Hubert Rhomberg, CEO of the Austrian construction company Rhomberg with 3.000 employees, wants to dust off the image of the construction industry, break up old thought patterns and promote an economy of sharing. Here are four sources that inspire him and four short stories to accompany them.
Hubert Rhomberg and the entrepreneurial family - prologue
The story of the Rhomberg family of entrepreneurs was almost over after the first generation of entrepreneurs, and the succession story of Hubert Rhomberg would not have come to be at all. Otto Rhomberg founded a construction company in Bregenz in 1886. Six years later, his brother and master builder Cornelius Rhomberg joined the company. Cornelius' son and potential successor Walter Rhomberg was less than a year old when his father died. The family's fortune was lost through forced loans during the First World War. The business was gone.
Walter Rhomberg did indeed pursue a career in the same field as his father, but did not think of starting up his own business again, as he received good employment offers after his education. His mother did not want to accept this and persuasively suggested to her son. "There should be another Rhomberg company," she said. At some point, Walter Rhomberg could not help but agree. So he started from scratch, in an entrepreneurial fashion, the company ‘Walter Rhomberg, Baumeister’, founded in 1938. After the war, things went well in the second attempt. The company benefited from the reconstruction and upswing of the fifties. Hubert Rhomberg, today's managing director, calls what his grandfather and his employees did at that time "real master builders" - the Festspielhaus and the Landestheater in Bregenz were built by the Rhomberg company, as well as the Seehallenbad, the National Bank and also the pipeline on the shores of Lake Constance. Walter Rhomberg expanded the business model to include track construction, structural and civil engineering.
The third-generation alias Walter-Heinz Rhomberg joined the company in 1963; he was at the top until 2002. He left an ever-expanding company to his son Hubert. Walter-Heinz had, besides other things, opened a branch in Switzerland, entered the general contractor business and mechanical track construction and founded a joint company together with the German construction family Goldbeck. Today, the Rhomberg Group has a total turnover of 782.5 million euros and employs over 3.000 people.
What did and does Hubert Rhomberg want to bring to the family business, and where does he place his entrepreneurial focus? Following on are four short stories that pick up on the Austrian's approaches based on figures that inspire him.
"Whatever one person knows, let him share it with the whole collective." – Borg
The Borg are a species from the Star Trek universe. Driven by the goal of expanding into the entire universe, they are constantly technically adapting themselves and their bodies to the environment - hence the reference to the word ‘cyborg,’ a hybrid of human and machine. They evolve by absorbing the knowledge and experience of other life forms, resulting in a collective consciousness. Their society is totalitarian, but hardly hierarchical. As in insect colonies, there is only a kind of queen at the top.
Entrepreneur Hubert Rhomberg is fascinated by this organisational structure. He believes that even an antagonist in a TV series can be inspiring. However: The Borg know neither compassion nor mercy, and Rhomberg naturally wants to distance himself from that. Ants are a less controversial example of this approach, so the Austrian. But ants are not as cool as the Borg.
Nevertheless, the swarm intelligence demonstrated by creatures from the distant galaxy and Earth's tiny inhabitants has appealed to the entrepreneur. "Everyone who comes to us should have all the knowledge of our business," Rhomberg says. He wants to move toward collective leadership and a knowledge network. He says that only in this way will the Rhomberg company be able to function sustainably and flexibly. All the more so since an economic entity in itself cannot be sustainable, but only the behaviour of the employees, he says.
“No one knows as much as all of us”, say the Borg, and so says the Austrian. For him, that means making his employees' visions and projects available to everyone on via an accessible platform. Like when a staff member is fine-tuning a piece of technology or an idea for a business model, everyone at Rhomberg should have a chance to find out that this project exists. If someone is interested in contributing, he or she can come forward and do just that. This creates synergies and an environment in which people enjoy working. It doesn't take a big investment. "Out of 100 ways you can change a company, 90 cost nothing," Hubert Rhomberg is convinced.
With a little funding, the entrepreneur wants to push digital learning projects. He talks about gaming engines, augmented reality, virtual reality to name a few. "What if three young construction managers used virtual reality goggles to virtually enter a construction site with an experienced old construction manager and learn procedures before the project even gets off the ground in the real world?" the CEO wonders. A win-win-win situation, Hubert Rhomberg believes. The junior construction managers would be provided with technical knowledge appropriate to their generation, the old construction manager would be happy that people are interested in his knowledge, and the potential customer can count on the fact that the construction company has already dealt with the project in depth before the start. And why shouldn't the customer be there when his construction site is virtually entered? Then everyone would know everything ... which would almost be Borg-Star-Trek style.
