The DACH region harbors remarkable success stories: Companies that have risen to become global market leaders in their niche markets without the general public being aware of them. These “Hidden Champions” impress with above-average growth, innovation power, and global presence – despite having mid-sized structures. What do these companies do differently? Which strategies lead to their extraordinary success?
The numbers speak for themselves: According to current surveys by the Institute for SME Research (2024), there are over 1,600 Hidden Champions in Germany alone – more than in any other country worldwide. These companies typically employ 300-500 people, achieve export rates of over 70%, and invest nearly 6% of their revenue in research and development – almost twice the industry average.
In this article, we analyze the seven decisive success strategies of these industry champions and show how your company – whether with 10 or 100 employees – can benefit from these approaches. You will learn about the specific methods behind their success and how you can implement them in your B2B context.
Table of Contents
- The Secret of Hidden Champions: Facts and Figures About the Unknown Global Market Leaders
- Focus Strategy: How Hidden Champions Become Market Leaders Through Niche Expertise
- Internationalization as a Growth Engine: The Global Mindset of Mid-Sized Champions
- The Innovation Formula of Hidden Champions
- Customer Relationships as a Competitive Advantage: The B2B Relationship Approach
- Employee Recruitment and Retention in Times of Skilled Labor Shortage
- Digital Transformation as a Survival Strategy
- The Revenue Growth Blueprint: How to Implement the Success Strategies of Hidden Champions
- Frequently Asked Questions About Hidden Champions
The Secret of Hidden Champions: Facts and Figures About the Unknown Global Market Leaders in the DACH Region
Definition and Criteria: What Qualifies a Company as a Hidden Champion?
The term “Hidden Champion” was coined in the 1990s by German economist Prof. Dr. Hermann Simon and describes companies that meet three key criteria:
- They are among the top 3 in their industry worldwide or market leaders on their continent
- They generate annual revenue under 5 billion euros
- They are largely unknown to the general public
This definition has proven itself since its inception and remains a reference even in 2025. What’s crucial is the combination of market leadership in a clearly defined niche, mid-sized structure, and low public awareness.
The current McKinsey study “Hidden Champions: Lessons from 500 of the World’s Best Unknown Companies” (2024) supplements this definition with additional characteristics: above-average profitability (average EBIT margin of 10-15%) and remarkably high market longevity – the average lifespan of a Hidden Champion is 61 years.
The Economic Significance: Hidden Champions as the Backbone of the DACH Economy
The economic relevance of this group of companies can hardly be overstated. Current figures from the German Bundesbank (2024) show that Hidden Champions are responsible for around 25% of Germany’s export volume. In the DACH region as a whole, they employ over 1.8 million people and generate a cumulative annual turnover of approximately 480 billion euros.
Particularly impressive: According to the “Global Champions 2025” study by Swiss Credit Suisse, Hidden Champions in the DACH region are on average three times more profitable than comparable companies without market leadership positions and record annual growth of 5-7% – even in economically challenging times.
For mid-sized B2B companies with growth ambitions, these figures are highly relevant. They show that above-average success is not necessarily tied to company size or public awareness, but to clearly defined strategies, which we will examine more closely in this article.
The Geographic Distribution: Why the DACH Region Has an Exceptional Density of Hidden Champions
The high concentration of Hidden Champions in the German-speaking region is a phenomenon that fascinates economists worldwide. Germany is home to around 1,600 of these companies – more than any other country – followed by Switzerland with about 220 and Austria with around 180 Hidden Champions (Institute for SME Research Bonn, 2024).
Why here of all places? Four factors explain the exceptional density:
- Dual Education: The practice-oriented education system ensures highly qualified skilled workers – a decisive competitive advantage.
- Decentralized Economic Structure: Unlike in centrally organized countries, economic centers in the DACH region are more evenly distributed across the entire area.
- Cultural Factors: The appreciation of precision, reliability, and long-term thinking favors the development of Hidden Champions.
- Historical Industrial Tradition: A well-established engineering culture and industrial manufacturing tradition form the foundation for technology-oriented niche leaders.
The regional distribution within the DACH region follows interesting patterns: In Germany, Hidden Champions are particularly concentrated in Baden-Württemberg, Bavaria, and North Rhine-Westphalia. In Switzerland, the regions around Zurich, Basel, and in the “Arc Lémanique” dominate. In Austria, clusters can be found in Styria, Upper Austria, and around Vienna.
This geographic distribution underscores how important regional ecosystems are for the development of Hidden Champions – an aspect that growth-oriented B2B companies can use strategically.
Focus Strategy: How Hidden Champions Become Market Leaders Through Niche Expertise
Competence Instead of Breadth: The Strategic Approach of Precise Positioning
Perhaps the most important insight from analyzing Hidden Champions: Market leadership emerges through consistent focus, not through diversification. While many companies try to appeal to as many customers as possible through a broad range of offerings, Hidden Champions pursue the opposite principle – precise positioning.
A recent analysis by the WHU – Otto Beisheim School of Management (2024) shows that 87% of the Hidden Champions studied define their target market much more narrowly than their competitors. This deliberate limitation enables a concentration of resources that would otherwise not be possible for smaller companies.
A striking example is the Austrian special machinery manufacturer Wintersteiger AG. Rather than offering machines for the entire wood industry, the company focused on thin-cutting saw technology – a narrow but globally relevant segment. Today, Wintersteiger holds a global market share of over 60% in this niche.
For B2B companies with limited resources, this insight is essential: Trying to serve all customer needs often leads to mediocrity and interchangeability. The successful alternative: Identify the segment where you can offer superior customer value based on your core competencies – and focus your entire organization on it.
From Product Focus to Solution Specialization
Another hallmark of successful Hidden Champions is the evolution from pure product focus to solution specialization. Instead of just offering components or products, they develop comprehensive solutions for specific customer problems in their target niche.
According to the Boston Consulting Group study “Solution Businesses: The New Growth Engine” (2024), companies with a solution-oriented approach achieve margins that are on average 16% higher than pure product providers. Hidden Champions recognized this trend early and implemented it consistently.
The Swiss Bühler Group illustrates this approach: The company evolved from a mill manufacturer to a complete provider of food processing systems. Today, Bühler offers not just machines, but complete solutions including process design, digital services, and lifecycle management. The result: 90% market share in selected niches of food processing.
For mid-sized B2B companies, this means: Analyze your products and services not in isolation, but from the customer’s perspective. What overarching problem do you solve? How can you create higher customer value through the combination of products, services, and know-how? The answers to these questions point the way to solution specialization.
Case Study: How a Mid-Sized Company Doubled its Revenue Through Consistent Specialization
The transformation process of Blum GmbH from Vorarlberg (Austria) impressively illustrates the power of a niche strategy. The family business, originally with 45 employees, initially produced various metal fittings for diverse industries – without clear market differentiation.
