So far, we can still enter German schools without wearing a special badge or identification. For safety reasons, this will probably also soon be a thing of the past in our future all-day schools.

Doing my inspection – or rather my “feeling around” – I did not have a very good feeling.
Currently, they are busy doing construction work in Ottobrunn, too. Around the mid-term of next year, the children now being taught in Höhenkirchen-Siegertsbrunn will return to breathing Ottobrunn air. But they say that in the new building in Ottobrunn, you cannot open the windows, either. And I am sure in Ottobrunn, too, the least expensive bidder was given the contract. Why can’t they at least again build houses with windows you can (and may) actually open?

Also, I am quite curious to see how long the new buildings in Höhenkirchen-Siegertsbrunn, Neubiberg and Ottobrunn will last. I think this is another area where the half-life gets ever shorter.

(Translated by EG)


Allegedly, they have a rule in Switzerland: 
As soon as the bidding process is finished, the least expensive bid is automatically removed.

Roland Dürre
Sunday June 21st, 2015

Birthday – 65 Years Old – Party and Speech.

P1070216In only invited close family and friends to come to my birthday party on June, 20th. Consequently, it was only a small party in nice surroundings and with a wonderful musical background. I had also prepared a speech, which I presented later in the evening, after all guests had eaten and before we started dancing. Here is what I had prepared:

Today, Barbara and I celebrate a birthday – and we invited only a few people. All those who are here today are very special to us, or else we shared a very special experience with them.

Let me start by introducing to you some persons who are extremely important for this day. Here are our hosts Rita and Same Afsali, who provided the venue for this party. Next, I would like to introduce our musicians around George Greene, who will entertain us with beautiful melodies. And then there is Charly Ritzer, who will serve us food and drinks.

Same und ich mit Christian, der uns zusammen gebracht hat.

Same and yours truly with Christian, who brought us together.

Same and I go back a long way. We first met at Siemens when he was rather green there. Later, he had his own career and was very important for many people. Today, he sponsors us with his pavilion.

George Greene and his friends play for us today. I first met George in the 1960ies in Augsburg. In those days, he was still impresario in the US Army and sometimes played his Blues in dark hovels in Augsburg in the evenings, for instance at Hanks Night Club.

And in those days, we as senior class students were more than fascinated by this totally different world. Next to him today, you see Rocky, Thilo and Willy; the sound director is Mike. Our musicians are good friends of mine and played quite often for me in the past.

P1070182Charly and his young team will serve our meals. He is also one of those I have known for a long time. He used to be the landlord at TS, a great Unterhaching bar. For me, it had special meaning because our young programming experts in the 1980ies would go and spend the last hours of the night after having finished work around midnight fairly regularly. However, the quality of our products did not suffer from this. It might even have been important for our success.

Now about me. I am constantly asked what I am doing all day long these days. After all, I stopped being an operational part of the managing board at InterFace AG on January, 1st and will now soon be old enough to collect my pension.

Being an ex-programmer, I structured my spheres of activity in different columns.

The first column is my private life.

First and foremost, there is the family. After all, in 2015, the second grandchild was born into our family. It is a boy and he was named Naveen Daniel. Since currently  Naveen Daniel and his parents move from Mumbai to Peking, visiting him is rather costly and time consuming. But we are just as happy to have our 2014 grandchild, Carolina, daughter of Patrick and Anna, visiting us. It is a little easier, because Carolina lives only two kilometres from our home.

An important part of my private life are our bike tours. Mostly, there is only the two of us – Barbara and I. This year, we already had a wonderful experience – two weeks through the west of Cuba on our bikes
Our two “small” children (those born last), Franz Rupert Simon and Lisa Maresa Marie reached important milestones in their lives. Rupert finished his Master diploma and Maresa did a small final spurt towards graduating from high school that turned out quite brilliant, after all.

