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Best Case Schmachtl

Company Schmachtl was established in 1936 as a family business and became a führender Anbieter von Produkt- und Systemlösungen für die Industrie und Kooperationspartner der Hersteller und Technologieführer. 210 employees in Austria, the Czech Republic and Slovakia offer services such as consulting, planning, and delivery of high-quality components as well as the installation of system solutions in automation, hydro technology, energy technology.


Digitalization is the most significant innovation in the last 5 years

According to the Executive Director of Schmachtl, Ing. Günther Probst, the innovation, which changed the market the most in the last 5 years, was digitalization. Whereas before, the salespeople were in touch with the customer from the beginning of the sales process and needed to drive to the customers frequently, in this digital age, the customer first identifies what he needs, then looks online for suitable suppliers, and only then gets in touch with a respective salesperson. Ing. Probst believes that in the next 5 years, there will be no difference between the inside and outside salesforce.

Another aspect greatly changed by digitalization is marketing. Schmachtl plans its marketing activities 5 months ahead and the content generation is done by external partners. Internally, the core marketing processes in Schmachtl are the following; content management (creation of stories, product information etc.), distribution analytics (appropriate marketing channel selection), and automated tools to process a large quantity of customer data.  

Formalization of innovation processes

Four years ago, Schmachtl formalized its internal innovation processes and the position of an Innovation Manager was created. The Innovation Manager is the driver of innovation processes in the company, works closely with a team of six other employees from various departments (such as marketing, financial, technical etc), and reports to the top management.

The innovation team collects ideas internally from the employees, which is an important step of any innovation process. As the ideas and knowledge might be lost easily, Schmachtl makes sure, that it is easy for the employees to communicate their new ideas effectively. Multiple channels are available, although the Suggestion Box, which is usually applied in the companies, proved to be the least productive. As it is often difficult and time-consuming for the employee to write down the exact idea, a possibility to directly communicate the idea to one of the innovation team members proved to be more effective. The ideas are written down by the members around the Innovation Manager, the name of the employee who came up with the idea is recorded, as well as the date, and what benefits it would provide for the company and for customers. The ideas are systematically recorded and discussed during the innovation team meetings.

Stage Gate Model

During the innovation team meeting, each idea recorded is checked and prioritised. Several ideas are selected for further analysis and passed the first stage. The potential of the ideas is discussed with the customers. If the analysis is promising, the innovative idea is analysed and evaluated from the financial perspective; mainly the cost and time resources essential for the idea development and implementation are assessed. Moreover, the potential revenue which could be produced by the new idea is analysed.

The ideas, which passed the stage of the analysis are further moved to the actual execution and implementation phase. These processes are continuously monitored and discussed during the innovation team meetings.

Future challenges

The primary motivation to start with the changes supporting innovation and implementing formalized processes was to keep the company competitive. However, as the business environment and markets have been changing faster than ever, Schmachtl has been changing its structure to build an agile organization with a flat hierarchy. As the periods, which can be planned and predicted are getting shorter, all employees have to be involved in the activities to create a highly reactive environment. The customers on the market collect information and talk to the customers to collect new information so that Schmachtl can quickly react to any changes happening. Possible failures are an accepted part of experimenting. 

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