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Interview – Franziska Mayr on entrepreneurship and risks in the software industry

Interview – Franziska Mayr on entrepreneurship and risks in the software industry
Franziska Mayr is co-owner and deputy managing director of German intralogistics software company CIM GmbH. As the wife of the company’s founder, mother of five children and former critical care nurse, she’s what you would call an expert in lateral career moves. Since she joined the management board of the family business, the software manufacturer has evolved to become a leading developer of intralogistics software. We talked to Franziska Mayr about entrepreneurship, risks in the software industry and the path towards self-organisation.

Mother of five, former critical care nurse and now on the management board of a software company. How does all of that fit together?

It fits together very well. My husband started his own business in 1985 when we’d just had our third child. I stopped working after the first two were born – twins – and became a stay-at-home mum. The fact that my husband was self-employed made the situation slightly more complicated. Young businesses, or start-ups as they’re called nowadays, involve a very heavy workload, especially in the first couple of years. It can be quite tough for a young family. But there was no other choice and we were adamant that we’d make it work. We hadn’t foreseen that it would all get pretty complicated.

Complicated in what way?

Well, creating a new software program from scratch isn’t exactly easy, especially when you’re doing it for the very first time. My husband used to work practically non-stop – that was the norm during the first few years. There was a lot of anxiety involved and a lot of investment to be made, of course. Computers were incredibly expensive back then, plus the company needed employees to help with the programming – mainly students at the start. You quickly get to a point where it’s inevitable that you’re going to get into debt. Then there’s no other choice but to stick with it.

Did you ever have doubts?

I wouldn’t say doubts. We had exactly the same difficulties at the start as you still encounter later once the company has grown. There are always customers who refuse to pay, for example. Mistakes are made and it takes time and money to iron them out – it’s no different today. There were significantly fewer shoulders to carry all the weight back then, though – mainly just my husband’s – but of course it also affected me and our marriage. But there’s a lot I don't even remember anymore; I’ve probably blocked it all out (she laughs).
But back to the doubts: we didn’t really have doubts. It was just a lot of hard work. You have a choice right from the start when you’re running a software company: either you program or you sell. And trying to do both at the same time was very stressful. We had financial worries, and a lot of things took a while to get up and running. We used to spend whole nights discussing things that we needed to do or change. There were quite a few obstacles to overcome at first. These things all require a huge amount of energy, but you come out stronger in the end.

So you were heavily involved even back then?

Not in terms of the day-to-day work routine – I had the children to take care of. There was no such thing as full-time or even part-time childcare at that time. With regard to strategic management, organisation and all the various challenges we had to overcome, yes, I was already heavily involved. But that was all sorted out relatively quickly. There wasn’t a whole lot of competition back then in terms of warehouse management systems – and the system that Fritz developed (editor’s note: Fritz Mayr, managing director of CIM) had enormous advantages compared with existing systems. We soon had a number of prestigious customers including major IT hardware producers, paper manufacturers and chocolate makers.

How did the company develop after the initial years?

After the first few projects, Fritz focused mainly on sales activities and the project work was done by our project managers – working mostly in teams. The tasks of the project team were centred around installing the software. You can never tell what’s going to happen, and software installations of this scope were risky back then. Minimising this risk remains our key activity and biggest challenge. Only an estimated 40% of all WMS installations are successfully completed. The success rate at CIM is much higher nowadays. We’ve achieved this primarily through early detection and prevention of risks.

How exactly do you mean?

Every customer brings a certain set of quirks, problems and requirements which we need to deal with – or rather our software does. Intralogistics software has to be very closely harmonised with a company’s business processes. We need to learn how to handle these quirks and expectations in order to design, build and install a functioning system. It requires a high level of communication and coordination with the customer. In this respect, we’re not just a service provider in the sense of a supplier. I like to compare it to a kitchen that’s installed for me by a service provider – including everything that goes along with a kitchen: crockery in the right place, the exact sink I have in mind, a cooker that allows me to cook the way I like. It doesn’t work without a certain amount of commitment from you in your customer role. You have to explain to the service provider exactly how you want to use your kitchen so that it can be set up accordingly. A lot of people seem to think you just have to find the right service provider and everything turns out the way you want it to. But service providers aren’t familiar with customers or their specific ideas and expectations. That’s where our project managers come in. They get to know and understand the customer, identify their needs and ultimately create a system that caters to these needs. And we try to provide the requisite support. The better the cooperation between the customer and the project manager, the lower the risk when it comes to implementing the project. But there are also factors not related to project management that can be influenced to minimise the risk.

What kind of factors?

