11 Apr What will continue to give your company “The Edge”?
Being a “forward thinking company” is a buzzword at the moment, but what does forward thinking really mean? In my opinion, it means anticipating the future amidst rapid changes in the world. By Donald Ernest Platt, Managing Director of FloorworX
I’m now in the last quartile of my business career and looking back, I realise that things took a long time to change in the past. Today, change is constant. With globalisation, technology and changes to the market are being implemented faster than ever before and companies can no longer thrive by simply having great products. It’s not enough to produce quality products and technologies because everyone in the industry has great products. Having a high quality product to sell is your entry into the market; it’s the starting point and is expected, but these products aren’t your company’s differentiating factor because it won’t keep giving you the edge well into the future. I recently read an interesting statistic that 77% of leading companies’ products are less than four years old. When looking at FloorworX’s international partners, I can confirm that new product development is definitely what will set you apart and keep you ahead of your competitors in the flooring industry. Research and development and product innovation are crucial if you want your business to ride the waves of change and be sustainable well into the future. Companies who have a winning product today can’t expect to still be selling it in 20 years’ time. Product development needs to be an ongoing process and this requires incredible market intelligence and insights.
How the idea of business sustainability has changed
Decades ago, the way that companies were formed was very different to the way that company formation happens today. Companies were mainly family-owned businesses set up with the long-term goal of providing wealth for the next generations in their family. This type of long term vision is what more businesses need today, but the way companies work isn’t aligned with this goal. Companies hire chief executives and these executives have five year plans because this is how they are incentivised. Many times, these CEO’s have great plans and strategies to grow the business within a few short years and they are able to yield fantastic results. However, the long-term focus on sustainability and growth is lacking. To go from good to great, always have a longterm end goal in mind. Don’t be driven by short-term profitability, but rather on the sustainability of your cash flow trajectory to build your business well into the future.
You don’t need to have all your ducks in a row
Many companies struggle to commit to strategies and new products because of the rapid pace of change in the industry. Unfortunately, we no longer have the luxury of waiting until everything falls in place before we launch a new product, campaign or strategy. If you have around 70% of the information you need, then my advice is to go for it or you may miss out on big opportunities. Just look at how technology companies launch new innovations or products. When a new smart phone, app or software becomes available, it’s not glitch-free. They launch it to the market, customers start using their product and then highlight the bugs that need to be fixed. Accept that you may never get everything 100% right because we live in a complex, ever-changing world. Work with the information you have and go for it!
Get your employees living your vision
If you look at a company’s website or within their office space, you will often see a written vision, mission and slogan. Executives go away for weekends to brainstorm these beautiful mission statements, but I think it’s time to throw them away because they have become meaningless. Your company’s vision has to be part of your organisation’s culture. Business thought leaders usually agree that the “customer is king”, but the most important relationships that you need to focus on are internal relationships. If you can’t get your own people excited about what you want to achieve, then there’s no way you will be able to extend this excitement to your customers. One thing that I have learned in my role as Managing Director is to conduct informal focus groups. Have tea and a muffin with your staff offsite to learn about their experiences and challenges in the business. The problem with formal meetings is that they have a formal outcome, but unstructured meetings are where you will learn more about your company and your people.
Become an expert instead of a generalist
FloorworX is a flooring solutions company and we have a very broad basket of products. To make sure we are remaining relevant in the marketplace, we have realised that we need product champions. Companies can no longer have general sales people who know a bit about all of your products. This isn’t only the case in our company – it applies to flooring companies across the globe. What we have found is that some flooring companies are specialising in flooring for the transport sector, for example. This company will then have a product champion for flooring that goes into trains, another champion for aviation related flooring, and so forth. This may seem like overkill because the market is so small and the surface areas of the projects are even smaller, but being a niche solutions provider is one of the keys to future proofing your business. Consider how your sales approach changes when you’re selling to an architect that is building hospitals as opposed to an architect who focuses on projects in the hospitality industry. Architects, specifiers and designers are busy people, so your best bet is to focus on how your product can provide a solution to the specific challenge they are facing. Instead of overwhelming potential clients with specifications and technical details, package the information that is relevant to them in a smart way. Besides being an expert in your sector, you also have to focus on access: how easy is it to do business with you? The companies that are changing the world are focusing on improving their logistics and supply chain models so that their access to the market is short, seamless and efficient. If customers want to buy a product, they expect instant feedback, delivery updates and increasingly shorter delivery times.
