May 18, 2020 - From a small family business of one 35m2 store in 1990 to among the London Stock Exchange's 50 most innovative companies in Europe. Meet Tokic Croatia.
Did you know that last year Peter Altmaier, the German Minister of Economy and Energy visited a Croatian automotive company to learn about innovative techniques in an industry where Germany is a global leader? And that the company was not Rimac?
There is a saying that Croatians can forgive you anything but success. It is one of the reasons why many Croatian success stories are under the radar, why so many people are negative about the business climate here and choose to emigrate. TCN recently decided to start focusing on telling some of those success stories to show that there are many Croatian companies which are doing incredible things on the European and world stage. And the more we tell those stories, the more emails and invitations we get to meet another Croatian success story.
And even though I always like to see the positives in things, I was beyond dubious when I accepted my latest invitation to visit a company which was so agile and innovative that German ministers were coming to pay homage.
A company selling car parts? Based in Sesvete, in eastern Zagreb? Really?
Tokic Croatia is a name I know well – it is impossible not to if you drive a car in Croatia. They are the biggest name in car parts, and I had never given Tokic Croatia a second thought until the invitation to visit their head office in Sesvete. I went more out of politeness – how could there be anything interesting about a company selling car parts?
Oh, boy, how wrong could I be?
It didn't take me long to realise that I was in a very special environment, one which was light years away from the typical Croatian business mindset, and one which was not actually selling car parts as its primary focus, as the VERY charismatic and amiable CEO Ivan Gadze explained to me in a sentence:
“We are not selling car parts, we are building up people.”
So revolutionary is the approach of Tokic Croatia that when a Croatian portal did a feature on them back in 2016, it was under a headline which went something like – Is it Google or Facebook – no, Tokic. London or New York? No Sesvete.
I am getting ahead of myself, so let's go back to the beginning. The year is 1990, and two brothers open a 35m2 retail outlet in Zagreb selling car parts. Things go well, and they expand. By 2000, there are 10 outlet stores in Zagreb, by 2014, over 100 in Croatia via a franchise model. In 2008, Tokic Croatia became a member and shareholder of ATR International AG in Germany. The company, although very successful, is still very traditional in an ever-changing world.
And then things changed.
The two founding brothers decided to step back and bring in professionals to work on the expansion and longterm sustainability of the company. Rarely for a family business, that decision meant an agreement that they abided by – to let the new management run things completely without family interference. Both brothers are part of the supervisory board, but the company is completely run by Gadze and his management team.
The decision was taken to build an innovative and agile company which invested heavily in human capital and kept itself at the forefront of new technology. A company which was open, innovative and inclusive, something very rare in Croatia, especially in a family company.
A new logistics centre, a gigantic 24,000 m2, was located in Sesvete (by way of comparison, IKEA Zagreb is 38,000 m2), and a new logistics operation began in 2016.
This included the moving of an incredible 1.1 million cases to the new location in 11 days by 140 people, without the supply chain of deliveries from suppliers and to customers being remotely interrupted. It was an incredible achievement, as Gadze explains in the video above, and one which is permanently recorded on the warehouse wall.
(The Hall of Fame of the incredible logistical move in 2016)
Where to start with the innovations? Perhaps with one of the reasons that the German minister visited. Tokic Croatia prides itself on its agility and innovation, and perhaps the best example of that is the fact that it became the first to implement robot technology from Gideon Brothers.
It was a perfect example of the Tokic agility. Gideon Brothers had a great concept but no implementing partner and they were talking to various companies. The two companies met on a Friday, signed a contract the following Monday and the first pilot started a month later.
It introduced the first concept shop for automotive spare parts in the region, something which did not even exist in Austria. Queueing machines are common in banks, but not in this industry, another introduction. In fact, quality control is in evidence wherever you walk in the Tokic offices – there are monitors in the sales department monitoring the length of time it takes to answer a call, and the percentage of missed calls. And the overwhelming desire from all I met was the desire to improve and do better.
This is a company aiming for perfection, and I smiled internally when I asked about the delivery time from the concept store to the customer, as the sales assistant needed to go into that massive warehouse to find the part. While the delivery time is still very quick, it is not quick enough for the Tokic ethos, and I could tell that it troubled my guide, while knowing that a solution would not be far away.