P1070192I gain more and more freedom and treat myself to many small joys, such as visits to the theatre, not just in Munich. For example, a short time ago, we went to the Sommerhausen “Torturmtheater” with our hosts of today, Rita and Same. The three weeks of family vacation spent in a tent in the southernmost end of the Peloponnesus have become a cherished and important tradition. This year, Carolina will also come along. Whenever at all possible, I will go swimming every day in summer. The only occupation in my private life that does not get enough time these days is playing chess, which was always important in my life.

But there are three more columns:

I would name the second column “sharing knowledge and experience”.

For instance, I am supervising a series of start-ups and mentees. I meet them through UnternehmerTUM or the TUM alumni network. Once in a while, they will also be friends or people I met by chance through my network.

In my life, there has been only one direction for fifty years: up. I have a lot to thank other persons for, and I would like to give something back. I believe it is my sacred duty to help young (and sometimes also some not quite so young) persons find their place in life.

My partners often ask me what my support costs. As a general rule, it costs nothing, because, after all, I do it primarily for myself. I learned that you need to practice a lot if you aim at perfection. Consequently, every single discussion is a practice in knowledge sharing for me. Practicing like this helps me to improve; that is: to better understand people and their anxieties and fears, as well as their values, expectations, interests and needs and help them to autonomously find their way through undistorted mirroring and prudent comments. In this process, “autonomous” is the central word.

Incidentally, “start ups” sometimes really turn out to become hard work. For instance, I received five business plans yesterday and will take a closer look at all of them tomorrow, before sending them back with my feedback. I am truly excited and looking forward to the work ahead, even though sometimes this kind of work is a little dry and formal.

The third column is “learning”.

Regardless of the fact that I find schools and the educational system in Germany and Bavaria rather sub-optimal and inadequate – or perhaps because that is what I feel about them – “learning” is and always has been very important for me. What I mean is learning outside school, learning in innovation, learning from people. That is what this is all about.

In my life, I was taught a lot of technological and human wisdom by various persons. There were master programmers whose art I was permitted to learn. Mentors such as Rupert Lay taught me much that had been alien to and unexplored by me. Friends helped me to better understand what leadership and management might mean. I hugely benefitted from my regular participation at the St. Gallen RISE workshops as far as my entrepreneurial life is concerned. And again and again, meeting people helped me to find my own way in life.

In recent years, I learned most in PM-Camps. The topics on these barcamps are project management, management as such, entrepreneurship and leadership. To a large extent, these anti-conferences are about social and systemic change.

I initiated the PM Camp movement together with Stefan Hagen – incidentally, today is his birthday, too – and other friends. Thus, I find the PM Camp a humorous example for the “old bootstrapping” we know from computer science. After all, I myself was among those who founded the very institution where, for the last four years, I learned most.

By now, there are regular PM Camps in many cities in the geographical zones of D-A-CH: in Bad Homburg (Rhein-Main), Berlin, Dornbirn (this is where everything began), Karlsruhe, München, Stuttgart, Wien, Zürich and perhaps soon in Hamburg, as well. And the repercussions start showing even in the non-German-speaking part of Europe. For instance, I was made godfather for the Barcelona PM Camp this autumn (which, for me, means around one weekly hour of skype sessions).

And then there is a little philosophy, for instance this autumn on the “Grashof” behind Kassel and, if possible, meeting my friend Klaus-Jürgen Grün once a month in his wonderful Munich day symposium.

My fourth column is “change”.

Encouraged by the success of the PM Camp, I, along with friends, am currently starting a movement that will institute barcamps for “active mobility in everyday life”. It will start on January, 4th and 5th in Unterhaching. Preparations are well under way and you can register online from July, 1st.

Let me elucidate:    
Our mostly used way of transport is the individual mobility based on combustion motors. As I see it, this is something that is going to lead us astray, both socially and individually, not to mention the planet. This mode of transport lowers the quality of life for the individual person and for society, kills lives in traffic accidents  (according to the UNO, 1.4 million persons were killed worldwide in 2013) and, in particular, kills the environment.