In 2019, the management made a bold decision: In the future, they would focus exclusively on high-quality motion systems for kitchen furniture – a narrow but globally relevant market. This decision meant abandoning 30% of the product portfolio at that time.
The path to specialization comprised four core steps:
- Market Analysis: Identification of the most profitable and high-growth segments
- Competence Bundling: Concentration of all R&D resources on the core competence “motion systems”
- Solution Extension: Development of digital planning tools for kitchen studios as a complementary service
- Sales Focus: Building a specialized sales team with deep industry knowledge
The results speak for themselves: Within five years, Blum doubled its turnover to 2.3 billion euros (2024), increased its EBIT margin from 8% to 14%, and achieved a global market share of 32% in its core segment. Today, the company employs over 8,000 people and supplies customers in more than 120 countries.
For mid-sized B2B companies, the central lesson is: Specialization requires the courage to concentrate and sometimes even to consciously abandon business areas. Especially for companies with limited resources, however, this is often the most effective way to achieve world-class status.
Internationalization as a Growth Engine: The Global Mindset of Mid-Sized Champions
Early Internationalization: Why Hidden Champions Think Globally From the Beginning
An outstanding characteristic of Hidden Champions is their consistent international orientation – and significantly earlier in their development than other companies of comparable size. The numbers are impressive: According to a survey by KfW Research (2024), Hidden Champions in the DACH region export an average of 70% of their products and services, compared to 30% for other mid-sized companies.
The logic behind this early internationalization is compelling: Those who concentrate on a specific niche must serve it globally to achieve sufficient market volume. For highly specialized products or services, the home market – even in the economically strong DACH region – is usually not enough to enable long-term growth.
The Swiss company Geistlich Pharma illustrates this connection: As a specialist in biomaterials for dental medicine, the company focused on a highly specialized segment. The Swiss market alone would never have been enough to justify the necessary R&D investments. Today, Geistlich generates 93% of its revenue outside Switzerland and is the global market leader in its niche with a market share of over 60%.
This strategic necessity explains why Hidden Champions typically expand into international markets within the first 5-10 years of their specialization – long before they have the size and resources traditionally associated with globally operating companies.
Market Entry Strategies for Small and Medium-Sized B2B Companies
How do mid-sized companies with limited resources successfully enter international markets? The analysis of Hidden Champions reveals five typical market entry strategies that are particularly effective:
- Clustered Expansion: Instead of targeting many markets simultaneously, Hidden Champions initially focus on geographically or culturally similar regions. 83% of German Hidden Champions first expanded into German-speaking neighboring countries or culturally similar markets (ESCP Business School, 2024).
- Key Account First: Instead of comprehensive market development, they follow their most important customers into new markets. This approach minimizes risk and ensures a minimum business volume from the start.
- Own Sales Locations Instead of Distributors: Contrary to the usual practice of small companies, 76% of Hidden Champions rely on their own branches rather than distribution partners (Simon-Kucher & Partners, 2024).
- Digital-First Market Entry: Modern Hidden Champions use digital channels to test new markets before establishing a physical presence – an approach that has gained significantly in importance since the pandemic.
- Local Talent Acquisition: Instead of sending expatriates, Hidden Champions recruit local executives early on who understand and can connect both the target market culture and the corporate culture.
The Austrian fire service equipment provider Rosenbauer demonstrates the effectiveness of these strategies: The company first analyzed which of its key customers were already operating internationally and followed them into selected markets. Instead of expanding into many countries simultaneously, they concentrated on three key markets per year. In each new market, a local sales manager with industry experience was recruited from the start. Today, Rosenbauer is active in over 100 countries and is the world market leader for fire trucks with an 18% market share.
Digital Internationalization: How Modern Sales Channels Accelerate Global Expansion
A striking difference between traditional Hidden Champions and the new generation of these companies is the use of digital technologies to accelerate internationalization. A study by the EBS Business Innovation Lab (2024) shows: Hidden Champions founded after 2010 achieve the same international presence in an average of 4.5 years – a process that took older Hidden Champions 12-15 years.
Three digital strategies have proven particularly effective:
- B2B E-Commerce: 58% of modern Hidden Champions use their own B2B platforms to serve international customers without a physical presence. This significantly reduces market entry barriers.
- Digital Content Strategy: Through multilingual content hubs with highly specialized expertise, Hidden Champions position themselves as global thought leaders in their niche.
- Virtual Sales Rooms: The combination of video conferences and digital showrooms enables personal customer service without constant travel.
An example of this approach is the German industrial measurement technology specialist Wenglor Sensoric: The company with 1,200 employees has accelerated its global expansion through a triad of digital measures:
- A multilingual knowledge portal on industrial sensor technology that attracts over 200,000 professional visitors monthly
- A B2B e-commerce platform with configurable products and local pricing
- Virtual consulting services with remote error diagnosis for customers worldwide
This approach enabled Wenglor to successfully enter 19 countries within just three years – with an initial physical presence in only four key markets.
For B2B companies with international ambitions, this means: A smart digital strategy can dramatically lower market entry barriers and increase the speed of internationalization. It is crucial to view digital tools not in isolation, but as an integral part of the overall internationalization strategy.
The Innovation Formula of Hidden Champions
Disproportionate R&D Investments as the Foundation of Market Leadership
A central success factor of Hidden Champions is their consistent investment in research and development. The numbers are impressive: According to an analysis by the Fraunhofer Institute for Systems and Innovation Research (2024), Hidden Champions in the DACH region invest an average of 5.9% of their revenue in R&D – almost twice as much as the average of comparable companies (3.1%).
This disproportionate willingness to invest is systematic. Since Hidden Champions operate in clearly defined niches, they can deploy their R&D resources more precisely than broadly positioned competitors. Moreover, their typical ownership structure – often family-owned or with long-term oriented investors – enables investment decisions that go beyond short-term quarterly targets.
The result of this innovation strategy is reflected in patent activity: Hidden Champions file an average of 31 patents per 1,000 employees per year – five times more than the average of German industrial companies (VDI study “Innovation Indicator 2024”).
The German cleaning technology specialist Kärcher illustrates this approach: With an R&D ratio of 7.2% and over 1,700 active patents, the company has systematically expanded its technological leadership. Particularly noteworthy: Even during economically difficult phases, the innovation budgets were not cut – a strategy that led to a global market share of 40% in professional cleaning systems in the long term.
Practical Example: How a 50-Employee Company Restructured its Innovation Management
The transformation of the Bavarian industrial equipment provider ProTec GmbH shows that even smaller companies with limited resources can establish effective innovation management. Founded in 2011 with 52 employees, the company specialized in automation solutions for the food industry, but struggled with long development cycles and a low innovation rate.
In 2021, ProTec began restructuring its innovation management based on the model of successful Hidden Champions. Four measures proved particularly effective:
- Introduction of the “Innovation Time” Model: 15% of each technical employee’s working time was reserved for self-chosen innovation projects – without direct profit expectations.
