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Case Study: KMAG Office Redesign

How creating an optimal work environment has been paying great dividends

KMAG is a car retail business, with several offices in the Adriatic region, which has recently upgraded its Ljubljana office with Kragelj’s expert assistance.

After the floor layout was rationalized to better support teamwork as well as individual work, and the fitout went through a complete overhaul to match the company’s culture and brand, KMAG’s fresh new work environment has been making a massive positive impact on many aspects of individual and organizational performance.

Six months after the upgrade employees are more productive, creative and collaborative, and work with greater engagement and enthusiasm. People using or visiting the space feel more positive about the company, and as a result, staff retention has improved, and KMAG’s management now finds it easier to attract top talent as well as new business.

About Kmag

KMAG (Kia Motors Adria Group) is a family owned car retail business, founded shortly after Slovenia declared independence in 1991.  After 25 years in business the company is still growing steadily; it currently employs around 400 people in five countries across the Adriatic region, including around 70 people in the Ljubljana headquarters.

The upgrade of KMAG’s HQ office in Ljubljana was completed in mid-2015, and became another important milestone in the company’s development.

KMag Offices
KMag Offices

KMAG started in 1994 with distributorship of Chrysler vehicles in Slovenia (as company C.J.I.), and shortly afterwards with Kia Motors (as KMI), becoming one of the first European distributor of this Korean brand.  Hard work paid off and KMAG expanded into regional markets of Croatia, Serbia, Bosnia, Montenegro and Kosovo.

The upgrade of KMAG’s HQ office in Ljubljana
The upgrade of KMAG’s HQ office in Ljubljana

Today KMAG is distributor for Korean brands Kia and SsangYong, authorized dealer for Swedish premium brand Volvo and authorized dealer for Slovenian network of independent car services called Service Maxx.  KMAG offers new mainstream and premium cars as well as a broad range of used cars, and service operations within the Adria region.

30% increase in number of workplaces
30% increase in number of workplaces

The workplace analysis revealed several pressing issues.

The office was uninspiring and uninviting; there was not enough daylight, artificial lighting was poor, and much of the furniture was old and uncomfortable. In addition, the interiors didn’t reflect and support the company’s youthful and dynamic culture.

KMag’s office before the upgrade

Before the upgrade the organization was fragmented. Those working in different locations hardly ever met in person, but even the Ljubljana -based
employees— who worked in the same building but on different floors or in different rooms—rarely talked to each other face to face. People and small teams mostly worked in isolation, which hindered problem solving and innovation.
These communication issues were largely due to the dated and inefficient office layout with lots of small enclosed offices separated by solid walls, but also due to the poor spatial connection between the different floors. Employees had virtually no opportunities to spontaneously meet or socialize.

There were not enough meeting spaces either, which led to a lot of noise in the workstation areas. At the same time, the old space didn’t offer enough opportunities for privacy.

37% higher sales when sales-persons are in a positive mood. -HBR study-
37% higher sales when sales-persons are in a positive mood. -HBR study-

Project Objectives

The workplace upgrade was initiated by KMAG’s President Domen Habič.  His vision was to take the company to the next level, and to turn the main office into a modern, welcoming and high-performing central headquarters that was also able to accommodate transient staff from other offices of the company.

KMAG employs a young and dynamic team that thrives on exciting challenges.  Each member of  the KMAG ‘family’ is deeply passionate about cars, so they naturally strive to work in an environment that reflects this passion.

Recognizing the deficiencies of the existing space, Habič and his team wanted to create a fresh new environment that enhanced productivity.  As he states, “Part of our strategy was to make the office more conducive to communication and collaboration while also supporting quiet, focused work.”

“Our old office failed on both fronts”, Habič adds.  “It was also important for us to create a greater level of transparency, so that our employees could see, hear and learn how the company was functioning and performing.”

Furthermore, the leadership team wanted to make people feel valued and cared about, and to create an energizing environment with a positive ambience.  In a sales business, employees’ mood and energy levels can make or break deals.

A Harvard Business Review study shows that people in a positive mood make 37% more sales compared to those who feel neutral or negative.

In a sales business, employees’ mood and energy levels can make or break deals.

6x more meeting rooms, ad hoc sports and creative spaces
6x more meeting rooms, ad hoc sports and creative spaces

Engaging Kragelj

As Domen Habič explains, “Our team agreed that we should engage workplace specialists who

understood where we come from, and who were knowledgeable enough to help us achieve our goals.  One of our business partners who has already worked with Kragelj recommended them as the best workplace specialists for our project.”

“Once we met, learned about their expertise and methodologies, and saw the results of their past projects, we were quickly convinced that working with Kragelj would be the right choice.”


Kragelj needed to be very resourceful to work around the project’s constraints.  The timeframe was extremely tight; the upgrade had to be completed in three months, from the initial Meetings and pre-design inquiries through design development to construction and fitout works.

In addition, the budget was low.  However, KMAG’s frugal approach is understandable, considering that their brand value and philosophy is to seek and offer maximum return on investment.  KMAG incentivized the project team to carefully evaluate priorities, rigorously calculate costs and returns, and look for evidence-based design solutions.

