In 1993, the first full year of the existence of Starnet as a legal entity, a Harvard Business Review article, "Customer Intimacy and Other Value Disciplines” by Michael Treacy and Fred Wiersema was published. It seemed such a strange way to describe the dynamic between buyers and sellers at the time. Its fundamental lessons were more fully developed in a 1995 book, The Discipline of Market Leaders, which codified the Value Disciplines Model. This strategic concept outlines three distinct approaches businesses can adopt to deliver value and gain competitive advantage.

The core principle of the Value Disciplines Model is that companies should choose to excel in one of these three disciplines while maintaining acceptable, industry-standard performance in the other two. Attempting to be superior in all three simultaneously can dilute focus and strain resources, potentially leading to a company being "known for nothing.” This focused approach allows for clarity in decision-making, optimal resource allocation, and a stronger competitive position.

Here are the three value disciplines from the model and how commercial flooring leaders can apply them for growth and market leadership:

1. Operational Excellence 

Companies pursuing operational excellence aim to deliver products or services at the lowest cost and with the highest efficiency in the industry, minimizing difficulty or inconvenience for customers. This involves optimizing processes, reducing waste, and achieving economies of scale. Key characteristics include:

• Process Optimization: Streamlining workflows and eliminating non-value-adding activities such as change order dynamics and late-stage value engineering.
• Continuous Improvement: Fostering a culture where employees enhance processes and increase efficiency through transparent communication and value delivery.
• Cost Reduction: Significantly lowering operational costs through repeatable efficiency over inefficient and error prone bidding processes.
• Standardization: Ensuring consistency and reliability in product or service delivery. Examples of companies mastering this include Walmart, Southwest Airlines, Dell, and FedEx. 

For Commercial Flooring: An operationally excellent flooring contractor would focus on highly efficient sales execution using structured agreements, state contracts, and maintenance/repair/operations (MRO) service agreements. This means optimizing installed construction services procurement, standardizing the proposal to closeout model for non-construction professionals, implementing robust and transparent project documentation for compliance, and ensuring project delivery with minimal client hassle.

Photo courtesy W.C. Carpenter

Cecil Ward – Vice President at W.C. Carpenter, Virginia Beach, Virginia 

“In recent years we have introduced and implemented various structured purchasing agreements to our collegiate and K-12 client base. These contracts have proven success, and they bring a tremendous amount of value to our clients. The way that these are structured satisfies the bid requirement which saves time, and more importantly, these agreements ensure that the end user is delivered a quality job at a fair price. Summer is always a busy time for us because of the amount of work we handle in the education segment, but this past summer was one of the more challenging ones we’ve faced. In addition to all our forecasted work, we had countless last-minute requests for additional work to be completed, which involved incredibly tight deadlines. We were able to exceed all deadlines this summer, largely in part because of the structured pricing agreements that had already been implemented. Our clients were able to send purchase orders in an efficient manner, which then allowed our company to execute these jobs promptly and in compliance with purchasing guidelines. This is a win-win for the client and the dealer, and we look forward to continued growth in this channel.”

2. Customer Intimacy 

Firms adopting customer intimacy prioritize understanding and catering to business partner specific needs and preferences, building deep relationships, and providing personalized solutions. The focus is on the lifetime value of network relationships rather than single transactions. Key characteristics include:

• Customer and Supplier Understanding: Investing heavily in granular customer insights and business partnerships through data and feedback.
• Customization and Personalization: Tailoring products or services to meet unique requirements, moving beyond a one-size-fits-all approach.
• Exceptional Service: Building strong relationships through personalized support and genuine care. Nordstrom, Amazon (for its personalization), Home Depot, and Kraft are examples. 

For Commercial Flooring: A customer-intimate contractor would emphasize tailored flooring solutions and consultative selling. This involves deep understanding of a client's specific business needs, aesthetic goals, and long-term facility plans. Their sales teams would focus on long-term relationships, retention, and upselling strategies, positioning themselves as trusted advisors who anticipate needs and connect them to the best solutions. This requires developing committed vendor relationships beyond functional product specifications.

