The change of the calendar year is normally a time of reflection, goal setting and a renewed focus on the future. For the last year, the Starnet members have been held back by the supreme effort involved in accomplishing the most random of daily tasks, such as getting accurate ship dates. However, the strong desire to work “on their business” instead of “in their business” is emerging. In discussions with member companies and the manufacturers affiliated with Starnet, some themes around realignment have emerged. The key rally points below include the challenges and opportunities that lay ahead in 2022.
Talent Recruiting, Development and Continuity
Investing in employee engagement is vital for every company. Our industry must always be committed to an employee recruitment and engagement process. This part of running our businesses cannot be a reactive process. Part of the leadership solution to improve engagement levels is connecting the employee experience to more meaningful client relationships.
Our industry must always be committed to an employee recruitment and engagement process. This part of running our businesses cannot be a reactive process.
Having a proven channel path with long standing histories and personal relationships creates an extension of the manufacturer’s brand experience. This reinforces the manufacturer’s position as an employer of choice. A stable channel like Starnet allows companies to attract and retain operations and product management talent to build a career around. On the other hand, for companies focused on sales and service such as professional flooring contractors, aligning with manufacturers and a compelling brand promise adds levels of assurance as contractor employers of choice. This mutually beneficial structure requires continuity, and the Starnet members provide that market stability for manufacturers.
As global consolidation drives turnover, mergers and acquisitions in manufacturing, Starnet members provide a stabilizing effect in the industry as generational businesses. These concepts help to mitigate the foolish notion of a simple buyer/seller relationship that cannot support the complexity of the contract interiors industry. Manufacturers and flooring contractors must continue to be competitive with compensation offerings, but they must also create partnership systems to ensure that employees feel visible and appreciated, provide professional development opportunities, flexibility and an overall environment that has high market connectivity. The attendance levels at meetings, tradeshows and live training experiences should increase as savvy leaders use those events to increase the connectivity and immersion for their associates. Marketing cooperatives such as Starnet are well positioned to provide these compelling events.
Importance of Industry Partnership and Leadership Communication
The contract interiors industry is a community of giant personalities and powerful organizations that enable all other businesses to thrive in the built environment. The professional flooring contractor allows manufactured flooring products in a warehouse carton to command a value more than zero through the application of skilled labor and project management. Every manufacturer’s limited warranty clearly places all responsibility for end user satisfaction on the professional flooring contractor.
Due to the massive internal challenges faced in plant operations and raw material shortages during the market disruptions of the last few years, manufacturers retreated from the front end of the business to put a focus on production. Manufacturers can efficiently deploy the resources of manufacturing and product innovation when they allow the end user sales and service roles to fall to the professional flooring contractor. This balance optimizes profitability under challenging conditions but requires both sides to display strong leadership skills.
Examples of the leadership skills that result in more profitable relationships include creating mutual accountability, developing excitement and alignment for strategic goals, generating combined value stories to earn market investment priority and execute positive project delivery experiences for end users. Gone are the days of the masquerade that a business plan is “sell more than last year.” Selling more than last year is the result of a good business plan that aligns manufacturers with flooring contractors in strategy. That strategy fills the plants.
Focus On Productivity and Deployment of New Technologies
In the last few years, we saw yet again companies that thrived were able to adapt and overcome change quickly. The changing landscape of supply chain access and inflationary pressure exposed historic weaknesses in compensation models and communication norms for the industry. Manufacturing companies that were used to publishing two price increases per year aligned with GDP growth were completely caught out by broken supply agreements.
Flooring contractors that had not updated their standard forecast costs for sundry items in their estimating process watched all the profit evaporate from fixed price contract bids. This just a few months after the greatest economy we have ever seen. Managing submittal, selections, pricing, lead time and other communication necessary for our industry to function became all consuming. Collecting the supporting references to explain a 30% price increase or explain why ordering material 50 weeks ahead of time to make a project schedule could not have been foreseen, became a full-time job.
Due to the stress on employees and sober reflection of the dramatic drop in our industry productivity, new focus has developed around the notion of “let’s not do that again.” Some of it is incremental, such as the online manufacturer ordering and quoting portals instead of email and text quotes with a local representative. Other adoptions are revolutionary, like the proliferation of self-leveling underlayment for small projects and the use of visualization tools to speed decision making.
Professional contractors are now beginning to say out loud, “My fully deployed labor teams cost me $4,800 per minute, how do I make them optimally productive and physically comfortable laying flooring every minute of a workday.” This change in worldview will have outstanding benefits for the flooring contractor and provide endless opportunities for savvy manufacturers asking the right questions of that audience.
Steady Demand and Optimism Across Multiple Segments
2022 will be a comeback year for many industries, including ours. With the pent-up demand in segments such as retail, hospitality and ambulatory care, discretionary spending on commercial interiors should keep demand healthy. Before they get it right, companies will need to deploy multiple back-to-work strategies to support their return to the office.
Read more on the latest developments in the commercial segment!
The investment demand for quality commercial real estate remains strong, and lenders continue to support new real estate development. New build commercial properties continue to demonstrate leading investment performance and older inventory will need to be refreshed to compete as fresh spaces with high quality interiors. And then there is the massive demand wave coming for education facilities to support new expectations.
All these positive trends will allow our industry to overcome our current challenges, as long as the manufacturers and the Starnet professional flooring contractor “Partner for Success!”
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