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Only those who are aware of their own background and development, their key milestones and special characteristics, can shape the future successfully.
Siemens has played an impressive role over the past 170 years in shaping the technological evolution of Germany, Europe and the whole world. Unlike many other companies, it has found ways to overcome and learn from challenges and crises. Playing an active role in shaping the future has always been a major goal of every head of the company, from Werner von Siemens to Joe Kaeser. That ambition has turned the 10-man operation at Schöneberger Strasse 19 in Berlin into a great international corporation.
How does Siemens differ from so many other companies? The answer: Siemens has always been innovative, customer-oriented, quality-driven, international, responsible, able to withstand crises, and able to change. These traits have kept it strong and unique, in good times and bad. Join us on an exciting journey through our company's history. Experience what has made Siemens the world-class company it is today. Because every foreground needs a background.
Pioneering technologies have been the foundation at Siemens for 170 years. If the road wasn’t always smooth, that was simply what made learning and improvement possible. Come see some of the important innovations and challenges that channeled our development.
The construction of a hydroelectric power station requires excavating approximately eight million cubic meters of dirt and blasting approximately one million cubic meters of rock.
Ireland’s damp climate and problematic soil conditions, as well as geological formations that were not detected during preliminary surveys and test drilling, keep interfering with the work’s progress.
The idea of tapping the hydropower of the Shannon River comes from Siemens engineer Thomas McLaughlin, an Irishman. The spiral-shaped inlet scroll gives the water an additional swirl before it proceeds to the turbines.
The installation work begins in 1928. Initially, three three-phase generators, each with a capacity of 30 megavolt-amperes, are set up and coupled directly to the vertically standing 38,600-horsepower Francis spiral turbines.
As the general contractor, Siemens ensures that the entire Irish Free State is supplied with power starting in October 1929. This is made possible by a line network with a total length of 3,400 kilometers as well as numerous switching points and transformer stations.
Ideas are of little value in themselves. The value of an invention is in its practical application.
Creative ideas alone are not enough for long-term success. What counts is that they have to set standards in the market as new products, solutions or services. And if forward-looking business models additionally meet an era’s specific needs, genuine innovations are the result.
Creative ideas, pioneering business models and entrepreneurial action are the components of Siemens’ innovative strength.
focused on quality and the customer
The customer is the focus of everything we do – and has been for 170 years. But a customer orientation has to be learned, acted upon and constantly re-checked. Company founder Werner von Siemens already realized that “the one who supplies the best quality is the one who stays on top, and I always prefer to advertise with results rather than words.”
We try to think from the customer’s vantage point. Only those who can adopt the customer’s perspective as their own can do the best possible job of meeting the customer’s needs. Yet this has to be learned, implemented and repeatedly demonstrated. Which is why customer satisfaction is one of the company’s most important goals – the aim is to improve it at least 20 percent by 2020.
For us, customer satisfaction is a yardstick to measure the quality of what we offer our customers.
Siemens became an international firm at an early date. Today, the company is at home in some 200 countries around the world – a global player through and through. It assists with the economic and sociopolitical development of many countries, provides aid in reconstruction – with such work as helping to rebuild infrastructure destroyed by war – and doesn’t head for the hills when things get difficult, whether politically or economically.
The time of national isolation is over; we must recognize that we have come to depend on each other in today’s world.
It is one of the great adventures and feats of the waning years of the 19th century. By laying the transatlantic cable, the Siemens brothers connect Europe and North America and open up new markets for their company in the international submarine cable business.
Together with regional partners, Siemens forms a financing company for local public transportation. As a result, the Siemens tram is put into operation in Budapest in November 1897, with additional projects following later.
At the end of the 1890s, the discovery of tremendous gold and diamond deposits lures tens of thousands of individuals from around the world to South Africa. The country’s economic development increases rapidly, and Siemens builds South Africa’s first public power plant in Brakpan. Starting in 1897, it supplies power to the growing city of Johannesburg and the surrounding gold mines.
In 1897, Siemens builds a steam-driven power plant. It also installs the entire electrical lighting network for the Mexican capital. The new lighting system, which replaces the previous street lights with 800 new lights, is one of the world’s largest at the time.
Moscow’s tram system is only one of many projects with which Siemens further develops Russia’s infrastructure. For example, in 1896, the company builds Eastern Europe’s largest power plant in Moscow, which supplies electricity for the city’s lights as well as the tram network.
Many large-scale contracts, such as supplying equipment for China’s first grid power station and three telephone exchanges in Beijing, allow sales to start climbing rapidly again after the interruption caused by World War I. In 1925, Siemens has 400 employees there.
Despite major setbacks and crises in the international business, and the loss of trademark rights, patents and material assets during the two World Wars, there has really been no alternative to the worldwide presence Siemens has striven for since its founding. Globalization calls for an ability to transform and adapt, and production sites worldwide have become an important criterion for success.
Today, Siemens is at home in some 200 countries all over the world – a global player through and through.
tested in crises, able to change
Companies have to prove their mettle in crises and be able to change. Every large company has been confronted at some point during its history with declining margins, stagnating growth, falling stock prices, sales slumps, financing problems or similar issues. Yet it’s often those special challenges themselves that make a company grow; Siemens has also understood how to treat crises as opportunities.
