Can ostriches fly?

 

Next time I’m asked which is my favourite brand, I’ll be tempted to name Engelbert Strauss. I listened in to the OMR Podcast last week, where managing director Henning Strauss was the guest. Now, the first thing that hit me in the face about this brand is how extraordinary its success has been. 

From the early 2000s to now, sales have multiplied tenfold, from ca. €100m to ca. €1bn. The company has grown from 100 co-workers to around 1,600 today. That would be impressive enough for some Berlin tech start-up. But for a family firm based in Biebergemünd, deepest Hessen, who started off selling brushes and brooms?

A lot is down to the business model, which was the right one at the right time. How much is by design and how much chance and smart choices in the circumstances is hard to say. The fact is that the huge bulk of sales come from Engelbert Strauss’s own online channel. Throughout the company’s history, from the brooms and brushes on, it’s been direct selling, with no wholesalers involved. We call it D2B and D2C these days, and it’s done online rather than mail order or knocking on doors, but the principle hasn’t changed.

A catalogue as the main communication medium? A firm HQ in the middle of nowhere, that few have heard of? I can think of plenty of parallels with IKEA. Could Biebergemünd set up town-twinning with Älmhult? When I worked with IKEA, the spirit of Ingvar Kamprad was ever-present. It was a matter of pride that Ingvar always trusted his instincts rather than doing things by the “Best Practice in Management” book. And there’s a lot of following instinct at Engelbert Strauss, too. Henning Strauss’s period of study in LA had a huge emphasis on the decision to expand into the US. But more on that later.

So many companies bang on about their “Authentic Culture” these days, but family and roots you can’t fake. Ask IKEA, ask Engelbert Strauss. The family have always rolled their sleeves up and got stuck in with the daily business. Henning Strauss referred to the Biebergemünd HQ as their “extended living room” and the logo as “the family coat of arms.” And this democratic culture, like that of IKEA, can be summed up by the idea of a local hero who’s open to the world. When the company calls its customers, they can see the 0 60 50 Biebergemünd dialling code. It’s a Somewhere brand that is at home Anywhere. 

Business model, culture - the other Engelbert Strauss success factor is a biggie. Customers - relationship and psychology. The brand’s core customers are crafts- and trades- people. And what is clear about everything that Engelbert Strauss does is that it’s done with understanding of and respect for people who do, build, make, repair, maintain. Not just that, but elevating and celebrating Handwerk as something noble and praiseworthy. This all starts with the attention to detail that goes into product design - a typical pair of work trousers from Engelbert Strauss is made from 200 individual components. And that respect goes right through to the marketing. Partnerships and sponsorships are deliberately chosen not just for reach, but to reflect the core customer group interests - football, handball, egaming and heavy metal in the form of Metallica. 

Engelbert Strauss is not just a workwear brand today. It’s a lifestyle brand, worn by off-duty doctors, dog walkers and kindergarten kids. And freelance strategic planners (see above). The brand has ticked the Mark Ritson boxes to get where it’s got. Distinctiveness: name of founder with “quirky” potential outside DE, red & white ostrich logo. Full marks. And Relative Differentiation - not the only workwear brand, but certainly the “quality German engineering” one. 

These are internally-driven factors that have powered the success of Engelbert Strauss. There are broader human societal trends that have put a bit of turbo behind that. One is the recognition of and yearning for Real Work, which became clear to all in the pandemic. Without essential workers, everything ground to a halt. The people who can’t work from home, the people who work with hand and heart as well as head were our heroes. And so should they be.

AI can take over much of office work, generating content, speeding up mundane tasks. But can an AI-powered robot replicate the intrictate brain-hand coordination of an aircraft mechanic? No way. And learning a craft or trade is becoming more aspirational. Maybe it’s because the generation who grew up on Super Mario and Bob the Builder are now finding their way in the world of work. Young people are questioning whether an apprenticeship may be a more useful start in life than studying for years, running up a huge debt with no guarantee of a good job at the end of it. 

For those of us still stuck behind a desk, the more time we spend in the digital world, the more we yearn to get stuck into the physical world with our hands. Make, create, build - do something positive that won’t be lost in the cloud of ephemera. And pulling on a pair of Engelbert Strauss trousers has a psychological effect. You immediately feel more practical, more competent, more of a capable pair of hands. 

The final trend is the changing meaning of masculinity. While Engelbert Strauss is for everyone, its core is the adult male worker. And here, maybe the brand represents a positive, timely antidote to macho-macho and toxic masculinity. Constructiveness, grit, competence, ingenuity, down-to-earthness, honesty and yes-we-can-ness. These are all values that sit comfortably with Engelbert Strauss. 

The latest news from Engelbert Strauss is the US expansion. There are a few challenges with the market, just as there were for IKEA. Two huge competitors in the form of Dickies and Carhartt. The potential confusion with another famous Strauss who pioneered workwear in the USA in the 19th century. And, what the heck has that ostrich got to do with workwear anyway?