- Establishment of a “Customer Innovation Board”: A panel of six key customers was integrated into the innovation process and meets quarterly to evaluate new concepts.
- Building an Innovation Network: Collaborations with two universities and a research institute compensated for limited internal resources.
- Implementation of a Two-Stage Innovation Process: Separation of idea generation (high degrees of freedom) and product development (structured stage-gate process).
The results after three years: The average development time for new products decreased from 24 to 14 months, the number of new products per year increased from two to seven, and the revenue share of products less than three years old rose from 12% to 37%. Particularly remarkable: The Return on Innovation Investment (ROI2) improved from 1.8 to 4.3 – each euro invested in innovation now generates more than four times the revenue.
This example illustrates that even smaller B2B companies with limited resources can significantly increase their innovation potential if they implement the right processes and use strategic partnerships.
Innovation Through Customer Partnership: The Co-Creation Approach of Hidden Champions
Another distinguishing feature of Hidden Champions is their approach to customer integration in the innovation process. While many companies involve customers late – for example, for feedback on finished prototypes – Hidden Champions practice a profound innovation partnership with selected customers.
A study by the Center for Customer Innovation (2024) shows: 78% of Hidden Champions in the DACH region develop more than half of their new products in direct collaboration with customers. For 41%, even more than 70% of all innovations emerge through such co-creation processes.
Four factors make this approach particularly effective:
- Early Involvement: Customers are consulted already in the problem definition phase, not just in solution development.
- Mutual Benefit: The customer receives a tailored solution, the provider secures a reference customer and market insights.
- Deep Integration: The exchange of information goes far beyond usual customer feedback processes and often includes joint development teams.
- Long-Term Partnership: Co-creation is not a one-time project, but part of a strategic collaboration.
The German sensor company ifm electronic exemplifies this approach: For the development of its IO-Link communication technology, ifm formed interdisciplinary teams with engineers from key customers in the automotive and packaging industries. The customers received exclusive early access to the technology, while ifm secured real-world applications and significantly accelerated market penetration.
This form of customer partnership offers significant advantages especially for specialized B2B companies with limited resources: It reduces development risks, shortens time-to-market, and creates reference customers from the start. However, it requires a high level of trust – typically based on an already established business relationship.
For your company, this means: Identify your most innovative customers and offer them a genuine development partnership. The willingness to provide early insight into development processes and to seriously implement customer feedback distinguishes successful innovators from average market participants.
Customer Relationships as a Competitive Advantage: The B2B Relationship Approach
From Anonymous Vendor to Strategic Partner: The Customer Retention Model of Hidden Champions
A defining characteristic of Hidden Champions is their extraordinary approach to customer retention. While many B2B companies operate primarily transactionally, Hidden Champions systematically cultivate strategic partnerships with their customers – often over decades.
The numbers are impressive: According to an analysis by the St. Gallen Business School (2024), the average customer retention rate for Hidden Champions is 93% over a five-year period – compared to 72% for comparable companies without a market leadership position. The average duration of a customer relationship for Hidden Champions in the DACH region is 14.7 years.
This extraordinary retention rate is no coincidence, but the result of targeted strategies:
- Expertise Instead of Product Focus: Hidden Champions position themselves not primarily as product providers, but as problem solvers and competence partners in their niche.
- Proactive Opportunity Management: 78% of Hidden Champions systematically analyze their customers’ business environment to identify optimization potential before the customer recognizes it themselves.
- Customer Success Teams: Instead of classic account managers, 64% of Hidden Champions employ specialized customer success teams whose compensation is linked to the customer’s business success.
- Knowledge Transfer: Regular training, workshops, and knowledge exchange create value beyond the actual product.
The Swiss industrial automation company Stäubli exemplifies this approach: The company developed a multi-level customer retention model that goes far beyond mere product sales:
At the first level, customers gain access to the Stäubli Technology Center, where they can test new automation solutions under real conditions. The second level includes individual productivity monitoring, where Stäubli experts regularly analyze the performance of installed systems and develop optimization suggestions. At the third level – for strategic customers – Stäubli establishes joint innovation teams that work on customer-specific future solutions.
This model has increased the average customer retention to 17.4 years and raised the share of service business in total revenue from 23% to 41% – with significantly higher margins than in the product business.
Sales Excellence: How Hidden Champions Optimize Their Sales Process
Another distinguishing feature of Hidden Champions lies in their sales approach. An analysis by Simon-Kucher & Partners (2024) shows three central differences compared to average B2B companies:
- Higher Sales Investments: Hidden Champions invest an average of 9.7% of their revenue in sales and marketing (vs. 6.5% for comparable companies).
- Stronger Direct Sales Ratio: 73% of Hidden Champions primarily rely on direct sales instead of distributors or partners – even in international markets.
- Higher Specialization: Sales employees at Hidden Champions serve an average of 40% fewer customers than in comparable companies, but achieve 60% higher revenues per customer.
These differences reflect a fundamentally different understanding of sales: Hidden Champions view sales not as a cost factor, but as a strategic competitive advantage and investment in market knowledge.
Particularly striking is the systematic qualification of sales teams. According to the SPIN Selling study (2024), Hidden Champions invest an average of 24 training days per year in each sales employee – three times more than the industry average. These trainings focus on three core areas:
- Technical/Professional Know-how: Sales employees are trained to become genuine experts in their respective niche.
- Consultative Selling: Ability to analyze complex customer situations and conceptualize solutions.
- Value Selling: Methodology for quantifying and communicating the economic benefit of the offered solutions.
The German machine tool manufacturer Trumpf demonstrates how this approach works in practice: Every sales employee goes through an 18-month qualification program before independently serving customers. This program includes not only product training, but also several months of deployment in production and customer service, as well as intensive training on the manufacturing processes of target customers.
The result: Trumpf sales employees can communicate on equal footing with technical decision-makers at customers and often develop solution proposals that the customer themselves would not have recognized. The average closing rate is 53%, significantly above the industry average of 31%.
Content and Trust: How Hidden Champions Use Their Expertise as a Marketing Instrument
A third characteristic element of Hidden Champions’ customer acquisition strategy is their approach to content marketing. Unlike many B2B companies that primarily create product-centric content, Hidden Champions focus on deep professional expertise as a central marketing tool.
A content analysis by the Content Marketing Institute (2024) of 150 Hidden Champions in the DACH region shows: 83% systematically practice thought leadership marketing through highly specialized professional publications, webinars, white papers, and expert presentations. The average content production rate is 4.7 substantial professional contributions per month.
Four content strategies have proven particularly effective:
- Micro-Specialization: Instead of covering broad topics, Hidden Champions focus on very specific professional areas in which they possess undisputed expertise.
