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| Miele boss explains how his two-family business has lasted four generations | Miele boss explains how his two-family business has lasted four generations |
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| "People do very weird things with their appliances," says Markus Miele. He would know. The German entrepreneur is the great-grandson of Carl Miele, who 115 years ago founded the upmarket brand which is the badge of a middle-class kitchen. | |
| Miele's managing director is referring to a market research project, when the company gave disposable cameras to customers, asking them to photograph their loaded dishwashers. It turned out some people used their machines to clean Lego. So Miele built a special rack to hold the plastic bricks, and any other small pieces likely to jump about during the cycle. | Miele's managing director is referring to a market research project, when the company gave disposable cameras to customers, asking them to photograph their loaded dishwashers. It turned out some people used their machines to clean Lego. So Miele built a special rack to hold the plastic bricks, and any other small pieces likely to jump about during the cycle. |
| It is this kind of attention to detail, along with the durability of the products – a Miele washing machine should last 5,000 cycles – that Miele says has convinced his customers to pay seriously high prices for the company's appliances – up to £2,800 for a washing machine, albeit one that claims to cut the amount of ironing required afterwards by 50%. Or maybe £2,500 for a mobile Teppan grill, and another £2,500 for a wine cooler. | It is this kind of attention to detail, along with the durability of the products – a Miele washing machine should last 5,000 cycles – that Miele says has convinced his customers to pay seriously high prices for the company's appliances – up to £2,800 for a washing machine, albeit one that claims to cut the amount of ironing required afterwards by 50%. Or maybe £2,500 for a mobile Teppan grill, and another £2,500 for a wine cooler. |
| Miele is actually a two-family business that has lasted four generations. Carl Miels's partner was Reinhard Zinkann, and today Markus runs the company alongside Zinkann's great-grandson, also called Reinhard, with ownership split 51%-49% between the Miele and Zinkann families. | |
| The firm has maintained its independence under the twin-family control through two world wars and without recourse to stock markets. The recent economic crisis has also been weathered. Revenues rose nearly 4% last year to £2.6bn. | |
| Miele and Zinkann now have children who could eventually take up the reins, although not yet given that the eldest is just 19. The elder Miele says there is no pressure to hand over the baton. "We've seen a number of our electrical retailers, if they force their kids inside the business and then the business is not growing, it's not only bad for the business, but it's also bad for the family. Most of the time the better solution is to sell the business or give it to somebody else." | Miele and Zinkann now have children who could eventually take up the reins, although not yet given that the eldest is just 19. The elder Miele says there is no pressure to hand over the baton. "We've seen a number of our electrical retailers, if they force their kids inside the business and then the business is not growing, it's not only bad for the business, but it's also bad for the family. Most of the time the better solution is to sell the business or give it to somebody else." |
| But right now the Miele business is growing. Sales are surging in the US and among the new middle classes of Russia and China. The UK is also having a double-digit growth spurt, propelled by the property boom in the capital. "I was a little bit surprised, even shocked by house prices," says Miele, who is in the capital on a flying visit. | But right now the Miele business is growing. Sales are surging in the US and among the new middle classes of Russia and China. The UK is also having a double-digit growth spurt, propelled by the property boom in the capital. "I was a little bit surprised, even shocked by house prices," says Miele, who is in the capital on a flying visit. |
| This astonishment at London's house price boom comes from a man whose top-of-the-range coffee machine will set you back £3,300. | This astonishment at London's house price boom comes from a man whose top-of-the-range coffee machine will set you back £3,300. |
| Even in Greece, where in 2010 Miele suffered as public spending cuts tipped many homes into poverty, normal service is resuming. "Last year was the first growth in Greece for seven years," he says. "The spirit is coming back. They are saying this is now the bottom, we can't fall any further." | Even in Greece, where in 2010 Miele suffered as public spending cuts tipped many homes into poverty, normal service is resuming. "Last year was the first growth in Greece for seven years," he says. "The spirit is coming back. They are saying this is now the bottom, we can't fall any further." |
