Main products/services: advanced hardware and software for testing and measurement equipment for aerospace, automotive, civil engineering, e-mobility, heavy machinery, power & green energy, and railway industries.
Highlight of their unique approach
Investing in regional development
Embeddedness in local networks
Preference for local employees and suppliers
High employee engagement and participation
Open book management
>100-year time horizon
Highlight of their unique design
Employee-ownership
100% self-financing
Participatory governance
Underlying time horizon of over 100 years informing the definition of purpose and approach to networks
Dewesoft staff
02 | Founding Story and Industry Context
Dewesoft is a Slovenian company with 100-million-euro revenue in 2023 and roughly 400 employees worldwide, about half of them in Slovenia. It was founded in the Trbovlje town in Zasavje region in the year 2000 and is currently among the fastest growing Slovenian companiesy with a 25% yearly growth rate and over 2015 subsidiaries, including in the USA, China, Austria, Brazil, India, Mexico, Germany, Italy, Hong Kong and France.
Today, it is a global top 5 Data Acquisition (DAQ) company. It designs advanced hardware and software for testing and measurement equipment, with its systems used by test engineers across many industries such as aerospace, automotive, civil engineering, e-mobility, heavy machinery, power & green energy, and railway. Its clients include NASA, ESA, Apple, Volvo, John Deere, Akrapovič, Tesla, Caterpillar, Rimac, Siemens Gamesa and WEG. As a general rule, Dewesoft does not wish for its devices and solutions to be used for war purposes.
Its numerous awards, recognitions and achievements include best employer, fastest growing company , highest average salary and highest value added per employee in Slovenia.
Dewesoft staff
03 | Regenerative & Distributive Strategies and Actions
Dewesoft’s mission statement is to “simplify the advancement of humanity” and the company strives to make a positive difference to human progress as engineers. Its measurement products and solutions transformed the industry by being unprecedentedly fast, efficient, simple and user-friendly. They enable their clients to optimise the efficiency and performance of their products, including satellites, bridges, trains, EVs and windmills.
Dewesoft pursues strategies and undertakes actions the result of which is distributive towards its local stakeholders - employees, suppliers and regional non-profit organisations, and regenerative - for the regional future outlook as a whole, for local abandoned and degraded sites and infrastructure and for the local supply chains.
The company is committed to remain Slovenian, fully financially independent and around for at least the next 100 years. The 100 years is in fact the widely communicated timeframe considered when creating internal systems and making strategic decisions.
The current ownership structure consists of more than 100 employees and one remaining active founder Dr. Jure Knez, who holds a stake both directly and through a family holding, which is intended to operate as a foundation. In the future, the founder wishes to have an ownership design that draws inspiration from some steward owned companies, such as Bosch.
While 50% of employees collectively own 20% of the shares, the majority owner in several cases votes for decisions, including those on profit distribution, in line with the majority. As all issues are raised and discussed internally in an ongoing manner, the voting itself represents a formalisation of a consensus that has already been reached before.
As per the internal practice aimed to ensure the growth-oriented business model, the company reinvests 80-90% of its yearly profit into further growth and development, while 10-20% is distributed as dividends. While this is not a formal written rule, it is a universally accepted internal guideline.
On a monthly basis, the company distributes what it calls the “variable part of monthly results” among all employees, including the cleaning personnel and canteen personnel. The variable part constitutes 18% of the added value, which is defined by the company as the revenue generated above the amount equal to 2x fixed costs. Typically, this translates into a roughly 30% add-on to the basic monthly salary.
Once a week, an Ideas Council is held where every employeeone is welcome to participate and share their ideas.
According to Dewesoft, it is committed to the region and actively cares about its future. Zasavje is a region once associated with coal mining and heavy industry, while Trbovlje used to be one of the 10 most economically developed towns in ex-Yugoslavia. After the closure of the majority of the mines and other industrial companies the region was left with environmental degradation, poverty, stagnation, high unemployment and outward migration. In the end, one could say that the region was written-off.
Today Trbovlje and Zasavje region have a population of 164K and 57K inhabitants, respectively. The people feel strongly about their distinct identity and the legacy of the miners’ shared values – pride, camaraderie, collaboration, trust, mutual reliance.
Thus, Dewesoft has assumed a role of the leading anchor of the local ecosystem, which it is creating around itself to drive the revival of the region, in order to propel economic development and employment opportunities. It does so by engaging and prioritising »local«, which in practice translates into preference given to the local Zasavje suppliers and 2/3 of employees in Slovenia being from the region. It supports local suppliers who experience difficulties in a variety of customised arrangements and helps them to establish supply, which meet Dewesoft’s high technical and quality requirements.
In addition, Dewesoft majority owner set up an incubator providing a wide range of support to local start-ups and giving them an open two-way access channel to Dewesoft and its facilities. The company also opens its doors to local schools and kindergartens, aiming to inspire and engage children with engineering and technical sciences.
Dewesoft adopted a regenerative approach when making decisions in relation to its real estate. For its new production hall, it has decided to adapt an already existing facility, abandoned due to bankruptcy of its previous owner. There it is piloting an innovative geothermal technology for building temperature regulation, the aim of which is to eventually achieve zero emissions energy supply. In addition, it has selected a degraded site of the former coal mine for building its new headquarters, which will also house a regional technological park and the start-up incubator. By the end of the year 50% of all power needs in its current headquarters is expected to beis provided by solar energy (currently 25%).
While being mostly dedicated to the support of the region where it is based, Dewesoft’s actions also reach beyond: During the severe floods in Slovenia in August 2023, voluntary firefighters from the whole country went to the rescue of the affected regions. And while the Zasavje region was not affected by the floods, voluntary firefighters among Dewesoft employees put forward a request to go to the affected areas and provide help. The management expressed their full support, which in business terms meant a suspension of production for two whole days of their absence and a consequent loss of EUR250K revenue for each of the days.