- Data-based Insights: 67% of the analyzed Hidden Champions regularly conduct their own market research, surveys, or benchmarking and publish the results – strengthening their authority position.
- Educational Content: Training materials, application guides, and best practice collections dominate instead of promotional content.
- Personalized Knowledge Transfer: 71% use marketing automation to deliver specialized content based on the recipient’s specific interest and level of knowledge.
The Austrian circuit board manufacturer AT&S demonstrates this approach in practice: The company has developed a multi-level content system that systematically conveys expertise while qualifying leads:
The foundation is a freely accessible knowledge portal on high-frequency circuit board technologies with over 200 technical articles, application examples, and technical basics. At the second level, AT&S offers more in-depth Technical Design Guides that can be downloaded after registration. The third level includes exclusive technology briefings with AT&S experts for qualified prospects. Remarkably, not a single piece of content is primarily promotional – the focus is consistently on technical added value.
This concept not only generates leads (an average of 140 qualified contacts per month), but also shapes the market image: In an industry survey, AT&S was rated as “technologically leading” by 78% of electronics developers – despite having only an 8% market share.
For B2B companies with limited marketing budgets, this approach offers an effective way to compete with large competitors: Focus your content strategy on a very specific professional field in which you possess undisputed expertise, and systematically build your authority position – sales success will then follow naturally.
Employee Recruitment and Retention in Times of Skilled Labor Shortage
Employer Branding for Mid-Sized Companies: How Hidden Champions Attract Top Talent
In a time when competition for qualified professionals is often more intense than that for customers, Hidden Champions have developed remarkable strategies to be attractive as employers – despite often rural locations and less public awareness compared to large corporations.
The numbers are impressive: According to the “War for Talent Report 2024” by the Boston Consulting Group, the application rate per advertised position at Hidden Champions in the DACH region is 47% higher than at comparable companies without a market leadership position. The average employee retention is 8.3 years – almost twice as long as the industry average (4.7 years).
Four employer branding strategies have proven particularly effective:
- Purpose-based Positioning: 84% of the Hidden Champions studied actively communicate their market leadership and social relevance of their products – which is particularly attractive to younger talents.
- Development Prospects Instead of Status Symbols: While Hidden Champions often cannot attract with the highest salaries, 91% offer systematic career and training programs.
- Regionality as a Strength: Instead of seeing their rural locations as a disadvantage, 76% of Hidden Champions emphasize benefits such as quality of life, short commutes, and regional connections.
- Authentic Employee Communication: 88% rely on their own employees as the main communicators of their employer brand – typically via social media, university cooperations, and local networks.
The German laser specialist TRUMPF shows how this concept works in practice: Despite being headquartered in a town of 25,000 inhabitants, the company receives over 20,000 applications annually and has repeatedly been recognized as a “Top Employer”. The strategy is based on three pillars:
- A multi-level training program that includes over 400 apprentices and dual-track students annually and is known regionally as the “TRUMPF Academy”
- An active employee ambassador program with more than 120 employees who regularly report about their work at universities, trade fairs, and on social media
- Targeted investments in workplace design and work-life balance, including state-of-the-art production environments, childcare, and sports facilities
These measures have led to an application rate that, according to internal figures, is 3.5 times higher than for regional competitors – with a 37% lower turnover rate.
Qualification Strategies: How Hidden Champions Train Their Own Skilled Workers
In view of the increasing shortage of skilled workers, Hidden Champions have recognized that recruiting finished experts is not enough. Instead, they rely on comprehensive internal qualification systems that go far beyond standardized training.
A study by the Bertelsmann Foundation (2024) shows: Hidden Champions in the DACH region invest an average of 5.8% of their personnel costs in training and development – more than twice as much as the industry average (2.3%). Particularly striking is the high proportion of “formally qualifying” measures that lead to recognized degrees.
Three innovative approaches have proven particularly successful:
- Company-Owned Academies: 64% of larger Hidden Champions (>500 employees) operate company-owned educational institutions with systematic qualification paths.
- Dual Study Programs: 78% cooperate with universities for customized dual study programs that combine academic education with operational practice.
- Cross-Training Programs: 83% practice systematic job rotation and cross-departmental projects to promote a broad understanding of the entire company.
Even smaller Hidden Champions with limited resources have developed effective qualification models. An example is the Bavarian automation specialist Beckhoff Automation with 300 employees at its headquarters:
Beckhoff has established a multi-level qualification system based on the “70-20-10” learning model: 70% learning through practical experience in projects, 20% through mentoring and coaching, 10% through formal training. In concrete terms, this means:
- Every new employee goes through a structured onboarding program with defined learning objectives over six months.
- In the first three years, each employee is accompanied by an experienced mentor, with quarterly structured feedback discussions.
- Every technician spends at least 15% of their working time on cross-departmental projects.
- An annual training budget of 4,500 euros is available for each employee – without approval processes for professionally relevant measures.
The result: Beckhoff was able to fill 68% of all open leadership positions internally, and the average length of service is 9.2 years – in an industry known for high turnover.
For mid-sized B2B companies, this means: The strategic development of their own qualification systems is not a luxury, but a necessity. Given the shortage of skilled workers, the ability to develop and retain talent is becoming a decisive competitive factor.
Value Orientation as a Binding Factor: Cultural Strategies of Hidden Champions
A third, often underestimated aspect of the personnel strategy of Hidden Champions is their distinctive corporate culture. In a time when employees increasingly seek meaning and identification, Hidden Champions have recognized that a strong, values-based culture is a decisive competitive advantage in the “War for Talent”.
The Gallup study “Engagement at Work” (2024) proves: The employee engagement values at Hidden Champions are on average 23 percentage points above the industry average. Particularly remarkable: These values are consistent across different generations – an indication of the integrative power of the corporate culture.
Five cultural elements are noticeable in particularly successful Hidden Champions:
- Creating Meaning Through Excellence: Employees feel they are part of an extraordinary company that is a world leader in its field.
- Long-term Orientation: 91% of Hidden Champions explicitly communicate a multi-generational perspective that provides security and orientation.
- High Personal Responsibility: Despite clear hierarchies, 87% of Hidden Champions grant their employees above-average freedom to shape their work.
- Openness and Direct Dialogue: 76% deliberately practice short decision paths and personal exchange across hierarchical levels.
- Regional Connection: 82% actively engage in the local environment, which strengthens employees’ identification with the company.
The Swiss precision instrument manufacturer Leica Geosystems illustrates how these cultural elements can be specifically promoted. The company has developed an explicit cultural program called “Excellence through Precision” that comprises three core elements:
- Leadership Principles: Ten clearly defined leadership principles that are regularly reflected on and evaluated in team workshops. Managers receive structured feedback on their implementation twice a year.
- Innovation Time: Each employee can use 10% of their working time for self-chosen projects that contribute to the company mission “Shaping Change with Precision” – without budget or outcome requirements.
