HRM PRESENTATION

HILTI—LEADERSHIP AND OWNERSHIP TRANSITION IN A CULTURE-RICH COMPANY

PRESENTED BY:

Manpreet Singh: 2K19/DMBA/48

Divya Goel: 2K19/DMBA/28
Swati Srivastava: 2K19/DMBA/102
Aditya Chauhan: 2K19/DMBA/06
Ankit Solanki:
2K19/DMBA/16
Gayatri Singh 2K19/DMBA/33
INTRODUCTION
THIS IS HILTI

 The year 2018 was to witness a momentous transition in the history of

Hilti, a privately held family-owned business in Liechtenstein.
 For the first time a non-family member was going to occupy the
leadership position on the company board and family trust management.
 Hilti was established in 1941 and has since then diversified into domains
like power tools, anchors, drills and laser products.
 Sales of CHF 5.1 billion
 28,000 employees in more than120 countries
 In 1990 Martin’s son, Michael took over as the Chairman of the
Executive board.
CORPORATE CULTURE- A DEFINITION

Organizational culture
encompasses values and
behaviors that “contribute to “Culture is what people do “Culture is the
the unique social and when no one is looking.” organization’s immune
psychological environment system.”
of an organization

Herb Kelleher,
Michael Walkins,
Wikipedia former CEO of
professor at IMD
Southwest Airlines
LIVING STRONG VALUES: CORE PART OF HILTI’S WORK
CULTURE

• They act with INTEGRITY in all they do.

• They demonstrate COURAGE to go beyond the circle of
habits.
Integrity Courage
• They outperform through TEAMWORK.
• They have COMMITMENT to personal and company
growth.

Teamwork Commitment
HILTI IS CONVINCED THAT

Business
Managerial Employee Customer
Performance:
behaviour & engagement & engagement &
Sustainable
leadership morale loyalty
Value Creation
CONTINUED…

 The Hilti values were deeply intertwined with business issues such as strategy, change management, and customer
satisfaction.
 The company made efforts through special programs “cultural program” and annual board meetings to ensure that
the executives were actively involved at the ground level in their interactions, understanding and commitment to
the employees, customers and partners.
 It prepared contingency plans covering all possibilities and scenarios in case of a crisis.
 In 1980, Martin setup the family trust and transferred all the family shares to the trust
DIGGING DEEPER INTO THE CASE

 The family members were the beneficiaries of the trust and didn’t own the right to sell the shares. This protected
the company from family shares.
 The Hilti family through leadership and stewardship were able to build a long lasting institution.
 The 4 values defined by Martin remained unchanged over the years even through the company leadership
transitioned from Martin to his son Michael to the non-family Chairman Basrecha and later Fisher.
 In 2017, the family trust and the Board of Directors both had non-family members and Michael was happy that the
transition of leadership had happened smoothly and as planned.
CULTURE
BUILDING AT
HILTI
CULTURE BUILDING UNDER MARTIN HILTI

 Martin Hilti was the founder of Hilti Mechanical Engineering Co.

 Martin embraced social partnership, advancement in technology and management.
 Believes in innovations & high quality standards.
 Unique culture of Hilti.
 Employee benefit programmes at Hilti.
1552397145497-1.webp

HILTI CORPORATION UNDER MICHAEL HILTI

 Martin Hilti’s son Michael Hilti joined in 1975.

 Leadership at HILTI was going through a transition with a non- family member,
Pius Baschera as the speaker of the family trust for the first time.
 Hilti’s approach to embedding its culture and values throughout the organization.

MICHAEL HILTI PIUS BASCHERA

CULTURE TRAINING PROGRAMME AT HILTI

 It was a two year long cycle.

 Culture camp known as “Walk”
 Changes in culture training programme.
 Culture is the key of success at Hilti.
CHALLENGES FOR HILTI

CHALLENGES FOR HILTI ARE:

I. Manage culture across world.
II. Building relationship with
employees.
III. Integrating culture into business
practices.
CORPORATE
GOVERNANCE AT
THE CORE OF
HILTI
THE POLICY OF HILTI

“No discrimination on the basis of family and non-family member employees.”

Before 1990

CEO CHAIRMAN MARTIN

In 1990 – Martin stepped down as CEO

TRANSFER OF ROLES (HIERARCHY)

Martin 2005 – Michael

completed his tenure
(Started as CEO & and was replaced by
Chairman) Pius Baschera in 2006

2017 – Baschera
Martin dropped as stepped down as
CEO in 1990, and as Chairman and
chairman in 1993 Heinrich Fischer took
his place.