Ah, back to the ostrich. It’s obvious that Engelbert Strauss are not hiding any heads in sand. But can ostriches fly? Henning Strauss made it clear in the podcast that he’s not looking to be snapped up by an investor, and expansion is being kept within limits.

Maybe the question is more whether the ostrich wants to fly. Back to the topic of relative differentiation, being flightless means that the ostrich is the heaviest and largest bird on earth. And the fastest on land, with an impressive running speed of 70 km/h. Running, I understand, is far more energy-efficient than flying.

The ostrich’s wings aren’t used to fly. But they do have a role in balance, for courtship displays and for shade. It’s all about adaptation - something Engelbert Strauss are masters at. By design or intuition, head, hand or heart - who knows? But it works.

Engelbert Strauss LA Store exterior

P.S. Family firm, family favourite brand? My son’s nickname has been “Strauss” since his schooldays.

Mixed up, muddled up, shook up world

 

I had a lucky childhood.

I grew up believing I could do anything or be anything I wanted. If I set my mind to it hard enough.

At the age of 3 or so (above) I was convinced I was a dog.

I wasn’t at all concerned about whether I was a male dog or a female dog - it seemed irrelevant. I didn’t have any dolls - just a pack of furry toys. Many of them were dogs.

My hair was cut short and I tended to wear my brother’s hand-me-downs. It was a question of practicality. I did have a blue party dress with a sticking-out skirt, which I hated wearing. Not because it was a dress, but because it was itchy.

The boys’ clothes continued into my teens. I grew my hair a bit longer in the 70s, but so did my brother and most of the boys I knew. I do remember us getting muddled up by an elderly relative, who’d thought “the boy was the older one.” He was in purple cords, I was in a Ben Sherman shirt and jeans. We thought it was funny, a bit subversive. 

If you look at photos of groups of young people in the late 60s, 70s and 80s, the boys and girls look pretty similar. From Woodstock to the New Romantics. I dug out what I think must be a book to accompany an exhibition, entitled 14:24 British Youth Culture. It was published in 1986.

You can see the effect in these photos of punks and skinheads by Nick Knight.

But something started happening just after my son was born, in 2000. When he was small, our house was a sea of yellow, blue and red plastic. I bought his clothes from flea markets.

But I did start noticing that the brand new toddlers’ clothes in H&M were sectioned off  into “boys” and “girls”. For  “Mummy’s little man” and “Daddy’s princess."

And Lego had started producing rather “girly” toys.

And our neighbours/fellow primary school parents would have parties where men and women sat in different rooms. Or even “women/men only” parties. This latter phenomenon I initially (rather snobbishly) put down to class or maybe educational level. Or possibly even an age thing, although this seemed unlikely as it didn’t seem to reflect any kind of progress.

And that “Women are from Venus, Men are from Mars” book started a whole industry of pop-gender-psychology. Excerpts from 1950s publications coursed around the internet, demonstrating how dreadful life was for women in the 20th century. I found these somewhat suspect - my mum had two degrees and was better academically qualified than my dad.

Ten years ago, we had the whole full-blown pink glitter pony stuff spilling from the kindergarten into adult life.  

And then came the whole #MeToo thing, the victim/oppression/patriarchy stuff and the omnipresent adjective “toxic.” 

I wondered why on earth I’d want to join a “women only” group from my college, that I’d deliberately chosen because it was mixed. And whether segregation really is progress. 

This data, published recently in the Financial Times, didn’t really surprise me.

But some of the extreme reactions I saw on LinkedIn certainly did. A lot of screeching about how this is evidence that all young men are unredeemable sexist and racist bastards.

Still, I can look forward with optimism. I hear there’s a brilliant new invention called “gender-neutral clothing” for children.

Whatever will they think of next?

RETROWURST: Money February 2006

 

Today I discovered a lost world. That of German banks eighteen years ago. Things have changed and not necessarily for the better. Take a time-trip back to my Extrawurst from February 2006 and discover why Kredit was one of the dirtiest words in the German language. The Germans have plenty of new dirty words these days, mostly stolen from us or our US friends, which is not encouraging. Back then, I wrote about the big banks with their impressive Frankfurt skyscrapers, and their intimidating but competent advisors. The reassuring air of stuffiness and formality, coupled with the persistence of the personal touch, the reluctance to go online and digital with it all.

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The time has come, today, to tackle one of the dirtiest words in the German language. It’s not the word Scheiße or Schweinhund but a rather inoffensive looking and sounding little six letter word: Kredit. Along with looking at the reasons why this is a word so loaded with negative meaning, I’ll have a go at trying to get behind some general German views on all things money and finance.