"I will make up my world as I like it." - Pippi Longstocking
The Rhomberg family of entrepreneurs from Vorarlberg, Austria, has always raised its children as free spirits. "That´s hard work", father Hubert Rhomberg knows from his own experience. His older brother even loved freedom so much that he didn't want to join the company. "He didn't see himself as someone for construction," says his brother Hubert and speculates: "Maybe he also always felt uncomfortable being the centre of attention as the eldest and the expectation to follow." After earning his stripes at Strabag, a construction company headquartered in Vienna, Hubert Rhomberg returned to Bregenz and joined the company in 1999, where he first had to fit in but saw opportunities to shape the company. His father stepped down after three years together and did so "tough and smart," as Hubert Rhomberg says. Walter-Heinz did not show his face in the office for three months. He had learned from his predecessor's mistakes, says Hubert, whose grandfather was too attached to his chair at the time.
Hubert gets his entrepreneurial freedom from his father. In addition to building up the rail technology division internationally, the successor devotes himself primarily to the employer brand. The construction industry is anything but exemplary. "Our industry is responsible for almost 40 percent of all harmful climate gases," says Rhomberg. He personally doesn't like that and - so the logical conclusion the entrepreneur draws - future employees won't either.
There's only one thing that helps: making the world the way you like it - and against all the prevailing rules and opinions of experts. The phrase: "We did it because we didn't know it couldn't be done" doesn't come from a nine-year-old girl with freckles who lives in a huge mansion, but from an Austrian entrepreneur who explains why his company CREE GmbH (CREE by Rhomberg), founded in 2010, managed to build vertically with the material wood and create a high-rise building with eight floors.
The construction of the Life Cycle Tower in Dornbirn near Bregenz took eight days - and that is without superhuman strength, because the wooden parts are produced modularly and can be put together like Lego pieces. What sounds like a ludicrous story to be told by one of Astrid Lindgren's novel characters is Hubert Rhomberg's personal and real matter. For no customer wanted the house, there was no demand for this type of house, and the regulations - especially in fire protection - seemed impossible to meet. He was ridiculed for his visions and ideas.
Working with third parties, Rhomberg began to research; in the process, the lab showed that wood could meet building codes if selected parts of the building - the foundation or the core of the stairwell - were concreted. According to CREE, the wood-hybrid building consumes less than 1.000 tons of carbon dioxide in its life cycle instead of 10.000 tons with the mixed concrete and wood construction method. And the building's modular design means it can be disassembled, because according to Rhomberg, "Beauty is sustainability. If a building looks good, society will make sure it's maintained." He adds that if it is no longer in keeping with the spirit of the times, the components can be used to build a new house. Perhaps a multi-coloured mansion?
„Copyright is for losers.“ – Banksy
What exactly is art, and what makes it successful? The graffiti artist Banksy is world famous, yet the majority of his works doesn't hang in big galleries, but decorates public walls and murals. The British artist's motto is "Copyright is for losers." Entrepreneur Hubert Rhomberg agrees wholeheartedly - even though his motivation is not art, but the construction industry. More precisely: A digital twin. A digital twin is the online image of a building. The data should ideally be available in five dimensions. Because if Rhomberg has it his way, the model will depict not only the 3-D construction, but also the time and financial dimensions.
For this concept to work and to lead the construction industry into the future however, Rhomberg says that those involved must say their goodbyes to the idea of copyright. But let's take it one step at a time: To date, every building has been individually designed. There is even more scepticism about innovations in the industry than elsewhere. There is hardly any research. Rhomberg wants to strike into this notch and make use of what he has learned with the construction of the modular timber hybrid building in Dornbirn. His timber construction company CREE has been transformed into a digital platform. There, the customer - or user - can "assemble" a house with millions of components. Once the digital twin is online, the required elements can be built by timber construction companies, delivered by a service provider and assembled on site by a third partner. So CREE no longer builds itself, but provides the platform for planning the house and takes a few percent of the volume for itself for the technology, logistics concepts and procurement support. As a marketplace for components, the Vorarlberg-based company also charges a commission.
What today sounds like a logically thought-out, modern business idea led to the first and only real conflict between father and son at an entrepreneurial level, says Hubert Rhomberg. CREE as well as the Rhomberg Group is today represented by Hubert Rhomberg as managing director, but the companies do not belong together. At the beginning of the "wooden construction up high" project, he was much too early and too bold in his approach, Hubert Rhomberg looks back. CREE swallowed up a pile of money which made his father, who held substantial shares in the company despite having left the operative side of the business, unhappy. Without proof of concept or financial success, his father no longer wanted CREE on Rhomberg's balance sheet.
