Create a strategy
The first step for Hendrix was creating a
new strategy, so he and his team had a
three-day strategy session off site, and he
hired an outside consultant to help them
come up with a plan.
“If you’re trying to have a change-management approach, a lot of times you can
come up with the ideas internally, but you
really have to get buy-in with your people,”
Hendrix says. “A lot of times, a consulting
firm can confirm where you’re trying to go
and help get buy-in with your people
because it’s just another outside endorsement of the strategy you have embraced.”
As they looked at the various businesses
that composed Interface, they saw that
many were declining, but Hendrix and his
team also saw that the core — modular
carpet tile — had continued to perform.
“It was the most profitable part of our
business, and it had always grown pretty
much through the cycles,” Hendrix says. “It
had not seen the downturns the other businesses had.”
Seeing that, it was an easy decision for
the company to invest in that area instead
of the businesses that weren’t even returning their cost of capital. Despite that decision, it also meant getting rid of areas that
accounted for more than half of the company’s business, which would also cut half
of the company’s 8,000 employees. It was
an emotional decision, but with his financial background, it was easier for Hendrix
to make that tough choice by focusing solely on the numbers.
If Interface was going to focus on the
modular carpet tile business, he next needed
to expand where they sold it. Because the
office market had gone into such a great
downturn, he knew that the company
needed to reduce its dependence on that
market and instead expand into other
areas, including residential, health care
facilities and educational institutions. By
focusing on the core and then segmenting
that into other areas besides the office market, Hendrix felt this would help deliver the
company and eliminate its debt.
“Our direction at the time was to diversify and integrate worldwide in the commercial marketplace, and we changed
that,” he says. “I changed that, along with
our team, to the core modular business,
and let’s do it across the vertical markets
as well as geographically.”
With a strategy in place, he also had to
create benchmarks for progress and performance.
“You have to say, ‘These are the milestones that we have to have,’” Hendrix
says. ‘“This is our one-year milestone, this
is our three-year milestone, and this is our
10-year vision of where we’re taking the
business,’ and you have to communicate
those milestones.”
When creating milestones, it’s critical to
know what is and isn’t possible by
researching the market and measuring
how you do against the market.
“You have to get in the weeds a little bit,”
he says. “You have to understand the market and do a lot of market research. You
have to understand where you have competitive advantages against your competition, and you have to have a vision and get
buy-in and get your people energized
around that vision.”
