Strategic Exchange - July 2012

By Kemp Harr

 

This 20-year review of the floorcovering industry is enlightening but also a bit scary. Where is this industry in its lifecycle? What happened to the entrepreneurs who required little sleep and awoke every morning hell-bent on making a difference and taking this budding industry to a new level?

As Jim Collins, author of Good to Great, adroitly pointed out, good is the enemy of great. Could it be that our industry has matured to a level where we have a consolidated number of large suppliers, filled with plenty of “good” people who are more focused on building shareholder value than challenging the status quo and making a differentiating decision that will plant us at the base of the next growth curve? 

The smart people in the channel—our own retailers—tell us in this issue’s Retail Survey that they fear we are headed toward commoditization. Who are these retailers? A few of the “good” people who drive the sales organizations on the supply side of this industry answer that question by saying, “the retailer is our customer.” But I challenge that! Retailers are not your customers; they are your business partners. The “great” leaders on the supply side recognize that suppliers and their channel partners should sit on the same side of the desk and build a “go to market strategy” that incorporates all touch points all the way to the consumer and end user—who is ultimately the customer.

The leaders on the supply side of this business have got to ask the question; Can all retailers be my business partner? The answer is absolutely not! The retailers that have built their reputation around high volume, low price and no service are the ones that need to be treated a little differently. But wait a minute. “Those are the guys that cover my overhead,” a “good” flooring producer might say. That’s just about as absurd as saying, “Don’t worry, we’ll make it up in volume.” We have our own case study right here in the floorcovering business. Just ask the folks at Pergo whose name became the Kleenex of laminate flooring but today can only be found at the home centers.

So let’s take this notion a bit further. How do you deal with the mass merchants of the world? You can’t deny that they are here to stay and they do sell large volumes of product. John Deere and Levi Strauss think they have the solution. You let them have your brand but you sell them a cheaper product. In essence, you let the consumer sort it out. This strategy gets mixed reviews from Deere’s stocking dealers and Levi’s boutique store partners. Deere answers the problem by saying that they’re bringing more traffic to their loyal dealers in the form of parts and service—something Home Depot and Lowe’s don’t offer. And Levi Strauss tells its boutique retailers that its Levi Signature brand at Wal-Mart does not compete for the same consumer that pays $100 for a pair of jeans at the boutique store.

I mention these two brands as examples because they, too, are struggling with the right channel strategy. But they aren’t exactly relevant to our situation here in the flooring business, for one simple reason. Deere and Levi Strauss still spend millions talking to the consumer in the form of advertising. This business needs another Tom McAndrews, who propelled Stainmaster and Mannington Gold sales through aggressive consumer advertising. We’ve said it before and we’ll say it again—you can’t have a commanding voice in the channel unless you mean something to the consumer. One solution is your own investment in consumer advertising; the other is partnering with the right retailers who commit to building your brand downstream—or perhaps a blend of both.

LEADERSHIP MATTERS
Perhaps the most rewarding part of pulling this anniversary issue together was hearing the stories about some of the leaders who helped shape this industry over the last two decades. Many of these stories were conveyed to me by the industry’s current leadership. On both counts, this business has been blessed with a number of gentlemen who qualify as level 5 leaders as described in Good to Great. For those of you who haven’t read the book, a level 5 leader has a paradoxical blend of personal humility and professional will. They are usually self-effacing individuals who deflect adulation and yet have a stoic resolve to make their company achieve greatness. Their passion is not for personal wealth but for the success of their organization. 

Ray Anderson, the founder of Interface, is a perfect example. Early in his career, Ray risked everything he owned and focused his passion toward Interface’s success. And yet, all the while, he kept his cool with a swagger and an infectious smile. Later in life, he shifted his focus to environmental sustainability and with the same razor focus and refined Southern drawl, convinced our industry and many others to follow his lead on a trek toward sustainability. Each of the leaders we singled out in this special issue deserves to be honored for advancing within our industry over the last 20 years.

There’s a strong chance that we’ve inadvertently omitted a key person, fact or milestone from this issue that deserves mention. We sincerely seek feedback on any omissions so that we can add this information to our library and pass it along to our readers.

QUALITIES OF A GENTLEMAN
I used a word a minute ago that needs a little more attention. The word is gentleman. I mention this for fear that many men in today’s society have, for one reason or another, lost their aspiration to become gentlemen. Being a gentleman is behavioral and has nothing to do with economic stature. A gentleman is aware of what civilization is about and acts accordingly. He recognizes that there should be a balance between the needs of himself, others whom he is associated with (friends, family, associates), and all mankind. 

So, what makes a man a gentleman? He is well groomed and stands tall, he is quick to open the door for others, smile and acknowledge one’s presence, and when he shakes hands, he looks the other person in the eye as if there is no one else in the world at that moment. He is courteous and attentive and does not partake in idle gossip about others. A true gentleman is wise and in control of himself at all times. 