Research and ideas around CREE began in 2008. The successor had put his heart and soul into this project. He did not want to give it up. Two years later, CREE became an independent company. After the long dry spell and the dispute over direction with his father, Hubert Rhomberg bought CREE out of the family business for one symbolic euro in 2018 and found co-investors who were willing to share the risk and the vision. Hubert Rhomberg holds a stake in CREE with his family office Rhomberg Ventures. Zech Group SE, a family-owned company based in Bremen, became a co-owner of CREE in 2019.
CREE has already gained partner companies in Belgium, Denmark, Germany, Japan, Luxembourg, Austria, Portugal, Singapore and the USA. Over half a million users are on the platform. In the future, everyone will be able to see what is implemented and built worldwide via the platform. Ideally, according to Rhomberg, CREE will become a knowledge platform for all things around modular construction. The condition for using the CREE platform is that the knowledge gained - how could it be different with a Rhomberg project? - is fed into the system and made available to all users for future planning. This advantage is particularly evident in the case of building permits, which do vary from country to country. If a local partner realises a building that was planned on the CREE platform, but whose building permit could not run completely through the platform, then the missing knowledge is supplemented. Upcoming projects are thus implemented more quickly. Novelties and innovations belong to everyone, says Rhomberg, giving an example: "If a Japanese developer has built the house earthquake-proof, we take the knowledge into future projects and can build earthquake-proof anywhere in the world." In this way, the platform keeps getting better and faster and not only remains economical, but can scale exponentially.
Hubert Rhomberg is so convinced by the project that he dares to tease the big boys. "Because we learn as a collective, no one can catch us technologically - not even Google, if they take half a billion euros into their hands," he says. Because his platform is always evolving and internal knowledge is always growing, a new building system that starts over as a project can never catch up with CREE's lead, he says. To ensure that this remains the case though, there must be no copyright on innovations on the platform. This is the only way to continue to be faster than the others.
There will be an economy of sharing in the future, Rhomberg predicts, prophesying, "Anyone who builds their business model on patenting something to use that only for themselves, will not have a healthy business model in the future." CREE will be very easy to scale in the coming years in his view, because the principle can be applied anywhere. Construction is one of the largest industries in the world, Rhomberg says. However, the player with the most revenue only has about 0.03 percent of the market because construction takes place locally and decentralised. If the company stays that fast, why shouldn't CREE become the world's top-selling construction company, Hubert Rhomberg wonders.
„If everything seems under control, you’re just not going fast enough.“ – Mario Andretti
"If everything seems under control, you're just not going fast enough," is Mario Andretti's credo. Born in 1940 in what was then Montona, Italy, the racing driver's career included victories in the Formula One World Championship, the U.S. Indy Car Series and the Indianapolis 500-mile race. To be able to drive at such incredible speed, you have to think clearly, be able to withstand pressure and accept that not everything can be controlled. You also need confidence - in yourself, in others, in technology and in processes.
When Mario Andretti talks about speed, he measures it in miles or kilometres per hour. When Hubert Rhomberg talks about it, he quotes the racing driver, but then talks about metres per day. For one of his first major projects for Rhomberg Bahntechnik GmbH, the company was awarded the contract for the Cologne-Rhine/Main ICE high-speed line because "we offered a price that was far too cheap". Existential worries were therefore in the air. For the entrepreneur, it was a question of efficiency or failure. In three and a half months, the Rhomberg Group developed a machine with an automatic filling device that could continuously pour concrete. It was far from what was commercially available at the time and saved the project. "300 meters a day at most could be built for a slab track on a railway line," Rhomberg looks back. The newly established system managed more than twice that on average. The peak output was 980 metres a day. It was a project that provided an economic boost for the group of companies. Many builders took a look at what the machine and, above all, the young team were capable of, Hubert Rhomberg recounts. To be ahead of the game, with innovation and speed, that is the credo that medium-sized companies have to take up, he continues.
Every racing team needs a head, a representative, a figure who stands for that which defines the brand. For Hubert Rhomberg, family businesses are no different, and he makes a calculated approach to his ideas and values to the public. "This is my way of managing innovation," he explains. He says that as a family entrepreneur, he has to stand for what his ventures are all about.
Rhomberg knows that he sometimes goes out on a limb, and here he refers to the times he thinks in his various roles. After all, visions at the managing director level move within a time frame of two or three years. In his role as managing director of a holding company, he thinks in terms of decades; as a family businessman, he thinks in terms of the future of coming generations. He doesn't mind so much the shaking of heads or disapproval in interviews or debates, and it's almost as if he enjoys it.
But all of this helps him to be perceived by talents and also strategic partners, so that his company will remain fast and innovative also in the future. At the same time, it's not always as fast and great on the inside as it seems, the CEO admits. But that fits again with the racing driver Mario Andretti. If a spectator looks at the race car from the outside, he sees speed and dynamics; the fact that it's all shaking and rattling inside the race car is only experienced by the driver, but not by the outsider.