| Miele, who joined the family firm in 1999 and became managing director three years later, runs the research department and the factories. About 80% of production still takes place in Germany. Zinkann, who is a decade older than 45-year-old Miele, travels the world organising sales and distribution through 47 international subsidiaries. | |
| Miele's first products were butter churns, some of which spun horizontally. Very soon, these morphed into Miele's first washing machines, which were initially made of wood. By 1929, the firm had already produced electrical washing machines, dishwashers and vacuum cleaners. | Miele's first products were butter churns, some of which spun horizontally. Very soon, these morphed into Miele's first washing machines, which were initially made of wood. By 1929, the firm had already produced electrical washing machines, dishwashers and vacuum cleaners. |
| The years since the second world war have been dedicated to refining the appliances, bringing them to the mass market, and expanding abroad: 70% of revenues come from outside Germany. Since the digital revolution took hold, white goods have been left in something of a technological backwater. But the internet of things means that is now changing rapidly. Electrical appliances are now part of the 21st-century tech boom. This month Apple announced a software platform for the home, which lets householders control everything from lightbulbs to boilers and garage doors from their smartphones. Leave the house, and you can tell your phone to lock the doors, switch off the lights and make sure the oven isn't on. Google has ambitions in this space too. | The years since the second world war have been dedicated to refining the appliances, bringing them to the mass market, and expanding abroad: 70% of revenues come from outside Germany. Since the digital revolution took hold, white goods have been left in something of a technological backwater. But the internet of things means that is now changing rapidly. Electrical appliances are now part of the 21st-century tech boom. This month Apple announced a software platform for the home, which lets householders control everything from lightbulbs to boilers and garage doors from their smartphones. Leave the house, and you can tell your phone to lock the doors, switch off the lights and make sure the oven isn't on. Google has ambitions in this space too. |
| Miele now has intelligent household appliances that communicate via broadband. Its tumble drier will send an email when the filter needs de-fluffing, its fridge will text when the door has been left open, and in Germany, where the price of electricity can vary according to the time of day, the washing machine can be programmed to start a new load when energy is cheapest – so long as the home has a smart meter. | |
| Steve Jobs, whose phones first popularised the touchscreen, was a Miele customer, as are David Beckham and Madonna. Jobs once described to a journalist how European washing machines were better than American ones because they were kinder to clothes by using less water and detergent, even though they took twice as long to complete a cycle. | Steve Jobs, whose phones first popularised the touchscreen, was a Miele customer, as are David Beckham and Madonna. Jobs once described to a journalist how European washing machines were better than American ones because they were kinder to clothes by using less water and detergent, even though they took twice as long to complete a cycle. |
| Miele was flattered but baffled when he read the interview. "He said he was discussing for two weeks with the family about a washing machine," he says. "I was thinking about the family life … it is difficult to imagine talking for two weeks to my family about a washing machine. But it was interesting because he looked at all the details, energy consumption and so on and then decided." | Miele was flattered but baffled when he read the interview. "He said he was discussing for two weeks with the family about a washing machine," he says. "I was thinking about the family life … it is difficult to imagine talking for two weeks to my family about a washing machine. But it was interesting because he looked at all the details, energy consumption and so on and then decided." |
| With ownership of the business shared by an unwieldy 71 descendants, making decisions can take time. "The company comes first, then the family. We have never had any voting on anything that wasn't 100%." | With ownership of the business shared by an unwieldy 71 descendants, making decisions can take time. "The company comes first, then the family. We have never had any voting on anything that wasn't 100%." |
| A family council, with three people from each clan, meets four times a year. If Miele and Zinkann cannot agree, the finance director, Olaf Bartsch, one of the five-person management team, intervenes. | |
| Miele, whose ascendancy to the top job was never guaranteed, studied industrial engineering and worked at another family-run firm, the car parts maker Helle, before being offered a post in his father's company. Before he joined, he had to make a presentation and be interviewed by a recruitment agency, which gave a second opinion on whether he was capable. | Miele, whose ascendancy to the top job was never guaranteed, studied industrial engineering and worked at another family-run firm, the car parts maker Helle, before being offered a post in his father's company. Before he joined, he had to make a presentation and be interviewed by a recruitment agency, which gave a second opinion on whether he was capable. |
