President of the Management Board (CEO), LPP SA
ORGANIZACJA TURKUSOWA - MODEL SKAZANY NA SUKCES, CZY SZALEŃSTWO? Marek Piechocki /LPP/
Na czym polega sukces firmy LPP? Czy jest bezpośrednio związany z modelem zarządzania i stylem przywództwa? Czy taki model można zastosować w innych firmach?
Turkusowe zarządzanie, którego prekursorem był Frederic Laloux (on też jako pierwszy użył tego właśnie określenia) charakteryzuje się brakiem hierarchii władzy i systemu motywowania. Jego głównym celem jest samoorganizacja i samozarządzanie, które opiera się na zaufaniu, odpowiedzialności i partnerstwie między pracownikami.
Sposób ten różni się znacznie od tradycyjnych zasad zarządzania firmą, stawia na wolność, współpracę i odpowiedzi...
About Marek Piechocki
Marek Piechocki, president of LPP, has spoken about the company's growth and management philosophy. He estimated that LPP's revenue would reach 14 billion in the current year and increase significantly the following year, attributing this growth to creating career development opportunities for employees. Piechocki stated that he delegates responsibility to low levels within the organization, describing himself as "a slave of my best managers" and saying their happiness is his greatest concern. He also noted that the company would not pay dividends that year in order to preserve liquidity. Piechocki has discussed his personal approach to business and public life. He said he does not show his face in public in order to "live normally," explaining that media visibility makes it difficult to go unrecognized. He described himself as an "economic patriot" who focuses on practical, grassroots work for local society. During the COVID-19 pandemic, he said the company's biggest challenge was managing people to preserve as many jobs as possible, and he highlighted cooperation among competing firms through the Polish Employers' Union to respond to the crisis.
Transcript (49 segments)
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Ireneusz Osiński0:00
Welcome to another episode of 'Think Like an Entrepreneur.' My guest today is by profession a civil engineer, and by choice a creator, co-founder, and president of the family company LPP, one of the fastest-growing companies in the clothing industry in Central and Eastern Europe.
For 30 years, my guest has been successfully running a business in Poland and abroad, offering fashion collections under the brands Reserved, House, Mohito, Cropp, and Sinsay, available today in nearly 40 countries around the world.
From the beginning of his professional career, he has been focused on developing his own business. He has been connected with the clothing industry since 1989. He is also a happy husband, father, and grandfather. During and outside of work hours, he is a visionary and a positively disposed person for whom nothing is impossible.
My guest today will be Marek Piechocki. Good day, Marek! I wanted to meet with you today because my students and young people in general who are seeking their path declare that they would rather learn from practitioners, from people with experience, rather than from theoreticians. And that's why I'm here today, asking you to share your thoughts and observations about the future of our young generation, and the competencies they should acquire and the values they should focus on, especially in these times. Let me ask you: should people seeking their life path build their future based on employment, or on their own business ventures?
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Marek Piechocki2:03
You know, I think it's like this: virtually everyone starts somewhere with employment. And one's own business ventures can emerge when we have some idea that we want to change something, that we want to challenge the current state of the economy in this or another area. And this idea must be present. I think that in the vast majority of cases, every entrepreneur, even when they have some idea, starts their life working for someone, even to learn something, or even to see what the limitations are and what the market possibilities are.
So where should one start? It seems that in 90 percent of cases, we start working for someone, and later we see the imperfections, we see that we can do it better in a proven area, and then we set up our own business. Although there are cases where people start right after university, but then it may turn out that the cost of errors made is so high that we often end up working for someone anyway. It's probably worth being prudent. Most entrepreneurs say exactly this: it might be better to observe, to go work for someone, not to earn a living, but to see what mistakes are made, what decisions are taken, and what the consequences of those decisions are.
We once said something like this: if you want to be good managers, spend at least a year or two as an assistant to a good manager, carrying their briefcase. This younger generation somehow doesn't want to carry anyone's briefcase, they don't want to learn. They immediately want to be presidents, directors, or hold high positions. Why do you think that is?
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Ireneusz Osiński3:58
Why do you think that is?
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Marek Piechocki4:01
Well, I think they are aware. It's like this: of course, everyone carries a marshal's baton in their knapsack, as they say. But I think they are aware that we live in different times, and these times are somewhat connected with changes in social awareness — with changes such as young people knowing more, being able to do more. This is also linked to changes in management methods. I think we made quite a significant change a few years ago in our management approach. We have various types of organizations: hierarchical organizations, flat organizations. Organizational structures can be very different. One of the organizational forms is what's called 'turquoise' organizations, where responsibility is delegated to quite low levels.
