Travellers will know Gebr. Heinemann from its airport and cruise ship outlets. Founded in 1879, the firm now operates in over one hundred countries and is managed by the fourth and fifth generations of the family: Claus, cousin Gunnar and the latter’s son Max Heinemann. WERTE asked what it means to run a global corporation as a family business, how to ensure a harmonious transition to the next generation, and whether it is hard to let go.
WERTE: Gentlemen, what are the differences between a public limited company and a family business?
Gunnar Heinemann: We believe that family businesses simply react more quickly and think in the longer term. Listed companies have to release their quarterly results, which can lead to short-term strategic thinking. That is completely alien to us. There is no short-term profit optimisation here. We know that the firm has to adopt a longer-term perspective.
Claus Heinemann: What happens this year is of secondary importance to us. Family businesses think in generational – not quarterly – terms. External factors such as strikes or geopolitical developments that affect people's travel habits make our sector a volatile one. We think beyond the present into the future.
WERTE: Max, when did you realise that you would go into the family firm? Was your future mapped out for you or could you have done something different?
Max Heinemann: I could have done something different. It was never forced upon me. That has never been our style, and it never will be. One of our success factors is to keep your opportunities open. After graduating from high-school, I had no idea what I wanted to do. My father and my uncle asked if I would like to come and work in the business for six months – just to see if I could enjoy it. It was made clear from the outset that, if I didn't, it would be best for both parties if I didn't stay. It's still fresh in my mind and I'll remember it for the generation to come. It always has to be the right fit for the individual.
GH: Yes, for both parties...
MH: You have to have the desire and the imagination, too. And relatively little pressure. That was important. It took me just six weeks to realise that it might suit me very well.
CH: He learnt to love the firm in just six weeks.
GH: I still remember you coming into my office and saying that it was a great business.
MH: The main reasons for my decision were to do with the culture and the people I got to know during that period – customers, suppliers and employees alike. There’s an extremely exciting culture, a real togetherness here. I told myself that this was something worth committing to from a family perspective – ensuring that it could continue. I knew that I would feel at home here and that I wanted to carry it on.
"Our fathers raised us to always put the company first."
WERTE: But what if he had said that he would rather become a product designer?
GH: Then we would have pursued a different route.
CH: After all, there’s another branch of the family, too, with three potentially eligible women. But no more than one person from each branch can become a member of senior management. My sister’s two daughters have decided against it, for different reasons. My own daughter is just 23 and currently doing a Master’s degree in business studies.
WERTE: Has collaboration within the family, i.e. between the two branches, proven successful over the years?
GH: One hundred per cent.
CH: We’re delighted that a very harmonious relationship prevails within the family, also between the cousins in the next generation. Let’s hope it stays that way.
GH: We’ve been very lucky. But harmony has always prevailed. We’ve had the two branches since the second generation, and they’ve always got on well.
WERTE: How do you settle disputes?
GH: By sitting down, talking at length and then arriving at a conclusion. White smoke rises to signal that we have come to a decision!
CH: My cousin and I have been working together for forty years. Our opinions have often differed, but we just dealt with it. Nobody else ever got wind of this.
WERTE: And how does it work now that there are three of you? Does somebody have the final say?
MH: It’s an exciting time for us at the moment. We didn’t really collaborate that closely during my first ten years at the firm. I was busy establishing our subsidiary in Singapore. But now that we are working together more closely, we are learning more about cooperation every day. In the event of any pressing issues, criticism or arguments, we know which three rooms to go to and which doors to close behind us in order to thrash it out. A lot of it is a matter of basic trust, and I receive one-hundred-per-cent backing in my work and responsibilities. We don’t see each other that often, even though we are based in the same building. But we regularly seek one another out and often hold spontaneous meetings.
WERTE: Have you organised a division of labour?
CH: In the early days, we never used to split responsibilities. But then, the firm wasn’t nearly as complex as it is now. We are far more structured nowadays. Max has a clearly defined remit, also with regard to external management.
GH: His time spent in Singapore and building up the Asian market gave Max the opportunity to look at the parent company from the outside and gain a range of new insights. So we asked him to examine the structure of the firm in detail and to reorganise it where necessary. And he’s done just that.
MH: We managed to establish a logical structure and then work together intensively to fine-tune it. It was like a design process. I like tweaking and tinkering with something to make a coherent whole. The result is a modern C-level structure. It seems that my initial notion of studying product design wasn’t quite so far-fetched after all!
CH: It also stood to reason that a family member should take responsibility for Human Resources at Board level, with a view to underscoring its significance within the firm. That’s another answer to your first question: one of the characteristics of a family business is that it takes special care of its employees. They are our greatest asset and form the basis for our success.
WERTE: The work-life balance is an issue in many companies. Some older folk may not think so, but it’s very important to the younger ones. Where do you stand?
GH: Today’s generation attaches much greater importance to family than ours did. Our fathers raised us to always put the company first. Today, work and family have equal status.
MH: I take a very transparent approach and try to balance work and home life fairly. You learn a lot when you constantly have to decide where your priorities lie. We have to show flexibility here if we want to continue to foster and train new talent.
"Letting go is the biggest challenge at the end of a professional career."
WERTE: How important is it to let go? Is there a defined point when you let Max go it alone?
CH: I admit that it’s not easy to retire from active business life. But the trust that we have in Max certainly justifies us letting go. It would be a problem if he weren’t quite so able.
MH: I’m not putting you under any pressure to let go. It would be very dull for me if you were both to say tomorrow that you wouldn’t come in regularly any more. Quite apart from which, this is really the first opportunity we’ve had to work together. We’re talking about a generational transition, rather than a sudden change. It sounds more realistic.
GH: It’s easier for me to let go – easier than for my cousin. His daughter, who will probably come into the firm, isn’t here yet. My son has been with us for ten years, which really brings it home to me that I am part of the past – or at least not part of the future. How could I find it difficult to let go when I look at Max and see how well he is doing?
CH: This letting go is the biggest challenge as you approach the end of a professional career. It takes a lot of effort. You have put your heart and soul into working for – and with – the business.
WERTE: What do you admire in one another?
MH: Even as a young boy, I learnt from my father that trust and generosity create a good culture. You can feel it throughout the firm. And it took me very little time to discover that my uncle is no different.
GH: I’ve observed that my son can be less emotional than I am at times. He makes more rational decisions. I admire him for that.
CH: My cousin is my best friend. We have had a very harmonious relationship in our forty years of working together. But he’s more willing to compromise than I am. I admire Max’s structured approach. He spotted the firm’s weaknesses from the outside and is now contributing all kinds of fresh ideas.
This article first appeared in the May 2020 edition of WERTE, the client magazine of Deutsche Bank Wealth Management. You can read more from the magazine at werte.com
Company profile: Gebr. Heinemann
Founded in 1879, the company has grown over five generations to become one of the most important retailers and distributors in the travel market. Forty million people a year shop at their airport or cruise ship outlets for perfume, spirits and accessories. Gebr. Heinemann operates in over 100 countries.