Thomas Schmitz was destined for leadership from the start, and given his penchant for engineering-related hobbies, it was only inevitable he would become President of Andritz China. “When I was a kid, I was always a builder,” he recalls. “Lego, sandcastles and so on, so becoming an engineer was not beyond the realm of possibility. I was also the leader of my pack of childhood friends, so I’ve always been considered to fit that kind of role.”
Even so, his first position in management came as a surprise and a challenge. Thomas was only 29 when he was appointed head of sales at his workplace, overseeing a department of 10 people. He was the youngest in the department at the time, and had only been there for two and a half years. Of course, with every challenge comes opportunity, and though it was unexpected, it also proved a chance for Thomas to grow as a leader.
“The challenge is more about what the nature of that challenge is, how you approach it, how you think about it and how you overcome it,” he says. “I’m always looking forward to having challenges, because in a way it’s stimulating.”
Decades later – true to those childhood inclinations – Thomas is now a leader in one of the world’s largest industrial engineering groups. Andritz is a company with €6 billion in revenue as of 2018, operating in more than 40 countries around the world, with 26,000 employees across 250 sites. While part of the reason for Andritz’s success is its 166 years of continued operation, Thomas also sees the company’s broad reach as a continued source of strength.
“Andritz is an interesting company because it’s so diversified,” Thomas says. “At the same time, we’re successful with many different businesses. We’re trying to be a market leader for each business, and trying to be active across many different markets.”
This diversity consists of four core businesses – paper and pulp, which includes biofuels; equipment and components for hydropower generation; metals, including carbon and stainless steel production, and non-ferrous metal furnaces; and chemical and industrial separation processes. Andritz isn’t just diverse in terms of its markets either; the group is involved in projects sometimes costing up to US$2 billion, while also producing machinery components weighing just a few grams.
Thomas believes that with Andritz’s high level of diversity in terms of products, markets and industries, the next step is to become and then remain one of the most innovative players in each market. “I want high profitability, and to try to be a technology leader in our key markets as much as possible, as well as being a leader in customer service. We have applied that as a slogan, a kind of best-in-class approach.”
In China, Andritz has started to work closely with local researchers, employing more than 200 employees for Design R&D. The company has completed numerous research projects and holds a number of patents – for example, Andritz China has collaborated with a Guangdong company on a new system for kitchen waste disposal and recycling.
A greater focus on R&D is necessary for a rapidly changing world – not just in terms of Andritz’s market, but also humanity’s level of technology. “It’s important that you prepare an organisation, not only locally but also globally, for what is going to change in the market,” Thomas says. “When you do this, well, then you capture a major share of the market. That is, for me, a fascination in China. You need to be prepared and you need to think big. And if you’re already thinking big, think bigger.”
Cultural affinity
Andritz has been in China for more than 20 years, maintaining a long-term presence in the region, and an in-depth understanding of its culture. It’s no wonder then that Thomas has found himself leading Andritz China, given that he has been living in Asia for 16 years now. He’s worked in five different countries – Germany, Switzerland, France, Malaysia and now China – but he says ending up in China has long been an ambition of his, describing himself as being fascinated with the country.
“I’ve always been interested in travelling, specifically in Asia,” he says. “Even as a boy, I thought, ‘I will not spend my whole professional, adult life in Germany’. I never planned to stay in one country. I had an ambition to become an engineer, to take on leadership positions and to move to Asia.”
- Andritz founded by Josef Körösi. Initially producing iron, it expanded to include products like bridges, cranes, engines and mining equipment.
- Andritz becomes a stock corporation.
- Andritz establishes a lasting partnership with Escher Wyss Group, changing its portfolio to incorporate water turbines, pumps, cranes and steel structures.
- Andritz expands to include paper machines. Over the next few decades, the company adds electrochemical and metallurgical equipment to its portfolio.
- Andritz is first listed on the Vienna Stock Exchange, and again two years later. Both listings are tremendously successful.
- Andritz China is founded, the first Chinese company wholly foreign-owned by Andritz.
- Thomas Schmitz takes over as China President of Andritz in January.
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While one might think the transition from Western Europe to Asia would be quite a culture shock, Thomas’s interest in the region smoothed his path. The promise of better pay and the scale of change and economic growth in China also proved a powerful lure for him. As if that wasn’t reason enough for Thomas to move to Asia, he found just as many cultural similarities between Germany and China as he found differences. This made him an ideal fit for Andritz China.
