© istockphoto.com/whyframestudio

“The Mittelstand continues to form the backbone of the German economy”

An interview with Steinbeis entrepreneur Dr. Oliver Hettmer

Medium-sized companies have seldom been faced with more diverse and demanding challenges. In an interview for TRANSFER magazine, Dr. Oliver Hettmer, an expert in the issues faced by SMEs, explains why the Mittelstand is equipped to meet those challenges. Management Seminars & Advisory Services for Small and Medium-Sized Businesses, the Steinbeis Transfer Center run by Hettmer, offers a wide range of support services for everyday business.

Hello Dr. Hettmer. You’ve been working on the issues facing SMEs for more than 25 years. What developments has the German Mittelstand undergone during this time?

The Mittelstand continues to form the backbone of the German economy and is an important source of innovation. Given the huge number of challenges SMEs have had to cope with in recent years, that’s not the sort of thing you should take for granted. Just think about the financial problems that arose after the financial and economic crisis, the pressure brought on by the coronavirus pandemic, and the foreign trade ordeals caused by protective measures, sanctions, and war. And then there’s the need to digitalize systems and the impact of skilled worker shortages – despite recession. All in all, it has meant that not all traditional medium-sized companies managed to survive. But as the economist Joseph Schumpeter told us, so-called creative destruction also creates opportunities for industrial and structural change, and it also offers chances to set up companies as the next round of Mittelstand enterprises.

The New Mittelstand – as a term, it’s very much to the point, but it’s also laden with expectations. What’s your interpretation of this term as an expert on SMEs? And what constitutes a New Mittelstand company in terms of characteristics?

New Mittelstand firms can be seen as a synthesis of the classic German Mittelstand and startups. It brings together the best of both worlds – tradition and the future. A New Mittelstand enterprise can be characterized by its positive, sustainable, and genuine vision. With its holistic innovation strategy and a culture of leadership that revolves around transformation, it’s practically predestined to develop as a forward-looking company.

What do you think is the best way for the transition to the New Mittelstand to succeed?

Companies need a culture of openness, based on concise communication and quick decision-making. They also need change management to support the transformation. And then they need the possibility to use agile working methods and offer remote working. I say this because the size of SMEs means they’re predestined to adopt new forms of work. Digital transformation couldn’t come at a better time for them. But it also means they’ve got to be prepared to let go and bid farewell to the possibility that they’ll be able to keep staff under tight control. It’s important to have a new culture of mutual trust between employers and their employees. Given the backdrop of environmental challenges and skilled worker shortages, what’s needed is a holistic approach to managing resources responsibly.

You have contacts at a large number of medium-sized enterprises. What are the main issues companies are coming to you with at the moment?

The main concern our customers have at the moment is how to attract skilled workers. This is because competition is now cut-throat in the labor market – across all sectors of industry. It’s a competition companies can only win by point-scoring with their particular point of appeal as an employer, and by differentiating themselves from the competition with a so-called employer value proposition – the strategic core of an employer brand. We offer consulting to our clients in this area, tailored to the individual company, plus participation in open seminars. Two things worth highlighting in this area are employer branding and digital recruitment. That includes exploiting the potential of Google by using Google Ads, Google for Jobs, a company profile in Google, and YouTube. And of course social media also offers a whole host of opportunities. But you need to attain an appropriate level of professionalism to ensure measures really make an impact.

Another important factor when it comes to transformation is the new EU Machinery Directive, which replaces the 2006/42/EC directive. The new directive places greater emphasis on the increasing use of software and so-called autonomous systems equipped with self-learning functionalities. Among other things, this is leading to extended requirements when it comes to risk assessments. It was against this background that we designed a special seminar, which opened for bookings in September: The New EU Machinery Regulation 2023 – What’s Different Compared to Machinery Directive 2006/42/EU?

One thing I’m also increasingly noticing, especially given the downturn in the economy, is the number of questions about seminars on purchasing topics and inquiries about customer acquisition. Regarding transformation to the New Mittelstand, we’re asked about organizational support in order to actively involve employees. Running moderated workshops on corporate analysis and business development can turn affected stakeholders into participative stakeholders.

What opportunities does this transformation bring for companies, and what hurdles have to be overcome?

There’s an opportunity to be had not only in securing the existence of a company, in a global economy marked by change and upheaval, but in pursuing a path of growth as an attractive employer, while also taking sustainability factors into account. The hurdles are partly global in nature, especially regarding the unpredictability of crises and the intensifying degree of competition, but also partly to do with financial challenges and planning problems, especially if you think about the confusion regarding legal requirements.

Is this process of transformation toward the New Mittelstand also changing work at your Steinbeis Enterprise?

The onward march of digital transformation is accelerating, especially behind the scenes. In the more visible areas it affects the topics of seminars and lectures, which need constant adaptation, as does the design of corresponding consulting services, so that medium-sized companies can be offered targeted support. As the saying goes, nothing is as constant as change.


Dr. Oliver Hettmer (interviewee)
Steinbeis Entrepreneur
Steinbeis Transfer Center Management Seminars & Advisory Services for Small and Medium-Sized Businesses (Winnenden)