If you have any comments about this month’s column, you can email me at kemp@floorfocus.com.

Copyright 2012 Floor Focus



Other Archived Articles

Floors and More Wins Chamber Award   Full Article
Benton, AR, Feb. 16, 2015 -- Floors and More recently won a 2014 Small Business Award from the Bryant chamber of commerce.

Patent Board Rules for Tandus in Dispute with Interface   Full Article
New York, NY, Feb. 16, 2015 -- The Patent Trial and Appeal Board has ruled in favor of Tandus Flooring in a dispute with Interface regarding a patent on an installation system, according to Law 360.

IICRC Moves Headquarters to Las Vegas   Full Article
Las Vegas, NV, Feb. 16, 2015 -- The Institute of Inspection, Cleaning and Restoration Certification said it is moving its headquarters to its Global Resource Center in Las Vegas.

Kährs Acquires Minority Stake in Pozgaj Flooring   Full Article
Stockholm, Sweden, Feb. 16, 2015 -- Wood and resilient maker Kährs Group said it has acquired a minority stake in recently formed Croatian Pozgaj Flooring.

Consumer Sentiment Falls from January Peak   Full Article
Ann Arbor, MI, Feb. 13, 2015 -- Consumer sentiment declined in February after reaching an 11-year high in January, according to the Thomson Reuters/University of Michigan index.

Mohawk Group Sponsors HPD Collaborative   Full Article
Calhoun, GA, Feb. 13, 2015 -- Mohawk Group said it has become part of a growing list of “Visionary” sponsors of the Health Product Declaration Collaborative.

Earthwerks Signs Distributor Longust   Full Article
Houston, TX, Feb. 13, 2015 -- EarthWerks said it has signed a distribution agreement with Longust Distributing, Inc. to cover the southwestern U.S.

NAHB Analyzes Data on Boomerang Millennials   Full Article
Washington, DC, Feb. 13, 2015 -- A recent study of “Boomerang Millennials” may have important implications for this key demographic and what it means for the housing market, according to the National Association of Home Builders.

Metroflor Names Langstaff Design Director   Full Article
Norwalk, CT, Feb. 13, 2015 – Metroflor Corp. said that Robert Langstaff has been named the company's first director of design.

More Designers, Architects Attend Surfaces   Full Article
Dallas, TX, Feb. 12, 2015 -- Informa Exhibitions U.S. said that attendance at this year's International Surface Event was comparable to the 2014 show.

Retail Sales Decline in January   Full Article
Washington, DC, Feb. 12, 2015 -- Retail sales fell 0.8% last month, according to the Commerce Department.

Jobless Claims Edge Up Last Week   Full Article
Washington, DC, Feb. 12, 2015 -- Initial applications for unemployment benefits last week rose 25,000 to a seasonally adjusted 304,000, the Labor Department said.

Milton Warman, Coloramic Tile Founder, Dies   Full Article
Chicago, IL, Feb. 12, 2015 -- Milton Warman, 92, founder of Coloramic Tile and Carpet Fair, died Feb. 7.

House Price Growth Steady in Most Markets   Full Article
Washington, DC, Feb. 12, 2015 -- The majority of metropolitan areas experienced steady but slightly stronger price growth in the fourth quarter, according to the latest quarterly report by the National Association of Realtors.

Stonewood Floors Names Martin Senior Vice President   Full Article
Everett, WA, Feb. 11, 2015 -- Daniel Martin been named senior vice president for Stonewood Floors.

Mortgage Application Volume Declines Last Week   Full Article
Washington, DC, Feb. 11, 2015 -- Mortgage applications last week decreased 9% from one week earlier, according to the Mortgage Bankers Association.

December Foreclosures Lowest Since 2007   Full Article
Irvine, CA, Feb. 11, 2015 -- There were 39,000 completed foreclosures nationwide in December, according to real estate information firm CoreLogic.

Nydree Expands Distribution Agreement With Spartan   Full Article
Forest, VA, Feb. 11, 2015 -- Engineered wood flooring maker Nydree Flooring has chosen Spartan Surfaces to distribute its products in Virginia, Washington, D.C., and Maryland.

Mohawk, Shaw, Tandus/Centiva Again on Training 125 List   Full Article
New York, NY, Feb. 11, 2015 -- Training magazine has ranked Mohawk Industries 14th, Shaw Industries 54th, and Tandus/Centiva 66th on its annual list of top training organizations.

NeoCon East Moving to Philadelphia   Full Article
Chicago, IL, Feb. 11, 2015 -- The 13th edition of NeoCon East will be held Oct. 28-29 in Philadelphia.