Giving Unternehmers a Good Name
Bleary-eyed and a tad irascible, Peter KrÄmer, 51, seems tired. And why not? In the past two years KrÄmer, cofounder of Spinnrad, has run a company, attended school, and lobbied for European small businesses, a difficult juggling act for anyone, let alone the CEO of one of Germany's fastest-growing cosmetics companies. Not that he's complaining. His two stints at Harvard Business School's Owner/President Management Program helped him overhaul the way Spinnrad operates, boosting revenues last year by 50%, to roughly $90 million.
As president of Europe's 500, an organization of the European Union's fastest-growing small to midsize enterprises, KrÄmer spreads the gospel that entrepreneurs are Europe's best hope for economic renewal and job creation. "All of a sudden people are listening to me," he says sheepishly. Indeed they are. Inc. staff writer Marc Ballon recently caught up with him.
Peter KrÄmer: European politicians know only how to speak to the old industries, the dinosaurs. And they speak a different language than entrepreneurs do. As president of Europe's 500, I'm trying to change that.
Inc.: How are entrepreneurs viewed in Europe?
KrÄmer: The translation of entrepreneur into German is Unternehmer, which means a man with very deep pockets. It has a very bad connotation. Thankfully, this view is starting to change a bit as people begin to realize that entrepreneurs are dynamic and good for the economy.
Inc.: What obstacles do European entrepreneurs face?
KrÄmer: Owners of start-ups have virtually no access to bank loans. Once a company proves itself and may no longer need the money, banks line up to give it money. Also, small and medium-size companies often find themselves victims of government indifference. For example, a small company in Germany that wants to build a new factory might have to wait a year before it gets all the necessary approvals, whereas a big company has to wait only six weeks. The bigger the company, the smaller the obstacles. In most European countries, high tax rates make it difficult for small businesses to amass the capital to grow. Cash-flow problems often kill small companies or make them easy prey for takeovers. In Germany the corporate tax rate can easily reach 66%.
Inc.: What did you learn at the Harvard program?
KrÄmer: At the first session, in February 1996, I asked Professor Ben Shapiro for some advice about problems I was having with my partners. He told me to get rid of them. My partners weren't interested in going unless I paid so much that it would be a pleasure for them to leave. After much negotiation, I bought them out for $11 million. Their departure has been good for the company. Also, I changed my attitudes toward my customers. In Germany, as a rule, customers are not treated very well. They almost beg for goods and services, and shopkeepers act as if they're doing them a favor. Now we treat customers as if they're always right. The results have been amazing.
At my second session, I learned the importance of the Internet. I want to have a system that allows a salesperson to assist the customer on-line and guide him through a transaction. I want to have the best Web site in Europe within a year.
Inc.: Have you become a celebrity of sorts?
KrÄmer: Kind of. People read about me in the papers and hear that I'm meeting with ministers, mayors, and politicians. I was invited to speak at the World Economic Forum in Davos. I've met with Martin Bangemann, the European Union's commissioner of industry. That's not to say I'm recognized in the streets. But I'm getting known in the right circles in the business community. All this is great PR for me and my company, especially if I take Spinnrad public one day. Until the Europe's 500, people didn't take me that seriously. Things have changed dramatically since then. I went from nobody to somebody.
The Harvard Owner/President Management (OPM) Program is a compressive management program open to owners and executives with 10 years of management experience whose companies have revenues of several million to several hundred million dollars. About 2,400 businesspeople have thus far completed the nine-week program, which is held over a three-year period.
"I learned so much there and have applied much of it to my company," Spinnrad's Peter KrÄmer says. KrÄmer also says he wants his Web site to be the best in Europe within a year. For more information about OPM, call 800-HBS-5577, ext. 6009, inside the United States, or 617-495-6555, ext. 6009, outside the country. Harvard's OPM program may also be reached by fax (617-495-6999) or E-mail.
For information on Europe's 500, contact EFER, Bessenveldstraat 25, 1831 Diegem (Brussels), Belgium; phone 011-32-2-716-4838; fax, 011-32-2-716-4107.
PETER KRAMER, Spinnrad GmbH, Am Luftschacht 3A, D-45886 Gelsenkirchen; 49 (0)209-70000; email@example.com 29
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