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Joined at the hip

One of Europe's biggest logistics companies is grooming the management skills of the sons of the two brothers who run the business. Rashmi Kumar and David Bain ask whether the German company has struck upon the perfect succession plan.
Fiege trucks

Felix and Jens Fiege could easily be Europe’s poster boys of next- generation family business success.

Cousins Felix and Jens are the fifth generation of the Fiege family to work at the eponymous business, set up more than a century ago by their great-great-grandfather Joan Joseph Fiege in the small town of Greven in the German state of North Rhine-Westphalia.

Felix, 33, heads up the engineering part of the multi-million-euro logistics company and Jens, 37, sits on the executive board. They are the only sons of the two brothers currently running the business – Hugo, Felix’s father, and Heinz – who are working in the company.

Just as there is a strong relationship between the two-brother team running Fiege, so there is a strong bond developing between the cousins – and this appears to be at the heart of the succession plan at Fiege.

The older Jens might sit on the executive board, but this has more to do with his age rather than any ability differences, and Felix is expected to soon take up a position on the board. Family members won’t say it, but there is likely to be a strong desire for Felix and Jens to assume the co-chief executive roles now held by their fathers.

While Felix has a younger brother and a sister, Jens has three other siblings, but none are so far involved in the business.

Felix says his father and uncle brought their older sons into the business and gave them more responsibility at an earlier stage partly because of their own experience.

“My father and uncle decided early on that the next generation should have time to prepare and manage the business,” he says. “And the approach all of us want to take is a step-by-step one – and not to have a hard beginning.”

Such a cautious approach is partly born out of the experience Hugo and Heinz had to deal with in the late 1950s, when they were suddenly thrust into managing the company after the unexpected death of their father Josef Fiege Jr in a freak car accident.

“My father and uncle had to step in at quite a young age – they weren’t prepared and hadn’t seen it coming,” says Felix. “It was a stressful period but they managed to keep going in the end.”

From this experience, the family was determined to have the next-generation ready for any unexpected events and was keen to get Felix and Jens entrenched in the management of the business at an early stage.

The importance of getting succession right at Fiege is underlined by a statement on the company’s website about bringing the next-generation into the business.

“Fiege is family-run – and remains family-run,” says the statement, which further goes on to detail when Jens and Felix joined the company and what positions they have. Few family businesses make such a clear statement of the importance of the family and succession in their corporate literature.

Obtaining a diploma in business administration from the German campus of the European Business School, Felix worked at the huge consumer goods group Unilever and then Haniel, one of Germany’s biggest family-owned conglomerates, before joining Fiege in 2008.

Felix says that there was no pressure from the family to gain experience outside before joining Fiege, but rather he felt it would be good in terms of learning new ideas and helping to cement respect among non-family members at the business.

“You can bring in new ideas and ways to do things,” he says. “Although I was aware when younger that I would join the family business, to me it was important to work outside before making the final leap to Fiege.”

Jens, who worked at Bertelsmann Ventures for three years and at Lufthansa’s logistic division for a year before joining Fiege, was recently voted by CampdenFB as one of 40 under 40 top next-generation family business members.

The importance of family control is evident at the executive board, where Hugo, Heinz and Jens share control only with two non-family executives. The business is also 100% controlled by the family and has no intention of listing on the German stock market.

Last year, Fiege reported revenues of €1.5 billion. It employs more than 20,000 people in 18 countries. In many ways Fiege is a good example, albeit at the upper end, of Germany’s revered Mittelstand corporate structures – small and medium-sized companies, usually family-owned, that are at the heart of the country’s robust economy.

Marie-Christine Ostermann, who works with Germany’s family business lobby group Die Jungen Unternehmer, says that Fiege is a family business at the top of its game.

“As with most family businesses, Fiege attaches great importance to sustainable development and corporate social responsibility. Based on a history going back 130 years, this traditional enterprise stands for state of the art services in logistics,” she says.

Felix reckons that being a family-controlled business has helped to ensure a long-term perspective has always held fast during tough times. “We are not driven by quarterly results or stock markets,” he says. “Given we have more time there is the possibility to build the business – we look at long-term success and wait for payback.”

That way of running a business no doubt helped the company during the downturn when revenues were squeezed by around €300 million between 2008 and 2010. Fiege doesn’t report its profit numbers and the company was unwilling to disclose them to CampdenFB.

But the downturn at Fiege was not out of kilter for the logistics sector as a whole. In 2008, the global contract logistics sector was worth around $501 billion, dropping significantly in 2009 and only rose slightly last year to around $540 billion, according to logistics outsourcing specialist Armstrong & Associates.

Despite the big role the family plays in running Fiege, Felix says it isn’t complacent in bringing in talent from outside. He points to deputy chief executive Stefan Kurrle.

“Kurrle is somewhere between my age and my father’s, so that is a big factor because he acts as a bridge between the two generations,” says Felix.

Asked when he’s likely to get a seat on the board, Felix wasn’t forthcoming. But he’s clear about the importance of the role the family will continue to play at the logistics company, which suggests that it might be sooner rather than later.

“The family remains at the heart of the company – this is central to its success and will continue to be so.”

STOP PRESS: At the time of going to press, Fiege announced the appointment of Felix and four other non-family members to its executive board. 

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