“There are always cultural challenges when you move, it’s true,” he admits. “But being a German national, I feel much in line with the mentality of the Chinese people, which involves being hands-on and getting things done quickly and precisely. I feel at home working in China, because this cultural mindset fits well with my own approach.”
Thanks to the connection Thomas has developed with China’s culture, he’s made sure to prioritise local talent when recruiting managerial staff for Andritz China. While many expat business leaders tend to bring in talent from other regions, Thomas believes team members from China are naturally the best fit.
“Local team members understand the market and the customers best,” he explains. “They speak a common language. What you see in China is that the Chinese have a hands-on approach to getting things done. It varies depending on the position and the approach, but often you are well-advised to invest in Chinese managers.”
Over the course of his four and a half years, Thomas has therefore engineered a shift towards a team with a far greater proportion of Chinese employees. Many of the management positions that had been held by expats have since been replaced by domestic expertise.
At the same time, his cultural familiarity with China has led him to adjust his leadership style, to better lead Andritz’s China division. As an example, he has noted a cultural tendency in China to read too much into leaders’ statements. When Chinese President Xi Jinping says something, Thomas notes, the question is less about what he said and more about what he meant, and it’s common for people to seek out meaning and create their own interpretations. To circumvent this, Thomas ensures he’s transparent and straightforward, clearly spelling out his ideas and goals.
“You need to get good at seeing the waves of the industry coming.”
As well as ensuring his vision is clearly spelled out for his team, he has encouraged a culture of mentorship in Andritz, starting with personally mentoring and providing guidance to employees. Over the years, Thomas has benefited from the wisdom and experience of numerous friends and colleagues in building his management and leadership skills, which has since inspired his emphasis on mentoring.
“If you ask me who had the biggest impact on me in a personal sense,” he says, “it was a good friend, a psychotherapist, who influenced me not in management or in leadership, but in terms of developing a clear focus and getting rid of anything that may get in the way of being effective.”
The training and encouragement of the Andritz China team goes towards improving the company as a whole as well as individual team members’ careers. For Thomas, the creation of a professional network is integral to one’s career development, and provides a lot of the factors crucial to personal success for younger employees. One need only look at how much Thomas learned from those around him to see the importance of strong industry contacts.
“When you develop these connections, which you don’t have as a young employee, you establish a better network in the market and the industry,” he says. “You have a lot of contacts, you have people who can help you, and so on. You are much better set up.”
Despite these concerted efforts to teach, guide and ingrain his own ambitions and values in his team, Thomas still ensures they operate with some degree of autonomy. “When I’m in meetings, I seldom propose solutions,” he says. “I always ask people to come up with their own solutions and give my feedback to the proposals. I’m a great believer in responsibility and initiative – the entrepreneurial approach.”
Thomas also maintains an approachable atmosphere, by organising events for the team and encouraging sociable, friendly work relationships. Some of these relaxed, casual meetups with team members include a bi-weekly lunch scheduled for a few employees, so they can chat with Thomas directly about any issues they might have. This isn’t limited to employees of a certain rank; it’s an open invitation to team members from across Andritz China.
In a company of 2,000 people, maintaining a warm, familiar environment is no easy task, but Thomas is dedicated to doing as much as he can to aid this. “The responsibility of any leader is to focus on employees, because these are the guys who are doing your work,” he stresses.
“Of course, you must also focus on your customers and, at my level, on the key customers. Be there for them as much as you can. Concentrate on making sure that operations are applying the right strategies for the market. So it is imperative to get the right managers and the right employees.”
Evolution, inside and out
Supporting and growing his team is one of Thomas’s greatest motivations for Andritz China. With the management’s extensive focus on developing the skills of staff across all levels, the result is a company that is growing not just financially, but also in terms of each team member’s capabilities. After all, an organisation is more than the sum of its parts, and each part needs to be operating at its best.
“I have a mission, what I want to achieve in the company,” he says. “I’m in the right position to achieve a lot of the things I want to do. I have the power to put them into reality. It’s a great motivation, to see us developing, to see us changing at a good pace and to see our influence in the market growing as well.”
When Thomas stepped into the position of President of Andritz China, it took some time to properly implement this vision. His predecessor had ably led Andritz China for nearly 20 years since 1997, and had been instrumental in overseeing the early days of Andritz’s expansion into China. So Thomas was taking on a role and a culture that had been deeply influenced by his predecessor.
“It is quite difficult when you take over the management of a company after it has been under the leadership of one person for such a long time,” he says. “It’s always a big issue because we’re different. We’re different in management style. We’re different in how we approach things. We’re different in what our focuses are. This was a challenge, but it was solved quickly.
