When Brand And Corporate Values Meet!

Interview with Hermann Demmel


“Human resources management is brand management for the inside”, says Hermann Demmel. WE couldn’t agree more! SportScheck is a great case study that shows how the WE inside a company is congruent with the “WE” outside the company.


Hermann Demmel
… is divisional director for Human Resources Development and Corporate Culture Development at SportScheck GmbH. SportScheck is an affiliate of the Otto Group.



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we_magazine:
How does leadership change with Enterprise 2.0?

Hermann Demmel: What you see on Web2.0 – whether you look at Facebook or any number of other platforms – is an uncontrolled proliferation of autonomy. In other words, of self-proclaimed groups who make their own rules and who protest about things and in doing so manage to create resonance. We all know a few examples of this from the Net that show us how resonance can be built and large numbers of people be brought on the move. Of course autonomy is also important in company terms too: employees want to have some kind of hand in shaping things. They don’t necessarily want to play a part in the co-determination process, but employees too need to feel the tension between hierarchy and heterarchy.

we_magazine:
When do they need heterarcy and when do they need hierarchy?

Hermann Demmel: They need a heterarchy when they want to put lots of things on a community footing. For instance, they need communitizing processes when they want to make customers aware of a brand and a brand message. In 2005 we put our brand statement on sport on a community footing. In a heterarchical process we discussed this issue in a way that was almost grassroots democracy – I really shouldn’t be saying this – but yes, almost grassroots democracy.

we_magazine:
What do you mean by “communitize”?

Hermann Demmel: Communitize means two things to me. Employees shouldn’t just be on the same information standpoint, they should also be capable of contributing some of their own individual identity. So when they formulate a brand message, as we did with our claim “Wir machen Sport” (“We make sport and play sport”), that’s a clear statement. So it’s extremely important that employees bring in a piece of their own identity so that this “Wir machen Sport” claim really can become reality. And you also have to ensure that there are opportunities to make employees aware of how they can contribute their identity. Web 2.0 is one excellent way of translating such an opportunity.

we_magazine:
Why is this communitization so important? Who’s taking the lead here?

Hermann Demmel: It is important because building an identity means first making the charisma of a brand come through inside the company. If the charisma of a brand resonates within the company, it’s bound to shine on the outside too. Otherwise the claim is just an empty marketing attitude. Of course, as so often  is the case, you need role models. Starting with company management and not forgetting employee representation, you have to shape identity. Role models take a clear leading role in this. And anybody can be a role model.

we_magazine:
You often use a phrase that I haven’t heard for these past 25 years:

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“Human resources management is brand management for the inside.”

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Hermann Demmel: Human resources management should have its focus securely fixed on the company’s brand identity. When the brand message really does serve to create identity among company employees, the charisma of the brand will be clearly visible on the outside too. This calls for human resources development. You have to find out what’s important for your employees, what they identify themselves with. Keeping these values in constant harmony with the brand is a daunting challenge. But perhaps we’re particularly lucky with our chosen theme of sport. Sport is a theme that brims with emotion so we have this incredibly wonderful playing field where we can kick this theme around with our employees.

we_magazine:
How far then does the consumer on the outside determine how employees are “led” on the inside?

Hermann Demmel: Consumers aren’t primarily interested in what management does. Of course they do notice that employees identify closely with the product, the brand, and the job they do. Customerside services are an excellent opportunity to show authenticity. We need to concentrate on this but it’s always hard work.

we_magazine:
When you talk about brand culture and corporate culture, which concepts do you have at the back of your mind?

Hermann Demmel: In the best case scenario we talk about employees as brand ambassadors. As brand ambassadors they largely identify with the brand’s core message and reflect it too in all its myriad facets. In principle that’s the best advertising you can possibly have. And it’s particularly important when you’re dependent on high customer frequency and face-to face dealings. We have 800 people working in our retail outlets. Giving customers a tangible feeling for this is a USP that’s beyond price. At the same time we’re exposed to the full range of social currents and economic imperatives. And our own trading environment is particularly finely meshed which makes it difficult to reap profit and invest. This is why it’s vital that we succeed in ensuring that employees find their own identities reflected in the brand identity and that they can transport this to the outside.

we_magazine:
How does your company do this?

Hermann Demmel: You can do this easily if your company is in a pioneering phase. In this phase high identification with the product brand goes hand in hand with what you’re doing. This is mainly where it’s created and is directly tangible. But in a company that’s been on the market for over 60 years and has scaled all the heights and depths, such identification is by no means self-evident. And this brings us nicely to the issue of corporate culture. The truly exciting thing about it is that nobody can probably succeed in putting a corporate culture into precise words. The simplest sentence is “That’s just the way we are”. Or if you came into our headquarters and took a look around – “Yes, that’s SportScheck for you!” Or if you met one of our managers and said afterwards “Yes, exactly, he must be one of the SportScheck crew.”

we_magazine:
How do you arrive at such statements?

