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Polycom - Formula One level innovators
The story of the Polycom family company is one of two brothers, Iztok and Igor Stanonik. It began in 1985, when Iztok decided to start a business in the basement of the family house in Škofja Loka, making plastic furniture handles with a manual injection moulding machine.
The business took off and after only a year the garage space became too cramped. Because Igor also wanted to start up in business, the family was confronted with a dilemma. Should the brothers maintain separate entrepreneurial paths or join forces in one company? With the generous financial and moral support of their parents, they decided on the latter. As Igor recounts, he always wanted to manage a company, but ideally not alone, “…as it was necessary to make the transition from trade craftsmanship into entrepreneurship, which is not an easy task.” The nature of their business and kinship of the brothers are embodied in the company name, where “Poly” refers to the material used and “com” represents the involvement of both brothers, as they are each other’s wingmen or “companions”.
After 30 years, Polycom today operates at two production sites, in Poljane nad Škofjo Loko and Črnomelj, and has more than 270 employees. In 2017, they improved on their previous year’s revenue by almost by a quarter, to €31.2 million. Iztok’s daughters Špela and Diana are also company employees and his son Grega is being gradually introduced. Having completed studies at the Faculty of Mechanical Engineering in Ljubljana, he will next pursue MBA studies in the USA. Pride and interest in the company is shown even by Igor’s 18-year-old daughter Maša, while his older daughter Tija already works there.
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Chapter 1
First two challenges: cigarette snuffers and furniture handles
The idea for production of cigarette snuffers struck them when they were visiting relatives in Vienna.
The first business idea the brothers and their father Vinko came up with, production of cigarette snuffers, struck them when they were visiting their relatives in Vienna. The product, which was on their uncle’s table, seemed peculiar enough, so they decided to begin manufacturing it in order to “make a buck”. They tried, but the project did not come to life. Despite this, it got their creativity rolling and they continued searching for new opportunities.
It all started happening very quickly when the two brothers attended a Sunday lunch and learnt from their friend, a purchaser at the Lesnina company, that they were looking for a cheaper alternative to wooden furniture handles. “In a week, we came to him with an idea and price. And so we started the work,” recall the brothers of the beginning. The handles were manufactured for the Brest company and they agreed a good price; but then came the time to make the next step forward.
“The competition in the handle manufacturing business was too fierce, so there was no perspective. Therefore, in 1990 we started looking for new opportunities and entered the automotive industry. We were acquiring new customers, one after another.”
Although the competition is also intense in the automotive industry, they are one step ahead of the rest due to their innovation, quality and speedy development of new solutions. They are manufacturing more and more complex and demanding products. “We showed one global company, who had only two suppliers of special gears until last year, that we were able to manufacture them as well. We surprised them and became their third biggest supplier,” explains Iztok.
How do the development and manufacturing processes at Polycom work? They get a range of requirements from the customer, based on which they make a prototype. When the buyer confirms the order, they produce a tool in their own tool room, and then they automate the process in the automation department. They conduct the entire process independently, from concept to product. Consequently, they are faster than their competitors, they get ahead of deadlines, and are therefore additionally rewarded with higher prices, which are also reflected in their employees’ salaries. The brothers place a high value on their people and their knowledge. “Our employees are our advantage, namely their skills and knowledge. We encourage them to take the initiative for their own development within the company,” they explain.
Their business volume increases from year to year. Last year, their revenue amounted to €31.2 million, which is 24.7% greater than in 2016. Net profit amounted to almost €1.9 million. With 10 large customers, they achieve an 80% share of revenue, mostly in the automotive industry, and 70% of revenue is generated in foreign markets.
Their strategic orientation is toward the globalization of services, developing new tools and injection moulding of complex technical products for the automotive industry, compressor technology, electrical engineering and electronics. “If we want to be competitive, we must have the most state-of-the-art technology. For the last two years, we have been ‘cleaning out’ the list of our customers, and we are looking out for clients requiring less complex products that are produced in smaller batches.”
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Chapter 2
Younger generation already fully engaged in the family business
The younger generation of the Stanonik family is already employed in the company.
“In 1990, we established Polycom Škofja Loka, d.o.o., but even then we insisted on the status of individual entrepreneurs, as in our opinion our income was too low to conduct the business operation as a limited liability company (d.o.o.). Ten years later, we finally closed the individual entrepreneurship and between 2003 and 2005, we also arranged equity shares in the company. My brother and I are now co-owners of the company in the ratio of 60 to 40,” explains Iztok.
Today, the younger generation of the Stanonik family is already employed in the company. Iztok’s older daughter Diana achieved a master’s degree and works in sales, and the younger daughter Špela is in charge of contractual relationships in the HR department. “However, they are family-oriented and have no great desire to manage the company,” says their father Iztok. Nevertheless, Igor’s 18-year-old daughter Maša sees herself at Polycom in the future, while elder Tija is already employed in the HR department.
Iztok’s son Grega has been part of the company since his early youth, and is already thoroughly acquainted with the production department. He is now gradually learning about management functions, but still wants to pursue MBA studies in the USA.
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Chapter 3
Competitive advantage of people and their knowledge
The success is to connect the people.
In the opinion of the brothers, it is very important to have consideration for other people: “to listen to them, even if we think otherwise. The success is to connect the people.” And they connect them so well that their employees are real ambassadors for the company, recommending new employees.
It is also important which people they employ. “You need to have a ‘knack’ in order to find out who is an actor, and who is a bee (hard-working and less talkative), who is decisive, who is able to talk and who is able to do. The company needs a mixture of everything in the right places,” declares Iztok, who knows employees by sight, but unfortunately no longer by name. Since the company now has more than 200 employees, he is only involved in the recruitment process when middle and top management are selected, while hiring of manufacturing workers is left to production managers.
Polycom is also strongly tied to the local environment, the Poljane Valley, operating in both a socially and environmentally responsible manner. They live with the place and for the place. “We are the largest employer in the municipality and sponsor events in Poljane.” Local inhabitants are equally enthusiastic; this year, the “Open Doors Day” welcomed 1600 people, when they were expecting just 300. “They were impressed by the machines, robots and modern manufacturing processes. They felt that this is a company that lives with the people. We are always emphasising that we are only the physical owners of the company, but we would not have managed to make the Polycom story as big as it is without such employees,” say Igor and Iztok.
Their future, the two co-owners say, is outlined very well. They are hoping that the market continues without major disruption. “We have invested a lot in the development and I think that we have outlined an excellent future,” says Igor, and Iztok adds that the most prominent concern is stable 10% growth and the satisfaction of the employees.
Summary
Polycom in a nutshell: speed, quality, diligence, social responsibility, respect.