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Iscar Ltd

Breakthrough in 1982

The breakthrough came in 1982/83, when Mr Harpaz became the marketing manager of the company. He realised that in order to be internationally successful, you have to think outside the box, travel a lot and work with local companies to actually tap into new markets. “I realised that in order to gain people’s attention we needed a product that would be a breakthrough, something that people would ask for as an alternative to well-known names in the cutting tool business.”

“I think that R&D is driving the company and I can tell you that I am still the head of R&D, giving the guidelines not only for Iscar, but also for the whole IMC Group. You need to have a vision. I believe I have a feeling for what products can be sold in the market.”

You need your own people selling one product line

Indeed, Mr Harpaz does travel a lot; the first time I met the man who became Iscar’s CEO in 1992 was at a seminar in Australia, a small market and quite far away; but he still insists to appear in person, and to have subsidiaries instead of distributors in all the different markets. “You need your own people selling one product line, working for one company and not selling a basket of different products,” he explained. “In the early 1980s I started to open subsidiaries, but then I found it was hard to penetrate the Korean or Japanese markets and decided to work with a local company instead. Every time I started to work with a local company, it became an important part of us, and we ended up discussing an acquisition. It happened with Taegutec, Ingersoll, Tungaloy and many other companies that are part of the IMC Group today.”

In 2006, Warren E. Buffett, the multi-billionaire investor, put up $4bn to buy 80% of the IMC Group of Metalworking Companies. In 2013, Berkshire Hathaway completed the purchase of the IMC Group, paying $2bn for the remaining 20% of the Group. Mr Harpaz emphasised that the acquisition never changed Iscar’s unique company culture.

But what is the often-cited unique company culture? Mr Harpaz finds the question difficult to answer, but says that it’s an Iscar culture, not an Israeli culture. “No matter if I am at Iscar Germany or Japan or any other subsidiary around the world I feel like I’m working here in Tefen; the way people are doing business is the same. We make everything easy, there is no Israeli culture as such, for us it is easy to adopt all types of cultures.”

Mr Harpaz cultivates an open-door culture. “You will never see my door closed, it doesn't matter how important the meeting is. Everybody can come in.” He is a hard-working man, working at least 12 hours a day, six days a week. For him, to be successful you have to work hard and be good at what you do; and he expects the same from his managers and employees. And success proves him right. Almost all of Iscar’s managers have worked at the company for decades. They grew up together. They come, and they don't go.

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