One of the biggest design challenges was to create space for common areas and additional workstations in an office which had no unused space to start with, and to strike the right balance between spaces provided for teamwork and individual work.

KMAG’s decision-making team was easy and rewarding to work with. The project team worked in a positive atmosphere all the way through.

Working with KMAG

After a series of interviews with heads of departments, and observation studies of how employees worked and used the existing office, Kragelj developed a range of different design concepts.
Tomaž Kodrič, CFO, had a key role in advancing the project in the right direction. Apart from managing the project efficiently and skillfully on the client’s side, he thoroughly understood the impact of the work environment on the company’s operations and financial results, and made quick but well-thought-through decisions.

Project delivery and cost control

Costs were closely controlled right from the start of the project.  KMAG and Kragelj evaluated the design options together, and always chose the most costeffective version.

Kragelj introduced an integrated approach to project delivery, a design management method  that minimizes delays and errors as well as disruption to employees’ work during the design and implementation process.

Beyond finding design solutions that would generate high returns for KMAG, Kragelj’s business development, management and sales expertise also contributed to completing the project as efficiently as possible. The project team had clear priorities about how money should be spent—where not to make any compromise, and where the opportunities were to cut costs.

For example, as employees’ health and wellbeing were top priorities, almost all workstation desks in the office were chosen to be sit/stand.  However, these desks were from IKEA—high range but relatively inexpensive products.

Kragelj facilitated an integrated project delivery process, which helped to reduce risks and errors, and prevented any delays.

250 square meters of smart wall paint making creative work visible
250 square meters of smart wall paint making creative work visible
46 sit/stands desks for dynamic and productive work
46 sit/stands desks for dynamic and productive work

Design Solutions

All office areas have been moved to one floor, and only the retail space and the garage are on a separate floor.  By removing most of the enclosed offices, optimizing the floor layout and using smaller desks than previously, a lot of space was freed up.  This made it possible to create a variety of new work settings for different individual and team activities, such as small meeting rooms (formal and informal), creative spots, collaboration spaces, social and breakout spaces, focused work areas, and a quiet room.

A hot-desing area with 10 desks was established to accommodate part-time and transient staff, enabling colleagues in other countries to regularly come over and collaborate with the Ljubljana team.

Despite adding new workstations and facilities, the office doesn’t feel crowded, and employees have plenty of personal space.  The new layout also provides a great level of transparency, elevating KMAG’s culture, supporting learning and promoting impromptu interactions.

Based on analysis of workflow and information flow within the organization, Kragelj also provided recommendations for where the different teams should be located and where people should sit to optimize knowledge exchange.

The new interior has an inspiring and up-lifting ambience.  “We wanted to help people be on the top of their game, and put a smile on their faces”, says Alenka Kragelj Eržen, Principal Architect and Consultant at Kragelj.  “Work at KMAG is very dynamic, and people need a lot of energy to perform well.  So we created an environment that matches that energy.”

The interior is characterized by pleasant wood surfaces as well as vibrant feature colors.  These colors not only reflect KMAG’s fresh culture, but have been purposefully chosen for their psychological effects.

For example, the breakout space is a relaxing green, the meeting and collaboration areas are dominated by intense orange and yellow which promote interaction and creativity, while areas where people need to concentrate are characterized by blue, which is proven to help with focus.

Wherever it was possible, non-toxic and non-allergenic materials were chosen, and the indoor plants, apart from livening up the space, were selected based on their capacity to improve air quality.

81 days from the start of the project to its completition
81 days from the start of the project to its completition

Managing Change

Due to the time constraints, employees had little opportunity to influence the design. However, Alenka ran a series of workshops to explain to everyone why the new office was designed the way it was, and how to use it to get the most out of the features of the new space.

The proposed design solutions were very wellreceived, so much so that the features of the new office actually became a discussion topic among employees even before the upgrade.

To make the transformation truly successful, management also needed to embrace change and adapt the way they evaluate employees’ performance.

This is because in a flexible work enviroment—and with people moving between Offices—management is no longer able to directly oversee what people are doing at any given time.

KMAG’s management embraced the change, giving staff an example to follow.

KMAG’s managers were not only open to these changes, but have themselves been regularly moving between offices to give staff an example to follow.


The project was completed within budget, and fol-lowed the planned timeline. After half a year of operation, the office is being used really well, just as intended by the designers and management. Interestingly, the only room which is rarely used is a small quiet room. This is an indication that one of the biggest challenges of the old office—noise—has been successfully resolved.

Managers are starting to notice distinct improvements in key performance indicators, such as sales results, staff engagement and retention, and speed and quality of work. “We notice that our staff members are now working smarter and with more enthusiasm than they used to before the upgrade.

They are more resourceful in solving problems, and make fewer errors. But most importantly, I see the pride and enthusiasm on their faces when they come to work each day, and this is why I love being in this business.” – says Domen Habič.

The office upgrade improved key performance indicators, such as sales results, staff engagement and speed and quality of work.

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