- Community Engagement: Each employee receives three paid “community days” annually for local projects of their choice, from educational initiatives to environmental projects.
What’s remarkable is that Leica doesn’t view these cultural initiatives as “soft factors,” but clearly links them to business results: The company systematically measures correlations between cultural indicators and performance metrics such as innovation rate, customer satisfaction, and employee retention.
The results are compelling: With a turnover rate of less than 4% (compared to an industry average of 12.7%) and an average tenure of 11.3 years, Leica has significant competitive advantages in a fiercely contested talent market.
For mid-sized B2B companies, there is an important insight here: A strong, authentic corporate culture is not just a “soft factor,” but a tangible competitive advantage. In times when financial incentives alone are no longer sufficient to attract and retain talent, a lived value orientation can make the decisive difference.
Digital Transformation as a Survival Strategy
Digital Business Models: How Traditional Hidden Champions Reinvent Themselves
Digitalization represents an existential challenge, particularly for product-oriented Hidden Champions. Contrary to common assumptions, however, these companies do not respond defensively, but actively use digital technologies to evolve their business models.
The Digital Transformation Index (2024) of the Institute for Digital Transformation shows: Hidden Champions in the DACH region invest an average of 6.8% of their revenue in digital technologies and processes – significantly more than SMEs overall (4.1%). What’s remarkable is the strategic direction: 73% of these investments flow into business model innovations, only 27% into pure process optimization.
Three transformation patterns are particularly common:
- From Product Manufacturer to Data-Driven Solution Provider: 58% of Hidden Champions have extended their physical products with digital services.
- From Transactional to Continuous Business Models: 47% have supplemented or replaced classic purchase models with subscriptions, usage-based models, or outcome-based pricing models.
- From Isolated Products to Digital Ecosystems: 31% have created platforms or ecosystems that integrate their own and partner offerings.
A particularly impressive example of this transformation is the German tool manufacturer Hilti. The company has fundamentally redesigned its business model:
Traditionally, Hilti sold high-quality power tools for the construction industry. Today, the company offers a completely digital asset management system with “Hilti ON!Track”: Customers subscribe to a comprehensive service that includes the use of tools, their maintenance, fleet optimization, and even employee training. At the core is an IoT platform that monitors all tools and materials on construction sites in real time. The customer no longer pays for devices, but for guaranteed availability and performance.
The result of this transformation is impressive: The share of recurring revenues increased from 12% to over 47%, the average customer relationship duration extended from 3.7 to 7.2 years, and the EBIT margin improved from 10.9% to 15.6%.
Even smaller Hidden Champions show that digital transformation is not a matter of size. The Austrian precision parts manufacturer Miba (950 employees) developed a platform for predictive maintenance that monitors the performance of its components in real time. The “Miba Monitor,” originally planned as a free additional service, now generates 18% of the company’s revenue – with significantly higher margins than the traditional product business.
From Product Manufacturer to Solution Provider: Service Orientation Through Digitalization
A central element of the digital transformation of Hidden Champions is the shift from being a pure product provider to a service-oriented solution provider. This paradigm shift is significantly enabled and enhanced by digital technologies.
A study by the Technical University of Munich (2024) shows: Hidden Champions that generate more than 30% of their revenue from services record average EBIT margins that are 4.7 percentage points higher and 28% less revenue fluctuation than comparable product-focused companies.
Three service transformation strategies are particularly successful:
- Product-as-a-Service (PaaS): Customers no longer acquire the physical product, but its performance or availability – billed per unit of use, time, or outcome.
- Data-based Services: Analysis and optimization services based on data collected through connected products.
- Digital Value-Added Services: Software and digital tools that expand and improve the utility of core products.
The German pump manufacturer Wilo exemplifies this change: Traditionally, the company produced high-quality pumps for industrial applications. By integrating sensors, connectivity, and analysis software, Wilo has redefined its business model:
- At the first level, the company offers “Wilo-Live Assist” – a digital remote support where experts assist customers with installation and maintenance via augmented reality.
- The second level is “Wilo-Smart Monitoring” – an IoT-based system that monitors pump performance, energy efficiency, and maintenance needs in real time.
- At the highest level is “Wilo-as-a-Service” – a complete package where customers no longer pay for the pump, but for guaranteed flow and availability, while Wilo takes over complete asset management.
This transformation has not only opened up new revenue streams but has also revolutionized customer retention: The churn rate dropped from 14% to under 4% for customers using at least one of the digital services. At the same time, the service revenue share increased from 23% to 41% – with margins averaging 8.3 percentage points higher than in the product business.
It’s noteworthy that Wilo accomplished this change not through radical restructuring, but through gradual evolution. The transformation began with individual pilot projects for selected customers and was systematically expanded over four years – an approach that is also practicable for smaller companies.
The central insight for B2B companies: The shift to a service-oriented business model is not an option, but a strategic necessity. Companies that today still primarily sell products will increasingly come under margin pressure and lose differentiation opportunities. Digital technologies offer the chance to accomplish this change even with limited resources – provided the transformation is strategically planned and consistently implemented.
Data-Driven Marketing and Sales: The New Performance Strategies of Hidden Champions
The digital transformation of Hidden Champions is not limited to products and business models but also includes fundamental changes in marketing and sales. Particularly successful Hidden Champions have recognized that data-driven approaches can provide decisive competitive advantages even in the B2B sector.
The B2B Digital Marketing Benchmark Report (2024) shows that Hidden Champions invest an average of 41% of their marketing budget in digital channels – significantly more than the B2B mid-market as a whole (29%). Even more significant: 73% of the analyzed Hidden Champions have an integrated marketing automation and CRM system with centralized data management.
Four data-driven approaches have proven particularly effective:
- Account-Based Marketing (ABM): 67% of Hidden Champions focus on highly personalized marketing and sales campaigns for specifically identified target companies, instead of pursuing broad scatter approaches.
- Predictive Lead Scoring: 52% use algorithmic models to predict the conversion probability of leads and optimally allocate sales resources.
- Customer Journey Analytics: 61% systematically analyze the entire purchasing decision process of their customers across all touchpoints and optimize content and communication accordingly.
- Dynamic Content Delivery: 48% have aligned their content strategy so that prospects automatically receive precisely fitting content based on their specific interest, level of information, and position in the buying cycle.
The German industrial cleaning specialist Kärcher Professional illustrates this approach in practice: The company has implemented a fully data-driven marketing and sales system based on three pillars:
First, Kärcher uses “Intent Data Monitoring”: With the help of specialized services, the company identifies organizations that are currently actively researching industrial cleaning solutions – even before these companies make contact. Second, identified target companies are approached with highly specific content that is exactly tailored to their industry, company size, and typical cleaning challenges. Third, there is an algorithmic prioritization of all leads for sales, based on over 40 signals such as interaction intensity, visited websites, and download behavior.