| Given that Miele is really a partnership, it seems unfair that the Zinkanns have still not got their name above the door, let alone on the products. But the company's motto is immer besser, which means forever better, and Miele says discussion focuses on how to improve the merchandise rather than rebrand the business or redistribute the shares. | |
| "My grandfather said whenever this doesn't work out, I can take another partner into the company. But it has worked out for 115 years. Hopefully it will stay like this for another 115 years." | "My grandfather said whenever this doesn't work out, I can take another partner into the company. But it has worked out for 115 years. Hopefully it will stay like this for another 115 years." |
| Keeping it in the family | Keeping it in the family |
| Bertelsmann | Bertelsmann |
| The Bertelsmann publishing name could have disappeared after the second world war. Instead the late Reinhard Mohn turned the religious publishing house, founded in 1835, into one of the world's largest media groups. | The Bertelsmann publishing name could have disappeared after the second world war. Instead the late Reinhard Mohn turned the religious publishing house, founded in 1835, into one of the world's largest media groups. |
| A great-grandson of the company founder, Mohn used revenues from a successful book club business to acquire media companies, from the American publisher Random House to the German broadcaster RTL. A former prisoner of war, Mohn also commissioned investigations that revealed the company's extensive Nazi connections. His widow Liz is estimated by Forbes to be worth $4.2bn, and along with her children owns 19% of the company. | A great-grandson of the company founder, Mohn used revenues from a successful book club business to acquire media companies, from the American publisher Random House to the German broadcaster RTL. A former prisoner of war, Mohn also commissioned investigations that revealed the company's extensive Nazi connections. His widow Liz is estimated by Forbes to be worth $4.2bn, and along with her children owns 19% of the company. |
| Versace | Versace |
| The Versace fashion brand is worth €1bn and remains a favourite of glossy-magazine editors, despite suffering the premature loss of its founder, Gianni Versace, who was murdered in 1997. | The Versace fashion brand is worth €1bn and remains a favourite of glossy-magazine editors, despite suffering the premature loss of its founder, Gianni Versace, who was murdered in 1997. |
| Versace, who once claimed he took inspiration from the prostitutes of his home town of Reggio di Calabria, launched the label in 1978, and his bold designs soon captured the 1980s zeitgeist. Although private equity now owns a 20% stake, the business remains a family affair, with Gianni's siblings, Donatella and Santo, in key roles, while Donatella's daughter Allegra owns half the company. | Versace, who once claimed he took inspiration from the prostitutes of his home town of Reggio di Calabria, launched the label in 1978, and his bold designs soon captured the 1980s zeitgeist. Although private equity now owns a 20% stake, the business remains a family affair, with Gianni's siblings, Donatella and Santo, in key roles, while Donatella's daughter Allegra owns half the company. |
| L'Oréal | L'Oréal |
| Eugène Schueller was a brilliant chemistry student, who started selling a hair dye he had made in his bedroom to Paris hairdressers in 1908. By the eve of the first world war, his company, now called L'Oréal, was selling products in half a dozen countries. Schueller's descendants still own a third of the business, although Schueller's daughter, the octogenarian Liliane Bettencourt, was removed from the board and replaced with her grandson Jean-Victor Meyers in 2011, after a long-running family feud. | |
| Aldi | Aldi |
| Aldi traces its roots back to a corner shop in the German mining town of Essen, but split into two separate companies in 1961 when brothers Karl and the late Theo Albrecht fell out over whether they should stock cigarettes. Aldi Sud, still owned by 94-year-old Karl, controls the UK business. Aldi Nord operates in France, the Netherlands and Spain and owns Trader Joe's in the US. The discount chain used to be notoriously publicity-shy, attributed to the kidnapping of Theo in 1971. According to Der Spiegel, the cost-conscious entrepreneur went to court to claim back his ransom money as a tax-deductible business expense. He failed. | Aldi traces its roots back to a corner shop in the German mining town of Essen, but split into two separate companies in 1961 when brothers Karl and the late Theo Albrecht fell out over whether they should stock cigarettes. Aldi Sud, still owned by 94-year-old Karl, controls the UK business. Aldi Nord operates in France, the Netherlands and Spain and owns Trader Joe's in the US. The discount chain used to be notoriously publicity-shy, attributed to the kidnapping of Theo in 1971. According to Der Spiegel, the cost-conscious entrepreneur went to court to claim back his ransom money as a tax-deductible business expense. He failed. |