Pius Baschera (non

family) appointed as Christopher was
new CEO and appointed as new
Michael as new CEO
Chairman
HILTI'S BOARD
MAJOR HIGHLIGHTS OF HILTI'S GOVERNANCE

Very open & operated as a Team

Undisputed Integrity

Innovative
Members financially well off

No major management issues &unique corporate

culture
Ease of proposing ideas
EXECUTIVE BOARD

Members – 6

Multiple
round
selection
process

No outsiders
were included
in executive
board of Hilti
since 1982.
CONTINUOUS LEARNING & Appraisal
Culture Camp
FEEDBACK Sheet Filling
CONTINUITY
Hilti prepared itself well for
any kind of contingency.
Its values considered Hilti as
a separate entity, which must
Reason may be any such as
run smoothly irrespective of
sickness, untimely death.
the contingency situation
that might arise.
HILTI OWNERSHIP
TRUST
HILTI UNIVERSE

Hilti
Family
Trust

Hilti
Hilti Group
Foundation
DEVELOPMENT OF THE FAMILY TRUST

Early 1960s First consideration within testamentary clauses

Formation of a foundation with the aim to become active in case of death of Martin
1967 Hilti Sr.

1980 Formation of a trusteeship (Martin Hilti Family Trust) with the aim to become
active in case of death of Martin Hilti Sr.

1980-1990 Phase 1: Formation of Trust and stand-by

1991-1996 Phase 2: Making Trust operational

1990 First general revision of the trust certificate

1996 Review I: Fundamental revision & restatement of the trust certificate (family
constitution and policy)

Continuous adaption of trust deed to dynamics within Hilti Family/ Hilti AG/
1997- Ongoing environment (trust deed today over 60 pages)
HILTI FAMILY TRUST: CORE PURPOSE
TRUST DEED — CRITICAL QUESTIONS

Arbitrariness/ Misuse
Perpetualness Standoff Situation Disagreement
of Power

Position of Power of
Qualification Use of Capital
Crisis Situation Non-Family Function
Requirement Markets
Owners

Clarity and
Trust Deed -
Comprehensibility of
Vision/Mission Hilti
Trust Deed (now and
Group
for later generations)
STRUCTURE OF THE HILTI FAMILY TRUST

 Protectors
 Administrative Trustees
 Beneficiaries
APPOINTMENT SYSTEM

Protectors
Beneficiaries Trustees
(keeps a check on Trustees)

Executive board Board Members

Only the Protectors can veto election of Trustees and no one else have the power to do so.
So the protectors need to ethical and competent . Also they have no functional role in company or foundation
CURRENT SCENARIO OF PROTECTORS

In 2018, the protector board comprised of :

I. 2 Family members
II. 4 Non – family members

To be appointed as a protector, family members are prepared, educated and enlightened by the current staff of the
company.
QUALIFICATIONS
Personal competencies
 Integrity
 Loyalty to Trust, Family and
Hilti Group
 Performance-oriented
 Teamwork
 High ethical standards in
thinking and acting
 Personal and financial
independence
 No desire for personal power
• Availability / accessibility
Functional expertise
• Proven successful business
record in management position
with high responsibility:
 Top management position in
bigger corporation with
international exposure
 Well-respected specialist in a
large international enterprise
 Distinct analytical judgment
and decision- making ability
 Strong in execution during
times of crisis
DISTRIBUTION OF INCOME AND DIVIDENDS

Hilti AG

Trust
Beneficiaries
Other Trust  Family
Investments  Hilti Family Foundation

Trust Assets
And Liabilities
Trust Finance
Investments

HILTI - FOUNDATION
FAMILY CONSTITUTION

 Only bloodline has the voting rights

 No one can sell company share
 Trust Deed (Ownership and Distribution of Income)
 Ethical Principles
 Long Term Goals
 How to tackle crisis, worst case scenarios, conflicts etc.
 Dividend Policy
 HILTI FOUNDATION

 Founded in 1996 and financed by the Trust.

 Main objective to provide financial assistance to empower people.
 Also, contributed to Disaster relief efforts.

Disaster Relief
Funds

50% from HILTI 50% from Trust

NEW TRUST DEED

Important Points
 Approved by Family members, protectors and Trustees.
 A family member can be Chairman plus trustee at the same time.
 A non – family member cannot hold these two position at the same time.
Family Office
 To manage portfolios and investments of the family
 War chest – A special measure to be used in case of extremities to infuse the equity to raise funds.
FAMILY INFLUENCE ON THE COMPANY

1.Direct influence:
strategic management 2. Regulations/
guiding principles of
development and Trust deed
corporate culture.
3. Most Important drivers:
strategic imperatives , focus
areas, growth, innovation,
customer and employee
satisfaction, profitability
and productivity

5. Trust represented as
4. Presence in Bod sole shareholder in
HILTI AG, at max 3
General Shareholder
Trustees at a time meeting
KEY TAKEAWAYS
CULTURE BUILDING

 Organizational culture is very important to the success and overall health of the company, people and customers.
So, it’s important to spread your culture throughout the organization.
 Hilti reflected the value of its founder Martin Hilti.
 Hilti had a unique approach to embedding its culture and values throughout the organization.
 Even the top level management integrated in the program.
SUCCESSION PLANNING

• Succession planning is a process for identifying and

developing new leaders who can replace old leaders
when they leave, retire or die.
• Ensured stability and business continuity and never
lost momentum.
 FAMILY TRUST

 Martin established trust to safeguard the future of

his lifework.
 This trust helps to avoid any issues that may
occur in the family due to ownership
 The trust has two levels of trusteeship control.
THANK YOU