What is more, the “individualized motorised traffic” has become a metaphor for the grotesque development on our planet that destroys our habitat and harms us all. In order to get rid of this, we will have to forego many habits we have come to love, but which are still evil. However, changing habits is always hard – just think of smoking or watching TV. You are all on your own and have to start at your own front door.

I think there is no better alternative for us than changing from the car to active mobility – no matter if you walk or use the bike or some other way of moving under your own steam. Because it does not hurt at all. In fact, you will soon experience how much better you feel. This is the only way for us to become happier again.

So what else am I up to?

P1070194I am trying to “de-crust” the world a little bit – from too many morals and too much bureaucracy. I play lobbyist for “good” IT projects für Bavaria, I inspire persons – not only in my IT environment – and meddle in all varieties of things.

I am in favour of participation, change, watchfulness, appreciation and acknowledgement of the social systems of our times. I want to help towards people being made greater, instead of smaller, by their environment. I want to see to it that the quality of life for the persons near me will increase, rather than decrease. And that we humans will not be enslaved and destroyed for irrational reasons by non-personalized systems.

And I also want to continue voicing my opinions in the IF Blog. As you see, there is enough left to do. But today, let us party and then let us work tomorrow!

(Translated by EG)

The pictures taken at the party have just now been sent to me by my friend Same. Thanks a lot!

Roland Dürre
Thursday June 18th, 2015

Heroes, Gladiators and Consumers.

220px-Weltmeister_autograph_1954On one of the early PM Camps in Dornbirn, Eberhard Huber initiated a really great session about “cultural onions”. I wrote about it.

The “cultural onion” describes of such social systems as, for instance, the Federal Republic of Germany in the form of a model. For instance, the peel of the “onion” are its symbols, rituals, basic beliefs, certainties, values, … And, in particular, the “heroes” of a system also play a role.
This session motivated me to look for a “German” hero. I was thinking of the great classics of literature (Goethe, Schiller, … ), modern authors (Brecht, Grass …) and philosophers (Kant, Nietzsche …). Also, I wondered if politicians (Erhard, Brandt …), people who resisted (Scholl, Staufenberg), composers (Bach, Beethoven …) and musicians (Lindenberg, Nina) and many more might be candidates for the role of my personal hero.

None of them was good enough to meet my requirements for a “German Hero”. Since I am a passionate soccer player, I continued my search there. However, Beckenbauer, Haller and Uwe Seeler (although he came pretty close), too, fell short.

And then I had an idea:
The soccer world champion team of 1954 – the heroes of Bern – they meet the bill! This is the team I consider just about good enough to be my “German Heroes”

But then, this was 61 years ago. We now live in the 21st century. A short time ago, I watched the Champions League Final Match   Juventus against Barcelona 2015 in Berlin on TV. And again, I was surprised to see how excessively all the stars of today are tattooed. I also wondered why they all had such strange hairstyles.

And then it immediately dawned on me:
The soccer players of today are the gladiators of our times. The tattoos and dyed red-Indian and other hairstyles are part of their war outfit. They serve the clubs and, behind those, the concerns. That is who they fight for and that is who pays them for it. Along with extensive marketing, this is how the consumers are kept dependent and motivated to buy more and more. Said consumers will cheer “their” gladiators and obediently buy the products advertised by those gentlemen.

Thus, the contests of our gladiators are the biggest spectacles of our times. If the “right team” wins, the people will go crazy, if they lose, the fans (the consumer population) are sad and wish to die, burning their banners.

Soccer players are the modern mercenaries in our times. They “play” for those who pay best. But above all, they fight for mass consumption. This is no longer about panem et circenses in order to distract and entertain the people, as was customary in ancient Rome. Instead, this is all about turnover and profit, e.g. about “the money” of the masses.

As I see it, this development is an indicator of the decadence of our times. Decadence which, in prospering social systems, can be observed as the preliminary stage of the end shortly before the downfall.

However, we know that innovation is creative destruction and I already look forward to what will come next. And we relish the morbid joy witnessing the downfall of all those who are responsible for this development.. Except that this concerns all of us!