 

I used to live in Frankfurt where one of the defining features or iconic elements is the skyline, which is dominated by Frankfurt (and Germany’s) leading banks, all vying with each other to see who can build the tallest skyscraper. Since the late 1990s, the Deutsche Bank, Commerzbank and rivals have also been joined by the European Central Bank, the spawning ground (if you like) of the Euro. It is actually quite difficult to get away from money in Frankfurt: on every corner is a bank or at least a Geldautomat and even if you do escape to one of the Olde Worlde Apfelwein pubs in Alt Sachsenhausen, one quick glance skywards will bring you back to the world of money, even if your neighbours at the table aren’t bankers (which would be unusual.).

 

The German banks, particularly the “big boys” such as the Deutsche Bank (www.deutsche-bank.de ), Dresdner Bank (www.dresdner-bank.de ) and Commerzbank (www.commerzbank.de) tend to be, on the surface, somewhat intimidating and less immediately approachable than their UK equivalents. One still gets the feeling, which is reflected in their web presence to some extent, that there will be no chummy banter here and one should really put on a suit when going to the bank, even if it’s just to make a simple money transfer. Although the big banks have moved with the times to some extent, there still seems to be some feeling of stuffiness and formality. However, one can sense a pattern here that is very similar to that of relationships in general in Germany: these tend to develop slowly, step-by-step, until the no-turning-back-friend-for-life stage of “du-sing” is attained. 

 

Although one doesn’t get all the chummy, jokey, for-God’s sake we’re-not-boring-and-we’re gonna-prove-it attitude of UK banks in Germany, we also don’t get the call centres and never speaking to the same person twice that we are beset with in the UK (I know, I still have a UK bank account.) In Germany, everyone has an advisor assigned to them at their own branch, with a direct phone line, regardless of whether you have a couple of thousand Euros or a few billion. These advisors really do get to know you and your preferences when it comes to accessibility of your money, what kind of investments suit you and what your future plans are, which is particularly important in a country where everyone is rapidly having to seek alternatives to the state for health insurance, pensions and the rest.

 

While the big three banks dominate the skyline of Frankfurt, most Germans actually have their account at the local Sparkasse or savings bank (www.sparkasse.de ), Volksbank or Co-op bank (www.volksbank.de ) or the Postbank (www.postbank.de ). While these banks may be a little less intimidating than the big three, they are never-the-less places of seriousness and formality. In fact, when Germans are asked about which qualities or values are important in choosing a bank, trustworthiness, serious and solid reputation and flexible to my personal needs are the top three criteria, with modernity and friendliness seen as “nice to have” but not critical. 

 

Although the banks do seem to have moved with the times, the use of services such as on-line banking is still relatively low in Germany and the idea of physically visiting the bank to make transactions still a very popular one. Even cash dispensers seemed to take longer to catch on here and one feels that there is a huge underlying mistrust of finance and banking conducted by anything other than real people.

 

This brings me on, of course, to that dirty word: Kredit. While things have improved over the last ten years, when I first came to Germany, I was astounded by the unacceptability of plastic generally. To buy a major item, one either had to pay in cash or write out a number of cheques, each of which had a maximum value of DM 400 in those days. Credit cards were scorned and frowned upon almost as much as if one came up with a begging bowl. Again, the distrust seems to stem from a very direct relationship that Germans seem to have about money: carrying large wads of cash around or openly discussing with strangers the cost of your house or car are not seen in any way as vulgar displays but rather as an honest, straightforward approach.

 

Credit cards are still barely accepted today. Visitors to Germany are often surprised and embarrassed that restaurants turn their noses up even at Mastercard and VISA. And the Mastercard and VISA cards here tend to be cards that are paid off within 4-8 weeks, so not real credit cards at all! Mastercard did themselves no favours with the German public by making the World Cup tickets draw only accessible to Mastercard holders. However, a step in the right direction, to win the Germans’ trust in plastic money has been made in the last few years with the introduction of the “ec card”, a form of direct debit card that doubles as a cash card that is issued by most banks. But to think that this has only been in general use for the last 5 years or so is astounding.

 

Part of the disgust for credit cards may well come from the fact that they are seen as coming from profligate and decadent lands, such as the US and UK. Perhaps if one of the big German banks could introduce a very serious, trustworthy and solid credit card (maybe made a bit thicker than “your flexible friend”) that signaled control and financial acumen instead of profligacy when you took it out of your wallet, they could be onto a real money-spinner.

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Things probably started to go sour in that fateful year 2008. The Dresdner Bank was acquired by the Commerzbank in May 2009. 

What do we have now? Blowing up cash machines seems to be a national hobby. Bank branches are disappearing faster than tigers. I’m reduced to asking for cashback at the supermarket more often than not. While Covid speeded up the move to a cashless society, there are plenty of flies in the ointment - local independent shops and restaurants who don’t take cards - and who can blame them?

I’m still hanging on in there with the Commerzbank in the hope that things will get better, but I’ve been let down by them far too often, with the resulting loss of trust. Frying pan and fire come to mind.

Still, things aren’t quite as dire as they are in the UK. But that’s another story.