"It is better to have a bad vision than no vision. And the way to achieve it must be planned together with my team. And along the way, let people make mistakes. They'll learn more than in any training."
Of course I know what to do. I've been carrying this around in my head for a while. But vision and strategy, that's not for me.
Visions and strategies are written about in every business or coaching book. Maybe that's why we take them for granted. So commonplace that we often don't have them formally developed in our own companies. We carry them around in our heads. We just drop random crumbs of them among our own people. And then we are amazed that we grow unengaged teams under our hands, playing in the sand of their own department. And we're doing everything we can to break it. It takes so little.
Have a formally established and clearly communicated vision and strategy somewhere. But you already know that from those business and coaching books. I'd be carrying firewood into the woods.
Instead, I invited someone to the microphone who is going through this change. Michal Pešek, the founder of Pešek Machinery, has kept his plans to himself for many years. Until one day... And that's what this episode of Ignition is about, in which I ask Michal...
🔸 What does the vision bring him in his practical everyday life?
🔸 What was the process of creating the vision practically?
🔸 How detailed is his vision?
🔸 What role do innovation and business play in strategy?
🔸 How do they measure steps in achieving the vision?
HOW IMPORTANT THE COMPANY VISION REALLY IS FOR THE OWNER (INTERVIEW TRANSCRIPT)
Martin Hurych
Hello. I'm Martin Hurych and this is another Ignition. Today we're going to look at the importance of vision and long-term strategy for entrepreneurs. I know this topic resonates a lot in the ether, we're going to look at it very practically today because my experience is that the more this topic resonates in the ether, the less entrepreneurs have a real strategy and vision. I would like to discuss this topic with Michal Pešek. Hi, Michal.
Michal Pešek
Hi, Martin. Thanks for inviting me.
What does cycling give him?
Martin Hurych
Michal is the owner and the boss, the helmsman of PEŠEK Machinery. When was the last time you were on a bike and where did you go?
Michal Pešek
It's been about 3 days now and it's been such a nostalgic ride pulling my almost 6 year old daughter in a wheelchair behind the bike. I realised that this was probably the last ride with her, as she no longer fit in the wheelchair, and I realised that I had spent a lovely 5+ years with her like this and we had covered almost 3,000 km. Now she'll be pedaling on her own, which she has been for the last few years.
Martin Hurych
Is the cycling more of an escape for you or a brainstorming session?
Michal Pešek
Whenever. When my mind is racing and I need to calm down, I wouldn't exactly say the bike works. On the other hand, when I'm calm, I'll go on it to relax even more, but then I just have the best thoughts on it, only I always have trouble noticing them while I'm riding.
How did Michal Pešek come to Pešek Machinery?
Martin Hurych
When I go on my bike, I feel like I'm in the clear, I get home and I'm done. How did Michal Pešek come to PEŠEK Machinery?
Michal Pešek
It was a long time ago. In 2001 I was so young, unreasonable, full of optimism and I thought the world was rosy. Mostly I wanted to be accountable for what I promised someone, to be able to influence it, and if we agreed on something, to be able to influence it, which I wasn't quite able to do in my previous job. There were things going on there that I was not able to influence, even though I vouched for them in the beginning on my behalf. So at 24, I decided to go out on my own. It wasn't at all that I wanted to be my own boss, that I was naive, that I would have more time and so on, in short I wanted to be responsible for what I promised someone.
Martin Hurych
Is that why the company is called PEŠEK Machinery?
Michal Pešek
Yes, that's the reason why the company has had my name in the title all along and I'm a signatory on everything.
Martin Hurych
It's nice when things are going well. How do you breathe when things aren't going well? Even if you're not in the meeting, you're still there.
Michal Pešek
I've gotten used to it over the years. Those early days were very hard, those first years I really felt like whatever went wrong, even though I wasn't there, it was like I was the one who messed up. Nowadays I can rise above that a little bit, but I still see it as my personal responsibility. I always tell any of my customers or employees that they can always call me directly and I'm there.
Martin Hurych
It would probably be fair to also note how great you are and what you do.