There is also a kind of exploitation and insurance organization for the gladiators. It is called FIFA and earns a lot of money with the new games.

Roland Dürre
Tuesday June 16th, 2015

Are We Nuts, Or What?

Schwedisches Mehrzweckkampfflugzeug Saab JAS 39 Gripen (schwed. „Greif“)

Swedish Multi-Task Fighter Jet Saab JAS 39 Gripen (Swedish „Greif“)

I rather like the Swiss. After all, I have many Swiss friends and know numerous enterprises there quite well. They fascinate me.

Consequently, I get the impression that much is a little more innovative there than here. General studies confirm my opinion. And I also think that the direct democracy is one of the reasons for the Swiss success story – which can actually even survive an enormous increase in value of the Swiss Franken. Incidentally, this is also due to many very industrious and important German “Guest Labourers” – at all levels. I just met many of them in Zurich.

Here is an example for a nice result of direct democracy:

The Swiss Government (Schweizer Regierung) wanted to buy 22 Swedish Gripes (fighter jets made by Saab) for its air force. Well, many people world-wide wonder what a country like Switzerland would want with such fighter jets. Also, it is hard to imagine a real scenario where they might become active. Apparently, this is also what the Swiss citizens asked themselves. They voted against it with a majority of 53.4 per cent when they were asked if the jet should be bought on May, 18th, 2014.

An important argument of Gripe enemies was that the same money they would have had to spend on the fighter jets could be used a lot more effectively to, for example, protect people against attacks from the internet, also called cyberspace.

And what will the Germans and the Bavarians do in the summer of 2015?

They institute the first study course for military fighter jet pilots at the German Armed Forces. This new course of studies “Aeronautical Engineering” will start at October, 1st, 2015 with 13 students and future pilots. I do not know if some of them are women.

The study course combines extensive studies in engineering with flight training for “military fighter jet pilots”. It will all happen in Ottobrunn/Taufkirchen. That is where we have some kind of armament-industrial area. In parts, it is a run-down district, but over the last few years, they invested significantly into infra-structure. There is a strange contrast between rather dilapidated office buildings and beautiful new streets with cyclist’s paths, (both of) which nobody really needs.

And in this district, the Ludwig Bölkow campus will be built. It is part of the University of the Armed Forces and will probably house some kind of external education. The studying concept is a dual system designed to combine academic content and technological/practical training. The director of the Munich Aerospace e.V., Prof. Klaus Drechsler, is certain that the “new and first study course on the Ludwig Bölkow Campus will be an enormous attraction for future study courses”.

On May, 22nd, the president of the University of the Armed Forces, Prof. Merith Niehuss, gave the starting shot for the project on the Ludwig Bölkow Campus in Ottobrunn/Taufkirchen. Among the persons present were Airbus Boss Thomas Enders, the director general of the European Space-and Aircraft Organization ESA Jean-Jacques Dordain and other representatives from industry, science, politics, and the Armed Forces. Naturally, the ritualistic ceremony was also attended by the Bavarian Minister Frau Ilse Aigner, who holds the record of attendances and speeches when it comes to events and openings in Bavaria. Will “Mrs. Super-Busy” now become “Mrs. Supersonic”? For details, read the article on the University of the Armed Forces website.

One would assume that studying and flying fighter planes are primarily educational and military issues. Consequently, the defence minister (ok, Bavaria has no defence minister) or the minister of education should be responsible, shouldn’t they? At least that is what comes to mind. But then, the minister of economy is probably involved because in our country, all is about business and profit, anyway. The communication about it always includes the lie that “it is all in the interest of jobs”.

Consequently, the new course of study – just like the decision we heard early in June 2015 that the anti-missile system MEADS will be bought for several billion Euros by the Armed Forces for air defence – is only a part of the federal and substantial program initiated for a gigantic business promotion. It has been made to happen by a powerful lobby, but people gladly comply, because otherwise the German success balloon might burst!

Here are a few comments telling you why I do not understand any of this.

