Pilz – Bringing the Mittelstand down under

Pilz – Bringing the Mittelstand down under

Pilz is getting set to pass the baton, as it announces the retirement of Renate Pilz – who for four decades has been the driving force behind the growth of the 70-year-old German engineering giant.

Mrs Pilz visited Australia in late August and affirmed that Pilz’s Australian business has the potential to be a local powerhouse of engineering. Pilz Australia is headquartered in Melbourne, with offices in Sydney, Brisbane and Auckland, providing sales and logistics, along with turnkey engineering projects to the local market. Pilz Australia forms part of the Asia Pacific region for Pilz, where it has high expectations for growth, in line with business doubling in five years to nearly $100m, accounting for 20% of company revenue.

Australia was part of the company’s first foray outside Europe in 1998, when it launched subsidiaries in Australia, Brazil and Japan – with Australia seen as a forerunner into the Asia Pacific market. Australia has a safety culture that matches Europe’s – in particular Germany – which leads the world in safety products and services.

Pilz came to world-wide acclaim as the pioneer of the Emergency Stop – that red button you see on machinery everywhere. Today this button is integral to everyday safety in everything from baggage handling and packaging equipment through to the process lines in manufacturing and automotive factories. There is a lot of technology behind what looks like a very simple button, given that it has to reliably operate every time since every time is an emergency.

The button relies on the smart technology pioneered by Pilz and contained largely within its safety relays and configurable safety controllers: the yellow box used to control everything related to safety on machinery from simple guard-switches on a wood-working machine, to emergency shutdown sequences on nuclear reactors, known colloquially as the Pilz relay.

An economic powerhouse
Pilz is the quintessential German “Mittelstand” company. Like so many German words, Mittelstand doesn’t really have a clear translation into English. It’s an ethos, often cited as the miracle of the German economy.

The character of Mittelstand is a perfect fit for the Australian economy, which like Germany shares a dependence on the success of small-to-medium-sized enterprises to power the economy. The German Mittelstand philosophy is a hereditary DNA that carries through into the products and services it produces. Typically these companies are heavily focussed in niche markets producing highly superior products that are either number one or number two in their markets and taking them to the world.

Herman Pilz founded Pilz in 1948 and its international growth and innovative trajectory is based posthumously on his son Peter Pilz, who was killed in a plane crash in 1975. His legacy is the driving force behind the company, where 40 years later his vision for safety automation is just as prevalent today. When the team gathers to talk of innovation, new products or services it is guided by one single ethos: “What would Peter think?”

Picking up the reins at the time was his wife and mother of his two small children – Renate Pilz. She had not studied, and she had no technical or economic knowledge, let alone a clear concept of automation technology.

“Nonetheless, against the advice of my confidantes, I decided not to sell the company, out of a sense of duty,” says Mrs Pilz. “When I stepped into my husband’s shoes in 1975 I had two small children, Susanne and Thomas. My friends were all housewives and mothers so they were quite surprised at what I was doing. That was a different era and it was very unusual for a woman to head a company, let alone a technical engineering business in Germany’s southwest region of Swabia.”

Mrs Pilz remembers clearly the day her husband had shown her a safety relay for the first time. She told him not to even start explaining it to her as automation was a complete mystery. Initially she limited her involvement to chairing the company’s advisory board, before taking full control of the company in 1994. Having committed herself to a period of intense learning, today she speaks automation and safety fluently.

“Like anything, you can apply yourself diligently and you will learn it,” she says. “I have had no technical training, but I made it my mission to educate myself in this industry and surround myself with a supportive and instructive team. Now I have been in the business so long - over 40 years - I don’t know any other life. It is wonderful to be independent: you are the author of your success.”

Surprisingly, Mrs Pilz says that taking over the leadership of the company was not in fact the most challenging part of her career.

“By far the most challenging time was the global financial crash in 2008,” she says. “It was not something we anticipated and it felt like we were being buffeted in a storm. We fought hard in every direction, especially with the banks. Our priority was to secure everyone’s jobs worldwide, that’s 1500 workers – which we did.

“Globalisation is a concept we struggle with. The challenges balance themselves out, an international market place is exciting and we just look forward to what the next day will bring.”

The future – Industry 4.0
Mrs Pilz previously visited Australia in 1998 for the opening of the new subsidiary, which coincided with the company’s 50-year anniversary. Her philosophy is firmly that each region is run as a “Schwestergessellschaft” – the German word that describes a sister company that is independent and autonomous. With her latest visit to Australia, Mrs Pilz has announced her retirement and is handing over the reins to her son Thomas and daughter Susanne.

Pilz reinvests nearly 20% cent of revenues a year on research & development – whereas most industries are around 3% to 5% – in a bid to capture the future. This includes a large focus on Industry 4.0, the new cyber-physical world of manufacturing systems and the digital factory of the future. This ‘smart’ factory sees devices communicate in real time, connected to big data, thinking for themselves. Work is a ‘batch size of one’ as the customer designs a bespoke piece of equipment. The company’s R&D program is setting it on a growth trajectory, and Mrs Pilz steps down knowing the future will be both successful and exciting.

“The advice I have for any person in business is the same as I give to my son and daughter who are taking over the reins,” she says. “Put your whole heart into what you do and commit to the customer – without customers we do not have a business.

“Once I retire I’m looking forward to some quiet time gardening and enjoying my family.”
www.pilz.com.au