Michal Pešek
We are a small company, today we are about 30. Our products are special products and industrial automation. Our typical customer is a company that has at least medium or high volume production and is either introducing a new product or looking for some optimization of that production process. We are able to map those processes and find the bottleneck and then at the same time propose some optimization, some solution. That solution could be a simple product that saves those people work or improves the ergonomics of that person's work. The jig is about the person either simply putting it in and the jig speeds up the process or eliminates some error. It's also quite popular these days that people can take turns on it and there's a much higher degree of interchangeability in the process.
This gradually progresses to more complex preparations, which are then equipped with sensors, hydraulics, pneumatics and basically become a semi-automatic workplace. For example, we were able to give a customer a process that took two people three quarters of an hour to do, cut it down to 25 minutes and one person is doing it. Then it goes smoothly into the automation and there are sometimes elements where it's a question of whether the human is still there and whether to put a robot there instead and automate the whole process.
Martin Hurych
So you make things so that others can make things?
Michal Pešek
Exactly, and to make it easier for them to do the job, so that their backs don't hurt, their hands don't hurt, they do it more efficiently, and the substitution actually works much easier.
Martin Hurych
Automotive, engineering, anything else?
Michal Pešek
We grew up in the automotive industry and to this day it is still a fairly important customer of ours. No matter what anyone says about it, it is still something that pulls the Czech economy here, at least in the sense that it sets the trend in automation, it is rarely so far ahead. We stick with it because it forces us to move with it. Another important segment of our business is the rail industry, the manufacturers of rolling stock. What I always say, and I love it, is the overlapping of the different disciplines and the possibility to enrich each other's disciplines. It doesn't seem like it, but maybe even the automotive industry should slow down sometimes and look in the mirror a little bit.
Martin Hurych
It's true, my customers who have been or are in the automotive industry say that automotive is college compared to anything else. Even in my first life, whenever we needed anything fixed in the company, we looked to the automotive people.
Michal Pešek
On the other hand, I sometimes feel that it's a bit like colleges, which are often ossified and inward-looking and then stop taking in the world around them.
Has he always had a corporate vision? And what led him to it?
Martin Hurych
On the topic, we said vision, mission, strategy, a lot of people call it different things. Everybody picks a book that's closest to their heart, a lot of people read it, they want the same vision for the company, but they don't have time to do it because they have to put out trouble. Before we get to how you're doing now, have you always had it this way?
Michal Pešek
No, exactly for the first 20 years I functioned exactly as you say, that I knew I should have something and I didn't have time for it because I had to put out that operative and those daily problems. It took me 20 years to work my way through that, to make my first vision.
Martin Hurych
What brought you to this vision and long-term strategy? You've been in business for 20 years, you've been successful for 20 years, you've made it to some 30 people and international business, and now suddenly you have an epiphany.
Michal Pešek
Honestly it was a school, it was getting away from the business a little bit, I started working on myself, I did two years of some study and I had the opportunity to step back. That was what made me step away from the company. I found out that the people there are absolutely great, even though I'm not there, and I realized more that my role is more in that visioning and that longer term planning. I can totally leave the day-to-day operational stuff to the people who are there.
Martin Hurych
So when did you start building all this?
Michal Pešek
In 2018, I started to get an idea of where the company should be heading, we started to change our strategy a bit, we narrowed down our portfolio and focused on products and automation. From 2020 onwards, it started to get more concrete and I started toputting it on paper and drawing what the vision should look like.
Martin Hurych
Is it a coincidence of timing or a random sequence, or did the difficult times motivate you to get things straight and put them on paper? Would you have done it without what was and is happening around us at the moment?
Michal Pešek
It's such a coincidence, it's probably an indirect consequence. I had a vision, it's different now, but at that time my strategic goal was to build new production facilities and I focused everything on that. Then the first Covid just came in, we lost our first big orders and I realised that it was not quite the right time to make a big investment at that time. Anyway, I started thinking about where to go next with the company. At that time, I had just ordered the study and it just kind of fell into place. I realized that the vision of the company wasn't about whether we were going to
to have some material possessions and there's going to be a hall somewhere, but it's about the people and what those people produce and who you're surrounded by and where you're actually moving. The situation that was there is indirectly to blame for that, but it's not like I was sitting there and it was a bad situation, whether it was Covid or the war conflict. Of course it affected us too, but I think we fought it quite bravely.