And you could say that even though LPP is a company employing perhaps two and a half thousand people at headquarters and over 25,000 people in total, we are organized quite flatly. And we needed to look at this so that we'd move more strongly toward this turquoise model. The majority of these 25,000 people consists of so-called 'mini-teams' — groups of 6 to 10 people, and these are like little companies that function autonomously. These teams have a very high level of decision-making authority — they basically decide what they buy, at what price, how they buy, what they sell, and so on. And I think this gives young people the possibility of self-realization when they join. So this question of whether we'll work for someone, whether we'll carry someone's briefcase, is again about what opportunities for self-realization these companies offer.
I look at it also from the perspective that as skills of these young people progress, they get increasingly broader competencies and possibilities. A young buyer who has been a buyer for maybe a year or two, who started as an assistant buyer — so has been working for about four years in total — suddenly discovers he has a budget of 10 million dollars for purchasing and goes to Asia to buy. That seems like a lot. He has to do this responsibly, he has to do it thoughtfully. And at that point he's already essentially a decision-maker. And that brings us back to saying that maybe what young people really want isn't to be president right away, but rather to make their own decisions about things, to have influence on what happens. Whether they hold specific titles, they understand they need to climb the hierarchy for a while. I see it more as young people today expecting to make decisions rather than to hold positions.
They expect, to a large extent, the possibility of having influence on things — not just executing orders or following instructions, but being a decision-maker. I think that part, or even a large part, of our success at LPP is that this responsibility is delegated to very low levels. When you think about it, if you don't ask, you wouldn't know who exactly decides what Reserved sells in Germany or somewhere. It doesn't interest me. A small team of six people does it a thousand times better than I could, or their boss, or anyone from the outside.
And I think that's what young people want. The issue is trust — to manage this way, you need to have trust in people. You need the ability to select the right people. That's probably a big problem — with trust and with the ability to choose. We're fortunate that people often work with us for a very long time. We have a tradition every year of giving elegant watches to people who have worked with us for over 10 years, along with a dinner. At such a dinner, there are currently 120 to 140 people. We now have about a thousand people who have worked for over 10 years, and perhaps 30 or 40 who have been at LPP for 25 years.
This creates a mass of people with extensive experience. There are hundreds who have been with us for five years or more. But you know, on the other hand, what's happening — when we started entering this system of delegating responsibility to lower levels, fears appeared on the side of managers: 'Should I really give this responsibility to these young people? Why am I afraid? I'm now their supervisor, and they'll decide on their own?' Certain tensions arose.
But on the other hand, we kept saying: listen, the more successes you have, the more self-decision-making authority you'll get. Starting from some product category, we expand it, and in this way, these young people gradually take on more and more responsibility. You can't just give an assistant 10 million dollars right away when they're going to Asia without any experience. It probably takes two or three years for someone to actually manage that budget independently. But it happens quite quickly with us — within two or three years, they're handling 10 million dollars. It's also a matter of responsibility: you start as an assistant buyer, then become a buyer, get a budget — maybe a small one at first, but it grows quickly.
Working in this industry, we also quickly evaluate work results. We see whether what someone is buying or designing is working — we have daily reports that show the people something: what sells more, what sells less. Green or red, you need to buy more green and not red, and so on. Let's go back to business: is it worth starting your own business now?
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Ireneusz Osiński11:03
Let's go back to business. Is it worth starting your own business now?
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Marek Piechocki11:05
Well, you know, it's always — the person who asks that question — I think you need to have that internal feeling that you want to change something, that internal restlessness that what's on the market today isn't perfect, and I have an idea how to fix this imperfection. But on the other hand, it's a choice. We have people who tried to create their own businesses, it didn't work out for a while, they came back. But you can also be perfectly fulfilled in an organization like ours, where we really have a whole range of possibilities.
People in logistics, in freight forwarding — they're doing things that are incredible. We'll be building three distribution centers per year, and that's a huge challenge — building one in Bucharest, or near Bucharest, in Russia, or in Rzeszów. That's a big challenge for people, it's a big score, involving large sums of money. Same with managing IT teams, with data science, where we're processing data and doing things that practically few firms in Europe do. It's always a question of choice — whether you want to, whether you see such an opportunity. Because there are plenty of people who are fulfilled because we offer a high level of autonomy.
Honestly, I can say that this organization — and I'll start with an example from the top — that often recently, people come to me and say: 'Thank you, I'm so glad that you gave me this level of autonomy, that you don't interfere.' I assign them a problem, give them a deadline, and they figure it out. The organization is flat.
So, whether it's worth starting your own business — you need to have the idea. I probably don't have an idea for any business other than clothing. I only know clothing, I don't know anything else. People often laugh and say I'm so focused on one thing that if you asked me about other businesses, I wouldn't know. I've been doing the same thing for 20, 30 years, and it seems to be working well for us.
