How these companies embraced innovation to take the lead in their markets provides lessons for small and medium enterprises (SMEs) everywhere
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In 1972, a German man took his dog for a walk. He had an excitable, curious, and leash-tugging dog – a simple fact that eventually led him to an equally simple solution. He decided to make a longer leash.
Flexi, the German manufacturer of retractable dog leashes, is now the global market leader in its niche. Nearly 50 years after that walk in the park, more than 200 million Flexi leashes have been sold to dog-lovers in over 90 countries. But this is not the success story of just one German company.
Indeed, while Germany is famous for its beer, its fast cars, and the Autobahn, it’s just as famous for small, successful, often family-owned companies just like Flexi. Because underneath beneath the beer foam and highway asphalt lies the bedrock of Germany’s economy: the so-called “hidden champions.” One HC employer captured the strategy well: “We will do only one thing, but we do it better than anyone else.” How these companies embraced innovation to take the lead in their markets provides lessons for small and medium enterprises (SMEs) everywhere.
Small sizes, big wins
Hidden champions (HCs) are not unique to Germany – approximately 2,700 can be found around the globe. However, according to Hermann Simon, the German management consultant who coined the term, nearly 50 percent of HCs are based in Germany. They contribute heavily to the nation’s economic wealth – more than one out of every two euros is generated by SMEs, according to the German Federal Ministry for Economic Affairs and Energy.
[This article has been reproduced with permission from ESMT. Views expressed are personal.]