Mohawk Group has been on a laser-focused path to grow its business across commercial segments for the last several years. Recently, the company announced a major restructuring of its teams and strategy. We spoke with Mohawk Commercial President Michel Vermette to learn about the approach and how it will help drive business and provide solutions to the architecture and design community.
FT: Elaborate on your approach to business segmentation in Mohawk Group.
Vermette: Basically, what we’re going through is breaking down our commercial sales force in four major segments in North America with leadership and supported by design studios and marketing, sales operation and so on. We already had a very strong Durkan sales focus on hospitality with David Duncan, and now we have Mark Oliver overseeing workplace and retail [interim], David Dembowitz heading up education and government, and Mark Bischoff managing healthcare and senior living. They will have the whole Mohawk product suite and will focus on those respective end users, designers the market and really work with them to create great projects. We will be ready to make it go January 2.
FT: Why was it important to restructure commercial sales?
Vermette: We’ve been on a journey to get to this structure for about three-and-a-half years. We believe the business is getting more complex for our customers. Mohawk has evolved from a carpet company to full flooring company and there are different requirements and sales cycles for each of those segments. So, if we want to excel, we thought it would be important that our folks are focused on the customers’ needs and how our product lines can provide solutions to their product needs. A hospital has very different needs from a retailer, product-wise and performance-wise. The purchasing cycle is very different, going through general purchasing offices on the healthcare side, more of a design and merchandising and branding team on the retail side. Every one of those segments has unique complexities and challenges. Coaching and empowering our account executives to tailor to those segment needs, we believe, will create a better customer experience.
When you look at the A&D community, every major firm often has many studios. You think about how those firms are structured — they will have a hospitality studio and a retail studio; they will have a workplace studio or education. For the bigger ones, they will tailor their studios accordingly to know everything about the customer and create the best and most relevant spaces for their customers, so they are segments themselves internally. And it’s not unusual for the smaller firms to have a specialty, so it fits directly in the same way we are replicating a lot of that expertise and we will match it better with them.
FT: How do Mohawk showrooms fit into the overalls?
Vermette: What you will see — and you can take as an example our New York showroom that’s going to be opening in the January timeframe — is that we will have areas that will feature the products and solutions for each segment, and they will be there to embody the capabilities of the company so we can tell the story and deliver on that promise. Something that’s also a little unique about New York is that it will be a LEED Gold and a Well-Certified showroom, so that will be exciting. It’s one of the few in the commercial interiors industry, so it will not only have stories and exhibit our capabilities for each segment, but it will do it in a sustainable way. New York is always a magnet for designers, not only in the Northeast, but also from around the world; so, we often have people from the Middle East, Australia, Europe, Asia come to New York to see what we do.
FT: You had some major wins in 2017, such as the launch of Lichen. What does the industry have to look forward to from Mohawk Group in 2018?
Vermette: We just completed, about five months ago, our new product direction. We liked what happened with Lichen, with it being a Neocon Gold product, the great sustainability story, and it’s also been a very strong commercial success. Lichen got recognized with the Nightingale Award at the Healthcare Design Expo, so you see it’s a corporate product and a healthcare product. We are seeing some nice success in hospitality with it, so we like the perspective, and it helps to show what Mohawk can do as a business with a holistic approach, being Red List free, being the great process and returning to Mother Nature its resources. So, you will see us build on that story and you will see continuing great design, being more dynamic in color. You probably saw a little more color from us in 2017, and you will see that trend continue in 2018, and also you will see us continue developing our hard-surface platform to be that complete flooring solution.
FT: You’ve been diligently building your hard-surface business. Tell us about that growth.
Vermette: We are four years into it, and it’s 20 percent of our business now and growing. We are adding to it all the time. Our goal is to be closer to—depending on how you look at it, projects are about 50-50 in most industries by platform, so 50 percent soft, 50 percent hard. Our goal is to continue evolving in that direction, but when you have a large soft business, it takes a little longer; but you will see us continue evolving and growing to ensure we have a full and complete portfolio for every type of segment. And that’s one of the things with having a dedicated sales team. We believe it will also accelerate the feedback loop from the market to our design studios, our product management team and manufacturing team to make sure we have the right solutions. So, we are not only developing carpet tile, resilient or hardwood in general, we are now developing it for a particular segment. That brings different color decisions, size decisions or different sound requirements. We are making sure we are finding the sweet spot for each product solution for each segment.
FT: What’s in store for the group in 2018?
Vermette: In 2018, we are expanding in Europe. We are going to have a carpet tile plant in Europe in Q2. We are expanding our global reach, and you will see some global collections coming out of that. We are working on other locations to expand the complete platform, so you will see us expand that global footprint for needs across the business. You will also see us expanding our sales team in 2018 across the marketplace to complement the segments we mentioned. We are much more mature in workplace and education and we are in the early cycles in healthcare, for example, so we need feet on the street in that area. You will see us build on our sustainability efforts. You’ve seen us talk about Living Product Certification, transparency, continuing augmenting our recycling in our community involvement — you will see us do much more of that. I think we are upbeat on the market for next year and those are things we will capitalize on.