Karel Volenec

 

I see business as a lifestyle

 

It sounds like a fairytale… ELLA-CS, a Czech company without any foreign capital based in Hradec Králové, is operating with success across 70 countries worldwide in the medical products market. The reality of small and medium-sized enterprises operating in the Czech market, however, is more of thriller than anything else. How do you look back at the last quarter-century from the perspective of an entrepreneur?

It’s very difficult to assess 25 years of life in a limited space. I don’t see business as a way of making money, but rather as a lifestyle. The lifestyle is sometimes really exhausting, but it is exciting and extremely satisfying. For me, it is a conditio sine qua non in the meaningfulness of what I do and the opportunity to create something completely new. Last but not least, I would add the responsibility for the team I lead.

Although we export to seventy countries, we only have direct branches in the Czech and Slovak Republics. Distributors represent us in other countries. We have tried building direct subsidiaries in Western European countries, but to my surprise we came up against a language barrier from customers, even though these were countries where English was a second language.

The disadvantage here is the fact we are not sufficiently frequently in direct contact with healthcare providers; in our case, as implant manufacturers we do not have direct contact with the patient. For new products in particular, this can be counterproductive because the distributor does not always know the product inside out and it is merely an object bought and sold for the distributor.

In contrast to many companies which focus only on manufacture, you have also focused your attention on research and development since you began your career in 1986. How do you see developments in this sector?

I worked as an assistant at the Charles University Medical Faculty in Hradec Kralove’s Biophysics Institute and I was also involved at the Institute for Experimental and Clinical Radiobiology. Working in these institutes was invaluable to me. I found out about research methods and lecturing was also great preparation for my future focus.

It is important to say that research and development used to be funded in a similar manner to today, but was more centrally managed. We perceive the previous regime as having a high level of bureaucracy leading to situations in which large investments could be made, but where it was then very difficult to subsequently purchase component parts needed.

Usually there were attempts made at the end of the year to spend your funding at any cost so your budget was not reduced in the following period. I thought naively that this situation would change after the 1989 revolution, but alas this unfortunate model persists not just in science, but other sectors too. My other disappointment has been the little interest shown by companies in any co-operation.

Once I had finished my military and civil projects after 1989 with the end of the commissioning institutions, I had hoped that representatives of major companies would come to us and we would be able to choose which company we would co-operate with. But nobody was interested.

At that time, I knew nothing about quality systems and normative requirements on managing research and development, and it wasn’t until moving to the private sector that I realised how huge the gap was between applied research and between companies and the academic sphere. I still hope these differences will one day disappear and we will be able to overcome this rift as in other countries.

I had the opportunity to see a few days ago in Estonia how the university in Tartu built a fully certified analytical laboratory. They found the courage and space in the legislation and established a subsidiary.

You frequently act as one of the leading proponents of co-operation between the academic and business world. But the general population see these worlds as entirely separate and almost impenetrable…

Both spheres — the private and academic and university worlds — complement each other, but there must be the will on both sides to manage the different methods of communication in particular. It’s sad to see statistics showing that the success of applied research outcomes in practice is of the order of 3% – 5% of all assignments dealt with at an EU level. These projects are subsidised by taxpayers. No private company in the world would be able to allow this. Companies have to be much more careful and think in great detail about where they can invest and with what efficiency they should set funding so that a return on investment can be achieved as fast as possible from idea to concept.

I had the opportunity to listen to your talk on Innovation at Charles University. I was taken by two areas in particular which we often discuss with leaders in our magazine. The first area is the use of mentoring as a tool for bringing the private and academic spheres together. The second idea regards support for humanities, especially at a time when industry is calling for support to be given to technical sciences and compulsory school leaving exams in Maths are being discussed.

In terms of mentoring, I think this is a very effective solution in terms of money and time invested. Representatives of university and academia should be able to visit manufacturing businesses more frequently and get the opportunity to discuss with their representatives, and in the same way company representatives should be involved in the teaching process more frequently, at least at the level of motivational talks. Exchange placements at the workplace are incredibly beneficial and are going to become ever more important.Today, it is not ‘just’ about product quality, which is taken for granted; now the speed of launching a product is also important.

The issue of supporting humanities is simple from my perspective. It is my conviction that very soon businesses will represent conglomerates of workers who share common ideas and common goals. Companies will be forced to focus much more on building an internal corporate culture. An example here might be their approach to criticism — what about rewarding criticism instead of penalising it? My tutor Prof. Steinhard encouraged me to always surround myself with people who know more than me. And that’s exactly the situation today when there is ever less space for individualists and many results can only be achieved within a well-oiled team.

Let’s look at a very topical and also underestimated issue closely related to science and research in which the Czech Republic lags behind… how are we getting on in terms of intellectual property and its protection?

I’m afraid there is still a massive gap here. Over a quarter century I have personally made a number of very serious errors in underestimating this field and I think that there should be an expert in this field at every university and at every faculty, someone who is knowledgeable in these matters and who can provide the appropriate help to anyone endeavouring to develop or innovate and who wants someone to manufacture and launch their product. This is often one of the most critical phases. It is practically committing suicide, for example, to enter into a contract with an American company without a professional lawyer. I trust that our poor protection of intellectual rights will be eliminated in future. A warning in this regard is the fact that a few years ago a certain foreign organisation went around different faculties deliberately taking away outcomes of research which were insufficiently protected.

ELLA-CS is not headquartered in Prague, but in Hradec Kralove. Hradec Kralove has been assessed as the best place to live in the Czech Republic. How is it to do business outside the capital?

I was born in a beautiful part of the Czech Republic in the Sumava region, and I moved to Hradec Kralove as a student. I studied here and I’ve lived here for many years now. My background means it would be very hard for me to live in a busy place like Prague, or in another city where I would miss the peace and countryside I need. It must be something which is imprinted on you in childhood and which you can’t take away.

On the other hand, when someone comes to visit from abroad, then logically the most common place to visit is Prague which brings together so many different styles, and not just in architecture. It is a city for which all the world envies us. I split my life between Hradec Kralove, Sumava and Prague and many other places in the world, but I will always return to the place of my birth.

I think we all need our roots and a sense of belonging.

 

Your final words for Czech and Slovak Leaders readers?

It is my wish that only those who enjoy it and do it not just to make money, but to make those around them happy, remain in the business sector. In my case, those who I will probably never meet, but to whom I and my team can return that which they value the most — their health

By Linda Štucbartová