Hermut Kormann

		Hermut Kormann
		CEO (retired) of J.M. Voith AG

Interview with Hermut Kormann

Hermut Korman studied for his masters degree in business administration (“Diplomkaufmann”) at the University of Nuremberg-Erlangen between 1961 and 1965, and was awarded his doctorate from that university in 1968. On completing his studies, his intention originally had been to pursue a university career. However, he took the decision to work for a while as a corporate consultant first – and started out on his career with Booz & Company in Düsseldorf.

After a total of four years with Booz & Company and another consultancy firm, in 1973 Kormann joined Brown Boveri (now ABB). There he gained wide-ranging experience in a number of management positions, including in Iran, before being appointed to the board of J.M.Voith AG in 1991. Voith is today one of the biggest family-run enterprises in Europe, operating in the markets for paper, energy, mobility and services. The company was founded in 1867 and now employs 43,000 staff at 290 locations world-wide. From 2000, Kormann held the post of CEO. During his time at Voith, the company raised its sales from around EUR 1.2 billion to just under EUR 5 billion. Since March 2008, Hermut Kormann has officially been “retired”. Not that things have quietened down that much for him: he has been signed up to teach about strategies for family-run companies, and is much in demand as an independent consultant and Supervisory Board member.

Is there someone or something which has particularly influenced your professional career?

The early years of my professional work, as a corporate consultant with Booz & Company, had a very strong influence on the manner in which I approached problems or issues throughout my entire career. As a consultant, you analyse situations down to the smallest detail, you try at the same time to take an objective view of matters, you stick to the issues and you consider problems from different viewpoints. This approach, and the “prove it to me” mind-set, is a great strength which consultants can contribute. Both aspects have also been very influential on me and my work.

In my later career, however, I also learned that analysis is not everything. One of my first bosses in industry taught me that a problem doesn’t simply get solved by being analysed perfectly. In his words, “you need to take people along, enthuse them about your solution, communicate it outwardly and carry them forward.” Only managers who also live out the things they are seeking to implement will achieve their objective. The mixture of analysis, operating in the background, and the correct use of communications are what make the difference.

What were the key factors behind your success at Voith AG?

When I joined Voith in 1991, I went in as a director and the intention was for me to become the Finance Director – albeit with a 9-month transition period, during which my predecessor was still in post. One of my big challenges was to develop the financial and tax-optimised solution to a conflict between the owner families. We spun off one part of Voith and paid off the shareholders who were leaving the company. At that time, the capital structure was therefore an especially challenging area. But we were able to solve these issues successfully, and today Voith stands as one of the leading family-run companies in Europe.

It was not least during this work that one of my maxims proved its worth: you have to work hard if you want to be successful. Passion, creativity, innovation play a part, and equally the ability to stick with a problem and go into things thoroughly.

My experience has shown me that the neutrality of the corporate consultant is a major advantage. Consultants see many companies; they have the ability to transfer solutions developed on one project to a different company. These advantages are there to be exploited – even within your own company.

You similarly need to achieve this change in tasks and responsibilities in the internal development of managers. During my time as CEO, I always took care to deploy engineers who had delivered outstanding performance in their specialist area to work as managers in a completely different division. There, they were required to rethink, to engage with sets of issues which in some cases were completely different, and to prove themselves all over again. That way, I simulated situations in our traditional company which are the everyday experience in consultancy.

You have now been “retired” for a year, more or less. How does that feel, and what is now taking the place in your life previously held by your work at Voith?

I have always lived in two worlds: alongside my responsibility as a manager in business, I have always been interested in the academic world. When the right assistant professorship opportunity did not present itself in the period immediately after completing my studies, I made the decisive move of joining Booz & Company in Düsseldorf. Even after this phase, initially conceived as just a transitional period, I was completely convinced about sticking with business – in the firm belief that I was also needed where I was.

In all the years, however, I have never lost sight of the academic side, and I have written books and essays about the subjects which have been my areas of focus. The issue of strategies for SME-sized, family-run companies has long been a concern of mine. The knowledge gained in this field over many years is something I would like to pass on. Since going into retirement, I have more time to devote to this passion, and I am really now doing what I wanted to do all those years ago after completing my studies. For example, I hold an honorary professorship in Leipzig for management of family-run enterprises, and now also at the Zeppelin University in Friedrichshafen. And last autumn, my book on the role of advisory boards in family-run companies, “Beiräte in der Verantwortung“, was published.

Have you any advice for young colleagues just starting out on their career with us?

I would certainly choose consultancy over again as a starting-point for a career, and can recommend it to others. You learn from a wide range of projects, often in different sectors of industry; you gain an ability to make comparisons and contrasts – someone who has been in industry from the very start is often unable to do so.

It is not always the issue which is important, because if someone engages with a particular subject in depth, you generally find that exciting outcomes can always be achieved. The key thing is that you work intensively, that you solve problems, enabling you to demonstrate successes (there’s a German expression, “dicke Bretter bohren“, combining the sense of not shirking from the hard work of drilling planks at their thickest point with the sense of in-depth and intensive work, which seems particularly appropriate); and you must ensure that actions back up what you say.

I advise young people to ask themselves the question: “How do I become a good employee?“ There is any amount of literature on the subject of “How do I become a good manager?” – but, conversely, from the employee viewpoint, thus far there hasn’t been a lot of useful material written. Showing respect for your line manager, acting correctly towards colleagues – that is often critical for success.

When switching from consultancy to industry, it is not easy to find the right entry point. You have to behave differently, to adjust. Consultants have mostly come to corporate management levels very young, and some cases too quickly. When switching to industry, it's important to put significant emphasis on allowing yourself sufficient time to make the transition. Often, the pay levels alone can mean that you initially have to moderate your expectations for 2-3 years. Entry via the internal strategy department is a particularly suitable approach; after a few years, you can then move to corresponding line management functions.