  • Do we still live in a world where the daredevil fight of lonely heroes with their jets in the sky fighting for life and death is at all justifiable?
  • Do manned fighter jets still make any military sense in an epoch dominated by anti-missile systems and drones?
  • Can we not find enough examples in fields where we should re-establish our competitiveness, for instance in computer science?

I think there are many things on this planet that would be more worthy of our money and intelligence than studies for fighter pilots. Consequently, news like this one give e me almost physical pain.

(Translated by EG)

I took the picture from Wikipedia – it was uploaded by User:MatthiasKabel – own product.

Roland Dürre
Tuesday June 9th, 2015


2013Oberstaufen2Now it is over, the G7 summit. It hardly mattered to me – except that, on my way back home from Zurich in the DB IC-BUS last Saturday, I was subjected to massively armed and gum-chewing policemen at the German border. Also, many helicopters made a lot of noise during the G7 weekend and before in the skies over our home country. We in the south-east of Munich had high air traffic.

But what moved me was that, apparently, the top leaders of nations still have not learned what wise managers already should know in the third millennium: part of good leadership should be to display a certain amount of humility and mindfulness. The same is true for understanding the people emotionally and being capable of some empathy for their sorrows. If possible, it should come along with a sense of reality – applying modesty and with the adequate appearances.

However, this plays no role when our political elite act. They will quickly declare that they represent an “association of values”. And the bad guy Putin is not invited. Because he would be a risk factor for the unity as demonstrated by the others. Even if, behind the façade, said unity is not all that pronounced.

Yet we know that those who talk most about values have the fewest. After all, it is no coincidence that the “rich nations” basically always live at the cost of the “poor ones”, enjoying to leave them in suppression and dependence. Protection of acquired possession is the motto. After all, none of us want to jeopardize our prosperity, even if it reduces us and will eventually kill us.

On the other hand, the gentlemen of the world have learned that you need to announce positive things. Consequently, they announce what “results” have been achieved. Now they really want to find an approach for doing something about the climate. Everybody knows that declarations of will are often publicly manifested and celebrated, yet even one week later they will be meaningless.

(Translated by EG)

CGu_W8WUgAI8wlMYesterday evening, I arrived back home from the PM Camp in Zürich #pmcampzue. It was a small but very exquisite PM Camp and gave me two great days.

The first day was opened by Nadja Schnetzler who is also co-chair at word and deed. She bewitched the Camp participants with her wonderful postcards: and she showed us how you can “Embrace Chaos” in a very unobtrusive and serene way.

To me, it seemed that this nice impulse presentation went a long way towards many other sessions considering it important to talk about the situation of humans in their various roles whenever project-typical tasks are concerned.

Consequently, much was about the change in our society and consequently also the change in our projects that progress brings in its wake. It was all about intended and unintended change – and about “Innovation as creative destruction”.

CGzS2XBVIAApMhUOn Saturday, which was the second day, we all started the day with a drumbeat. Bruno Gantenbein, owner of, who has been a successful business counsellor for many years, started the day early in the morning with a strong impulse on “learning, too, is part of evolution”.

And his way of doing so was so emotional that some of the audience were moved to tears of emotion and joy.

And then he, too, spanned the bridge between what he had said and project management – asking the for me absolutely central question: “How, where and what do projects managers actually learn?”

Toni (Anton Maric) in Aktion.

Toni (Anton Maric) in action.

It was no surprise that the second day eventually led to a broad exchange of knowledge about the question how meaningful, efficient and humane learning might, should or must be.

As you can see on the pictures taken at the PM-Camp Zuerich, it was a great event. You can also see the pictures on the Flickr Account of the Zurich PM Camp!

Consequently, I would like to say many thanks to the PM Camp Zürich Orga-Team, namely Dagmar, Bruno, Christian, Matthias, Silvio and Toni, who initiated the Zurich event.

And in less than one month, from July, 2nd to July, 4th, the next PM Camps are waiting. They will be held in Bad Homburg! Then the day will be called #pmcamprm!
I definitely also want to be there and, of course, you will also read my report on it in the IF Blog!

