Family Business Excellence & Award

The Henkel Group

Founded 1876
Düsseldorf, Germany
www.henkel.com

The Henkel Group, headquartered in Düsseldorf, Germany, is a large family controlled business active in detergents, chemical products, adhesives, hygiene and surface technologies. The fourth generation today exercises an active ownership role. In 1876, the founder Fritz Henkel, started a modest business selling bleaching soda, having seen that detergents could vastly facilitate household cleaning and washing.

In 1907 Fritz launched the first branded detergent product under the name “Persil.” The brand provided users with a guarantee of consistent product quality. Fritz also launched the first pre-packaged detergent in smaller household size. These innovations laid the groundwork for the future growth of the company. In 1908 the first conveyor belt packaging line for Persil products was introduced and by 1911 employment had grown to 925.

By 1996 revenues had grown to DM 16.3 billion both through organic growth and acquisitions. And the fourth and the fifth generation of the Henkel family had grown to over 60 members.

In 1999, the Henkel family continued to control well over 50% of the voting shares. The Henkel Group had over 57,000 employees, 10,000 different products and operated in 70 countries worldwide.

Best Family Business practices from the Henkel Group

  • Each generation has added value to the family business in a distinctive way, building on the stewardship concept of passing an enhanced business on to the next generation.
  • All generations have deeply respected the wish of the founder to remain united as three branches, providing a homogenous family-ownership backing to a business that the founder already knew had an enormous potential for growth.
  • The third generation leader, who had engineered substantial growth through diversification and internationalization of the business, recognized the need for family members to redefine their role as supporters--not inhibitors--of this very large family business.
  • The third generation leader set the example for the family by giving up operational management control.
  • The family business was taken public in order to ensure funding for future growth as well as to provide exit opportunities for family members in need of liquidity.
  • The role of the Henkel family was redefined in terms of exercising responsible ownership; non-family members took over the operational management.
  • The ownership governance structure includes highly respected outside business personalities, which makes the strategic decision-making process more professional.
  • The fourth and the fifth generation undertook a lengthy reflection and discussion process in order to determine their own view of the role of the family vis-à-vis the business in the next generation. They freely decided on the ongoing long-term commitment of the family as majority owners to the business, adopting a shareholder value culture in alignment with the interests of their public shareholders.

  • Family members undertake regular formal and informal activities to maintain a high interest among members of the younger generation in the family business and to provide visibility of the family in a value-added way to the business.
  • The family culture puts business interests before family interests.