Hidden Champions of the 21st Century

When you’re drinking Coca-Cola, the name Jungbunzlauer is very unlikely to be the first thing that springs into your mind. But this Austrian-Swiss global company supplies the citric acid for every Coca-Cola produced and sold. That’s what Hermann Simon would call: a Hidden Champion company.

You might be surprised to learn that:

Whether you visit the Metropolitan Opera in New York, the Scala in Milan, or the Opera Bastille in Paris, you might not know that ALL of the curtains are from Gerriets – a company that produces theater curtains and stage equipment. As the world’s only manufacturer of large-stage curtains, it has a 100% market share in this segment.

Sounds intriguing? Here’s more:

Would you have guessed that the world’s number two in fitness equipment comes from an Italian village by the Adriatic Sea called Gambettola? Because of its outstanding innovation and new designs, a company named Technogym was selected as the exclusive supplier of fitness equipment for the Beijing Olympics in 2008.

Examples of “Hidden champions” might go on almost indefinitely.

The question is:

Did you recognize the names of any of these companies?
Probably not?

Yet, they are all world market leaders.

The term Hidden Champions was coined by the author of this book Hermann Simon in 1990, however, champions are often very well-known, not hidden. It refers to relatively small but highly successful companies that are concealed behind a curtain of inconspicuousness, invisibility, and sometimes, secrecy.

A few more questions:

• What is their success formula?
• What are the attitudes and strategies of the hidden champions?
• What can we learn from them in today’s context?

Now I would invite you to watch this 1 min video, in which Hermann Simon reveals the core strategy in these organizations.

What can we learn from this book?

According to Hermann Simon’s definition, a company must meet three criteria to be considered a hidden champion:

• Number one, two, or three in the global market, or number one on the company’s continent, determined by market share;
• Revenue below $5 billion;
• Low level of public awareness (This aspect cannot be quantified precisely, but over 90% of the companies included meet this requirement from the qualitative point of view.).

The hidden champions of the 21st century are those who control their markets on a global scale, have significantly expanded, have demonstrated an amazing capacity for survival, frequently focus on niche sectors, and become truly global competitors.

They are successful companies
but are not miracle companies.

In one of Simon’s more recent interviews (2022), he still points out that the secrets to the Hidden Champions’ success are:

Ambition, focus, and globalization.

In this book, he went into depth with data to support his theories. Here are some interesting findings:

• Stay hungry, stay open-minded

How could a business become a global market leader? Certainly not by sitting at home and waiting for customers to call. Instead, the hidden champions venture into the world and offer their products wherever their customers are.

The world is the market.

The hidden champions have proven that this statement equally applies to large, midsize, and even small companies. A broader global perspective reveals previously undiscovered growth opportunities.

Yet, globalism is not a question of company size,
but of spirit.

Pipe organs made by Klais Orgelbau are known the world over. The instruments crafted by this globally operating company can be heard in the Cologne Cathedral and Philharmonic Hall, the National Theater in Beijing, the Kyoto Concert Hall in Japan, in Caracas, London, Brisbane, Manila (a bamboo organ), and in the Petronas Twin Towers in Kuala Lumpur. You might find it hard to believe that Klais has a total workforce of only 65 people (2021).

Experience also shows that globalization is a long-term process that requires incessant stamina. It depends on entrepreneurs and employees who transcend their national and cultural boundaries – in this process, become global citizens.

• Show horses or Plow horses

Jim Collins (Author of Good to Great) makes a telling distinction between “show horses” and “plow horses.” The plow horses do not put much time or effort into grooming their public image, so they save time and energy to concentrate on their true purpose: conducting good business.

Keeping a low profile in the public eye provides advantages that should not be underestimated:

It helps companies to focus on their business.

Of course, this reserve does not imply that the direct customers of the hidden champions are unaware of them. It’s the other way around. Most hidden champions have extremely strong brand names in their markets. Their brand awareness is high, they enjoy outstanding reputations, and competitors often see them as benchmarks.

• Innovation is the foundation

The term “innovation” is commonly associated with technology and new products, and technology is the key factor behind most hidden champions’ innovativeness. 85% of the hidden champions see themselves as “technology leader”.

Fischer, the world leader in wall plugs, made innovation the core of its slogan, “If you look for innovation, you’ll find Fischer. (2009)” This is by no means a meaningless statement – as demonstrated by the more than 2,000 patents from this company.

Innovation is not limited to technology and products, innovations in distribution, sales, and marketing are abundant.

Let’s take a look at Aenne Burda, who was responsible for a groundbreaking innovation in 1952 when she began publishing cutting patterns in the fashion magazine she had launched two years previously. This made it possible for her readers to sew the clothes shown in the magazine at home. Cutting patterns have existed since the nineteenth century, but their real breakthrough came when magazines began to publish them. By 1961, Burda Style had become the largest fashion magazine in the world. Today, it is translated into 17 languages and published in 89 countries.

Many hidden champions were born out of such innovations or derived their growth from them. Despite their limited resources, the hidden champions prove to be extremely successful innovators.

Overall, this book offers many fascinating thoughts; it is a must-read for everyone interested in learning more about business and discovering unique but inspiring organizations.

Highly recommended!

Table of Content

Acknowledgments

Introduction

How I Discovered the Hidden Champions

• Chapter 1: The Mystique of the Hidden Champions
• Chapter 2: Growth and Market Leadership
• Chapter 3: Market and Focus
• Chapter 4: Globalization
• Chapter 5: Customers, Products, Services
• Chapter 6: Innovation
• Chapter 7: Competition
• Chapter 8: Financing, Organization, and Business
• Chapter 9: Employees
• Chapter 10: The Leaders
• Chapter 11: Hidden Champions: Audit and Strategy
• Chapter 12: The Lessons of the Hidden Champions

About the Author

Subject Index

Name Index

Company Name Index