04 | How the Deep Design Enables Strategy and Action
The deep design of Dewesoft reflects the values, philosophy and objectives of its founders. It provides the pillars of nesting the company into its social and environmental ecosystem, respecting its historical legacy.
Purpose
The stated business purpose of the company is to “simplify the advancement of humanity.” The business success is then deployed to create multiple positive social and environmental effects and the two dimensions positively reinforce each other.
Next to that, the company has a defined goal of existing for at least 100 years and remaining in Slovenian ownership. This has a profound impact on its guiding values, business model, partnerships, strategy and the way it builds relationships with all of its stakeholders.
Networks
Dewesoft is both embedded into and strengthening the local ecosystem, engaging local people, infrastructure, suppliers and other stakeholders to the greatest possible extent and whenever possible. All production takes place at Dewesoft locally. It also cooperates with and supports all regional cultural, sports and educational associations.
Governance
While there is a majority owner at Dewesoft, the company’s governance is set-up to be transparent, accessible and participatory, underpinned by the alignment of interests with employees, with a fair, attractive and transparent system of compensation.
The 100-year time horizon is known to all and informs all strategic decision-making. General Assembly for all owners is held bi-annually, to decide on all major non-operative issues. For decision-making, in several cases the majority owner adopted a stance of voting in line with the majority, in order to prevent dominance.
Ownership
The legal form of the company is limited liability, in which over 50% of employees currently own 20% of the company's equity. Employees can purchase a stake after being with the company for 1 year and in accordance with a set of internal rules. For this purpose, the company is always valued at its book value, which creates a straightforward and transparent basis for transactions at any given point in time.
The rationale for introducing the employee ownership model in 2016 was on the one hand rooted in the principle of fairness, and on the hand pursuing to align employees’ motivation with the goals and vision of the company and maintain their engagement and commitment at the highest level.
In order to preserve the alignment of interests, ownership is restricted only to the active employees. This means that an equity owning employee must sell his/her stake upon ceasing employment for whatever reason.
Apart from employee engagement, this form of ownership also reflects the fact that it is intended that the company does not find itself under foreign or other “external” ownership.
Finance
Dewesoft is committed to pursuing a 100% self-financing approach, with no bank loans and external investors. Business growth and development is financed exclusively by reinvesting 80-90% of annual profits, which are significant in this high-margin industry.
This financing approach ensures that the company remains fully autonomous and local. It gave the company freedom to decline the offers of mergers and acquisitions that came its way, which would have meant restructuring, relocation, weakening of the connection to the region and compromise on running the business in line with its core values.
At the same time, Dewesoft pursues collaboration whenever possible. For instance, when a competitor approached the company with a buy-out offer, the companyDewesoft’s management transformed the buy-out conversation into a Slovenia-based JV dedicated to creating common standards, paving the way for creation of an open industry ecosystem in the future.
05 | Reflections and Lessons for other Businesses
On the role of values
Values of the company founders and leadership play a key role in determining how the company’s business affects stakeholders and environment, as well as the deep business design it institutes in order to uphold the values.
In the case of Dewesoft, it seems that its current deep design is a formalisation of the founders’ values and philosophies, which existed from the start and became a foundation for everything that followed.
Employee-ownership, 100% self-financing, participatory governance, embeddedness in local networks were adopted because they best reflect and enable the “founding values”.
The present deep business design came to be as the best means towards achieving the vision of a successful, open, transparent, innovating business, where stakeholders’ interests and goals are aligned, and which creates value by collaboration and participation.
On arriving at a certain deep design structure
For Dewesoft, the arrival at its current deep design structure was an organic process, which followed an internal consensus on the best way to reach its business goals in line with the core values. When asked whether Dewesoft was different before the new compensation system and employee ownership was introduced in 2016, the answer was “No.” But while the deep design reflects the way things have already been before, going forward it formalises and further enables the continuity of Dewesoft's distributive and regenerative practices and strategies.
On the rationale for distributive strategies in relation to employees
Employee ownership, compensation system, participatory decision-making reflect a recognition by the company’s founders that they cannot pursue their vision and realise their ambitions on their own and that the whole Dewesoft team, comprising all employees, plays a vital part in Dewesoft’s performance and success. Distribution of financial gains, which arise from business success, therefore, was to the founders an obvious way to reflect employee contribution and align their ambitions with their own.
On the role of the time horizon
The long-term view, with a 100+ year horizon, which Dewesoft uses to guide its decisions, strategies and practices is strongly reflected in the networks and finance elements of the deep design.
It is not a company that was founded with a purpose of creating shareholder value by near-term selling shares to a fund or strategic investor. It therefore aims to build lasting solid networks, which will allow it to thrive in the future.
By preferring to employ local residents, supporting local suppliers and various regional non-profit organisations, renovating and restoring abandoned and degraded sites for its business needs, Dewesoft is contributing to making the region a place, where people will want to live in the future. As a result, the company's global business success fuels and supports the revival of the whole region, and the local region’s revival in turn has a positive impact on Dewesoft’s employees and suppliers.
On safeguarding continuity going forward
Presently, personal values and philosophy of the remaining founder and majority owner still play a key role in the company and underpin its strategies and practices. Safeguarding their continuity going forward would require legally enshrining them, thus making them robust to potential future changes and pressures.
And finally
It is not always straightforward for a company to identify a connection between its elements of deep design and its distributive and regenerative practices. Singling out the deep design and highlighting this connection draws a spotlight to the role of the deep design elements in supporting and enabling such practices going forward.