Some entrepreneurs who tried to develop their business and hit a wall, now try again in different industries, different fields — they try to change their fate somehow because they don't want to close the company and go back to employment. You often ask the question: is switching to employment a bad thing? I can tell you that I'm a slave to my best managers. They decide what they do. I'm dependent on them. I have to ensure their happiness and satisfaction — that's my biggest concern. If they're happy and satisfied, they won't start their own businesses.
One business is called logistics — they're building distribution centers, buying... Right now we have problems with containers from China. I hear they're sending entire trains — a train of a thousand containers — because they can't send ships, so they invented trains.
The possibilities for self-realization, for doing something, for earning money seem different. I believe we must pay people very good money so they're satisfied and have peace at home, because that's a kind of security — they come home without problems, can buy what they want, go on nice vacations. And because they don't have other problems, they can fully dedicate themselves to developing their area — whether it's creating clothing collections or logistics.
Listen, it's a huge problem when you think about it — we need to send, I don't know, from our 10 distribution centers, we ship 10 million pieces of clothing per week. That's quite a lot. Or receiving 500 containers in a week — that's also quite a lot. The challenges are enormous. When Gosia can't send 500 containers, she starts figuring out how to buy a few trains. These are incredible possibilities — you're giving your employees truly enormous responsibility.
I'd call them more partners than employees, because they co-create this business. They've been developing it for years, shaping it in their areas, based on their skills and competencies. But I treat these people as my partners. If you don't ask, you might not know what Sebastian does in logistics — generally, he spends a lot of my money playing with trains and other things, and it costs a fortune, but thanks to him, we ship the goods, the stores are stocked, and he does it better than anyone else, creating large-scale operations.
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Ireneusz Osiński16:51
Let's change the subject a bit. I wanted to ask about social areas. Do you think that engaging in social roles, taking part in social actions, can be a source of professional competencies? What does social engagement give you?
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Marek Piechocki17:22
Well, I think it's worth doing, for sure. I think you need to seek satisfaction and the desire to somehow compensate for the misfortunes of people who, for some reason, have been excluded or hurt by fate. But the idea that you go there to gain professional competencies — that's not quite right. You might learn something along the way, but the goal is something else. You shouldn't approach it thinking 'I'll join a social initiative to learn management' — that shouldn't be the main goal. You can go to a company to gain competencies. Organizations that deal with helping people — I think many people there act out of altruistic motives. The compensation in those organizations isn't the highest, and they deal with various other problems. I don't think you should seek professional competencies there — you should think you're going for something else.
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Ireneusz Osiński18:45
I mainly meant volunteering, taking on certain roles in organizations that aren't typically aid-oriented. We help disabled people, excluded people, but there are organizations that help certain industries develop better, help certain areas connect with each other. In those, you could gain competencies as a coordinator of a project.
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Marek Piechocki19:18
Yes, in those you could certainly gain certain competencies, even as an ordinary member, but you could be a project coordinator. What you're describing is more like expanding business potential through social engagement. We have such people. Since we're a family company, we belong to the Family Business Network, an organization of about 100 companies that connect and help people, and you can certainly learn many things there.
That's exactly what I was talking about. Our foundation — the LPP Foundation — has been operating for 10 years. We help people acquire competencies, but with a motto in the back of our minds: 'Help me do it myself' — that's Maria Montessori's motto, from her children's homes, where children acquired skills on their own, not by being carried on someone's back. What you're describing is much wiser and something I always support more. There's the famous saying: give someone a fish or a fishing rod. Giving the fishing rod — that's what you're talking about. You help people by showing or hinting, not by doing things for them. Those are competencies you can acquire while still a student.
Many young people — it follows a bell curve — these are the people who make things happen. When people engage in various organizations, student clubs, scientific circles — I call them people who have some internal clock that drives them to do something, to engage. Do you think there will be more or fewer of these people?
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Ireneusz Osiński22:03
Do you think there will be more of these people in the future, or fewer?
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Marek Piechocki22:05
Well, such people always appear. I think even the complaints today about the new generation — 'oh, they're not like this, not like that' — I think it's a bit like the bell curve. We always have a portion of the population like this. I often say as an example: in the 1990s, we had a big social divide — people were shaped by the 1980s. And I don't remember which year McDonald's entered Poland, but suddenly it turned out that they found a group of people selling hamburgers who were organized, happy, worked brilliantly. Meanwhile, in state-owned shops, ladies were lying on the counters, leaning on them, not caring. But they managed to find the right people. I think this will always be the case — young people will always appear who want to change the world or do something actively.
