Martin Reingruber

Our boss is showering us with trust

Martin Reingruber | Hammerschmid Maschinenbau

Hammerschmid Maschinenbau

“We are a factory for personality development,” says company founder Hans Hammerschmid, joyfully laughing about his engineering company in Upper Austria, Bad Leonfelden. It is not really surprising that you, upon your first visit with the up-and-go organizer, find a book by Ricardo Semler on his desk. Semler is known for the radical democratization of the company Semco. Under his leadership, sales increased over a 20-year period by more the 20 percent annually. By many corporate leaders around the world, the Brazilian businessman is regarded as someone to emulate. His book caught on with Hans Hammerschmid; in the near future Hammerschmid wants to democratise his company even more than it already is.

Even now, the Hammerschmid GmbH enjoys a corporate culture which focuses on the development of every single employee. “For us, long-term motivation is more important than short-term efficiency gains,” says Edi Jenner Braunschmied, one of two new managing directors. These days, the founding duo of Hans Hammerschmid and Ludwig Mülleder largely stay out of the daily business and instead take care of those strategic projects they like. They rightly claim, and this is true for the entire workforce, that every employee has the opportunity to tailor his work according to his strengths.

A CULTURE OF TRUST

“It was fascinating for me to see how Hans Hammerschmid has showered us with trust in those early years. Only now I understand why he did this,” says Martin Reingruber, one of the two managing directors who took over operational control in 2008. “In my role as the boss I first had to learn to trust my employees. Back then, when I went to school, teachers did not promote this skill.”

A special project of the company illustrates what this culture of trust looks like. The core business consists of traditional B2B contracts with other business customers. A few years ago, the Hammerschmid GmbH started the development of a first retail product: the electric motorcycle “biiista,” which was presented in 2012.

Much of the development originates from a 25-year-old graduate of a technical college, George Hochreiter. He has been an employee of Hammerschmid Engineering GmbH since 2008 and joined the research and development department “biiista” in 2011. Founder Hans Hammerschmid quickly handed the technical conception over to Hochreiter. “Hans has trusted me and gave me the responsibility; it was as if an engine was turned on inside me,” says Hochreiter. “While my friends quickly switch off after work, I often sit at home with paper and pen and draft any ideas I have. I still feel connected to my work, even if I am not at work anymore.”

“You won’t find the artificial distance which was created by the executives of my previous employers, here,” says Pia-Maria Maier, who recently joined the biiista team and handles sales management. “In particular, you can see the difference when mistakes are made. The employee is always shown emphasis and the aim is to learn from this error together.”

The Hammerschmid GmbH focuses on special machines. Not only the electric motorcycle, but every single product is a new development. Therefore, the company needs the creative potential of its employees. 

“Errors are always made, but without mistakes nothing is learned. I trust my employees,” announced Hammerschmid. “For example, you do not need to show me a sickness certificate. If an employee tells me that he is sick, I trust him. A piece of paper from the doctor is unnecessary.”

Through the high level of trust that Hammerschmid has in his staff, he subtly influences their own beliefs. In particular, new or young employees tend to ask, “Am I good enough? Am I am able to do all that?” These little doubts have the power to limit the development of their own potential and to negatively influence their behaviour. Through his faith and belief in his employees, Hans Hammerschmid counteracts those doubts. The phenomenon is well known in resilience research: If somebody else believes in me, I can strengthen my belief in myself, too. The result: People start to develop their potential better and grow beyond themselves.

AREA FOR CO-CREATION

Despite all these achievements, Hans Hammerschmid wanted even more democracy for his company. When the decision was made to expand into the retail area to build an electric motorcycle, the two founders were already right into it. When designing the company’s future, all employees were actively involved. After all, this decision meant that a lot of financial resources would be tied up. Hammerschmid Ltd. wanted to finance the development of the motorcycle from its cash flow. Staff supported the decision of the founding duo regarding the funding of the electric bike while at the same time refraining from moving into higher income brackets. They simply knew that they would have a lot of fun during the development and that in the long term they would gain valuable knowledge, making them—as a company—that much more attractive.

