A Client Close-Up: 2019 Pursuit of Prime Announced, Latakko.
Jevgenijs Kopilkovs founded Latakko when he started importing car batteries to Riga, Latvia, 25 years ago. In 1997, Jevegenijs added tyres to his product portfolio when he signed an agreement to distribute Pirelli tyres.
Today, Latakko is the market leader in the Baltics offering more than 40 international brands of tyres and sells more than 1,000,000 tyres a year. With 270 employees and more than 60 million Euros in revenues, Latakko opened the largest warehouse in the Baltic States in 2015 to support sales.
This success has not come without its challenges. From 2015 to 2017, Latakko lost about 2.5 million euros. Also, the company was suffering from low levels of managerial engagement and high employee turnover. The staff, the creditors and the suppliers were all looking to Jevgenijs solve the company’s problems. Feeling alone and overwhelmed, Jevgenijs turned to the Adizes Institute.
In August of 2017, Adizes Associates Greg Mathers and Vladimirs Kuzmins conducted a Symbergetic Organizational Diagnosis (Syndag™) with 25 of Latakko’s key managers. During this event, the company was diagnosed as being heavily embedded in the founder’s trap and, in addition to losing money, had strained relationships and low levels of collaboration. This meant that immediate action was needed to arrest the negative profitability and to develop managers and processes to spread the burden of running the company beyond Jevgenijs.
An Adizes program was deployed and early efforts went into optimizing sales planning among purchasing, sales, and marketing and to build efficiencies in logistics and warehousing. At the same time, the program focused on building collaborative management skills and processes to involve more people in decision making and to streamline the implementation of needed initiatives. Jevgenijs saw almost immediate behavioral changes as his managers began to meet and solve problems on their own, where before they had always come to him expecting answers.
In November of 2017, Latakko was ready for the next phase in its transformation program and Adizes Associate Mirko Music helped the management team define a mission action plan for the next three years. A few months later the structure was redesigned around this new mission action plan with the help of Adizes Principle Associate, Zvezdan Horvat.
In this new structure, multiple profit centers were created; each assigned a manager with full profit and loss responsibility who could be held accountable for building his or her business line. Support centers were put in place to provide services the profit centers needed to thrive with full quality and budgetary responsibilities.
The effects of these changes run based on the Adizes methodology were impressive. In 2018, the company returned to profitability with over 1 million euros in profits. In 2019 they are forecast to hit record levels of performance.
The company’s success has also been recognized in the Latvian business community. In 2018, they were named one of the Top50 most desirable employers in Latvia.
Jevgenijs Kopilkovs says:
“From the very beginning, CARE and ATTENTION have been the values, which Latakko is grounded on. When another two values TRUST and RESPECT accompanied, this has impacted the company a lot. People started to accept changes and challenges, be engaged, be open to new opportunities, looking for potential improvements.
Transformation is the best what people can experience. But to make this transformation working, a methodology is needed, and now we have one. With a new organizational structure, mission action plan, black Book and Blue Bock is much easier to move forward.
I‘m happy that now we face a process of step-by-step maturation. People are “infected” by the virus of changes. They are growing within the company, internal candidates apply to every vacancy we open, what we haven’t experienced before. And we give an opportunity to our staff to grow, even if they are not yet fully mature for a position, but we see the willingness to develop, see the potential.
All this has helped me to change. I’ve been full of ideas and changes through 25 years, though very often it was a big headache to my colleagues. Now, I first of all, try the methodology on myself, and I see the results – I’ve become more calm and happier, and these changes have reached my closest people, too.”
Currently, Adizes is helping Latakko redesign its reward systems, streamline information flow and build greater accountability for results while in-company Adizes integrators, Lena Ovsjannikova, Marija Ročane, and Yulia Sorokivskaya take over leadership of the continuous improvement module of the Adizes program.
Latakko will receive the Pursuit of Prime Award in recognition of its dedication to the Pursuit of Prime on January 13th during the 44th Adizes International Convention in Bangkok, Thailand. We welcome you to join us.