What does the vision bring him in his practical everyday life?
Martin Hurych
When you look back almost three years now, what does that clarification and throwing it on paper, as you put it here, do for you as an owner and a pilot in practical business life?
Michal Pešek
It's much easier for me to make important decisions and much easier to react when things don't go well for a while, so I don't lose that vision and keep looking forward. You still have to keep going for it, not veering off once to the left, once to the right, but still knowing where that clear goal is and looking for the closest and easiest path to it, even if it blows from the left or sometimes from the right and tries to deflect you. I didn't have that before.
What was the process of creating the vision practically?
Martin Hurych
Can you describe practically how you jumped into it, what was the process of realizing something on paper or somewhere on a hard drive to communicating it to the company?
Michal Pešek
In my case it was quite a long journey, it was almost 2 years that I spent on various analyses. It's been hundreds of hours that I've spent on analysing both the external environment, some of the market, the opportunities and the competition, as well as the internal environment, what kind of people I have in there, what we have behind us and which of those products are the most important for us. It was quite an interesting epiphany for me, where I had been building a business for a long time on one product that had been written out by me from the beginning, it was kind of my baby and I suddenly realized that it didn't really have a lot of potential. We've been pouring a lot of energy into it and stuff like that, but I only realized that because I had the time to suddenly stop and start planning this. So in my case it was careful preparation so that I had something to go on, so that I had some concrete data and it wasn't just about feelings.
I spent the next year just starting to model what our goals are, who our customers are, an idea of how the external environment can affect us and what it will allow us to do. Let's model where we want to be in 5 years and what conditions we have to get there. It took me maybe actually a year before I put that in front of my people, where I knew where I wanted to go and we were basically driving that vision, but I was still fine-tuning it. I wanted to be 100% sure before I got in front of them. When I got in front of them and presented my vision, I wanted them to take it as our vision and I was prepared for them to shoot me down and tell me I was crazy. I wanted to have a discussion with them about it and I wanted to be prepared for that discussion.
How did he get the time to create the vision?
Martin Hurych
You're a detailist and a maximalist. I can think of one more thing. You've listed a bunch of tasks here that for a lot of people may already be a stop sign at this point if only because it's a bunch of time. So does that mean that before you got into some long-term strategic planning, did you free your hands or did you do it on Saturdays, on Sundays, in the evenings because you're a maximalist?
Michal Pešek
For me, it was more that I relaxed my hands and did it at the expense of the work, because I already knew I had people there who could do it. Maybe you said it right, I certainly wouldn't want to put anyone off. That was my case because I'm a maximalist and I know now that the biggest mistake of the previous 20 years was that I had no strategy and no vision. I think it's better to have, even if it's a bad and imperfect one, to at least have one and shape it along the way.
Martin Hurych
It's like a startup, it's better to have something and then modify it than to wait until it's great and meanwhile the market goes somewhere else.
Michal Pešek
I'm prepared that even though I've spent hundreds of hours on it, a lot of things don't apply today anyway, the market is changing so fast, the environment is evolving, new opportunities are coming your way,so we're gonna change it anyway.
Where does the company end up going?
Martin Hurych
I don't know if absolutely everyone in your company knows where to go yet, I know you've communicated the vision to your senior management, but what can we put on the air here? We're not going to let your secrets out on the air here, but I'm interested in the mental direction of the company.
Michal Pešek
I think most of the company knows that now, because it wasn't just senior management. I invited about half of the people in the company to the strategy meeting, and I didn't pick them based on their position. Rather, I picked people who had taken a very active interest in how the company was doing over the last year and were coming up with initiatives on their own about what they could do to make it better. Right when we were talking about it there, I said that they were also the ambassadors who should be the ones to vent it further, either to the company or to the customers.
It's not a secret, and if I don't go into full detail, we've set where we want to be with our products, whether it's with those products or with that industrial automation in 2027. Even though it seems like 4 years now, I've already had a year under my belt, I've gone a year without anyone knowing about it. We want to roughly double the number of people, roughly double the manufacturing space, and while it may look very ambitious at first glance, it's achievable if we all get busy.