Photo courtesy Duffy & Lee Company

“Since I became the owner of Duffy & Lee, we have an open-door policy for our manufacturer relationships, and we hope every representative takes advantage of it. The ones that do are favored, especially if they are Starnet. We typically push their products harder because they make the effort and our relationship has grown stronger because of it. Very rarely is this focus around products, at least from my standpoint, fuzzy side up and we're good. My sales team gets more involved when it comes to product features. I would say every three months we want to have a formal meeting to focus on strategy and connect projects.  With all of the changes in the industry we must have a connection to the reps and face to face is the best way to build that on a personal level. We've seen these connections pay dividends and it helps us deliver the most value for our clients.”

3. Product Leadership 

Businesses that prioritize product leadership aim to create and offer the most innovative and cutting-edge products or services in their market. They invest heavily in research and development to stay ahead of the competition, constantly pushing the boundaries of what's possible. Key characteristics include:

• Innovation: Creating novel, high-quality products and introducing new features, functionalities, capabilities and technologies.
• Market Differentiation: Offering unique and superior products with a competitive edge.
• Relentless Pursuit of New Solutions: Being willing to make their own technology obsolete by continuously improving. Apple, Tesla, Nike, and Johnson & Johnson are prime examples. 

For Commercial Flooring: A product leader would be at the forefront of new flooring segment applications and materials. This could mean being the first to introduce specialized or non-traditional flooring options, adjacent solutions such as exterior paving and access systems, advanced modular systems for flex spaces, or high-performance materials that offer specialized attributes and acoustic properties. Invest in showcasing cutting-edge design capabilities and innovative installation techniques, allowing leaders to constantly redefine what's possible in commercial flooring.

Photo courtesy The Jack Laurie Group

“Our company has always been very passionate and focused on our apprenticeship program for our installation teams. This gives us a lot of confidence to add capability in a deliberate way. We’ve got manufacturer representatives in here every week showing products. When we identify an opportunity to take advantage of a technically difficult category or new solution we focus on it. We have our due diligence to make sure that the sales teams see the opportunities too. We assemble technical reps and get serious about training on these new products to lead the market. Over the last few years that has allowed us to take on challenges other companies shy away from. We have created new divisions and specialties to serve our customers supported by excellence in field operations. Our team takes a lot of pride in doing the work other companies just can’t handle.” 

To leverage the Value Disciplines Model effectively, commercial flooring leaders should follow these steps:

Step One - Choose One Primary Discipline: Assess your current operations, strengths, weaknesses, and market position to identify which value discipline aligns best with your capabilities and target market. While it's tempting to pursue all three, focusing on one is the most effective strategy for differentiating and growing.

Step Two - Align Your Organization: Once a primary discipline is chosen, restructure your people, processes, and technology to support this strategic focus. For instance, if choosing customer intimacy, empower your sales and project management teams to deeply understand and cater to client needs, and invest in robust CRM systems. If operational excellence, optimize your supply chain and installation logistics.

Step Three - Establish KPIs: Define key performance indicators (KPIs) that specifically align with your chosen value discipline. These metrics will help track progress and ensure efforts are delivering value according to the chosen strategy. For example, customer retention rate for customer intimacy, or number of CSI product categories your team can successfully install on any project for operational excellence.

Step Four - Innovate and Improve Continuously: Use the principles of your chosen discipline to constantly seek growth and improvements. This is not planning to compete by bidding, but an ongoing commitment to use strategy as a tool to make winning choices.

By embracing one of these value disciplines, Starnet members have demonstrated they can move beyond reactive bidding and develop a proactive, differentiated business model that secures predictable revenue streams. They have positioned themselves as innovators and market leaders. This strategic focus is key to creating a sustainable competitive advantage and achieving growth.