KWS (B): In full bloom - independence and continuity

KWS SAAT AG (KWS) was a leader in sugar beet, corn and cereal seed breeding, operating in 70 countries, employing over 2,700 people and reporting revenues of $724 million in FY 2006/07. It had traveled far from its founding in eastern Germany by two friends in 1856. Through the years, the two families operated the business together and moved through successive generations of hands-on management. The company prided itself on its scientific and innovative prowess. Staying on the cutting edge of the seed breeding business required a consistent and dedicated approach to research. Any short-term curtailment of investment in developing seed varieties that responded to customers’ specific needs regarding climate, pests or other concerns meant falling behind competitors, perhaps irretrievably. The families’ philosophy formed the cornerstone of the firm’s core values. Individual freedom, personal development, independence, confidence and growth were cherished ideas at KWS. Its ability to balance contradiction and reject limits was key to success. Several things came along recently to challenge the company’s approach. Consolidation in the increasingly biotechnology-oriented industry brought major global chemical companies to the industry. Their deep pockets meant that many smaller players were selling out and the field of competitors contracted. The possibility to assure the families’ financial future for generations to come was tempting. At this same time, KWS faced a management issue. The family leader saw retirement on the horizon. Yet, a family successor seemed uncertain. How could the family ensure that their values would continue to guide the firm’s operations, even perhaps in the absence of day-to-day family leadership? This two-part case series explores corporate culture within the context of change, fomenting entrepreneurship and innovation that invigorates, and developing effective strategy for a competitive environment undergoing significant adjustment.