IT Entrepreneur

Mittelstand Success Story is 'Big Enough to Deliver, Small Enough to Care'

ulrich dietz
GFT founder and chief executive Ulrich Dietz quit school but later earned an engineering degree.
  • Why it matters

    Why it matters

    Software engineering firm GFT exemplifies the Mittelstand, the successful small to medium-sized companies that form the backbone of the German economy.

  • Facts

    Facts

    • Company founder Ulrich Dietz dropped out of school and set up his first small business at the age of 17.
    • GFT was founded in 1987 with just 3 employees.
    • It now has 3,000 employees and sales of around €350 million.
  • Audio

    Audio

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When everyone else has left work, Ulrich Dietz, founder and chief executive of German IT firm GFT, sometimes drives to a derelict building near Stuttgart, in southwestern Germany, where he plans to open up his firm’s new headquarters.

The new building under construction reflects GFT’s success. The company has grown from just a handful of employees when it was first founded in the 1980s to becoming a listed company operating in several countries.

GFT is a successful member of the so-called Mittelstand firms – the many small-to-medium-sized companies that form the backbone of the German economy.

“This will be really great,” Mr. Dietz said as he looked around the clutter and debris. The man who admires artists for their outside-the-box thinking has exact visions of what the building will look like once it is completely refurbished.

As he walked around the debris, he praised the aesthetic value of the bare concrete walls and gray carpets that will soon be laid here. A new Mediterranean café, including a space for art exhibitions, is also part of the plan.

Not many people see what Mr. Dietz sees in the forlorn, industrial building site he selected for the new headquarters. He admitted that he was often asked why he did not raise the old structure and erect a completely new one.

“I always look for new tasks that use more brain power than money,” Mr. Dietz said. “I want to test new things even if other people don’t think much of them.”

His thirst for innovative business concepts is just one of the factors that have contributed to the success of his business.

Over the past 30 years,  GFT has evolved into one of Europe’s most successful IT businesses, with sales of around €350 million ($468 million), 3,000 employees and an equity ratio of more than 40 percent.

‘Big Enough to Deliver, Small Enough to Care’

Growing up, Mr. Dietz watched his father launch a fashion boutique in the southwestern German state of Baden-Württemberg, a state known for its economic prowess. From him, he learned how to “work with precision and to complete tasks as well as possible,” Mr. Dietz admitted.

Mr. Dietz did not like school, and after dropping out at just 17 years of age, he started a small business producing technical drawings. Soon he had enough orders to employ another person on a freelance basis.

Spurred on by his success, Mr. Dietz returned to school and took evening classes to obtain a high school diploma.

After that, he worked as an intern at Trumpf, a machine tool maker owned by one of his father’s friends, Berthold Leibinger. There he started understanding the importance of good relationships. “Ulrich always knew that relationships harm those who don’t have any,” Mr. Leibinger said.

After studying product engineering,  Mr. Dietz founded GFT in 1987.

The company had its ups and downs until it won Deutsche Post, the German national postal service, as a customer – a deal worth millions. Deutsche Post bought licenses and services for new production and planning software.

Dietz’s motto became: “Big enough to deliver, small enough to care.”

“I always look for new tasks that use more brain power than money.”

Ulrich Dietz, Founder and CEO, GFT

In 1966, Mr. Dietz began broadening his horizons, creating a new development center in Ireland. One year later he ventured into Switzerland, where he expanded the product portfolio and moved into web design.

Offers to acquire the company emerged, but Mr. Dietz always refused.

Whenever the entrepreneur needed financial advice, he looked to former Deutsche Bank analyst Markus Kerber who told him to increase GFT’s capital by launching an initial public offering. Mr. Kerber later joined the company and served as financial director from 1998 until 2003 when he left to enter politics.

The company IPO took place in 1999, at the height of the Internet bubble. The issue price was €23. The initial listing was €44 and climbed during the first day of trading to €66. GFT made €34 million from the successful listing.

Mr. Dietz continued to choose his own people and never relied on headhunters. He wanted to get to know the people he employed. It would be normal for his employees to be invited to his home, along with their children. “I want to know what drives people outside of work,” Mr. Dietz said.

Despite his success, Mr. Dietz has a modest life style. He doesn’t own expensive homes or yachts around the globe. Instead he has stayed home with his family in the Black Forest and spent any extra cash on expanding his business and offering start-ups a platform to present their ideas.

Start-ups will have an entire floor in his new headquarters “so that young and old can mutually stimulate each other,” he said, “like in a constant metamorphosis.”

Sarah Mewes translated this story.

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