“We Need More Freedom and Responsible Individuals”
Georg Kapsch, the 4th generation CEO of a family-owned yet global Kapsch company, came to Prague to open the exhibition The Charter 77 Story. His short speech at the exhibition opening night equalled the one of a statesman. Mr. Kapsch mentioned his mother’s influence suffering under the Nazi regime and therefore reminding her son about the importance and value of freedom. Mr. Kapsch followed the development in Czechoslovakia quite closely from neighbouring Austria, and mentioned how he lived the hopes and then crushed reality of the 1968 Prague Spring. He also reflected on the Charter 77 values and approach based on freedom, respect for human rights, the ability to lead the dialogue despite an ideological disagreement and last but not least the creativity, as values quite relevant and needed for the 21st century. I was pleased to meet him the next morning to get a new perspective on the issue of personal responsibility rather than CSR, to find out more about the challenge of managing a family-owned, global company and to ask how it is to run a company that bears his name.
Kapsch is the main sponsor of the Charter 77 Story Exhibition. In fact, your company has been very involved in supporting various cultural events. How do you perceive the Corporate Social Responsibility?
As I tend to travel a lot around the world, I often realize that people are frightened and they do not openly dare to say what they think. We have to fight against that, this is against human rights and we are obliged to defend human rights. I personally do not like the CSR notion, as it often results in a mere marketing gag in the form of a glossy brochure. I believe in responsibility and accountability of an individual. Such approach depends on values. I maintain that individuals – for institutions as such cannot be responsible – so individuals, entrepreneurs, CEOs and employees bear the responsibility. It is them who have to internalize the values of the company and act responsibly according to these values. In today’s world, we have one problem stemming from the fact that the legal framework does not give us freedom to act responsibly. As ridiculous as it may sound, when you act according to the law, to governance, compliance but nevertheless your behaviour might not be ethical in the end. We reached the point of being restricted too much by law, so we cannot do many valuable things for the society anymore, as any form of an agreement or settlement with a business partner or a supplier now might be disputed at the court level or elsewhere. So the entrepreneurial freedom has become very much restricted. In Kapsch, we work with eight key values. These values are applicable around the world and can be accepted in various cultures, di erent ethnical and religious groups as a common ground for acting.
Speaking of various cultures, Kapsch is quite unique about being the 4th generation family-owned company, currently having 6700 employees in 55 countries. How do you manage to reconcile family values with the corporate structure?
Family companies have advantages and disadvantages. We try to lead the company – and here I intentionally use the word lead instead of manage – professionally on one hand side but on the other side, we offer a cosier environment of a family enterprise. We are not dependent on the capital market as other public listed companies are. We do not have to think in terms of quarterly results and we can afford to have a more long-term perspective. And again, I deliberately chose the word long-term, not sustainable, as sustainability has become another buzz word for everything and anything.
As you mentioned “leading the company”, how would you describe your leadership style and has it evolved? I am referring to the new generation of millennials coming to the workplace?
It is quite easy for me to accommodate next generation’s requirements. I always have had a style of giving a lot of freedom to people with very little control. Despite having experienced in my professional life that one cannot lead without control, I still do not like to control people. People should have as much freedom as they want, as long as they act according to our values, as long as some discipline is in place as well. Freedom does not mean that she or he can do whatever she or he wants. I am a liberal and I believe that freedom of one person ends where it has a negative impact on another person.
The slogan “challenging limits” forms part of your Kapsch brand. What limits are you currently challenging?
We think that it is always necessary to challenge limits. We first wanted to use the slogan “ignoring limits” but for certain cultures this was too hard. So we stick to “challenging limits” in terms of trying to go beyond conventional restrictions to drive things forward, to make use of trial and error and let people have the initiative to explore. This being said, ethical and moral limits are the ones not to be challenged under any circumstances. But both technical and market limits are the ones to be challenged.
Let us discuss the brand from a different and a rather rare perspective. How does it feel when your personal name and brand is connected to the one of the company?
