The formula for success of dm founder Götz Werner

It is not without reason that Götz Werner titled his autobiography: “What I hadn’t expected”. In retrospect, the development of dm looks like a pure success story: With 3945 stores in Europe, the company now has a turnover of 13.6 billion euros and employs almost 72,000 people. But the way there was also marked by hurdles and setbacks.

Werner summed it up succinctly in his autobiography: “Stayed at school, dropped out after eleven school years. German junior champion in rowing, trained druggist, became authorized signatory. rejected son. real dreamer. Founders against their will.”

Everything could have been so easy. He was born on February 5, 1944 as the son of a druggist and joined his father’s business after completing his training. But because he wanted to change, but his father didn’t want anything to do with it, the two got into an argument. Götz Werner had to leave the family business.

He switched to the “Drogerie Roth” in Karlsruhe, where history repeated itself. Here, too, he was unable to assert himself with his new ideas. There was only one way left for him: to set up his own company.

And in doing so, he broke many rules that had previously applied in the industry: he translated the Aldi principle to the drugstore industry, reduced the range to around 800 items and introduced self-service. This concept was initially ridiculed by many competitors.

After the second store it would have been almost over for dm

But not by Dirk Roßmann. The founder of the Rossmann trading company was also building up a chain of self-service drugstores almost at the same time. The two entrepreneurs were not just rivals – they also shared mutual respect.

“The success of dm was always an incentive for me to be successful myself,” Dirk Roßmann told the Handelsblatt. And he confessed that he had learned a lot more from Götz Werner than the other way around.

The men had already met in 1972, before dm was founded. Götz Werner came to Hanover to inspect Dirk Roßmann’s new store. “I experienced a young man full of energy, strength and joie de vivre, whose motto ‘Off to new shores’ was noticeable at every moment,” Roßmann recalled.

But it was almost over for dm after the second store. Werner lacked the money for further expansion. Luckily for him, he met the entrepreneur Günther Lehmann, shareholder of the Pfannkuch supermarket chain in Baden.

Lehmann invested in Werner’s lifelong dream – and in return received 50 percent of the shares in dm. However, he always stayed in the background as a silent partner and has now transferred his share, which is estimated at around three billion euros, to his now 20-year-old son Kevin David Lehmann.

Aldi was initially the role model for the dm founder

Even if Lehmann would have had the opportunity to block decisions due to the stalemate in the shareholders’ committee, he stayed completely out of the operative business and left entrepreneurial management to Werner. And he used his freedom for dynamic expansion – and further development of the business idea.

Christoph Werner also experienced his father as someone who was always looking for improvements. “He had a constructive dissatisfaction,” he describes in an interview with the Handelsblatt.

“My father had an extraordinary willingness to change, he managed to lead the company into new phases again and again,” he says. “Because every corporate structure is only suitable for a certain size.”

Initially, Götz Werner ran the company very strictly, almost authoritarianly, following the example of Aldi. In order to implement the new business model, he made very clear specifications. If a local branch manager did not comply, Werner sometimes reacted harshly.

But it soon became clear to him that this could not be the right path in the long run. “He developed more and more confidence in his employees,” his son recalls. He had developed a structure in which it was possible to hand over more and more responsibility to the branches. “Otherwise, a company of this size could not be managed successfully in the long term,” emphasized Christoph Werner.

Götz Werner fought for the unconditional basic income

At the same time, he developed a management concept based on his anthroposophical attitude to life. He described his company as a “working group” and gave employees a share of the profits from an early stage. Later he also campaigned for an unconditional basic income. “He had the basic attitude that the focus was on people and their free decisions,” says Christoph Werner.

Companions experienced the same thing. “People’s development opportunities were always particularly important to Götz Werner,” said Erich Harsch, for example, who for many years managed the retail chain dm together with the founder. He was a “supporter and pioneer for many new ideas,” said Harsch, who now heads the Hornbach DIY store.

Even his brother-in-law Götz Rehn, who at times got into violent arguments with him and fought with him in court about the trademark rights for the jointly developed Alnatura brand, has great respect for the life’s work of the dm founder. “Anyone who met Götz Werner in person could experience what a visionary and yet down-to-earth and approachable founder personality he was,” he said after his death last year.

The freedom of choice that Götz Werner granted his employees, he also granted to his son Christoph. He never pushed him to take over the management of the family business. And that was ultimately the recipe for success for the successful succession plan.

“It wasn’t originally my goal to join dm,” remembers Christoph Werner. When he graduated from high school in 1992, the company was already very big. “I wouldn’t have dared to do anything at dm back then.”

Life’s work placed in younger hands at an early stage

Encouraged by his father, he did not do his training at dm, but completed a dual study program at the regional dealer Tegut. There he was able to gain his own experience, says Werner. He then made a career in the consumer goods industry, first at L’Oréal and then at Glaxo-Smithkline. However, he kept in touch with dm as a member of the supervisory board.

The opportunity to switch to dm arose at the end of 2010. The father had handed over management of the company to Erich Harsch two years earlier. And he was looking for a new managing director for marketing and purchasing.

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Harsch asked Christoph Werner, a change fitted into his life plan, and so he started in the family business at the age of 38. When Harsch then decided to switch to Hornbach in 2019, Werner took over management of dm.

Unlike his competitor Erwin Müller, who is still running his drugstore chain at the age of 90, Götz Werner had no problems placing his life’s work in younger hands at an early stage. “My father once said that his entire professional life was a series of handovers,” says Christoph Werner.

It probably helped that he never worked directly with his father. Because he has to break new ground, invests in digitization and sustainability, and has set up a pick-up service. “I couldn’t repeat what my father did,” he says. “You need to evolve the company by finding timely answers.”

But he’s not the type to turn everything upside down. “My father advised me: Don’t always just look at the things that aren’t going well, look above all at the things that are going well.” Because that’s exactly what explains why a company is successful.

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