Bosch: what you do isn’t what you should always do – a lesson for banks?
Ever stopped for a moment to consider exactly what is banking really all about? Could a lawn mower be the key to change?Not any old lawn mower. But Bosch lawn mowers – and how they came about. Because this is about re-invention at a very dark time. A time not unlike now.
About how a company faced with a collapsing market found the vision to change. Emerging stronger and able to cope with an even greater challenge to follow.
Once upon a time…
In 1886 in fact, a young engineer called Robert Bosch built a company that would kick-start the emerging car building industry.
By 1902, He’d designed the first spark plug and ignition systems and ten years later was exporting nearly ninety percent of what he made.
Bosch made it through the First World War only to face the great recession of 1930 and a country in turmoil. That signalled the Company’s first re-invention.
A company reborn
The Company turned to new markets, designing and releasing the world’s first hammer drill and then scored again with the first domestic refrigerator.
But Bosch wasn’t about to be dictated to by shareholders or greedy money-men. He made sure of that. By 1937, he took Bosch private giving any profits not ploughed back into R&D to charity, which is still the case today.
Another financial winter
But even a visionary company like Bosch isn’t impervious to a global collapse. 2009 was its worst year, losing 60% of its sales to see rare balance book red ink. But did Bosch reign in costs and try to shelter from the financial storm?
This is where we see the sharpest contrast between banking and Bosch. While banks shrank away from the cold wind of crisis, Bosch ploughed four million Euros into research and new products, 50% of which was in eco-development. And by 2010, they were back in profit and had filed nearly 4,000 patents.
The banks on the other hand despite doing nothing to change – having caused the crisis in the first place – had the audacity to award themselves extravagant bonuses in the name of “talent retention”.
So how could the banks learn from Bosch?
By realising that the fall of one market doesn’t mean the collapse of everything. By having the courage to use the value of the people they employ to work towards doing something different, something better.
But above all, by realising that a profitable business isn’t just about shareholders. Companies can be morally rich as well as financially successful.
Just a pity Bosch never chose to go into banking.