The name Formica Group is synonymous with the world of laminate, partly because its founders are credited with inventing it. During the last century, the company grew from its origins in a US provincial town into a global brand off the back of its innovative reputation.
But in recent years, an overreliance on its established name, "years of neglect" and a failure to modernise in the face of global competition caused profits to stagnate and Formica to lose its edge, says Peter Rush.
Since joining as European CEO in 2016, he has led the company through a three year turnaround that has seen revenues increase, operating loss fall and the firm acquired by Dutch firm Broadview Holding BV for $840m in December 2018, in a deal which is due to be completed in June 2019.
He shares three things all leaders need to consider when attempting to revitalise a tired business.
Start with the people...
"It’s all about the people and the customers. First and foremost you need to understand your customers’ needs and how they perceive the brand, otherwise you’ll quickly lose focus if you make too many changes. They are always the best judge of what you’re doing well and what needs to be improved.
"From the feedback we received it was clear that we were inconsistent across our audiences. We’d made the big mistake of under-investing in people, assets and processes and there were some urgent things we needed to address around the service we provided.
"Many of our customers felt that we’d sat on our laurels, and our competitors were biting at our heels.
"Humbled, we started listening, executing change and innovating. We’ve launched two new surfaces in the past year including Aria, a new type of kitchen worktop competing with stone. A key distributor has said it’s our best new product in 15 years.
Time is the biggest challenge...
"It can be frustrating when people look on from afar and try to speed things up; but this will lead to mistakes. Things as delicate as modernisation and cultural change take time.
"However, paradoxically it’s also important to change something early on that quickly makes a company-wide impact.
"We moved our European HQ back to the main manufacturing site at North Shields. Not only did this allow us to centralise all of our functions, but it also helped to underpin the central importance that manufacturing has throughout the whole business. It was no easy feat, but ultimately it sent the message that major change was afoot.
Your leadership really matters...
"Optimism is an underrated quality. The boss’s demeanour affects the mood of everyone else. If you’re positive you’ll bring people along with you.
"Empathy is another overlooked quality. Individuals can only do so much. A boss has to be able to spot when people are at their limit and understand when things are starting to fray, which means adapting your leadership style to suit all types of employees. It’s a tricky balance but it creates a stronger company ethos.
"Simplify the hell out of the business. Complexity is costly."
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