A lot has changed with regard to project management at CIM. Between 1990 and 2000 our project managers continued to develop the program in C and adapt it to customer needs. That worked well and our teams were very efficient. Then in 2000, the system was re-programmed using the latest software technology and our standardisation efforts were stepped up. After 2010, it was no longer required for project management to be involved in programming as the development department took over from that point. The more experienced colleagues in project management can still program, and although this can be very helpful, it’s no longer a prerequisite. We want and need to move within the standard, and interventions in the standard system are only carried out by the development team – the risk of project handling is considerably reduced by standardisation.

But now back to you again. You know the company better than almost anyone else. When did you become part of the day-to-day operations?

In the early 2000s. The children were all at school and I had more time to devote to the business. I started in accounting, optimising organisational processes and so on. Our time-tracking tool was very complicated back then, for instance, and desperately needed to be updated. After a while I hired someone for accounting, allowing me to focus on a much more key area: financial controlling.

Did you ever have anything to do with financial controlling before then?

Well, running a household requires a certain amount of financial controlling (she laughs). But I put myself through some very intensive training. I took some courses at the IHK in Munich and also read a lot of books on the subject. I’m a very pragmatic person, I did whatever was needed to improve the organisational side of things. Implementing a system of financial controlling – at that time we had about 20 employees – was an enormous step forward. The main goal was to monitor our projects in terms of numbers. I did it myself for a long time but I’ve handed it over to someone else in the meantime.

Mother of five, trained nurse – and then financial controller?

(She laughs again). Like I said, I did whatever was needed. I’m a very versatile person. I’ve always enjoyed working with numbers. But I also really enjoyed my time working in healthcare.

You trained as a critical care nurse, is that right?

Yes. I started in internal medicine and later worked as a dialysis nurse in Munich – for a renowned professor specialising in kidney bioengineering. I really enjoyed nursing. The work was fun and I also enjoyed the contact with the patients. I was brought up in a very rural setting, and going into nursing was partly a way for me to break away from home a bit and assert my independence. But you get a lot back working in the medical profession – it really forms your personality. You get a feel for the people you’re working with. That phase of my life probably shaped my dealings with our employees at CIM. Whether someone takes on one task or another is often a matter of negotiation. In the end, it’s always a question of weighing up what really needs to be pushed through and where you can back off a little.

So you recognised what had to be done and where the company needed to head?

Yes, you have to guide people in the direction you want to go. The crazy thing is that whether you’re starting out as an entrepreneur or are just planning projects or other things, you soon realise that if you define things clearly, they’re more likely to get done than if you don’t.

Is that not the opposite of self-organisation, the concept that’s currently being implemented at CIM?

I’m a big fan of self-organisation. It’s definitely the right way forward. We’ve always tried to manage our employees with as few guidelines as possible. As pared back as possible with a flat hierarchy. But it’s inevitable that you take on certain roles which are then expected of you. I sometimes hear employees saying, “That’s the way the boss wanted it”, even years later. With regard to self-organisation, there’s a hidden instruction there for me: I have to be careful not to get too involved. But because there are certain habits ingrained in my role – my own habits as well as those of my colleagues – I must admit that it’s difficult. I can no longer say anymore: it won’t work like that, we’ll do it differently. Instead, we start by holding a roundtable discussion. I think that’s really important and in keeping with the times. The company is too big to function without carefully considered structures otherwise hierarchies would inevitably be established. There’s no other way. A management board alone is no longer able to handle all the various management tasks. And there’s no reason why it shouldn’t work with self-organisation. We have democracy throughout. Why introduce a hierarchy between people?

Incidentally, I don't think self-organisation speaks against having some clear specifications and guidelines. The difference is that the decision to establish the guidelines is no longer made by an individual, but by a group of people. The individual needs to learn to let go a little. You can make specifications, but then your employees will find their own way of achieving the goal. The idea is that decisions made as a team are ultimately just as good or even better than decisions taken by an individual.

One last question: What would be the ideal use of PROLAG World from your point of view?

PROLAG World as a system for organising the household (she laughs). That would have been good. Storing and replenishing food supplies can get quite complicated when you’ve got a big family, for example. But in the end, it’s not worth it. There would always have to be someone to do inventory scanning. It’s easier and more efficient to use your memory, even if it can get annoying or you make mistakes from time to time. A warehouse is too complex for that kind of thing: a logistics specialist can distinguish between more than 30,000 storage locations. By comparison, the active vocabulary of the average German consists of between ten and fifteen thousand words at most. So enormous demands are placed on employees in the logistics sector if there is no system in place. With 30,000 storage locations, the articles are often very similar – even someone with an amazingly good memory can run into problems. In a household, you have a maximum of 1,000 storage locations. Personally, I prefer to rely on my brain.

Thank you for taking the time to speak to us. It’s been very interesting.

My pleasure.

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