Sustainable business – And cost optimization

Franz Fehrenbach, Chairman, Board of Management, Robert Bosch GmbH


In this IEC Global Visions interview, Franz Fehrenbach, Chairman, Board of Management, Robert Bosch GmbH, shares why he strongly believes that it is a big mistake for any company not to participate in international standardization work or to develop products with different standards in different markets. He further explains the philosophy that has driven Bosch since its founder’s days and how the company has always tried to have a long-term orientation, striking a balance between business, society and the environment to achieve sustainability.



Franz Fehrenbach, Chairman, Board of Management, Robert Bosch GmbH

Sustainability seems to be a new buzzword. Is it achievable and does it make sense from a business point of view?

Franz Fehrenbach: I would say that business thinking and social thinking go back to the founder of Bosch, Robert Bosch. What we added are environmental considerations. Today Bosch seeks to optimally balance its business thinking with society and the environment and this allows us to grow in a sustainable way. It makes a lot of business sense too. In all our actions and activities we have never strived for short-term profit maximization. We have always seen the need for a long-term outlook on things because the development of new products and systems takes time. If we had short-term profit optimization we would not be able to bring as many innovative products to the market. Sustainable thinking is definitely not new for Bosch, this is something we have been pursuing already for many decades.

Bosch has successfully weathered the economic crisis. What has been your secret?

Franz Fehrenbach: Bosch was a global company before anybody used the word globalization. We have been more than 100 years in the United States, just under 100 years in China and Japan. We achieved approximately 90% of our sales outside of Germany already at the beginning of last century. When you have such a broad reach, it is easier to weather storms. And when you are active in as many markets as we are, you really realize how important it is to have standardization.

It seems unusual for a CEO of a company your size to spontaneously mention the importance of standards?

Franz Fehrenbach: We are convinced that if we don’t have standardization in the different markets, we waste a lot of effort and money. So we have to participate first of all for our own benefit but also for the benefit of our customers. They can be sure that we fulfil international standards and they can be sure to have real tangible benefits.

What would you say to CEOs that don’t have standardization on their radar screen?

Franz Fehrenbach: Not to participate in international standardization - for any company - is a big mistake. I think this is really short-term thinking. You have to imagine what kind of double work you have to do, what kind of additional efforts you have to spend when you have different standards in different markets. You can use these efforts much better for real development instead of producing different products according to different standards in different markets.

One of the big counterarguments to standardization is the fear of revealing intellectual property. What is your take on this?
Franz Fehrenbach: There is a conflict. Of course, intellectual property has to be protected, it has value and you need to get paid for it. There are many companies - and we are one of them – who spend a lot of money for R&D. Bosch spends 10% of sales on development work. At the same time we realize that to build markets, to really bring this development work to the market, we need standardization. It is not useful to have a huge intellectual property pool without having broad access to the market, and that’s where you need international standards.

It seems that many organizations, consortia and fora are now engaged in developing standards. Is this something you encourage?

Franz Fehrenbach: No, we are very concerned about this development. We see that there are regional and smaller organizations that try to organize things, and I think that’s totally the wrong way. We need to involve the global standardization organizations, which prepare the standards and requirements for all the markets around the world.