(Translated by EG)

Euro_centThis is also one of the questions with no easy answer. The answer depends on far too many parameters and influence values. And one of those factors are certainly also the entrepreneurial goals, such as sustainability and common good economy (Gemeinwohl-Ökonomie).

It is frequently discussed and I am frequently asked: What is the “right” return for an enterprise with a certain concept and in a certain area? I also keep seeing absurd numbers set as obligatory values. For many enterprises, those numbers are utopia. Consequently, I want to use this article to try and give some reasonable advice.

If, on reading this now or on starting to read what follows, you get bored, then I would recommend you continue with the next paragraph written in bold letters, which is under the heading “All Bullshit?”.

First and foremost, let me again define the term “return”. We distinguish between return on sales and return on capital. They both tell you in per cent how high the proportion of the return is profit, or how much of the capital you gain from. That sounds fairly easy, doesn’t it?

One piece of information:
People often totally forget the trivial fact that even a small sales return might well mean a huge capital return. After all, the return is supposed to be many times the capital. And if I have a return of, for example, fifty times the used capital, then this means I get a capital return of 100 % for only 2% sales return! In the 1950ies and 1960ies, for instance, the German economy mainly focussed on the capital return – and it is surprising what low numbers (sometimes even in the low one-digit per cent range) were considered good results in trustworthy companies, such as Siemens and VW.

Second piece of information:
Well, basically, it is difficult to determine the “correct” absolute number for the profit (what exactly is the profit and how high is it?), since it is the profit per sale. More often than not, both the term and the reference are not clearly defined. Consequently, you usually take the EBIT (earnings before interest and taxes) for calculating the sales profit.

Third piece of information:
But the last profit contribution from the business statement, too, is a valid and yet not easily calculated basis. If you use it, the employee and/or director bonuses are already part of the salary and as such have been subtracted. Yet those were only due because the “profit strength” of the enterprise was very high, better than the EBIT, which has been reduced by the success premiums paid to the colleagues. The question arises if one should not, at least mentally, add them to the result.

Fourth piece of information:
“Investments“, into products (which, when we are talking software development, must be considered costs for services, rather than investments in the bookkeeping sense) reduce the EBIT in the bookkeeping sense. After all, the software that has been developed may/need not appear on the balance sheet in our company. The same is true for some other investments into the future you cannot put on your balance sheet, for instance training programs and the reputation of the enterprise. They minimize the profit, yet they are important “investments” into the future of the enterprise.

Fifth piece of Information:
I, however, propose that you should see this as your duty that goes without saying as an entrepreneur and that you first consider the profit as “return power of the enterprise”.as seen in the last contribution margin. The rest (all the measures taken with a view of the future or all the things that probably would not have happened if you had had less return, such as extensive trainee programs, team building, success parties, luxury and also investments in your own tools and the like) will be stored “mentally” for further reference.

Sixth piece of information:
When judging the situation of the enterprise, I can certainly virtually add to the return. On the other hand, I will subtract hidden costs and risks of the enterprise. Being the entrepreneur myself, I will know best what these are. Apart from and on top of the actual numbers, this is the best way to judge where the enterprise is standing.

Seventh piece of Information:
As far as the actual numbers for the profit (the return) are concerned, many factors play a role. The size of the enterprise may need to be considered. There might be critical numbers below optimum. Small firms, in particular, can be organized in such a lean way that they can render a high profit. Because you have a high awareness of costs and only little infrastructure and administration, everybody assigns to the account, much is just done in passing and what remains is done by the boss, anyway.

Eighth piece of information:
Of course, your sector is also a determining factor. If you sell mass products wholesale, an extremely small turnover return means a huge profit. And if you are into services or niches, your profit might well break away, with the result that you have not enough to make a living.

Ninth piece of information:
Usually, growth will cost money and therefore decrease your return. Consequently, you can never regard the return isolated from the growth. Growth is not a value per se, but a sensible organic growth is probably something natural and necessary for all enterprises.

