“Schunk belongs to its employees, and this is a very effective method.”
Michal Zahrádka leads technology company Schunk in the Czech Republic, which focuses mainly on carbon, graphite and tribology. Michal has worked well in the field of security, and he even built an international team of experts for the prevention and detection of economic crime. How is research and development progressing in the Czech Republic? And are any of Schunk’s products in Plzeň made in Czech?
The areas which the Czech branch of Schunk deals with are many. Your main slogans are “mobility, energy and industry.” What can we imagine that Schunk does?
“I’ll try to describe to you a usual day, based on the background of our products. In the morning you wake up and turn on the light. The power generators in the power station are turning our carbon brushes to transfer electricity. In the primary and secondary circuits of nuclear power plants are our seals. In the solar panels are our high temperatures grids. If you own an electric toothbrush, inside are our components, as well as in a washing machine or a vacuum cleaner. You take the lift down from your flat, and in its engine are our carbons. If you travel by car, then you should know that e.g. in the ordinary middle-class car are about 37 of our components, from starters to sintered transmission parts to fuel injection. If you would travel by train, or tram, you would come across to our components of the earthing switches or the pantographs. Our parts are in jet engines of airliners, and our seal surrounds a shaft of modern ship propellers. Turn on your GPS navigation and a satellite which locates you is covered with our protective layer. And so we could continue speaking of our products until we would get to Mars, which is probably the furthest place our products have arrived, and despite that, you have probably never heard of us. This is because Schunk does not produce final products, but highly specialised components. Our world is in graphite and in articles thereof. ”
How much has Schunk’s focus changed in the Czech Republic over time?
“Last year the group Schunk celebrated its 100 year anniversary, and this year we are going to celebrate 20 years of the establishment of Schunk Praha. During that time, the philosophy of the Czech Schunk has fundamentally changed as a company. From its original focus on efficient and inexpensive production, today’s direction of the company is determined by research and innovation. I think that Czech companies today, faced with global competition, have no chance to succeed with just a cheap workforce. For example, our standard product is the carbon brush the size of a cigarette pack, which over twenty years we have decreased in size by two times two millimeters.”
And could the products that you produce in Pilsen be considered as “Czech”?
“Yes, definitely. However the graphite is very extreme physical material, for instance electrographite is produced at a temperature of 3100°C, and this must go through extremely demanding production. Thus, for example, we have graphite furnaces for the whole world located in just two places – at the main enterprise in German Heuchelheimu and in Austria. But the complexity is not about the technology’s portability, that is easy, but the experience and mastery of the people who are involved in the production. “Der Grafitierer” – the master of the furnace – is like a violinist: half craftsman and half artist. His training is a long one, and takes over ten years for him/her get the necessary feeling for the material. In Pilsen we are engaged “only” with the final production of already produced materials, but the average length of employment is almost 9 years with our company. And this testifies to a lot of things. ”
During the economic recession, Schunk announced that it is one of the few companies that has not reduced salaries and is persistently successful. Have you maintained this “standard” even after the recession occurred? And do you currently notice more interest in investments in areas that are crucial for you?
“The answer is yes, yes and yes. Here, however, I must point out that Schunk is a bit of a different company. When in 1947 the company founder Ludwig Schunk died, he bequeathed the entire company to its employees. Part of his testament is also an emphasis on financial stability, investments from its own resources, and job protection. These are the values that we follow throughout our existence and values that enabled us to be much better prepared to face the crisis than other companies. ”
Have I understood correctly that the company belongs to its employees?
“Yes, Schunk group formally belongs to the Ludwig Schunk foundation and this belongs to the company’s employees. With our socialistic experience this model sounds incredible, but it is very effective that the company does not have to divide the profits outside of the company, may invest in its own development, and in this way gains a permanent advantage over competitors in research and development. However, if the company successfully turns a profit, part of the profit is paid to employees, and those shareholders receive the same amount of payment, whether they are workers or managers. It is also an extraordinary phenomenon in today’s world. ”
Recently, people often talk about the potential of the African market, especially in terms of demand for technology, mechanical engineering, etc…Do you see great potential there?
“Europe has done an absolutely fantastic job regarding help to Africa, in the whole spectrum of possible assistance, from individual volunteers to large international projects. Thanks to this assistance, Africa has moved forward enormously. But unfortunately Europe could not adapt to this development. Maybe it’s the European perception of Africa. I worked in South Africa, so I realise that our attitude toward Africa and its needs is tied to stereotypes and in the European context, and kinds of post-colonial clichés. So in terms of development aid, Europe, under the perception of “Out of Africa”, keeps sending bags of flour, while China builds roads and builds infrastructure. Africa has great investment and business potential that can be developed hand in hand with assistance which Africa still needs. ”
Research and development is therefore public investment, which is crucial for you. What are you currently “worried about” in this area? Is the Czech Republic or European Union a good partner?
“Probably every company at the top of technological development is worried about the protection of Intellectual Property. Plagiarism is always destroying the efforts of people who push research forward, and at the same time it raises prices. Schunk Praha is the main partner of the program called Research and Development of The Czech-German Chamber of Industry and Commerce, where I see great enthusiasm and effort toward moving things forward. I can say that the Czech Republic is a good partner. ”
By what are German companies characterised in terms of management? After all, you have a close relationship to the German headquarters…
“I can thoroughly assess only my own style of management… but for myself I can say that hard work, modesty and stability are great values. Let me give you an example: After the first meeting of the Group General Directors, all of those directors afterwards raised and quite obviously took their cups into the dishwasher. It’s a banality, but you learn a lot about the values of people with whom you work. ”
Schunk is comprised of more than 60 companies in twenty-eight countries and has over 8,000 employees. How significant is the Prague branch?
“We are not dealing with navel-gazing, as the Englishmen say. Prague was the first Eastern European branch of the company, and still belongs to the production backbone of the Austria-Czech Republic-Germany company, and we hope that thanks to the investment in research and development, it will continue to be a valid player in the group. ”
I have read that you used to work in security services. You even built an international team of experts in the prevention and detection of economic crime… Is it true?
“Yes, you said it very nicely. I have to write down this beautiful formulation for a rainy day… (laughs). No seriously, we were working in Europe, Latin America, Africa and Russia and where we were really great. EY estimated the average amount of fraud losses in financial institutions to be 5% of turnover, and we achieved 0.2%. We were young and rude, a great party where everybody let it all hang out and sarcasm was everywhere. Unfortunately this meant traveling nine months of the year, and you cannot educate your children through Skype. ”
And how did you develop into the front managerial position?
“That was a coincidence, as it happens. I worked in England as a manager in a financial group. In January 1999, a wise man poured me a drink after work, and asked me what I know about security and frauds. Absolutely nothing. Fifteen years later, another wise man poured me a drink and asked me what I know about graphite… It’s nice to know that even in today’s world Forrest Gump still has a chance. ”
Author: Jaroslav Kramer