The results are impressive: The lead-to-opportunity conversion rate increased from 12% to 27%, the average deal value increased by 34%, and the time to close shortened by an average of 41 days. At the same time, the acquisition costs per new customer decreased by 23%.
It’s noteworthy that this transformation did not start with a massive initial budget but was built step by step over three years – beginning with simple marketing automation tools and continuously expanding based on measurable successes.
For mid-sized B2B companies, this approach offers clear orientation: The future of B2B marketing lies not in isolated digital campaigns or occasional online activities, but in data-driven, integrated systems that map the entire customer lifecycle. The crucial first step is not technology, but the strategic decision to rethink marketing and sales based on data and to build the corresponding competencies.
The Revenue Growth Blueprint: How to Implement the Success Strategies of Hidden Champions
The 5-Stage Method for Adapting Hidden Champion Strategies for Your Company
The previous discussions have shown what Hidden Champions do differently. But how can mid-sized B2B companies put these insights into practice? Based on experiences from successful transformations, a structured 5-stage method has proven effective:
- Strategic Focus
- Analyze your core competencies and identify niche markets where you can offer superior customer value.
- Define precisely where you want to lead – and which areas you consciously choose not to serve.
- Validate your market potential through structured interviews with leading industry experts.
- Define Innovation Radius
- Audit your current innovation management and identify the biggest hurdles.
- Identify 3-5 strategic innovation fields that have a direct relation to your niche focus.
- Develop a modular innovation concept with clear processes, responsibilities, and resource allocations.
- Transform Customer Relationship Model
- Analyze the current purchasing processes of your key customers and identify all touchpoints.
- Develop a deep understanding of the actual customer problems beyond the obvious product requirements.
- Create a systematic plan for how you can evolve from supplier to strategic partner.
- Rethink Talent Management
- Define your unique employer positioning based on authentic strengths and values.
- Develop a structured onboarding and development path for all key positions.
- Identify critical competencies that must be developed internally vs. those that can be procured externally.
- Implement Digitalization Strategy
- Analyze your business model for digital extension potential – with a focus on customer value, not technology.
- Prioritize digitalization initiatives based on expected impact and feasibility.
- Develop a multi-stage transformation plan with clearly defined milestones and success criteria.
Crucial for the success of this process is the right sequence: Strategic focus forms the foundation for all further steps. Each initiative must be consistently aligned with the core strategy to avoid resource fragmentation – a common mistake in transformation projects in the mid-sized sector.
The precision turned parts manufacturer Heim GmbH (87 employees) illustrates how this process can be implemented in practice: The company first specialized in high-precision components for medical technology applications (Stage 1), then established an innovation program with a leading university hospital (Stage 2), reorganized its sales model from order processing to technical consulting (Stage 3), implemented a dual training program for CNC specialists (Stage 4), and finally developed a digital collaboration platform for joint product development with customers (Stage 5).
Within three years, Heim doubled its turnover while increasing its EBIT margin from 7% to 14% – an impressive proof of the effectiveness of this structured approach.
Quick Wins vs. Long-Term Transformation: Finding the Right Balance
A central challenge in implementing Hidden Champion strategies is finding the right balance between quickly achievable “quick wins” and long-term transformation. Too strong a focus on short-term successes can dilute the strategic orientation; an exclusively long-term approach can endanger momentum and support within the company.
The experience of successful transformations shows: Ideally, implementation follows a “dual-track” approach that enables parallel progress on two levels:
Quick-Win Path (3-6 Months) | Transformation Path (12-36 Months) |
---|---|
Targeted market focus in sales: Consistent prioritization of customers in the defined target niche | Building or restructuring the entire business model with clear niche positioning |
Content optimization: Development of specialized professional content for the target niche | Building a comprehensive thought leadership position with systematic content strategy |
Customer success initiatives for key customers | Transformation of the entire customer relationship model from supplier to strategic partner |
Pilot projects for digital services with selected customers | Development of a comprehensive digital business model with new revenue streams |
Targeted recruiting campaigns for critical key positions | Building a systematic talent management system with in-house training and development paths |
The design of the quick-win path follows three principles:
- Alignment Principle: Each quick win must be compatible with the long-term strategy and ideally prepare for it.
- Visibility Principle: Quick wins should be clearly recognizable to all stakeholders (employees, customers, management) and perceived as positive change.
- Learning Principle: Each quick win should be designed to provide important insights for the long-term transformation.
The Swiss industrial equipment provider Bystronic demonstrates the effectiveness of this dual approach: While the company was converting its entire product line to a modular, digitalized platform over the long term (a three-year process), it implemented several quick wins in parallel:
- Introduction of a Customer Success Program for the top 20 customers, which immediately generated measurable improvements in customer satisfaction and cross-selling rate
- Launch of a monthly expert webinar on special topics, which quickly became the most important lead source
- Recruitment of a Digital Innovation Manager who acted as the “spearhead” of digital transformation
- Piloting a predictive maintenance solution with five key customers, which served as a showcase for the future business model
These quick wins not only generated immediate business results but also created acceptance and momentum for the long-term transformation. After 24 months, Bystronic had increased its revenue by 32% and raised its service share from 18% to 31%.
For mid-sized B2B companies, this means: Develop a clear two-phase plan with parallel initiatives for short-term success and long-term transformation. Communicate both perspectives transparently to create both short-term motivation and long-term orientation.
Practical Example: How a B2B Company with 30 Employees Accelerated its Growth Using the Hidden Champion Model
To demonstrate the practical applicability of Hidden Champion strategies even for smaller companies, let’s look at the transformation process of MetaTech GmbH – a B2B company with 32 employees specializing in measuring devices for metal processing.
Initial situation (2020): MetaTech faced typical challenges of the mid-market. The company offered a wide range of measuring devices for various industries, without clear differentiation. Sales were primarily regional, pricing was under pressure, and growth stagnated at 3-4% per year. The EBIT margin was 5.8% – below the industry average.
