Family Firms

From Cuckoo Clocks to Smart Homes

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Gabriele Siedle is taking the family firm into a future filled with smart homes and wireless door opening apps. Source: Siedle PR.

Six generations in gold-framed oil paintings gaze sternly down on Gabriele Siedle. It feels as though they are not letting the head of their company out of sight. The Siedle villa in Furtwangen, in the middle of the Black Forest in south western Germany is the headquarters of the company that the farmer Matthäus Siedle founded in 1750 as a foundry. Today almost everybody in Germany has come into contact with a Siedle product, whether they know it or not: German apartment buildings usually connect to their main front doors by intercoms, that each individual apartment has; and every second intercom in Germany comes from S. Siedle and Sons, branded with the three letters, SSS.

“I’m the first woman to lead the firm in more than 260 years,” she says. That was never the plan. The 65-year-old is actually a banker and for many years, she headed the asset management department at Dresdner Bank in Baden-Baden.

Ms. Siedle met Horst Siedle, of the seventh-generation of S. Siedle and Sons, through her work with a foundation. After the couple fell in love, she moved to remote valley in Furtwangen.

“I was impressed with how quickly he put decisions into practice,” Ms. Siedle says. “Completely different than in a bank.” She was also impressed with how her husband went against convention and built a logistics center in Furtwangen, even though there was no connection to highway or rail networks, because he wanted to develop the town and increase employment opportunities there.

Soon Ms. Siedle was working in management as well, true to her motto: “I never want to need a man as a provider.”

Should a courier ring the doorbell at home, the postbox can be opened with an app, no matter where the homeowner is, whether at the office or on holiday.

However in 2005, Horst Siedle became severely ill. And from one day to the next, Ms. Siedle had to take things into her own hands after she sensed how quickly uncertainty was spreading through the firm: “He was the patriarch,” she says.

To her surprise, Ms. Siedle also discovered that the company’s sales had fallen by a third in the last decade. The construction boom was over and cheap brands were on a market where previously Siedle and Sons had virtually no competition.

Ms. Siedle made some quick decisions: The company would remain independent, it would be supervised by a family foundation and it would remain in Furtwangen. Above all though, the new boss had to develop a strategy for the future. What would become of a manufacturer of intercoms when a door could be opened with an app? “You have to have the courage to let loose and take up the new challenge,” Ms. Siedle says.

The courage to try something new is part of the culture at Siedle and Sons. Because the winters in the Black Forest are long and the slopes are too steep for agriculture, many farmers worked part-time at the clock factory. Farmer Matthäus Siedle also cast bells and weights for cuckoo clocks on his premises and in 1869, he built a little factory. In 1890, his great-grandson Salomon started making electric bells and telephones. But when the Deutsche Reichspost – or German national postal service – was given a monopoly on telecommunications in 1928, no other firm was allowed to make telephones. So Siedle focused on communications inside buildings instead: In 1935, the firm brought Portavox, the first loudspeaker for doors, onto the market. It was a breakthrough product.

In the mid-70s, Horst Siedle introduced a design element to the company’s products and introduced the Vario series to the market, a system with various elements including a doorbell, intercom, camera and motion sensor. “That was revolutionary at the time,” Ms. Siedle notes.

In 2000, she introduced the idea of the same series in stainless steel. “The Siedle brand is marked out by extremely clear, architectonic design, that has received multiple awards,” says Andrej Kupetz executive director of the German Design Council.

Today Siedle and Sons is dealing with competition from all-comers: From switch and socket manufacturers like Gira and Busch-Jaeger, from Google subsidiary, Nest, Apple offshoot Homekit and start-ups like Mobotix. All of these players are tinkering with ideas around the smart home, with an interconnected series of appliances, that includes windows and doors.

Since 2011 Siedle has been one of the players in this field. It was risky and expensive to get into the sector, Ms. Siedle concedes. “But it brought a lot of optimism to the company.”

It meant that the maker of precision mechanics became a software manufacturer too. The series Siedle Access, which connects to an existing wireless network, brought in 15 percent of the company’s €92 million in revenues for 2016. Digitization has opened up many new avenues for the Black Forest firm to explore and Siedle and Sons now earn a quarter of all their money abroad. For example, Siedle kitted out Russian IT security firm, Kaspersky, as well as the General Motors tower in Detroit.

Siedle now also offers smart postboxes. Should a courier ring the doorbell at home, the postbox can be opened with an app, no matter where the homeowner is, whether at the office or on holiday. In the long run, a mailbox with its own refrigerator – so that grocery deliveries can be kept fresh – might also be possible. Siedle is also working with Jung, another family firm, based in Sauerland, that specializes in smart homes.

Originally external consultants had advised Ms. Siedle to produce in China. But she says this was never an option for her. The family business, which now has nearly 1,000 staff and revenues of around €162 million, now includes subsidiaries that manufacture software for sensors, work with metal as well as plastic molding. Ms. Siedle says one of the group’s advantages is that all of their expertise is in one place.

“Ms. Siedle has mastered the transition to digital,” says Oliver Böhme, a senior member of IG Metall Villingen-Schwenningen, a labor union representing the interests of workers in the sector. Mr. Böhme is critical of the way collective payment agreements are being hollowed out. He also says that Ms. Siedle has less of a common touch than her husband.

“As a banker of many years, she is more distant than her husband, who walked through the plant each day and greeted employees with a handshake,” Mr. Böhme notes. Nonetheless, he agrees: “Ms. Siedle knows what she wants.”

“I never lose sight of the goal,” says the manager, who is currently building up a leadership team so she can withdraw from operations and join the board of the family foundation. At that stage, she hopes he would have more time for her passion, art. Over the years, she and her husband built up an extensive art collection that will be housed in a purpose built museum not far from Siedle and Sons headquarters.

Katrin Terpitz covers companies and markets at Handelsblatt, focusing on Germany’s Mittelstand and family-owned businesses. To contact the author: terpitz@handelsblatt.com

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