Entrepreneur Portrait

Doing Business with Principles

28.02.20236 minutes reading time

Michael Otto was born into entrepreneurship. His father, Werner Otto, had founded a mail-order business after World War II, which he ran with resourcefulness and a strong will. The business grew rapidly. Werner Otto was aware that an entrepreneur must keep moving to be successful, that he had to find the right answers to current and future customer needs and also think about the well-being of his staff. That is why he was the first to introduce payment by invoice in Germany in 1950 and the five-day work week for all employees in 1956, for example. “My father had many ideas and was a doer, implementer and optimizer,” says Michael Otto.

The principle of optimizing and remaining on top of something – combined with a deep sense of social responsibility – was also Michael Otto’s mindset when he started in 1971 as a member of the Executive Board and worked in the Textile Purchasing department of the company owned by the Otto family. And over the years, he developed and expanded on these principles, adding to his father’s intuitive sense for making the right decisions at the right time with strategic thinking. “Analytical and creative processes belong together,” he says. What this approach means in practice became apparent in various ways, at the latest in 1981, when Michael Otto became CEO of the Otto Group.

Agile Action, Long-term Decisions

Entrepreneurs must take risks and be able to respond flexibly to constantly new market challenges to find creative, entrepreneurial answers to customers’ needs and the problems of the world. Michael Otto was always aware of this. The risks and ability to act quickly must never jeopardize the company as a whole, however. That is why he diversified the Otto Group by acquiring and founding individual companies, opened new markets and expanded the customer base. He made decisions that were sustainable and would secure the long-term success of the company. This created today’s globally operating Group with around 43,000 employees in 30 major corporate groups in the segments of platforms, brand concepts, retailers, services and financial services. The uncertainties of the market and the risk of innovative business were spread across several shoulders with the Otto Group’s strategic triad: “optimize, expand, internationalize.” This approach combines both agility and long-term thinking, creating room for experiments. You could be curious about new things, even at the risk of making mistakes and occasionally failing. “Michael Otto thinks in decades. He has foresight as well as the courage, will and patience to support projects that will not pay off quickly,” says Tarek Müller, co-founder and managing director of online fashion retailer About You.

Protecting the Environment, Doing Business Sustainably

This foresight and courage can be seen in many parts of Michael Otto’s career. He was one of the first entrepreneurs to commit to ecologically responsible action. In the 1970s he began with projects such as using recycled cardboard in the mail-order sales sector, and ultimately in 1986 he declared sustainable business and environmental protection to be a corporate goal. This ushered in gradual changes to processes in all areas and a check for potentially environmentally harmful production processes in the range of goods sold. For example: Under what conditions is the cotton used manufactured, spun and later dyed? And what are the options for designing these processes in a more environmentally friendly way? This approach, which is part of the Otto Group’s DNA, made Michael Otto an exotic figure at the time, ridiculed by fellow entrepreneurs. Today, the Group is far ahead of others in terms of ecological responsibility. This is also because Michael Otto never forgot to keep an eye on the company’s economic interests, alongside environmental protection. The balance between ecological and economic responsibility must be preserved. After all, an insolvent company doesn’t help either the environment or people and society. The Otto Group has been able to achieve important ecological milestones with this approach. It uses almost exclusively sustainably grown cotton, with the share being around 98 percent, for its textile product line of own and licensed brands. The Group more than halved the carbon footprint of its own business activities between 2006 and 2020. By 2030, the Otto Group wants to be climate-neutral in all core processes. Since the end of the 1990s, social standards have been systematically introduced in the supply chain. These standards are not just imposed on suppliers. Rather, suppliers are also supported by training so the standards can be achieved. Furthermore, compliance with social standards is audited by the company’s own auditors and independent ones. “I think it’s great when someone in the world of tough capitalist competition upholds and enforces such values,” says environmental scientist Prof. Dr. Ernst Ulrich von Weizsäcker about Michael Otto.

Remaining Innovative, Daring to Experiment

Innovation is another field that has demonstrated Michael Otto’s foresight for quite some time and continues to do so to this day in his capacity as Chair of the Supervisory Board. “Dr. Otto is always on the cutting edge. He knows basically everything about technological changes,” says Alexander Birken, CEO of the Otto Group. In the 1980s, Michael Otto started traveling with colleagues from the Otto Group to the United States – to Silicon Valley and the east coast. He visited startups and innovative digital companies to get a feel for the latest trends in IT. That is also why the Otto Group already had an online shop in the mid-1990s. At a time when only 250,000 Germans had an internet connection, and long before many other mail order companies. That gave the company time to extensively test and introduce the new technologies. The previously mentioned principle of long-term decisions that secure the economic survival of the company made it possible to engage in experiments that always carry the risk of failure. It was some of these ventures that ultimately enabled the Otto Group to create the structures that have cushioned the intensity of the changes wrought by e-commerce and digitization. Michael Otto’s curiosity about technical progress and his desire to be in tune with the times continue to shape the company to this day. Even after handing over the company’s leadership to others in 2007.

Improving the Economy, Helping People

Michael Otto has also contributed his knowledge, experience and sense of responsibility for the environment and social issues outside the company. He is the co-founder and initiator of numerous seminal initiatives in the German business community. These include the amfori Business Social Compliance Initiative (amfori BSCI), which has supported a code of conduct since 2001 to improve social standards along various supply chains. Michael Otto’s efforts were instrumental in the establishment of the Foundation “Climate Economy” ("KlimaWirtschaft"), an alliance of German companies dedicated to moving ahead with the transformation to a climate-neutral economy. Or the “Hamburg Hauptschule Model” that he partnered with Hapag Lloyd to establish mainly for graduates of the lowest level of secondary school (Hauptschule) to help them enter the workforce. This engagement reveals another principle that Michael Otto has repeatedly emphasized throughout his career: The economy is there to benefit people, not the other way round.

Michael Otto received the Federal Cross of Merit with Star for his commitment to the environment and society in 2006.


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Prof. Dr. Michael Otto being interviewed
Prof. Dr. Michael Otto being interviewed

Prof. Dr. Michael Otto as


Prof. Dr. Michael Otto as