The investment in human capital is everywhere to see. The Kaizen programme (the Japanese philosophy of continuous improvement), two trained staff in MBTI, the biggest global psychometric test or model for measuring the preferences of people. The T1 Walk internal education academy, with over 1 million euro invested. The Tokic Education Centre (TEC) is offered in association with the German Chamber of Crafts in Dortmund, a qualification which is therefore applicable in Germany and the wider EU.
People, people, people. Develop the human capital and the company will look after itself. And the results speak for themselves. In an era where Croatian companies complain that they cannot find quality staff, Tokic Croatia is finding that the opposite is true, and the best of the best are coming to them from the competition, and even returning from places like the UK.
Walking around the very open and bright offices, it is not hard to see why. This is a company which started as a family business with two brothers, but which has grown into a much bigger family, bonded not by blood, but by company ethos, respect, diligence, transparency and a passion for improvement. Part of the reason might also be that the company is located in Sesvete, which not only has the highest population growth in Zagreb, but also apparently in the whole country.
As we toured the office, we stopped to chat to some random employees about their experiences working at Tokic Croatia. Apart from the VERY relaxed office culture, it was their passion and ideas which left their mark, with one telling me about his sleepless night trying to fix a robotics programme.
There are complaints procedures, as well as the chance to bring suggestions. Each department has a board on the wall where such things can be discussed and dealt with. I looked at several such boards on my walk around. Each had a box for Suggestions and one for Resolved. All the suggestions boxes were empty, dealt with and resolved as they came in.
Although Tokic Croatia is active in 14 countries, its core operations currently are in Croatia, Slovenia, Italy and Austria, and in those markets, it offers a quite extraordinary guarantee. Order your parts by 18:00 and it will be delivered the next day. Tokic is open to business east of Croatia (and has a partner in both Macedonia and Montenegro), but it sees itself very much as a European player of German quality serving the European market. They believe they have the product, the people and the know how, as well as that innovation and agility, to compete.
And so do others.
The London Stock Exchange chose Tokic Croatia as one of 13 European companies for its ELITE programme. Only this November, Tokic was listed in the illustrious LSE Future Shapers group of companies. And as one of 35 members of the 29 billion euro ATR International AG group, Tokic is one of the most visited companies by the other shareholders.
Walking around the offices is an uplifting and relaxing experience, and as far removed from any stereotype of a car parts company as you can imagine. Open plan, glass, but bright coloured chairs in chill zones, table football to take the stress away, even a book exchange library (where I was amused to note that the smallest section was called 'Automotive'). And everywhere there were smiles, dedication, purpose.
The culture of inclusion extends to lifestyle and partying, and Gadze told us how hospitality is one of the things for which Tokic Croatia is known. The company hosts about 12 big parties each year, the biggest this year being at their Expo in October, where 4,000 people partied into the night. But it is not just partying, sport is a major part of teambuilding. The Tokic racing team has 15 drivers, there is a football cup with 24 teams (all employees), a strong presence in the Advent in Zagreb run, table tennis, cycling, the list goes on.
And corporate and social responsibility.
The Tokic approach to education includes giving back to the community. They have, for example, a loyalty programme for mechanics, where 1 kuna in every 100 kuna is donated to a vocational school in Velika Gorica. And while they have little interest in professional sports, Tokic Croatia actively sponsors kids and sports. This includes the Christmas Cup in Dubrava, where the top teams in Europe bring their under-13 teams to compete in Zagreb. Luka Doncic was one past competitor.
And what of the future for the company? The aim is to become a relevant Central European company in terms of size and revenue, to build the brand and trust in that brand, to keep at the cutting edge of technology and innovation. Telematics is one key area of future interest, as too is predictive maintenance, something which Tokic is already involved in with predictive analytics but not yet monetising.
Two hours just flew by, and the world of Croatian car parts was transformed before my very eyes.
So just because Croatian companies do not always talk about their success, it does not mean that success is not happening. Quite the contrary, in fact, and while a visit to Tokic may be about a simple purchase of car parts on one level, that huge investment in human capital means the sale is taking place in one of the top 50 most innovative companies in Europe.