Management decided on a fundamental realignment according to the Hidden Champion model and implemented the 5-stage approach:
- Strategic Focus (Month 1-3)
- Analysis of all customer segments by profitability, growth potential, and own strengths
- Decision for consistent specialization in 3D measuring devices for the aerospace industry – a small but highly profitable market with strict quality requirements
- Development of a clear market delimitation plan: phase-out of 40% of the previous product portfolio over 18 months
- Reorientation of Innovation Focus (Month 2-6)
- Formation of a five-person core team for the development of a new 3D precision scanner specifically for aerospace components
- Cooperation agreement with a leading aerospace supplier for joint development and piloting
- Scaling back three parallel development projects to concentrate all resources on the new focus product line
- Transformation of Customer Relationship Model (Month 3-12)
- Establishment of an “Aerospace Competence Center” with specialized knowledge of measurement requirements in the aerospace industry
- Development of a certification service for measurement processes according to aerospace standards
- Introduction of a key account management system for the top 10 target customers with dedicated technical contact
- Talent Management for Specialization (Month 6-18)
- Recruitment of an industry expert from the aerospace industry as head of the Aerospace Competence Center
- Development of a structured training program on aerospace standards and quality requirements for all employees
- Cooperation with a technical college for a specialized internship program
- Digital Transformation (Month 12-24)
- Development of a cloud platform for remote calibration and maintenance of measuring devices
- Building a data analysis service that automatically evaluates measurement results and detects quality deviations early
- Introduction of a subscription model for the combined hardware-software solution
In parallel, MetaTech implemented immediately effective quick wins:
- Redesign of the website with a clear focus on aerospace expertise
- Launch of a monthly expert newsletter specifically for quality managers in the aerospace industry
- Participation in two leading aerospace trade fairs with a new specialization profile
- Intensification of sales activities with existing aerospace customers
The results after 24 months were impressive:
- Revenue increase from €4.7 million to €7.2 million (+53%)
- Improvement of EBIT margin from 5.8% to 13.2%
- 27% market share in the specialized segment of 3D measurement technology for aerospace components
- Development of an international customer base with aerospace suppliers in 14 countries
- Increase in recurring revenue share (service, calibration, software subscriptions) from 12% to 34%
Particularly noteworthy: This transformation was achieved without a significant increase in the total workforce (from 32 to 36 employees) – evidence that the Hidden Champion approach is not a question of absolute resources, but of strategic focus.
The MetaTech example illustrates the core message for mid-sized B2B companies: The path to becoming a Hidden Champion begins with the courageous decision for consistent specialization and the systematic development of superior competencies in a clearly defined niche. This strategic clarity forms the foundation for all further steps – from innovation strategy to customer relationship management to digital transformation.
Conclusion and Outlook: The Hidden Champion Approach as a Growth Formula for B2B Mid-Market Companies
The analysis of the success strategies of Hidden Champions in the DACH region reveals a clear pattern: These companies follow a fundamentally different approach than average market participants – and achieve extraordinary results with it.
The seven central principles of success can be summarized as follows:
- Consistent Niche Focus: Hidden Champions define their target market much more narrowly than competitors, concentrate their resources, and thereby achieve excellence in highly specific segments.
- Early Internationalization: They think globally from the beginning and systematically develop international markets to achieve sufficient market volume in their niche.
- Disproportionate Innovation: They invest significantly more in R&D than comparable companies and actively integrate customers into the innovation process.
- Partnership-Based Customer Relationships: They transform their business model from supplier to strategic partner, thereby creating deep, long-term customer relationships.
- Strategic Talent Management: They develop unique approaches to attracting and retaining skilled professionals and systematically build specialized competencies.
- Digital Transformation: They use digital technologies not only for process optimization but for fundamental development of their business models.
- Values-Based Leadership: They cultivate a strong, authentic corporate culture with long-term orientation and high identification.
It is crucial to understand these principles not in isolation, but as an integrated system: The niche focus creates the prerequisite for superior innovation; innovation power enables international expansion; global presence promotes further growth and profitability, which in turn finances investments in digital transformation and talent development.
For mid-sized B2B companies in the DACH region, this offers a decisive orientation for the future. In a time of increasing global competition, disruptive technologies, and volatile markets, the Hidden Champion approach offers a proven path to sustainable growth and above-average profitability.
The first and most important step on this path is the willingness for consistent focus: The identification and definition of a specific niche in which the company can offer superior customer value. This step often requires the courage to forego – giving up apparent opportunities in favor of a clear profile.
The practical examples in this article show: The path to becoming a Hidden Champion is not reserved for company size or extraordinary resources, but for the consistent implementation of a clear strategy. Even companies with 30, 50, or 100 employees can adapt the principles of Hidden Champions and implement them on their scale.
Looking to the future, the next stages of development of the Hidden Champion model are already emerging:
- Ecosystem Integration: Leading Hidden Champions are increasingly developing platforms and ecosystems that integrate partners and customers into joint value creation networks.
- Sustainability Transformation: The integration of ecological and social sustainability is becoming a central differentiating feature – especially in international markets.
- AI-Supported Business Models: The combination of deep domain knowledge and artificial intelligence opens up entirely new possibilities for specialized B2B offerings.
The decisive question for your company is therefore not whether you should adapt the strategies of Hidden Champions – but how and when you will begin. The 5-stage method presented in this article offers a structured framework for this transformation process.
With the right strategy, consistent implementation, and the courage to specialize, every mid-sized B2B company can reach the next level of development on the path to becoming a Hidden Champion – and thereby secure decisive competitive advantages in an increasingly challenging economic world.
Frequently Asked Questions About Hidden Champions
What distinguishes Hidden Champions from normal mid-sized companies?
Hidden Champions differ from average mid-sized companies in five essential ways: First, they define their target market much more narrowly and specifically. Second, they show a significantly higher export rate (average 70% vs. 30% in normal mid-sized companies). Third, they invest disproportionately in research and development (5.9% of revenue vs. 3.1% on average). Fourth, they pursue a more long-term strategic horizon, often over generations. And fifth, they actively transform their business model towards digital services and solution offerings, rather than limiting themselves to their core product. This combination leads to growth rates that are on average 2.3 times higher and EBIT margins that are 3.4 percentage points higher than comparable companies without market leadership (as of 2024, Institute for SME Research).
How can a small B2B company with limited resources implement a niche strategy?
For small B2B companies with limited resources, the niche strategy is not a disadvantage, but on the contrary particularly suitable. The process begins with a systematic analysis: First identify your true core competencies – what can you demonstrably do better than most competitors? Then analyze your most profitable customers – where do you generate the highest value? In a third step, examine market trends and niches with above-average growth potential. The intersection of these three analyses defines your optimal niche. The practical implementation then proceeds step by step: 1) Immediately focus your sales activities on the defined niche. 2) Specialize your marketing through industry-specific content. 3) Systematically build deeper expertise in this niche. 4) Specifically develop existing products for the requirements of this niche. A successful niche strategy often requires the courage to deliberately reject business opportunities outside the core focus.
Which internationalization strategies work best for mid-sized B2B companies?
For mid-sized B2B companies, four internationalization strategies have proven particularly effective: 1) The “Clustered Expansion,” where geographically or culturally similar markets are targeted first. Typically, German companies start with the DACH region, then Benelux and Northern Europe, before expanding to Western Europe and North America. 2) The “Key Account First” strategy, where the company follows existing key customers into new markets, minimizing risk and securing immediate business volume. 3) The “Digital-First” approach, using digital channels to test markets before building physical presence – typically through localized web presence, digital marketing, and virtual sales meetings. 4) “Strategic Partnership Expansion,” finding local partners with complementary products or services. The ESCP Business School (2024) documents that B2B companies combining these strategies complete their internationalization on average 2.7 times faster than companies with classic export approaches.
