The goal: Future-proof the business
The challenge: Transform a traditional mittelstand (midsized) company into a technology-based organisation to compete in a deregulated world
The result: A focus on cultural change and tech investments
Kroschke Gruppe, a successful private company based in Ahrensburg, near Hamburg, Germany, is the leading supplier of vehicle licence plates in the highly regulated German market; it also serves fleets, rental companies, banks and car dealerships, primarily with registration and document services. Felix Kroschke, 31, joined the executive board of the family firm three years ago, taking charge of finance, operations and HR alongside his brother, Philipp, who is CEO.
Today, the licence plates are sold through more than 450 shops located near vehicle registration offices. But this business model will be disrupted in the coming years as vehicle registration goes online. The brothers, who are third-generation Kroschkes, are in the process of future-proofing their organisation.
“Our challenge, knowing that things are going to change, is to use the profits we’ve got right now to transform our business,” says Felix. “If we don’t want to die, it’s not just digitisation we need to think about, it’s also internationalisation.”
“Our challenge, knowing that things are going to change, is to use the profits we’ve got right now to transform our business.”
To compete in this new world, Kroschke is building a digital platform that will record vehicle ownership, based on blockchain. But Felix is also trying to change the culture of the company so that current staff buy into the digital transformation and new talent is attracted to join the company.
“It’s not very common for a medium-sized company like us, but we decided to have two full-time recruiters in our company, one focussing on recruiting IT staff, approaching people directly instead of using the usual platforms,” Felix explains.
The in-house cultural changes involve both the way people speak to one another and the spaces where they work. Felix is asking staff to abandon formal modes of address that are part of the German language and has redesigned workspaces to encourage a modern, collaborative environment more conducive to the tech-led business Kroschke needs to become.
With the cultural changes in their early stages, the brothers are continuing to push ahead with the tech transformation programme. As well as building its blockchain-based digital platform, Kroschke is buying stakes in digital entrants into the mobility market. It recently invested in Santa Monica, Calif.,–based Fair.com, an app-based subscription service that lets users rent cars or ride-shares by the month, and in carwow, an e-commerce business selling new cars.
“People externally, as well as our employees, can see that we’re out there focussing on new business models in all relevant sectors. I’m pretty sure that they realise that we’re forward-thinking people,” says Felix.