The number of employees has trebled in the space of just a few years, six new plants have been opened, rivals swallowed up and joint ventures entered into. Expansion in the fast lane—with automotive electrical systems. This long-established company always works hand in hand with its global clients. For managing partner Hans-Otto Kromberg, grandson of the firm’s founder, this is totally normal. We spoke with him about expansion and a pioneering spirit.
Hans-Otto Kromberg looks at us somewhat bewildered: “What’s so unusual about that? That’s the way we’ve been doing things for years—no, for decades. It’s proven successful and is totally normal.”
What this 72-year-old entrepreneur considers to be totally normal gives other businessman sleepless nights: How do I grow the company without losing sight of the overall picture? With a lean management team? And a workforce that knuckles down and gives its all? In short: What risks can I take if I want to exploit the opportunities offered by growth?
Kromberg & Schubert manufacturers electrical systems for cars—put simply, everything to do with the cable harness. Only fifteen years ago (2002), the company founded back in 1902 employed 7,000 people—it’s now more than 30,000. During this period, new factories have been opened or acquired and the enterprises operations in Asia and America massively expanded. Kromberg & Schubert have kicked in the turbo.
And they’ve scarcely noticed any difference, which is why Hans-Otto Kromberg looks so bewildered. It goes without saying that we want to reduce our costs. It’s simply obvious that we don’t want a top-heavy management structure. “We’re not going to build some bloated bureaucracy,” he says. To make sure this doesn’t happen, he has divided the company up into lots of independently operating profit centers. This keeps bureaucracy in check and generates flat hierarchies with speedy decision-making processes.
This recipe for success wasn’t served to Kromberg & Schubert on a silver platter—they had to work hard for it. How do we expand in a smart way? This as a job Hans-Otto Kromberg tackled head on when he joined the company in 1973. “My first project was set up new locations: The year I joined the company, I initiated the founding of a plant in Ireland and of another one in Scotland, too.” These were his apprenticeship exam in the field of globalization, so to speak.
His masterpiece came seven year period later, thousands of miles away. A German carmaker had knocked at Kromberg’s door and asked whether “Kroschu” (as the company is affectionately known in the industry) wanted to set up a plant in South Africa. Kromberg gathered together all the necessary information and got to work. “We took some massive risks,” the entrepreneur admits, citing some of the questions he asked himself: “Do we have a market there? What’s the labor situation like? Are there enough workers? Are there enough qualified workers? How’s it look on the management side, with the work ethic, with productivity?” All of these were imponderables for which no client would assume any sort of responsibility. “Taking the entrepreneurial gamble to organize the business in such a way that the whole project is economically viable,” he says, “that’s part of the pioneering spirit.”
Being a pioneer means to blaze a trail where others hesitate This is the lesson Kromberg learned in South Africa. “As a supplier, it’s important to be there where the client is.” That’s why Kromberg & Schubert followed up its South African adventure by addressing the Latin American and Asian markets.
Another building block in the company’s corporate psyche that assures its continued success is its passion for research: Interdisciplinary teams tinker away on products that could be the trends of tomorrow. Market success can only come about through innovation, goes the company credo.
That’s why Kromberg & Schubert already knows precisely what its customers will want—or better said, should want. And that’s why this entrepreneur doesn’t fear the future. “We’re extending our portfolio into the periphery of our core product, the cable harness,” says Kromberg. And he then allows just one more sentence to escape his lips: “And our job now is to go out and acquire the necessary know-how enable us to do this.”
So “Kroschu” is yet again daring to enter new territory. Without fear and without hesitation.