How the flooring market has changed and continues to change
Access to market is only one of the ways that the flooring industry is changing, but it’s interesting to reflect on some of the massive changes that the market has undergone over the past few decades. Many years ago, there were wholesalers who sold flooring products to contractors, but globalisation and technology has led to wholesalers becoming irrelevant in the marketplace. Another interesting change that is hard for many flooring product suppliers to wrap their heads around is that their biggest customers are also their biggest competitors.
Contractors import products themselves and it’s something that suppliers need to accept. While this isn’t an issue in the industry, problems arise when small suppliers import a few containers and sell flooring products with a small markup. These people often don’t have overheads so it’s not the same as a flooring company who has backup support, staff, and is trying to create a sustainable business for the future. This brings me to my next topic: ethics. If you don’t do business with integrity and you don’t have an ethical approach when dealing with people and customers, then your business won’t be sustainable. If you are in the fortunate position of being able to deal with ethical companies, then you will know how inclined you are to become a brand ambassador for their business. People are always willing to do more for companies that have integrity.
Understanding your millennial workforce
A lot has been written about millennial employees and not all of it is positive, but if you take the time to understand where they are coming from and what their needs are, you will see that millennials are an immense addition to any company. When you start employing millennials, you have to be prepared for your whole new way of doing business to change. This is when you need to take a step back and ask yourself what the future of your organisation is going to look like. Millennials aren’t nationalistic in the way that we are, which is why they didn’t respond to the Brexit issue in the same way that older generations did. Millennials see themselves as citizens of the world, they value flexibility and mobility, and they don’t necessarily want to be stuck in the same company for many years. They aren’t as inclined to own property and they don’t associate with hierarchical organisations in the same way we did. Millennials want to be part of a process or a project, which is the big mind shift that businesses need to make. They are liberated from the attachments that we have to things and companies, but this doesn’t mean they aren’t hard workers. They’re very well educated and driven; they just have different needs and expectations and these differences also extend to how they see brands. Many millennials are conscious of the brand of watch or clothing they purchase, but if they join your company, they see it as a transaction. With the growing millennial population, this means that branding is more important than ever before. In a world where we can no longer trust politicians and are increasingly being let down by sports stars and celebrity heroes, the one thing that people can hold onto is the values that the brands they support project. Brand equity is being brought onto the balance sheet, which can seem like a strange concept until you really think about it. If Coca-Cola, for example, has to sell its company, it’s not just going to look at its stock, inventory or cash flow projections, it’s going to look at the equity that their brand portrays. Everyone knows Coca-Cola but this doesn’t mean that the company can stop advertising. Companies need to continually reinforce their brands, and branding is where most of us should be spending our money. In FloorworX’s case, we wouldn’t be the company we are today without media partners like FLOORS in Africa magazine. Since the start, the publication has helped us shape our messaging and make sure it reaches our target market. FLOORS in Africa has helped us develop our brand from nothing and for that we are truly grateful.
Anticipating the disruptors you least suspect
The hotel industry thought they would be doing business as usual until AirBnB was launched and taxis had no idea what was hitting them when Uber made an appearance. The stories of how disruptors turn industries on their heads are aweinspiring. One of the major disruptors of our time was Nokia. The company was initially in forestry and managed large forests in Scandinavian countries. The forest site managers needed a way to communicate with each other, which is why they developed walky talky type communication tools, which later became mobile phones as we knew them. Problems, however, arise when disruptors don’t continue to stay at the cutting edge of innovation. Today, Nokia is gone because they quickly became accustomed to owning the largest part of the cell phone market share. They weren’t anticipating how the industry would once again be turned on its head by Steve Jobs, who was busy developing the smart phone. These types of stories aren’t exclusive to technology companies. As flooring suppliers, manufacturers, contractors, and installers, we need to consider what type of disruptors could change our industry as we know it and make some of the major players obsolete. An idea that I’ve been thinking about for a while is how to provide a completely different kind of flooring solution for companies. Hospitals, for example, often struggle with maintaining and cleaning their floors. A hospital’s core business is patient care and when they invest in a beautiful floor, they don’t necessarily have the time, manpower or the motivation to give their floors the kind of care and attention they need. How could the industry change if I were to approach Government hospitals and tell them that we’ll solve this problem for them by owning the floor. They only rent the floor from us. We could take care of everything, from installing the subfloor, bringing in the right contractors, maintaining the floors and then installing a new floor when it has reached the end of its life. This way, a hospital will know that their floor is a fixed monthly expense and that all the hassles are taken care of.
Many times, the disruptors in the industry are the ones with the far-out ideas. They’re the ones who have wacky ideas and they’re willing to try something new. This is the mindset of forward-thinking companies.
For more information, contact FloorworX on Tel: +27 (11) 406 4024 or via email@example.com