Germany Archives - Bad Buying

In many countries, the UK included, there is still a lot of admiration for German business and industry. The common view is that the German economy and the nation’s way of doing business generally is focused on organisation, efficiency and competence – and generally succeeds in terms of the results.

That might seem to be a bit of a myth however, if you read the story of Brandenburg airport, which featured as a major case study in the Bad Buying book. Years late and billions over budget, the story included dreadful programme management, terrible specifications for the airport and its internal fittings (such as escalators that weren’t long enough to reach the next floor…) as well as substantial fraud and corruption.

Now a recent report into the German military, the Bundeswehr, from Eva Högl, the parliamentary armed forces commissioner, suggests that that sector is also home to quite a range of shocking “bad buying” stories of bureaucratic incompetence and general failure. Högl says that the Bundeswehr needs 300 million to modernise properly and that at current rates of progress, it will take 50 years.

Högl is an ex-politician and travelled to 70 German military sites around the world and interviewed over 2300 people, so this wasn’t a quick management consultancy review. The Times reported that her findings included some almost unbelievable examples. A military hospital had no internet connection, so sensitive medical devices had to monitored manually. A microbiological laboratory was still using a dot matrix printer and an ancient refrigerator. The standard uniforms – introduced decades ago – are susceptible to “cold and damp”, which sort of negates the whole point of clothing, really!

Troops often had to buy their own equipment, and IT staff at one site waited months for computers. The bureaucracy is not just around procurement though – a sergeant in HR waited 3 years for a routine check on him to be caried out, during which time he was not allowed to access the HR systems or visit his own workplace unaccompanied!

We’ve featured plenty of stories about wasted money in the UK Ministry of Defence (and indeed the Bad Buying book has examples from that sector in several other countries ). But most of the stories related to major capital programmes; the Ajax armoured car, or the new aircraft carriers. An exception is the long-running and sorry tale of the army’s residential property estate. However, the German report seems to suggest that the issues run across and through pretty much every aspect of general management, including but not limited to procurement.

Why is the situation so bad? Germany must have huge expertise in terms of management, including procurement and supply chain – you only have to look at their successful industries such as automotive and industrial equipment to see this. Why isn’t this translating into a professionally run military?

This isn’t just something to worry the people of Germany, of course. The country is a major contributor to NATO efforts, and that has been brought into the spotlight since the Russian invasion of Ukraine. Germany spent some 1.44% of its GDP on defence last year, less than the UK or France and well below NATO’s 2% target. That spend in Germany surely must be increased if western Europe faces a long-term stand-off (or worse) with Russia. But just as the UK’s Treasury (finance ministry) is wary of pumping more money into the Ministry of Defence until it shows it knows how to buy expensive military hardware better, we might assume that there are similar worries in Germany. No-one wants to throw money at an organization that does not appear to know how to run itself properly and efficiently.

In many countries, the image we have of German business and management is one of efficiency, formality and organisation. My view was shaken a few years back when I experienced the chaotic programme of work on the railways in and around Berlin, with chaos in stations and no help or communication apparent for confused travellers. Then we had the Brandenburg Airport fiasco, one of the best case studies in my Bad Buying book! It finally opened last year, 10 years behind schedule and billions over budget after a whole spectrum of incompetence, bad planning, fraud, and financial mismanagement had been demonstrated during its construction.

Another more recent story shows that less than perfect side of German management. Patricia Schlesinger was the €300K a year the director (CEO) of Berlin-based RBB, one of nine regional public broadcasters in the country funded by the taxpayer. But she resigned this week after a series of accusations about money wasted, conflicts of interest and improper procurement – in fact, the word “embezzlement” is even being used. Berlin’s public prosecutor is looking at accusations she used RBB funds to pay for lavish dinners at her home and private use by her husband of her company car and chauffeur.

Wolf-Dieter Wolf (crazy name, crazy guy…), chairman of the RBB board, also stood down. He is linked to some of the accusations and is seen as being complicit in her behaviour. Perhaps most extravagant was the €658,112 spent on refurbishing her office, according to The Times – shades of Fred Goodwin, the ex-Royal Bank of Scotland head. When the new RBS HQ opened in 2005 there were reports of over-the-top office furnishings and his own “scallop kitchen” (denied by his lawyers, we should say)!

In Berlin, the parquet flooring for Ms Schlesinger’s office cost a mere €16,783, and (here comes a Bad Buying link) complaints by the internal compliance department that no other quotations for the work had been sought were overridden.

The accusations began in June with a report by the news site Business Insider that Schlesinger’s husband, Gerhard Spörl, a journalist, had been awarded a consultancy contract by the state-owned trade fair company Messe Berlin. That contract was allegedly signed off by the company’s supervisory board chief, the same Wolf-Dieter Wolf. Was this an example of nepotism and favouritism? Then other consulting-type contracts emerged with little evidence of proper procurement, with accusations of Schlesinger and / or Wolf in effect favouring their friends.

Of course, this apparent arrogance and disregard for rules is something we see frequently and is not limited by geography, sector or type of role. (The Bad Buying book has quite a few examples, as you might expect). The boundaries between disregard for the organisation’s money or rules and outright fraud are also sometimes difficult to define exactly. However, there seems to be a character trait that means some people just feel they deserve more, they deserve to be treated differently and the rules don’t or shouldn’t apply to them. Boris Johnson comes to mind, as does Carlos Ghosn, now an international fugitive after running Nissan and being accused of using corporate expenditure for his personal benefit.

But back to the German broadcaster case, and I’m trying to think of a good way to close this article. I mean, if only there was a word for that feeling of pleasure we get from someone else’s misfortune, particularly when they think they’re better than you…!

Tag Archive for: Germany

Germany’s Military and More Bad Buying

Top German Broadcaster Resigns After Bad Buying (and more…)