Michal Štěrba (GZ Media): We’re analytical, America is intuitive

In this episode of the CEO na ostří nože podcast, we talk to Michal Štěrba, CEO of GZ Media. Over seventy years, the former state-owned record factory has become the world’s largest maker of vinyl records, with eight production plants and around 2,700 employees. The company isn’t afraid of new technologies, including artificial intelligence, yet many of its people have worked there for decades out of love for the craft.

According to Štěrba, the company has a strong survival instinct and the ability to adapt. Partly this comes from owner Zdeněk Pelc, who has been its face for forty years. Partly it’s the natural fight for survival in a music industry that had to deal with piracy and digitalisation. GZ Media is proud of its history but looks forward more than back. Štěrba’s main priority is for the company to stay competitive in five or ten years, when he and his colleagues may no longer be there. The company can afford that because it doesn’t have to meet short-term stock market expectations, and management’s and the owner’s interests are aligned.

When Štěrba took over, he had to renew the entire management team. It took five years and not everyone took it well. But the company doesn’t do revolutions. Explaining, time and the gradual retirement of the older generation helped. The key was that he didn’t bring anyone in from outside into his inner circle. He had been with the company for thirteen years by then, and the new managers in their thirties, developed within the company, had their colleagues’ trust because people knew them. The owner’s support was also crucial. Štěrba says it was very hard for Pelc to hand over the helm of a company he calls his “fifth child”. When the two of them disagree, they sit down, set their egos aside and find a compromise, because the team must never have to choose between the CEO’s way and the owner’s way. In moments of crisis, such as the start of Covid, they both speak to employees.

He sums up GZ Media’s values in three words: hard work, modesty and drive. The company is “quite a ruthless organism”, he says, and anyone who doesn’t share these values usually leaves on their own fairly quickly, or the people around them make it clear they don’t belong. People don’t love change, Štěrba says, so it’s best introduced through good examples. A small step that makes people’s lives easier convinces them more than a grand vision. The ideal is when people come up with ideas for change themselves.

As the company expands abroad, it is working out how much autonomy to give its foreign plants. Opening a 400-person plant in the US taught him that Czechs and Americans are similar in day-to-day operations. The differences show up at management level. Czech managers, he says, are more analytical and focus more on mapping processes, while American managers rely more on self-presentation and intuition. But the two can be brought together.

What else will you learn in the podcast?

• How a socialist-era factory became the world leader in vinyl production

• How to renew an entire management team and keep the company’s trust

• Why it helps when the CEO and the owner speak with one voice

• How much autonomy to give plants abroad

• Why change is best introduced through small, good examples

• How the CEO of a global company balances work and family

According to Michal Štěrba, GZ Media shows that a traditional company can change without revolutions. It’s enough to look ahead, give people from within a chance and persuade through small steps that show people change makes their work easier.