Like the German electrical equipment industry in general, Siemens’ international business expanded steadily up to 1913. But the outbreak of World War I in 1914 brought a profound disruption that had especially dire consequences for the international business. Not until 1923 was Siemens able to regain a foothold internationally – at first in Japan, and then in China and Ireland. Yet this stronger international focus would not last long. It ended abruptly once again with the outbreak of World War II. Once again Siemens lost a large share of its foreign markets, patents and trademark rights. The consequences of the war were a serious threat to the company’s survival. The loss of assets was even calculated at twice as high as the loss after World War I. On top of that came the irreplaceable intangible damage: the loss of intellectual capital, of faithful employees and of business partners and customers.
How did corporate management respond? It counted on international growth, and the company underwent a slow but continuous upswing that carried it back into the world markets. In parallel, it recovered not just its confiscated international companies, but its ownership rights in patents and trademarks. The crisis that had threatened the company with almost total destruction had been overcome. Adaptability, trust in its own strengths, and recourse to its technological core competences helped Siemens out, as did the persistence and endurance that had already characterized the company’s founding generation.
Taking historical experience and adapting it to the needs of the age is one of the tenets that has kept Siemens ahead for 170 years now. The company has regularly gone back to draw on its founders’ abilities, qualities and temperament: a clear willingness to take responsibility and act, an unwavering focus on the customer and a firmly established ownership culture.
Analyzing crises and learning from them, staying consistent, defining an unambiguous course – these are things Siemens stands for as much today as it did 170 years ago.
Trust and the acceptance of responsibility have always been the glue that binds people together worldwide – in politics and society, but also and especially in economic contexts. After all, “business is built on trust.”
Responsible management that leaves sufficient freedom for creativity is based on trust in employees’ ability to do their job and their sense of personal responsibility. That’s the core of the ownership culture that Siemens has kept in mind since its founding. After all, it’s the employees whose products and work sustainably consolidate customers’ and society’s trust in the company. That was already important to the company’s founder. And it’s reflected in a large number of social policy measures that are still in existence and that employees can rely on.
In 1872 and because of the additional load created by piecework, Werner von Siemens shortens daily work time to nine hours; in 1891, it drops to 8.5 hours.
In the company’s own consumer cooperatives, employees can purchase everyday commodities, such as food, housewares, and even bicycles, at reduced prices.
The realization that only healthy, well-rested employees can perform at their best led to the establishment of a number of employee facilities. The Ettershaus, a rest home for employees, opened in 1909; Ahlbeck, another rest home for women workers, opened in 1914; and in 1922 came the first convalescent home for employees’ children.
Workplace accidents and infectious diseases, as well as conventional occupational illnesses such as poisoning or lung diseases, become a priority at the end of the 19th century. Even before the government institutes healthcare policies, Werner von Siemens sets up medical care in the plants.
The first cafeteria is opened in Berlin in 1886 for managers, with employee cafeterias following three years later.
Between 1907 and 1915, just under 1,000 apartments were built for employees at various company levels in Siemensstadt. Built in close proximity to the workplace, they ensure short commutes to the plants. As the production facility grows, residential housing is also expanded.
Striking a balance between ecological, economic and social objectives is a guideline of Siemens’ sustainability strategy. It aims to use innovative products and solutions to improve the company’s own environmental balance and that of its customers, in ecological terms; to build on long-term value added through innovative products and solutions, in economic terms; and to commit to the well-being of the company’s employees and environs, in social terms. Principles of environmental protection are equally mandatory for both employees and suppliers.
One way in which Siemens shows how seriously it takes its sense of responsibility is that in 2001, it joined the United Nations Global Compact, the world’s largest and most important initiative for responsible corporate management. On the basis of its 10 universal principles on human rights, labor standards, environmental protection and corruption prevention, the Global Compact pursues the vision of a sustainable global economy for the benefit of all people, societies and markets.
If a company has a reputation for being responsible and trustworthy, then as a rule it will also be viewed as reliable, secure, stable and viable for the future. But trust doesn’t just come out of nowhere – and certainly not overnight. Trust takes time and persistence. It has to be earned. During its 170-year history, Siemens has always insisted on being a responsible partner for both its customers and its employees, and thus earning trust.
Acting responsibility in ecological, economic and social terms for the benefit of future generations is one of Siemens’ principal management axioms today.
Innovativeness, a commitment to quality and customers, internationality, crisis-tested strength, adaptability and a powerful sense of responsibility – these characteristics have guided Siemens throughout its history. Over the course of 170 years they have made it the company it is today. By keeping its background constantly in mind and acting upon it, Siemens makes an important contribution toward shaping the future for the long term.
“Whatever we do, it must add lasting value and deliver benefits – for shareholders, for employees, for customers, and for our partners in business and in society.” That appeal by President and CEO Joe Kaeser is closely allied with the conceptual world of company founder Werner von Siemens, who impressively established the prime imperative of his still-young company when he said, “I won’t sell the future for short-term profit!”
Coming equally from the two poles of Siemens history, in this way the past and the present inscribe a forward-looking principle in the company’s DNA: shape the future for the benefit of those you work for, and who are relying on you. Or – as Werner von Siemens wrote to his wife Mathilde in 1854: “There’s a powerful magic in ‘I want,’ if it is meant in earnest and if there’s some conviction behind it!”