Hermann Demmel: It’s a cultural asset which we nurture with our own company processes. We call them our corporate culture cogwheels – resonance points or crystallization points at which what we’ve achieved in terms of corporate culture becomes visible. Leadership is a good example. Leadership is a primary element which has great influence on a company’s culture. If you don’t clearly define leadership but leave it all to chance, you’ll be faced with a proliferation of styles of leadership which give rise to an unpredictable (non-quantifiable) momentum within corporate culture. This is when your employees start to lose their grasp of things because on the one hand they’re under management which acts according to one style of leadership, yet in another area they are confronted with a completely different leadership style. This is why it’s so essential to give it proper definition. Only definition is a long drawn-out process. You can’t simply write down five principles of management, you have to communitize them. This means you have to initiate identity building measures. The executive mission statement must also reflect who we are, where we want to go and what we need to get us there. It should never be a reflection of a perfectly quantifiable world.

we_magazine:
What are the other cogwheels in corporate culture?

Hermann Demmel: The other main themes are innovation, human resources development and the theme of values. Any discussion of values of course brings in themes like habits and customs, regulation and the theme of corporate behavior. Other companies too engage with these themes. And to them I would say – don’t get hung up on the principles of corporate behavior! Because these just describe codes of conduct. But codes of conduct say nothing about how we actually are. You have to conduct yourself within a particular context but what about your attitude, your mindset?

we_magazine:
How do you harmonize your inside perspective, your corporate culture and the values of your employees with the brand image on the outside, what customers think SportScheck is all about?

Hermann Demmel: That is a major challenge. Working together with Prof. Kruse we hit on a fascinating process. In 2005 we began to work on our brand image. We wanted to find out what customers thought of our brand. What kind of expectations they had in terms of sport and sports outlets? Customer behavior is certainly determined by a wide range of disparate factors. But at the end of the day it’s the customer’s value system that motivates consumer behavior. So for us it was very exciting to see how customers had changed, and how their value systems had changed on the global scale as well.  
We used a customer survey to find out what the value system of our customer looks like. And we took this survey along with our employees – about 100 of them, a good representative sample of our company’s various divisions – into a workshop where we sat down together and discussed the results. “Well, well, so that’s what customers think. That’s what concerns them. That’s what’s important for them. So what does all this really mean now for us?”
With Prof. Kruse’s workshop methodology “next moderator” we communitized results with 100 employees: “As part of the company, what do you think all this has to do with you personally? What consequences do you draw from it all? What does it mean to you as someone involved in the buying department when customers have these kinds of expectations about you?”
Out of our discussions on product line and human resources development and on system-related issues we then evolved and defined our own guidelines – our principles of leadership. Our actions had to be geared to our goals. If we have a certain idea of our customers and if we match our services to suit our customers, we must all be able to do this on the basis of a shared common understanding. To nurture such a common under- standing, we defined our guidelines. We identified three key concepts “surprise”; “convince” and “translate”.  
These concepts show just what this means for us as a company. “How do we surprise our customers? How do we pack conviction? How do we translate market-related issues for the customer in a way that reflects our own expertise?” In the next stage, on the other hand, what we were aiming for was to put these key concepts on a community footing. We didn’t produce some glossy brochure to showcase and trumpet them. We sat down and thought about how we could enter into interaction with our own employees.  
Together with the marketing department, we evolved a communication strategy that could reach each and every one of our employees. We developed a communication kit, a module that would enable us to interact with all our employees. We held talks with our employees and showed them your video with Prof. Kruse to start the dialog rolling. They were asked to make videos about what they had heard and seen and to give us feedback on what they personally felt about our new market positioning. And then we made a film which included excerpts from all their contributions. We made a commentary on the film and gave our employees yet more feedback. This marked the beginning of a new positioning which at the end of the day marked a complete turnaround for the company.

we_magazine:
How does Enterprise 2.0 help you to harmonize brand culture with corporate culture?

Hermann Demmel: Enterprise 2.0 helps me create transparency, helps me to network and bring my communication skills really up to speed.

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I am really convinced that Enterprise 2.0 will bring about a quantum leap in organization.

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we_magazine:
Under what conditions?

Hermann Demmel: To really create value by working with Enterprise 2.0, what you need is a basic dynamic in corporate culture, in other words you need the possibility of letting autonomous processes unfold. You need an understanding of the differences between hierarchy and heterarchy, that’s a fundamental prerequisite. And you need a totally clear vision and a readiness to seize opportunity.
Actually, nowadays Enterprise 2.0 is no longer a revelation for me in the sense of something special; it just helps us to do what we’re already doing. Enterprise 2.0 enables us to perform better, quicker and more efficiently.

we_magazine:
And how high do you see the risk that with such an understanding of leadership where every employee is a brand ambassador something could go wrong?

Hermann Demmel: It’s a risk that we must dare to take on board and learn from.

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We can’t stop the Web – so let’s work with it.

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About Leaders And Followers
(Gunter Dueck)
Leading From The Edge (John Hagel)
Leadership In A Flat Organization (J.P. Rangawasami)



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