Hidden Champion is a buzzword that has recently gained traction all over the world. As per an article by Forbes magazine, there are about 2,700 companies, extremely successful globally. These companies are referred to as “hidden champions” and around half of them are German companies. What are these hidden champions, how do they sustain? And what are their economic contributions? Why does Germany have the most number of these hidden champions? What does it imply for the Global tech industry? Besides, what do they offer the top tech talents?
In this article, we will answer all of the above questions and some more. So sit back and read on!
What exactly are hidden champions?
Hidden champions are not a type of business tool or a theory, but they are considered as a benchmark in the corporate world.
Hidden Champions are those companies that are:
- Amongst the top 3 in the global market, or number one on its continent
- Generate revenue below 4 billion USD
- Not well known in the general public
These hidden champions are extremely ambitious towards their goals and vision, and they are market leaders with a good growth rate.This is the fuel that drives them forward.
For the Hidden Champions, market and technology are the driving forces of innovation as compared to large corporations (Simon, 2010)
Germany has around 1,400 of these Hidden Champions. But they lay low and are often overlooked among the largest German companies. Yet, these firms remain the key pillars of the German economy and have single-handedly contributed to its growth.
Why do Hidden champions matter for the German economy?
The continuous export success of Germany is due to these Hidden Champions. Germany has the largest number of mid-sized market leaders as compared to any other nation. Where Switzerland and Austria stand somewhat on the same level on basis of per capita income, with around 15 Hidden Champions a million of population.
So what have these firms done for the economy? The contribution of the Hidden Champions to the German economy is more than just exports.
- The Hidden Champions have generated over 1.5 million new employments in Germany in the past two decades. They have been growing at a rate of 10% annually and are 6 times bigger than they were when they started 20 years back
- Talking about the revenues, these Hidden Champions have given rise to around 220 billionaire companies. Despite having a large market size, they are able to grow their worldwide market shares, while making innovations
Where these firms have made infinite contributions to the German economy, Germany has done its bit too. There are reasons why Germany has been home to the majority of these global hidden champions.
- Germany is acknowledged to have some of the finest skills and extremely punctual work culture which lead productivity, that has built and sustained businesses globally today
- Germany is still and will continue to be the hub of engineering
- Germany has over 2 times the patents per million inhabitants as France, 4 times as many as Italy, and 5 times as many as the UK. Moreover, the Southern countries of Europe like Spain, Greece, Portugal are still underperforming when we talk about innovation
- Germany also has a best-in-class vocational training system. Germany is, therefore, the habitat for some of the most skilled manual workers in the world
These are the primary foundations that can be attributed to the immense success of hidden champions from Germany all over the world.
Lack of tech-talents in German Hidden champions
Innovation is one of the main drivers in Hidden Champion companies. And innovation comes with innovative minds and tech-talents. Therefore under the current circumstances of scarcity in tech talents for Germany, it is extremely important that companies get a consistent line of skilled human resources and talents from across the world to be deemed or to continue as a hidden champion.
What do these hidden champions offer tech talent?
So, the key reason why you might be keenly interested in this article, what do these firms offer the top tech talents of the world? Why are they better than large corporations? The answer is, what isn’t? Everything! Let’s look at some of the key reasons why these firms must be on your list of dream companies.
- Extremely ambitious targets
Hidden Champions lay down extremely ambitious targets for themselves and their staff, related to market leadership and growth. This contributes to the exponential growth of the company as well as its employees. The Hidden Champions strive for progress and market leadership. This fuels their endeavors toward success.
- Focus and depth
Hidden champions maintain superiority in their end products. Being a part of these firms only means better quality of work and worldwide recognition. The German Hidden Champions focus on narrow markets and are deep rather than broad. They have a tendency to do things on their own and refrain from outsourcing their work.
Hidden Champions integrate their product specialization and know-how with the global selling market. And with firms that practice globalization there are no growth limits. They invest good amounts into future markets like Artificial Intelligence, Block-chain, etc. So you’ll have endless scopes if you’re from or are planning to get into these career lines.
- Loyalty towards employees
Hidden Champions have more work than heads, highly qualified employees and low turnover. They invest 50% more into vocational training of their employees than the average German company. Hence, the growth of their employees is their top. Turnover and sickness rates are also extremely low implying people really love going to work.
- Strong leadership values
The leadership opportunities that skilled foreigners working in Germany get are remarkable and best-in-class. Moreover, the Hidden Champions have more women in top positions and very high continuity of the CEOs. The average CEO tenure is 20 years. When a firm has deep know-how, high-performance employees, and continuous innovation, its employees are also bound to do extremely well in their job.
So these were some amazing facts about the German firms that you’ll hardly find anyone talking about, but their global influence is persistent and here to stay. If you are planning for a German Work Visa make sure to keep these hidden champions in the game! Keep following DevHof for more such articles around working in Germany.