Case study – the intrapreneurial mindset

77 Elektronika Ltd., with more than 700 employees, is one of the few Hun-garian brands that could continuously enhance their entrepreneurial agility and performance when becoming a large high-tech corporation from a startup. Established in 1986 as a family business, the company reached its first peak in 2000 when they received the Hungarian Innovation Grand Prize for their blood glucose meter product family. The next worldwide success came after releasing their UriSed product in 2007, which is cuvette-based automated microscopy equipment with particle recognition for examining urine sediment. They could repeat their excellent innovation achievement again in 2016 when the company received the Innovation Grand Prize second time for their semi-automated urine sediment analyser (UriSed mini).

We argue that the biggest contributor to their success is the intrapreneurial mindset of the company and the culture that makes entrepreneurship possible in the entire organisation. To understand in detail how 77 Elektronika could achieve such performance, we discussed the success criteria with Gabor Bayer, Director of Development. This section summarizes the most relevant statements of the semi-structured interview taken on 14 November 2019.

Gabor Bayer joined to head 77 Elektronika’s Development in 2004 when the department had 30 employees. Now, in 2019, they have 100 employees.

How are processes different now than 15 years ago?

• Lost some of their flexibility, agility – as Mr Bayer said: „This is the price of growth: you have to give up flexibility e.g. by development of dedicated OEM products for big players in the world market. Now the operation is more stable, and we have much higher revenue”.

• Time to Market: in general, time got longer, more control steps, go/no go decisions, much stricter international regulatory requirements.

• Availability of tools: To check the feasibility of certain solutions, ex-perimentation is a must using different tools. Now the company can afford expensive tools that are used rarely, but they want them imme-diately when needed. (Earlier they could not afford.)

• 10-15% of activities are not planned in advance (e.g., working with new ideas).

• In development: documentation of more details, milestone steps, all the changes are required for large partners (design control).

What is the product planning process before deciding about product devel-opment and production?

1. Idea generation 2. Conceptualization

3. Feasibility check parallel with market research

4. Go/No go decision about starting the product development based on the results of the feasibility and that of the market research

How does idea generation work?

• Brainstorming is a constant element of development in all stages.

• Ideas come either internally or from outside: demands from sales part-ners who know what features or solutions their customers would like to have.

How do you motivate employees?

• Bonus system: employees are rewarded differently, based on their per-formance.

• Employees can make mistakes (we are human…). Mistakes are esca-lated only if they have a real impact.

• It is important that employees should not be overstressed – otherwise their performance will decrease.

• Owner aspect: employees look at the company as it had theirs.

• Positive atmosphere: “there is no stupid idea”, honest and open discus-sions.

• Sharing knowledge – it is a required mentality for everybody at Devel-opment.

How has the organisation changed throughout the years?

• All departments have been established and further developed that is typical in a large company. It is a full-scale company incl.

develop-ment, separated test group, application team, technology group, pro-curement/logistics, production, warehouse, quality, IT, sales & market-ing, accounting departments, etc..

• Majority of development is execution and not just planning

• Application Team – very important. They communicate what and how the equipment measures. They are responsible for publications, arti-cles, presentations, trainings and application support not only for part-ners but also for the internal service and marketing departments.

• Quality Assurance – FDA compliance was achieved, responsible for up-to-date SOPs (Standard Operational Procedures).

The Story of UriSed Mini 1. 2013 March- Idea:

• Market need: How to make the expensive, automated UriSed more af-fordable for smaller doctors’ offices and smaller laboratories?

• The challenge: “How to make it cheaper? E.g., can we do it smaller?”

• “Let us do it smaller, that small” → “Ok, then forget automatic sample loading, i.e. the whole robot unit” meaning that the sample entry (the action of filling the sample in the cuvette) should be manual. After that, by pressing a button, everything is the same automatic analysis like in the large UriSed.

2. 2013 April – Internal presentation about the new concept for the CEO:

• This is a semi-automatic machine for a new market segment, a new instrument category.

• Interesting direction: „downgrading”: the automatic machine was suc-cessful, but expensive, mainly for large partners (buyers).

• 2013 May – Decision, after hesitation, based on feelings. CEO decided:

“Let’s GO”.

3. 2014 H1 – Market Research:

• Distributors were asked: “Maybe 200-300 equipment can be sold an-nually”.

• Not necessarily the end-user market should be asked, but the distribu-tors.

• 2013 Nov: Prototype was demonstrated at the MEDICA Exhibition.

Partners hemmed and hawed.

• 2014 Jan: A US veterinary partner (also in the urine sediment business) expressed interest. They wanted to use it for animals.

• 2014 June: Contract about common development with the veterinary partner.

4. 2014-16: product development including preparation of production

• New production line

• 84 new jobs

5. 2016 April – Product launch,

• 4,9 billion HUF revenue already in the very first year (only 8 months)

• 2000-3000 equipment sold annually

• Innovation Grand Prize.

We consider that 77 Elektronika’s case is one of the few success stories in Hungary that demonstrates that even a mid-size business (in worldwide com-parison) can develop and sell products for the entire world if the product is high quality and innovative. This company started as a traditional small com-pany as an ant type business, then with investing in development transformed into a gazelle type organisation and reached the tiger status when the com-pany became a real innovative intrapreneurial business¹¹⁵ (Vecsenyi 1999).

In addition, this success can be repeated only if the organisation has an en-trepreneurial culture and atmosphere.

115 Vecsenyi, Janos (1999): Vállalkozási szervezetek és stratégiák. Budapest, Aula kiadó. (In Hun-garian)

Béla Pataki