As a matter of fact, this has been always bothering me. I have never liked the fact that my company and my personal name were identical. I prefer the company would have a different name. I did not want to change my name and I could not change the name of the company as it was an existing brand. Eventually, you get used to the pressure. In the beginning, I was not seen as a person but rather as someone being born into something. Many people can think that being born into a family company is an easy task, everything is ready and served and you have to take it. This notion that a career in a family company comes automatically for a family member is completely wrong. There were many people both inside and outside the organization who wanted to challenge me and prove that I was not capable enough.
Is there any parallel to the tradition of nobility families and their care of heritage over generations or was it up to you to make a choice about your career?
In our case it was much less restrictive. I could make my choice and my children will also be able to choose. They are aged 19 and 21 and they can still make up their minds. If they join the company, I will be glad. If they do not want, I do not have a problem. They know that they must not live their lives being funded by what I earn. They have to have a profession and they have to work.
The Kapsch office in the Czech Republic is the second largest subsidiary in Europe. Can you trace any common roots, spirit or legacy dating back to the Austro-Hungarian Empire?
Actually, there were two countries where we tried to start co-operation prior to the end of communism, Czechoslovakia and Hungary. We are happy to have Karel Feix as the first managing director who is still with us. I can see very close ties both between Austria and the Czech Republic as well as between Kapsch and the Czech Republic, as we deliver infrastructure. We have always enjoyed being on the Czech market, even though it was not always easy. As to Czech-Austrian relations, I can feel certain bias. On one hand side, we have very close ties and we like each other. On the other hand, there has been a competition. The Czech lands used to be the centre of industry, Hungary used to be the centre of agriculture and Austria was always the centre of bureaucracy… (laughter)
Today, it would be called a management centre…
As a matter of fact, we still suffer from bureaucracy but we have managed to become a centre of industry as well. The transition process was not easy, in 1918 there was very little industry in Austria.
You also hold the position of Chairman of the Federation of Austrian Industries. How do you perceive European economy?
European economy is weak for many reasons. The inflexible legal framework is one of the reasons for the weakness. We do not have sufficient freedom for entrepreneurs and companies and we are very much restricted in compliance, governance and the banking sector. The banking sector is a good example, as we are restricting commercial banks, we are still not addressing the functioning of dark pools, hedge funds, high frequency trades etc. I do not want to say that it is the fault of Brussels. In the end, the decisions are taken by the Council, so it is the fault of the representatives of different European nations. We need more Europe on one side, and less Europe on the other side. We need to finalize single market and we need to protect the four basic freedoms of the European Union – freedom of trade, freedom of movement, freedom of capital and freedom of services – as the basis of the European Union. I am an advocate of the European Common Foreign, Security and Defence Policy, including European Army. We should have fewer restrictions for the economy, in labour law or in standardization. However, I support environmental standards on the other hand.
What are your final words for Czech and Slovak Leaders readers?
I love to work with people and different cultures, as they are enriching me and helping me to see issues from different angles. I learned that everything is about people, about working together to reach a common goal. I still have to learn to celebrate successes. Often, we take them for granted and after achieving them, we immediately start searching for new challenges.
By Linda Štucbartová
Inspiration from Kapsch – How to Manage Family Values in a Global Environment
The Kapsch Culture Principle: Creating and appreciating values.
We believe strongly in upholding our values. This is not just something we say, but rather our values are cultivated and practiced every day by each and every employee.
We are the Kapsch Group: the employees, the management, executive board members and the owners of the Kapsch Group.
- Responsibility – We understand responsibility as acting in the interests of the company and its employees, bearing the consequences and taking initiative.
- Transparency – We understand transparency as being open in dealing with information, as well as the traceability of our decisions and actions in daily communication.
- Respect – We understand respect as the basis of our cooperation, mutual recognition of our achievements and the opinion of others.
- Performance – We understand performance as the result of the dedication and the success of each individual employee who contributes to achieving our common goals.
- Freedom – We understand freedom as using and designing a defined scope of action and developing this through personal engagement.
- Family – We understand family to be pulling all on the same rope, strengthening our bonds and supporting one another.
- Dynamic – We understand dynamic as our determination toward continuous change and willingness to achieve newly established goals.
- Discipline – We understand discipline as the adherence to rules which govern our living and working together and the commitment to our values.