“Our ‘idea funding pool’ was the main revolution in the company”
Robert Ehlert talks about the opportunities of a revolutionary corporate culture and what sort of mindset leaders of the future should have.
Can you give us an idea of your daily work routine?
In my case, there is a natural flow that stems from the fact that my work is my vocation. Therefore, I do not differentiate between working time and leisure time. I do not have a fixed rhythm. During my many years as a corporate CEO, things were different. But even then, I quickly introduced a revolutionary culture.
What did that culture look like?
Our entire company was based on trust. We did not have traditional contracts of employment, or application procedures. Everything was based on our confidence that the employees who were working for us had the required know-how and were keen on putting it to good use for our company. Not because they had to, but because they wanted to. Every employee was also a shareholder, received a personal bonus, and could set their own salary. Despite 1,200 employees we did not have an HR department, because those belong to yesteryear, and to me they also exude an air of mistrust. In what we referred to as an agreement of trust, our employees would define their wishes and expectations that they wanted in return for a job well done. Once they had achieved the specified results, they could raise their own salary without having to ask anyone. They only had to inform Accounting that from day X onwards they should pay a higher amount into their account.
The employees basically managed themselves. But who, then, managed the company?
All employees, in a joint effort. I was an employee as well. While I held the position of CEO, I was voted into that position by the employees.
There was no hierarchy?
Only if a client needed a hierarchy. We would basically organise ourselves into project groups without managerial input. A project would come in, and those employees who wanted to be part of it would form their own project team. If a client wanted a team leader, project leader, or to talk to the same person with decision-making competence throughout the project, the project team would select somebody to fulfil that role for the duration of the project. No formalism. This came with the upside that clients got a project team who was really keen on developing and implementing something for them. Clients would notice that and were therefore prepared to pay an average of 10% more for our services.
So when it was necessary they would emulate the structures of the client and work accordingly. This sounds very progressive to me.
The main revolution in our company was not the abolition of hierarchy, but our “idea funding pool” from which we would develop innovations and ideas. This pool was funded with money at the outset, the idea being that every idea already had a budget available. All employees – who were also shareholders – had a bank card and could thus finance their ideas without having to ask for authorisation. The ideas always stayed with the employees. No documents had to be filed, no accountability was required. Everybody could just decide on their own what to do with their idea.
And what would happen once the pool was empty?
It never was, as so many ideas were successful. Half of the earnings generated by successful ideas would go back into the pool. We set up the idea funding pool with EUR 200,000 and ten years on, it was at EUR 22,000,000. We had an average of 18 spin-offs a year. More than 75 people have founded their own enterprise and paid back half of their earnings from the first two years into the pool. The rules – there are only eight – for the idea funding pool were developed and set up jointly by all employees. The crucial thing was that you didn’t have to ask anybody for permission – people could just plunge in medias res. Both money and opportunities were there.
This means that your employees had the chance to develop over time. What else do people need at work?
The chance to decide how they want to work, the competence, responsibility, and structure for their work and the funds to implement their ideas. What they don’t need is control. The employees can control themselves and plan their own budgets. I did that for 18 years and it was never stressful, no problems with anyone. In our company, everybody knew that at the end of the day the client paid our salaries. Therefore, we wanted to get to know our clients as well as possible. Our strategy was very much geared towards the client.
Don’t you also need some sort of purpose at work to motivate the employees?
That is a very general term. What does purpose mean in the context of work? Every person feels differently about their purpose. One person may want to develop environmentally friendly products, to another one design is of utmost importance, while yet another one may want to work with great colleagues, because to them, personal relationships are crucial. This is why I do not think that it is generally the company’s role to provide employees with purpose. A company’s task is to create a setting for perfect cooperation, as a result of which people can contribute and find their own personal purpose. It is therefore the task of Management to facilitate a situation where employees can discover, implement, and live their purpose.
What sort of leadership culture is fit for the future, from your point of view?
The most important aspect of good leadership culture is the concept of humanity and a strong common sense. Many leaders base their concept of humanity on suspicion, a lack of trust. They think people are unreliable and only interested in their own advantage. This means that the mindset of leaders has to change first. They have to develop a real interest in people as well as the desire to support them as mentors. What’s also important to me is the ability to communicate, and to do this on an emotional level. You will only get through to people if you manage to stir their emotions – then you aren’t just both working at the same company but rather doing a project together. I find that very important. A big topic for all companies and leaders is digitisation. Instead of leaving the employees in the dark, clever leaders should take a step forward and get their employees on board. They should motivate them to think about where technological developments can be put to use in the departments and in their work. They should offer training and incite curiosity and interest in new things.
Founding companies seems to come natural to Robert Ehlert. At the age of 17, he founded a company in the field of environmental technology. After that, he set up a consulting and training firm. He was CEO of PackSynergy AG until 2013. As an entrepreneur, he has successfully founded and managed eight companies.
Today, he lives in Augsburg, Germany, and is a private investor and consultant at Smart in Culture.