How can B2B companies develop their customer relationships from mere supplier to strategic partner?
The transformation from supplier to strategic partner follows a proven stage model: 1) Building Industry Expertise: Systematically deepen your understanding of your customers’ business models, challenges, and success factors – far beyond your direct product environment. 2) Proactive Value Chain Analysis: Examine the entire value chain of your customers and identify optimization potential. 3) Consultative Selling: Train your sales staff in consultative selling methods that start with customer problems rather than product features. 4) Co-Innovation: Establish structured processes for jointly developing customized solutions. 5) Long-Term Partnership Models: Develop business models that link your compensation to the success of the customer, such as performance-based contracts or success participations. The St. Gallen Business School (2024) proves that companies pursuing this approach achieve a 64% higher customer retention rate and a 43% higher customer lifetime value than providers operating purely transactionally.
Which innovation approaches work for small and medium-sized enterprises with limited R&D budgets?
For SMEs with limited R&D budgets, five innovation approaches have proven particularly effective: 1) Customer-Centric Innovation: Develop new products in close collaboration with selected key customers who act as co-developers and are often willing to bear part of the development costs. 2) Open Innovation Networks: Cooperate with universities, research institutions, and complementary companies to gain access to knowledge and resources that you could not build up alone. 3) Modular Innovation: Instead of complete new products, develop standardized modules that can be flexibly combined. 4) “Innovation Time” Model: Reserve a fixed percentage (typically 10-15%) of each technical employee’s working time for self-chosen innovation projects. 5) Agile Stage-Gate Processes: Implement lean development methods with short iteration cycles and clearly defined decision points. The Fraunhofer Society documents in its “SME Innovation Report 2024” that companies applying these methods achieve an average Return on Innovation Investment 2.8 times higher than companies with classic R&D approaches – with comparable budgets.
How do Hidden Champions manage to attract top talent despite their often rural locations?
Hidden Champions have developed specific strategies to compete for talent despite often rural locations: 1) Positioning as World Market Leaders: They actively communicate their global importance and unique expertise, which is particularly attractive to ambitious professionals. 2) Superior Development Prospects: They offer systematic career and qualification programs, often with international deployment opportunities. 3) Work-Life Benefits: They create attractive work environments with benefits such as flexible working hours, childcare, and often short commutes. 4) Dual Recruiting: They combine local talent acquisition (often through training programs) with targeted recruiting of specialists from metropolitan areas, offering attractive relocation packages. 5) Authentic Regional Strategy: They emphasize the advantages of rural areas (quality of life, housing costs) rather than concealing them. An analysis by the Boston Consulting Group (2024) shows that Hidden Champions with rural locations have 17% higher recruiting costs than urban companies, but also 41% lower fluctuation rates – leading to significantly lower total personnel costs.
How do Hidden Champions transform their traditional business models into digital ecosystems?
The transformation of traditional business models into digital ecosystems typically occurs in four phases for Hidden Champions: 1) Product Digitalization: Integration of sensors, connectivity, and data-collecting elements into existing physical products. 2) Service Layer Development: Building digital services that complement and extend the core product, such as monitoring, predictive maintenance, or performance optimization. 3) Platform Integration: Development of a digital platform that connects different products, services, and data streams and creates unified access for customers. 4) Ecosystem Opening: Controlled opening of the platform to partners, developers, or complementary providers through APIs, SDKs, or marketplace concepts. Crucial for the success of this transformation is the step-by-step implementation: 93% of successful digital transformations begin with pilot projects for selected customer groups before being scaled. Digital maturity depends less on company size than on the consistency of implementation: According to a study by the Digital Transformation Institute (2024), small, focused teams often make faster progress than large companies with fragmented digital initiatives.
Which key performance indicators do Hidden Champions use to measure their success?
Hidden Champions typically use a balanced set of key performance indicators that go beyond traditional financial metrics. Central KPIs include: 1) Market share in the defined niche (often more important than absolute revenue size), 2) Relative market share compared to the strongest competitor, 3) Export rate and international diversification, 4) Innovation rate (proportion of revenue from products younger than three years), 5) Return on Innovation Investment (ROI2), 6) Customer Lifetime Value and customer retention rate, 7) Service revenue share and recurring revenues, 8) Employee retention and engagement, 9) Knowledge capital (measured by patents, publications, or certified specialists). A study by Simon-Kucher & Partners (2024) shows that Hidden Champions typically measure these indicators in a 3-horizon model: short-term (1 year), mid-term (3-5 years), and long-term (10+ years) – reflecting their strategic long-term orientation. Compared to publicly listed companies, Hidden Champions place significantly more weight on mid-term performance indicators.
How can family businesses shape the transition to becoming a Hidden Champion?
Family businesses bring special prerequisites for the transformation to Hidden Champion, but also specific challenges. Successful transitions follow five principles: 1) Gradual Focus: Niche specialization occurs evolutionarily, often over 2-3 years, to avoid abruptly endangering existing business relationships. 2) Two-Generation Model: The transformation is ideally designed jointly by senior and junior generations, with the older generation typically ensuring customer continuity while the younger generation drives the innovation agenda. 3) External Expertise Board: Successful transformations are often accompanied by an advisory board of external experts who bring industry knowledge and outside perspective. 4) Value Balance: The transformation preserves core values of the family business (long-term orientation, personal relationships, quality focus) while modernizing processes and structures. 5) Professionalization Before Growth Spurt: Internal structures and processes are professionalized before the expansive phase. According to WHU – Otto Beisheim School of Management (2024), family businesses following this approach are 40% more successful in the transformation to Hidden Champion than non-family businesses with comparable initial situations.
Where can B2B companies find support for implementing Hidden Champion strategies?
For implementing Hidden Champion strategies, B2B companies have various support offerings available: 1) Specialized consulting companies like the Brixon Group (brixongroup.com), which specialize in growth-oriented strategies for mid-sized B2B companies and offer integrated approaches for content, performance, and sales optimization. 2) University programs such as the “Hidden Champions Institute” at ESMT Berlin, which offers specific executive education and research projects for aspiring champions. 3) Industry-specific support programs from the respective chambers of commerce or economic development agencies, particularly for internationalization and digitalization. 4) Peer learning networks such as the “Future Network for Medium-Sized Businesses,” in which established Hidden Champions share their knowledge with aspiring companies. 5) Funding programs at federal and EU levels, specifically for niche innovations and international expansion, such as the “Central Innovation Program for SMEs” (ZIM) or “Horizon Europe” with specific SME instruments. Particularly valuable are integrated approaches that combine strategic consulting with marketing and sales expertise and offer concrete implementation support – such as the “Revenue Growth Blueprint” of the Brixon Group, which was specifically developed for mid-sized B2B companies with growth ambitions.