You are currently viewing Billionaires You’Ve Never Heard of #4: Reinhold Würth: Growing and Scaling a Screw Shop to a 80 000 Employees Company

Billionaires You’Ve Never Heard of #4: Reinhold Würth: Growing and Scaling a Screw Shop to a 80 000 Employees Company

Reinhold Würth is the owner of Würth Group, a giant manufacturer and wholesaler of “fasteners, screws and screw accessories, dowels, chemicals, electronic and electromechanical components, furniture and construction fittings, tools, machines, installation material, automotive hardware, inventory management, storage and retrieval systems” according to Wikipedia.

To put it simply, it’s a hell of a company employing more than 80 000 people in 86 countries.

Find out how Reinhold Würth scaled a screw shop to a multinational conglomerate leader in its market.


It Began With One Man

Reinhold Würth for once, isn’t the founder of Würth. However, he was its very first employee.

Würth was created by Reinhold’s dad Adolf Würth in 1945 in Germany. Reinhold was just 10 years old. The idea was to sell companies screws, fasteners, and other accessories.

The business took off right away and Reinhold Würth helped his dad from the very beginning.

In 1949, at the age of 14 years old, Reinhold Würth joined the company officially as an employee. One year later, he was sent on his first sales trip to Dusseldorf.

In 1952, he completed his sales training and worked full-time in the business.

In 1954, Adolf Würth died despite being only 45 years old.

Reinhold Würth inherited the business at 19 years old and took its command, helped by his mother.

One year later, Würth had by far exceeded sales volume from the previous year.

He has never stopped growing the business ever since.


Management Visionary and Corporate Culture

Despite that Reinhold Würth attributed the success of his company to his employees, it was his visionary management practices that enabled him to grow the business.

He was a pioneer in almost all of the ideas highlighted below.


Goal setting

The first practice Würth established was goal setting.

At the death of his father in 1954, Reinhold Würth set the target to maintain an equal or higher sales volume for the upcoming year.

He ended up selling much more than that.

Likewise, in 1987, he set up his “Vision 2000” plan which sought to increase sales volume from DM (Deutsche Mark) 1.3 billion to DM 10 billion.

He achieved his goal on time, just as planned.

To this day, Würth keeps on setting goals and grows every year.

The next target is to scale Würth to 100 000 employees with a revenue of 20 billion EUR by 2023.


Proactive sales

Würth wasn’t the only screw wholesaler in Germany in the 1950s. But he did something no one else did.

While most businesses set up shop on Mainstreet and waited for customers to enter, Adolf Würth took a proactive approach to sales: he went to talk to his customers directly.

When Adolf hired his son officially in 1949, it was mainly to work as a salesman. Reinhold Würth’s mission was to go find construction companies and tradesmen and enquire about their need for screws and fasteners.

That approach, which Reinhold kept to this day, enabled him to grow the business very quickly. When his father died, the first people Reinhold hired (besides his mother) were sales reps.

The company hasn’t since changed its method.

A company report of 2018 specified that Würth contacts on average 300 000 customers every day through its 32 000 sales representatives.

This sales mindset is embodied by the two following quotes from Reinhold himself.

“Customer satisfaction is not enough – we want to inspire them!”

“We are our customers’ employees”.

Würth doesn’t merely sell; it serves.


Humility and excellence

From the very beginning, Würth sought to impose specific attitudes and mindsets in his company: humility, excellence, and respect for employees.

In an interview, he highlighted his disdain for arrogance and the importance for entrepreneurs to embrace modesty and skills.


Relentless innovation

Würth relentlessly innovates in pretty much everything they do.

Management innovation with goal setting, sales innovation with direct sales reps, HR innovation with the focus on employees, and operation innovation with…products manufacturing.

In 1958, the screw business wasn’t vertically integrated at all. Manufacturers made the products, sold them to wholesalers that sold them to professionals.

Contrary to these practices, Würth decided to start producing screws himself as early as…1958.

This enabled the company to make more money and control production.

In 1975, Würth realized that since he produced his own products, he could also tailor them how he wanted.

He started training his sales representatives to understand their customers’ problems. This enabled Würth to get feedback on its products and design better screws and fasteners to better serve their customers.

The need for higher-quality design eventually led them to develop an R&D department within the company. They filed a record of 60 patents in 2007.

This practice enabled them to understand the need for superior quality products on the market, and they developed ZEBRA, a brand whose slogan is “100% quality, 0% discussion”. If customers aren’t happy with the quality of one of their products, Würth delivers a new set, no question asked.


Aggressive expansion

Würth doesn’t stagnate but expands in everything, everywhere.

In 1962, Reinhold Würth created the first subsidiary in the Netherlands.

Seven years later, he entered the US market.

In 1970, he established another branch in South Africa. In 1982, he penetrated the Australian market and in 1987, bought a company in Japan and created another one in Malaysia.

While entering new markets, Würth also sold more and more products, and today sells more than 1 100 000 different products on their website, from screws to automotive parts and software.

Würth didn’t merely expand their markets and products: they also bought other companies. Today, Würth’s corporate structure is made of 400 companies in 86 countries. 206 of these companies are left completely autonomous, a similar management system to Berkshire Hathaway.


Societal retributions

In 1987, Würth established the Würth Foundation. Today, it is active in art, culture, research, science, training, and education. Würth being a huge art collector, his foundation owns a collection of more than 18 300 objects spanning 500 years.

These are shown in museums built for the occasion in Austria, Denmark, France, Italy, the Netherlands, Norway, Spain, and Switzerland.

The headquarters of Würth in Germany house one of these museums and is open to the public.


Conclusion

University mostly teaches you about Harvard business professor Michael Porter’s teachings, a guy whose only company was a consultancy which…went bankrupt in 2013.

Amazing, isn’t it!

Meanwhile, industry titans like Würth are left in the shadow.

Doing research about Würth, I was amazed at the scope and number of innovations he introduced in his company at a time the Internet didn’t yet enable the spread of information. He was (and still is) a visionary!

There are two lessons worth retaining about Reinhold Würth.

First, never stop expanding. Once he dominated the German market, Würth expanded in Europe, then went to America, Africa, Asia, and Oceania. He started with screws and today sells much more. The sky is the limit.

The second lesson is control.

Würth owns 100% of his business. He never sold a share, never went public, and hence, never had to deal with annoying shareholders looking for share appreciation and money.

That enabled him to spend monstrous amounts of cash on R&D that his competitors can’t afford. As a result, he never stops dominating his sector.

Customer service, hard work, superior quality, innovation are all traits that made Würth a worldwide leader in his market and Reinhold Würth one of the richest people in the world.

The only remaining question is: what prevents you from doing the same?

For more billionaire stories, head to auresnotes.com.

Picture credits: Photo by Yevgen Tarasov on Unsplash

Sources:

Forbes

Wikipedia

Wikipedia

Wuerth.com

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