With funding from the European Union under its EU4Business initiative, the European Bank for Reconstruction and Development (EBRD) has helped Ukrainian electrical manufacturer PromAvtomatika Vinnitsa to develop and ‘clean up’ the organisational structure of the business, leading to greater efficiency and flexibility.
Since 2002, the company has been engaged in the production, sale and installation of electrical equipment.
“We were growing and developing actively, but this growth stopped several years ago, and we didn’t know what to do next,” explains company director Michael Ganchuk. At the time, the company was employing about 100 people.
“І accidentally heard about the EBRD programme which supports small and medium-sized businesses. I called them immediately and filled out a questionnaire on the site,” said Ganchuk.
“It wasn’t about money,” he explained. “We needed consulting assistance to structure our company,” which is exactly what the EBRD’s Advice for Small Businesses Programme was there to provide.
“The consulting project gave us a lot of useful things. We have developed an organisational structure, with clear areas of responsibility.” The company had its own organisation, which was complex and had evolved over time. The EBRD advisors analysed it and ‘cleaned up’. “They took into account the existing state of things and, what is more important, the existing people,” said Ganchuk.
“We were taught to hold annual strategic sessions in which we developed our mission and vision, generated ideas together. We defined business processes: certain algorithms, which structure the work and make it more efficient.”
Development of financial incentives has also been a significant outcome of the project. Wages have become more flexible. “Every employee can influence the size of his earnings now.”
The company also created a fully-fledged HR department and a direct sales department. “Previously, we did not have an active customer involvement process. The manager just sat and waited for a call,” the company director said.
PromAvtomatika Vinnitsa is now involved in a second advisory project with EU4Business. The head consultant is a former top manager of Philips. The main objectives of the second project are to increase profits, prepare for ISO 9001 certification and prepare for external markets.
“There is a big distrust towards the consulting industry in Ukraine. It is traditional to invest in something material like an office, office equipment and transport,” says Ganchuk.
“But at the end of the project, we realised you should spend money on consulting without waiting for a grant. It is a much more profitable investment than buying a new office or a special machinery.”
Working with EU4Business has given the company greater credibility, he adds, saying that people now trust them more.
“Now we are trying to take goods for sale from manufacturers. For two companies - European, but with affiliates in Ukraine - the fact that we are working with the EBRD has become the key to making a decision.”
EBRD Advice for Small Businesses
The EBRD Advice for Small Businesses programme, funded in the Eastern Partnership countries by the EU under its EU4Business initiative, aims to promote good management in the SME sector by providing assistance to individual enterprises, helping them to grow their businesses. It supports SMEs to make structural changes and develop new business skills, helping them to thrive and compete in market economies. The programme also enables SMEs to access local consulting services on a cost-sharing basis by providing grants of up to €10,000.
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