Tenth piece of Information:
If you are into services, growth will happen either by working more hours or through adding persons, i.e. more employees. It gets harder and harder to increase the hours. So you will need more employees. It is rather costly and time consuming to find new employees. Young employees, such as graduates from universities, often need long adjustment phases and training on the job. A head hunter (which is something I usually would not recommend) who provides you with “finished” new employees, too, costs a lot of money and therefore minimizes the returns. But finished employees, too, will initially make the degree of capacity smaller.

Eleventh piece of information:
As you can see, return and growth belong together. And growth will cost money. Consequently, it seems rather logical that there is an inverse correlation between sales return and sales growth. And a “healthy” firm can probably only get its old profit through growth breaks.

Mind you, sometimes it might make sense to have a negative growth or a negative return. For instance if changes in your environment make it necessary.

Twelfth piece of information:
So, talking actual numbers, you could actually put x per cent growth in relation to a return change y (which is often negative with a strong growth). A very rough rule of thumb (formula) might be that the growth should always be considerably higher than the decrease in return.

If, compared to the previous year, the growth of a service providing firm was 10% while the sales return remained stable, then this is a rather good sign. If the growth increased by 10 %, you might well get a decrease in returns of y %, for instance 2 %. This might well be quite acceptable.

And it is the talent of the entrepreneur to see to it that the gradient of the sales growth is higher than the negative gradient of the sales return, i.e. that x > y remains or gets valid.

Mind you, all this is only true for a pre-defined “sustainable development” in the enterprise, for instance in the sense of “common good economy“ (Gemeinwohl-Ökonomie). Of course, if you are interested in short-term results, you can sometimes make a huge profit through depletion. But you should be careful not to damage too much of the substance.

Thirteenth piece of information:
Another formula, especially for start-ups, has been developed in the USA: 40%-Rule. The advice is:
Your annual revenue growth rate + your operating margin should equal 40%!
In other words, the sum of growth and operating margin should always be critical. See also the following comment:

This means you can build the sum of growth and return. So if I have 10% return, I should have 30% growth. And for 5%, I get 35%? That sounds logical, doesn’t it? And you can even apply it for negative numbers: If I have a negative return, (-10 %), I will have to have 50% growth. Perhaps in order to build up a particularly strong market position and thus attract the attention of an investor.

All bullshit about the return?

Regardless of the fact that I believe my ideas are quite reasonable, or else that they are backed by quite good sources, I believe that the “return question” is the totally wrong approach in terms of entrepreneurship. The question: How good is my return if compared to other enterprises? Is more like a game – if everything is running so smoothly that there is nothing better or more urgent you need to do.

What is truly important is the entrepreneurial culture. To what extent does it create a “sphere” for teamwork that is innovative, instead of making people ill? Does the enterprise give people a chance to actually participate? Is there a meaningful purpose that is not polluted by bureaucracy? How do the employees see themselves? (Everybody is a champion)? How to recruit the right persons for your enterprise?

Those are the important questions you permanently need to find answers to. They also call for never ending work. And that can only function if you have the right kinds of persons by your side. And if you employ the good ones.

That is what has absolute priority. It goes without saying that those considerations do not absolve the entrepreneur from taking the “business component” seriously and to always carefully and skilfully keep in mind what the connection between “the numbers” and “the development of the enterprise” signifies.

But if you take good care of this, the high “return” will be a natural result. And more likely than not, you will then gladly notice that, as a general rule, your results are better than those of the competition on the market.

And then you have to answer a totally different question:

How to distribute the good results:

  • How much do you need to keep as reserves?
  • What share do the people in the enterprise get?
  • What remains for the shareholders?

But this is a totally different matter. And, as I see it, it is a very enjoyable task.

(Translated by EG)

Many of the ideas in this article were motivated by Elmar Jürgens. Many thanks to Elmar.

For more articles of my entrepreneur’s diary, click here: Drehscheibe!