How detailed is his vision?
Martin Hurych
So people are supposed to take the initiative, however, how detailed is the picture you have drawn at the very end? Do your people still have a chance to color anything?
Michal Pešek
That was perhaps one of the very fundamental changes I made during that year when I had it theoretically ready and before I introduced it. My original scenario was that I had set a clear vision of where we would be in 2027, and I had the swim lanes mapped out, exactly when, who had to do what, under what conditions, who would be in charge and so on. Then I took all that and wrinkled it. I unpacked it, I don't mind it at all, because I made sure I knew it was realistic and I knew under what conditions. I've also learned over the year that something simply had to change, something happened the opposite of what I had counted on because the opportunity came my way. Today, I am very happy for that and I stand by the fact that the strategy to achieve that vision has to be a joint effort. It must not be that one visionary, however good, comes and presents it to these people and tells them who is going to do what, they must be involved. I am very happy for the way my people have taken it, they have taken it with responsibility and I think they are happy for it. Even though we are at the total beginning and we are a week after the strategy meeting, I can see in the behaviour of these people that they have been engaged up to now and now they are doubly so.
What role does innovation play in the company?
Martin Hurych
You're in a non-simple industry, and you said yourself that you enjoy being where others end, you start there, making engineering uniqueness. What role does innovation play in that 2027 strategic plan and how do you nudge it forward in your company?
Michal Pešek
This is quite a tricky question, what do we mean by innovation, we all probably imagine something a bit different. I think it's an improvement in anything and I think for us the company is set up for nothing staying the same for long. We're always moving somewhere and we're always moving somewhere, so that environment in our company is used to change. What's changed now is basically that we used to plan for change with a horizon of six months, a year and now this is the first time we've had some sort of a 5-year outlook. Of course, the shorter the period, the more detailed the planning.
So innovation is happening here too, and the strategic plan I have just presented has helped me to do one more thing. There were a lot of things going on in our company, whether it's like implementing a new ERP, taking the business somewhere, some business plan and so on, and I realized that it didn't make sense to a lot of people, it did to me, it didn't to them. They saw it as separate things and it was only because of this that it suddenly started to fit together for them. Even though, for example, we're doing an ERP now, which for a company of our size is maybe unnecessarily robust, they suddenly understood that if we're going to be twice as big in 4 years, we should have at least double the turnover, we need it already. It's good to be prepared for that in advance.
How does it create a breeding ground for them in the company?
Martin Hurych
What does this mean in practice? Do you have any internal processes or how do you really ensure on a day-to-day basis that the people who are supposed to be drawing those innovations for your clients are actually moving the needle? You said it beautifully, innovation is anything that we improve in the company, for me innovation is a state of mind rather than something materialized at the end. On the other hand, a lot of people here in the country, maybe with smaller companies, don't believe that innovation is something that is for them. Because innovation to them means SpaceX, TikTok, Tesla or something like that. Most people say that people in manufacturing prefer peace, stability, and now you're driving these people into permanent improvement, permanent instability. So how do you create a breeding ground in that company so that people can manage that across the board?
Michal Pešek
I think the undercurrent in our company has been like this for a long time. Because of the kind of person I am, I logically choose people who enjoy moving somewhere, enjoy changing. When they start with us from a regular locksmith, fitter and so on, they also have to learn on every job. Every job is new for us. We've had a few times in our history where we've had people come in that we
thought quite highly of and it could have been for production, it could have been for the office and very soonthey were leaving. It was because they couldn't afford it, because in our country it's about frequent changes. It's not like
you learn something, a manufacturing process or a procedure and you do it for a year, every job is original. Even though we make originals, maybe one percent of the time we make the same product the second time, so you have to be prepared for it to fail on the first try. It's perfectly natural and it's not something that anyone gives either. I think that over the 22, 23 years, those people have crystallized, hats off to those who have been there with me for 20 years or 15 years and there are enough of them that have stuck it out with me, that's saying something too. So I think that the undercurrent is there and the vision that is there now I think paradoxically it will make it easier for them because suddenly they start to connect and it starts to make more sense. It's not wall-to-wall, but they see clearly at the end of the long term some North and they know why they're doing it, that it's going somewhere.