Even in this smaller production, the employees are given as much creative freedom as possible. “Everyone can cut out his own work and put their effort exactly in what they really want to do”, says a young employee. “While at school, I spent years occupying myself with things which did not interest me,” said another employee. “The things I really liked back then I had to put on the back burner.” Apprentices, during their training, are encouraged to move to areas of particular interest.

One of the key phrases every applicant hears in the first weeks is: “You are not just allowed to get involved here, you need to get involved. We want free people here. However, that also means that by working with us, you quickly get a lot of responsibility.”

Some candidates are daunted by this perspective. Others realize that too much freedom can only overwhelm them and leave the company. However, most apprentices know in advance what is expected from an engineer and continue with enthusiasm.

Over time, it seems that it is to the company’s advantage that it give its employees so much design freedom. For example, a few years ago the workshop area had to be expanded. The founders hired a timber specialist and gave him absolute free reign. The new staff member toyed with the idea for a while and eventually built a 1300-square-foot hall for half the market price. The energy consumption of this huge building is not more than that of a family house. Yet the isolation is unbeatable; if the heating system fails in winter, staff only realize that it is getting cooler after three days.

DEVELOPMENT AT ALL LEVELS

“After a few years of independence, we noticed how rapidly we developed as human beings. That’s exactly what I want for everyone working for the company,” says Hans Hammerschmid.

Some years ago, an employee had a very sophisticated machine designed; almost every product of Hammerschmid Ltd. is a new design. The customer was delighted and asked after delivery for another, a similar job. On the way home from the client, the responsible engineer jokingly said to Hans Hammerschmid, “I don’t particularly like that.” Naturally, they tried to get the job, but there was a spark of truth in this statement for the simple reason that, already back then, the repetition of an already-existing design was not all that desirable for the enterprise.

“So far we only accepted jobs which we really liked,” says Hammerschmid’s partner, Ludwig Mülleder, who, next to the creative Hans Hammerschmid, likes to take on the role of the deliberate critical sceptic. “I still remember the sleepless nights in the early years. Sometimes I just didn’t know where to get the money for the next salaries.”

“By now I have given up all illusions that you really can plan your revenues,” adds Hammerschmid. “All you can do is ensure that you do your work as well as possible. In the rare case that we have only a few orders, we let our staff deliberate on new ideas and develop things we might need later.”

Personnel and owners leave capital in the company as much as possible. By investing in new ideas and tools, knowledge and experience can be continually developed and experimented with. “The resulting expertise helps to secure future orders. These days most of our customers seek our engineers because of an earlier positive experience or on recommendations.

“Many companies do not see the hidden economic power inherent in young employees. My personal concern is that these people can engage in our business in the best possible way. I am delighted to see the ideas they deliver. I do believe that this person-centred approach pays our company several times over.

“Even if it is strategically sensible, sometimes I have the feeling that the biiista project was launched by the founders for one reason only: for our employees to enjoy and to evolve,” says ex-organizational developer Pia Maria Maier.

The radiance and joy of the workforce seemingly carries over into the creative problem-solving process for new products as well as in the unified appearance to customers. “Personally I do not praise our colleagues explicitly, but our customers tell me many times that our guys are just exceptional,” closes Hans Hammerschmid in a marvelous Upper Austrian accent.

COMPANY FACTS

Hans Hammerschmid founded his company in 1996 and got Ludwig Mülleder on board as a partner. Together they changed the sole proprietorship into a Ltd. in 1998.

Hammerschmid Engineering Ltd. builds special machines for production automation. Today it produces machines for camera-based measurements and verification of complex starter systems or for the manufacture of water fittings to machines for the production of cross-country and jump skis. Hammerschmid Engineering Ltd. designed machines that can be found in the following industries: food processing, automotive supply, pharmaceutical, building materials, and sporting goods.

The number of employees steadily grew to a count of 40 people. None of them was dismissed. One of the corporate principles is: “We will never terminate an employee for economic reasons.”

Hammerschmid won several prestigious industry awards, including the “Network of Automotive Excellence” award of the Wurzburg Automotive Summit for the development of the 3D structure of the electric motorcycle sandwich biiista.