They were around in my time — I studied in the 1980s — and I think today, in the 2000s and 2020s, they also appear. It's just like that. Whether the proportion is larger or smaller — it's hard to measure.
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Ireneusz Osiński23:33
I wanted to ask whether you see the spirit of entrepreneurship in the young generation that differs from the entrepreneurship of your generation in the 1980s. Does something differentiate them? Do you see the spirit of entrepreneurship today?
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Marek Piechocki23:57
Look, a whole mass of companies is being created — internet companies and others. They're being created in somewhat different areas. In my time, these possibilities didn't exist. But there were other possibilities. Back then, you could get any goods — in the early 1990s, when the economy was changing, it was much easier. Today the possibilities are different, and these people are appearing. Companies are being created, especially online shops offering this and that. In those days, goods disappeared from shelves and weren't brought from abroad — they were bought up immediately. Today, young people have much greater possibilities. They have access to a broad market through the internet — you can sell anything, sell a lot.
But I think each decade brings new possibilities and changes. What used to be on a high growth level in our business — today it already looks flatter, at least in Western Europe. We're still growing. But you can see that technological, internet businesses are growing like mushrooms after rain, one after another. There's a big focus on e-commerce, on data science, these kinds of solutions. And these young people are appearing, exploiting this niche in these areas. A whole mass of startups are being created, offering this and that. Some succeed, of course — only a small percentage survive, but they try.
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Ireneusz Osiński25:44
Last question: do you think that in the future there will be more entrepreneurial people, or will they prefer secure positions in other people's organizations?
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Marek Piechocki25:56
They will always appear, in my opinion. Entrepreneurial people will always be there. There will always be someone who wants to change the status quo. Entrepreneurship is really the desire to change the current state in some area of the economy, the desire to improve that area. And there will always be someone with an idea and the courage — the idea, the courage, and that internal drive to do it. They always appear.
Look at how many are appearing today. A new profession has appeared called 'barber.' In my days, you went to a hairdresser. But today I hear that my young friends go to the barber around the corner. A whole mass of barbershops have opened. Young people who might have been ordinary, average hairdressers have created small businesses for themselves. There are a whole lot of them. It will keep evolving, and it will keep repeating.
I believe in entrepreneurship. I think we Poles show a higher level of entrepreneurship than other nations. Young people don't remember this, but let's say in the late '70s, '80s — a trip to the West in a Fiat 126p, going through Ukraine, Bulgaria, and along the way you could buy a pair of trousers, sell another, buy some medicine, sell it — the whole trip paid for itself. That was the birth of Polish entrepreneurship, and I think today something similar is happening. That's why the Polish economy, especially here in Szczecin, I think is in better shape even than our neighbors — the Czechs and Hungarians. Without this spirit of entrepreneurship... We're a bit rebellious. In Spain, they even call people from Barcelona 'Polacos' — Poles — meaning rebels, restless, wanting change, not giving up. So it will continue here.
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Ireneusz Osiński28:06
That's an interesting, optimistic note almost at the end. But one more thing: if you could draw young people's attention to certain competencies, values — what should they be learning now? What should they be acquiring?
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Marek Piechocki28:25
Competencies are one thing, values are another. About values — whenever a young person comes to us, I start with the three fundamental values that everyone's parents taught them, and I also teach and repeat: honesty, justice, and tolerance. Don't cheat, don't lie, don't scheme — because that has short legs and sooner or later it will end badly. We don't do that. If somewhere along the way you forgot what your mother taught you, we'll teach you at our company too. Remember that. It's important.
It's worth being honest — it comes back around eventually. I definitely tell young people not to cheat, not to scheme, because sooner or later it will backfire, whether you're working for someone or doing something bigger in life. Honesty — because everyone wants to be treated honestly, everyone wants to be treated fairly, even the president, even anyone in the organization. Young people must remember this. When creating their company, it's worth remembering these values.
As for competencies — well, it depends on the area they want. I think it's worth everyone thinking about being curious about the world, wanting to discover something new. Not just doing what's given to you, being closed in your little drawer, but seeking something new, wanting to discover. Because such people are sought after everywhere — in the economy, in companies. When you ask who we're looking for, we're looking for interesting people, people who want to change things, people who want to challenge the status quo — because they're like small entrepreneurs within us. What Sebastian does in logistics, or what Arek does hiring 400 IT people — I trust that they're doing good, solid things.
So I encourage them to be curious about the world and to question reality as much as is possible — thoughtfully, but to question it. Through that, they'll develop the companies they work for, or develop their own businesses, and they'll be needed by their potential employers or by the market.
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Ireneusz Osiński30:50
Thank you very much for the conversation. Thank you so much.
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Marek Piechocki30:53
Thank you.