Martin Hurych
In order to be original in creating an original, you have to keep your finger on the pulse of the times in terms of development, maybe in materials, maybe in general, what's going on in the world. I was wondering if you're encouraging that in the company in a controlled way, or if you're really relying on the personalities and personality profiles of the people you employ. Do you believe that they couldn't live without that and they bring that to the company themselves?
Michal Pešek
No, I support it, but it runs on many levels. The first is that we've been hiring quite a few people into the company lately for our size and we're already trying to select those people accordingly. It's about the fact that when you get a new person, it always pushes the firm somewhere. That person is open, and you give them that environment, that they have a voice there, that they have an opportunity to come up with suggestions, that you don't sweep them off the table. That's one of the reasons why I think the company has moved rapidly in the last three years because of the open- minded people that have come in. Often people from bigger firms have come in and they've come to us even on worse financial terms, but they've come in there precisely because they're going to have a say, they wanted to do something and I've given them that space.
When I felt it made sense for a profession, I would also provide them with some continuing education, whether it was somewhere from developing some specialized courses for people in manufacturing or a school for people in management. It's also working with research organizations on some development projects where it's taken it again somewhere else, even though the results are not visible right away. Sometimes, unfortunately, it happens that they are very little applicable to reality, but it still pushes you to meet that segment, those people who are detached from that productionreal estate. It helps us to connect the dots and I think we're not just going at one level, but we're trying to push these people on multiple levels.
How does he think about business?
Martin Hurych
You've already said here that you have big ambitions, you want to get bigger, you want new production facilities. That needs to be filled with somebody, so how are you thinking about the store, where you're going to expand to? Are you going to expand purely within the segments that you're in or are you going to do something new?
Michal Pešek
So far, we can say that we want to stick to the segments and products that we have. On the other hand, we want to strengthen the business with another retailer and I think the market is still there. We have a lot of foreign customers, but it's not about pushing west at any cost. The opportunities overseas came more to us on their own because it was based on some references they got from their sister companies in our market. We don't shy away from it, but I think that the Czech market still has a huge potential for us. So we are not going to expand and change the product yet.
Are they able to sell at world prices?
Martin Hurych
I was recently having coffee with a friend who inspires me a lot, and we were discussing whether our business models towards the west are still based on price. Are we still cheaper than the locals, or is it really what we often tell ourselves and try to believe anymore, that we are, for example, philistines in engineering and we are more innovative or technically better than the locals?
Michal Pešek
It's hard to say. My personal experience is that it's often still about the price. When we are approached by someone from the west, they approach companies further east or north and it is often a problem to compete. I'd even say that the advantage there gets washed away a little bit. There's that language barrier, even though we have a trader better equipped, there's still that difference in mentality, some language barrier. Our products are often about the fact that I need to explain to the customer in a credible way that because they buy it from us, they not only get the product but they get some service and service and it's better. We don't often get drawings and clear specifications, it's about us designing the solution and we need to convince that customer that our solution is better for them. It's going to make it faster, it's going to give himfaster payback, longer life, etc. Then if you can't explain that sufficiently, that's a problem and it washes away your advantage. I've also encountered a couple of times that even though we were cheaper than the western companies and it was for a western customer, they told us they didn't trust us anyway and would order it from their company anyway. Even though it was in France, even though they were unhappy with it on a previous job, they still ordered it from them. That was quite a disappointment for me.
What applies to foreign customers?
Martin Hurych
You want to be top 3 or top 5 in the Czech and Slovak Republic. Speaking of France, what about it? Because if we keep saying that they don't like us there, we are still cheap, at the same time there are articles coming from the West that we are no longer cheap for them, what do you think aboutby? You supply the industries that de facto feed this republic.
Michal Pešek
That's a tough question. It's a lot about references, that's a huge basis for me. It varies a lot even in the industry, in the railroad industry it's the references that are a big asset. There they look a lot at who you're working with and if that customer is happy with you. That's why we have 3 of the 4 biggest European manufacturers of wheeled trucks in our portfolio. In the automotive industry it's a bit different, unfortunately, where I often find that even though you've been working with the company for years and they're happy with you, they're able to give that other business to someone else just because of the price. It's a little more complicated there. So if I knew the answer to your question, I'd be happier.