“A lot of people were looking for a different kind of management style, and a change in how the company approached the market. Our success in growing the business by 50% over the past few years confirms this new approach works.” This is far from the only change that Andritz China has seen in the past 22 years. Mass privatisation of industries did not occur until the late 1990s, allowing the country’s private sector to expand rapidly.
Headquartered in Graz, Austria, Andritz began life more than 150 years ago in that same city, as an iron foundry established by Hungarian entrepreneur Josef Körösi.
As of 2018, China represents 21% of Andritz’s order intake, bringing in more than €400 million in sales in the first half of the year. These orders include:
- Pulping, refining and production systems for several paper companies across China.
- Press and line equipment to assist in construction and production for automotive companies.
- Separation and incineration equipment to treat sewage sludge of Asia’s largest waste water treatment plant Bailonggang in Shanghai.
- And most recently, a cold rolling mill plant with annual capacity of 280,000 tons.
It didn’t take long until China’s economy surpassed Japan’s as the biggest in Asia in 2005. It’s thus no surprise that the Chinese economy is renowned for rapid growth, and therefore provides ample economic opportunity for many companies. But at the same time, the constant speed of progress means those companies must be prepared.
“If you’d been here 20, even 10 years ago, it was a different country, so you need to keep your mind sharp and anticipate what’s happening in the market,” Thomas explains. “I always explain the Chinese market to the board like this: you’re a surfer, you’re in the swell and you see a wave coming. You need to position yourself to catch it. Shortly before the wave reaches you, you have to accelerate on your board, or else you won’t catch it. The wave will go over you or under you. It’s a bit like that here in China. You need to get good at seeing the waves of the industry coming and you need to speed up before, and not after, the market starts to boom.”
“We’re trying to be a market leader for each business.”
Fortunately, Andritz’s presence in the Chinese market has been buoyed by not only the local expertise of Thomas and his team, but also the sturdy network of suppliers that have proved themselves essential to Andritz China’s operation over the past two decades. It’s an extremely broad, diversified network, as a result of the expanse of markets and products in which Andritz deals.
Many of these supplier relationships have depended upon mutual growth, with Andritz China and its partners supporting each other’s development. Thomas lists the likes of manufacturing and quality assurance as areas in which Andritz has been able to improve the capabilities of suppliers. The provision of training and coaching has been an important element of these relationships, since the longevity of these associations means Andritz knows exactly what these partners can and cannot do.
“The big issue in China always has been that of quality,” Thomas says. “The necessity in China is the ability to continuously create products of good, reliable quality. For that, you need to have a good strategy together with your suppliers. You must have good processes to ensure that you are monitoring the quality you’re producing.
“It’s always good to involve the suppliers; to request their feedback, to involve their capabilities when you design your products, to get their advice on how to do things better. This is something we call design-to-cost, to view things from the perspective of cost when getting into the fabrication and design of the product. We have quite a good network of suppliers.”
“I had an ambition to become an engineer, to take on leadership positions and to move to Asia.”
This mutually supportive relationship has proved an important foundation for Andritz’s operations over the years, and will continue to do so as the manufacturer expands its capabilities. Thomas is looking into more comprehensive customer packages, including improvement and servicing packages, long-term after-sales maintenance and more. This plan extends to the entirety of the customer experience, from the initial sale to ongoing operation. This is a reflection of Thomas’s philosophy: “Keep the focus on the customers and what they want”.
The products and services provided by Andritz China are thus adapted to reflect its customers’ needs. “First you have to ask yourself what is important when providing customer service,” Thomas explains. “When I go to restaurants, when I want service, whatever that may be, what I want is something fast. The speed of doing business is important. You also want to become more customer-oriented. To improve the speed of your operations is important. But this is something you can measure and follow up, so that you can ask, ‘How long does it take us as a company to give a response to the customers?’ Be reliable and transparent in what you’re offering.”
Over the years, Andritz China has made ever-greater strides towards offering high levels of support for its customers and its partners. These achievements owe a lot to Thomas’s drive to gather together the most talented individuals in the industry. As an example, he points to the excellence of the company’s COO who, Thomas says, oversees Andritz China’s manufacturing locations to a high level of excellence. The result of his efforts to pull together the best have helped the company reduce its cost, quality and
lead time.
Thomas’s advice for being a good leader is simple:
“Keep it clear, keep it transparent. Be yourself. That’s my style. There is no secret strategy to help you be more successful.”
With this solid base of exceptional operations, employees and products, Andritz China is on a clear trajectory to achieve its dream of a widespread market presence – the dream that originally drew Thomas to the company.