How do they measure the steps in achieving the vision?
Martin Hurych
How will you measure, or perhaps are you already measuring, that you are on the right path to your goals?
Michal Pešek
That's a good question, it came up at our strategy meeting. I had some idea of how to measure it, but we agreed that it would be good for the strategy team, which I will not be part of, to set it up, and we will of course consult together. There may be a few, it may be achieving turnover, profit, but nobody has put together an official ranking of who's top in the fixtures here.
So we agreed that we would make it up ourselves. We have the market sort of mapped out, we meet the competition with our customers, so we know who we look up to and we'll make the ranking and we'll evaluate ourselves accordingly.
Martin Hurych
What will you be happy with as an owner? I understand that one level is that peoplemeasure their own success and somehow want to imprint themselves on that, which isobviouslycommendable, however, there is an undeniable level of owner. How do you think about it from the owner's level?
Michal Pešek
I will summarize it in one such sentence, which I have at the end of my vision. I'll be happy in 10 years if the company is working, I'll be happy to go there because I'll meet people I'll enjoy meeting, and we'll all be proud of what we produce. It's not about any financial results, I've never really cared much about that, I have my business as a hobby. I'll be happy if these people are responsible, take responsibility successes and failures and will look for solutions and not just problems.
Martin Hurych
Will PEŠEK Machinery be in the second generation?
Michal Pešek
Honestly, I'm not totally sold on it. I have two grown daughters, they probably don't and I don't worry about it, but maybe that will change in time. Now I have two young children freshly born and only my fourth son and if I were to be such a patriot I would say I have at least 20 more years to go. Whatever, I'll be proud if the brand stays here, but I don't insist that Pesek has to run it.
Summary
Martin Hurych
Can you sort of summarize in a couple of points how you think we should approach building a long-term plan, a strategic plan, from an owner's perspective? We'll then materialize that for the listeners and viewers at the same time into a bonus that's already on my website at this point. If we were to set something in stone for you, what would it be?
Michal Pešek
I don't remember exactly what I wrote to you on the shortlist, but in the end I'm probably not wrong if I say again that it's better to have at least some vision, even if it's a bad one. Then it's terribly important for me that the path, the strategy to achieve that vision is shared, it's not given by one person. Then certainly don't be afraid to let people make mistakes. I'm an advocate of letting people make mistakes while I'm still there in the company, and then if it gets into big troubleI can intervene. The moment I have to lead them by the hand and tell them what not to do at every first mistake, I basically never get out of having to be there every minute of every day. My biggest successes have been on learning from the mistakes I've made.
Furthermore, it is better to have a bit bigger vision, bigger goals, as they say, if you aim for the moon and miss, you end up among the stars, but the key is to have that vision. I can see it, having not had it for 20 years,so we were developing, we were going somewhere, but I often didn't know myself and I often wondered if it made sense to continue. In short, I was going in a serpentine way, sometimes to the left, sometimes to the right, and that's probably for me the reason why we haven't moved as much as we should have in 20 years.
Martin Hurych
I really wish that the approach you've just set in stone here will lead you to where you want to be and ideally not in the top 5 or top 3, but in the top position in what you do. Fingers crossed and best wishes for success.
Michal Pešek
Thank you, Martin. I'm not going to crumble if we're not even in the top 10, I'll be happy if the people I work with are happy, it makes economic sense and we all enjoy coming to work.
Martin Hurych
Another episode of Ignition is behind us, this time about the practical deployment of visions, missions and strategies. If we've somehow gotten you excited, motivated, or communicated an idea that you're starting to implement right now, we've done our job well. If that's the case, please like, share, comment, forward to a friend or staff member because otherwise it won't move forward. I would love to keep it moving so that I can invite more great guests like Michal was here today. Be sure to check out www.martinhurych.com, where in the Ignition section there's already the bonus download mentioned at the moment. I can't help but keep my fingers crossed and wish you success, thanks.