Cornering the market

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Sherritt says "fit" is important when Floform is considering potential employees. (KEN GIGLIOTTI / WINNIPEG FREE PRESS) Photo Store

Unlike some businesses tempted to diversify as part of their growth strategy, Ted Sherritt's company has expanded simply by staying true to the one and only product it has made since 1961 -- countertops.

"Making post-form, laminate countertops is where Floform started more than 50 years ago. It was an innovative product that the founders truly pioneered and championed and it helped them dominate the industry," says Sherritt, who took over as company president and CEO in 2000.

"In fact, in Manitoba and Saskatchewan, there are people who still refer to any one-piece postformed countertop as a Floform countertop, sort of like the way tissues are commonly called Kleenex."

Recently named one of Canada's 50 Best Managed Companies for the first time, Floform employs a total of 575 people in its eight locations across Western Canada and three in the northwest United States (the company acquired a Seattle-based business in 2008).

"Although we have customers all over North America, we are very western-focused," says Sherritt, adding that 75 per cent of the company's business remains residential work, which keeps more than 100 installers busy in the field every day.

"To be successful, we rely on our mission statement, which is a commitment to providing the best countertop purchasing experience in the marketplace. The trickle down from that is our core values, including the importance of treating employees fairly and with respect and honesty. We live by those values every day."

Q. What is your background and how did you come to lead this company?

A. Unlike most business owners in this industry, I didn't start out as a craftsman in a shop building his own countertops. I bought into the business in 1995 after being a chartered accountant and chartered business evaluator with KPMG. The accounting firm had been asked to help company owners John and Frank Dyck at a devastating time in Floform's history. They had switched to using environmentally friendly adhesives, but were sold an inferior glue product and as a result, had to go back and fix the problem in about 30,000 homes. It took years and cost them dearly. I arrived in an advisory role at a time when they needed an injection of capital and some direction in corporate finance. When Frank Dyck retired in 2000, I took over as president, CEO and the majority owner. I am proud to say that we've experienced double-digit growth in Western Canada every year of the past 10 years.

Q. Has this rate of growth changed the priorities of your operations?

A. I think we've really shifted our focus from manufacturing to being a sales-based company. We used to be totally production based, and our marketing strategy was little more than producing the order once it came over the fax. "Here's another order, let's make it." But within the past five years, we've moved to more of a "Let's go out and get that business; let's earn the opportunity to be their sole source countertop provider." And today, we're doing that in a number of exciting ways, including our website and building up our online presence through digital media, special events as well as creating showrooms that allow us to give designers and homeowners the complete buying experience.

Q. Do you think this growth helps retain good people?

A. There's certainly something exciting about being part of a growing company that is not only profitable, but is introducing new products and processes all the time. This year, we're growing our stone business and debuting new glass, stainless steel and copper products that are just coming into this market. That kind of stuff is not only interesting to our customers, but to our people as well because it means they get training to stay up to date on the latest features. Growth is great for company pride and it also creates opportunities for people who are eager to embrace it.

Q. Recently, you introduced Lean manufacturing practices to your production teams. How has it made a difference?

A. Lean manufacturing is important in all our fab shops and we continue to do training on an ongoing basis. To me, the engagement you get out of the staff is the real win. Once you bring Lean training in, it gives people the confidence and tools to contribute more to the company's overall success, because they're always thinking about ways to do things better. For example, before Lean was here, it was really just about how to fix the mistake that happened that morning instead of how to fix the entire system so that it doesn't happen again. I've always said that we're paying 575 people for their brains, not just to stand around and do a job. We want them to be thinking about continuous improvement all the time so that ultimately, we're all working on the business instead of in it.

Q. How important is hiring for "fit" to your workplace culture?

A. Fit is very important; in fact, one of the core competencies we look for in the people we hire is a sense of humour because of how important having a fun, positive attitude is to our culture. We each spend at least one-third of our day at work, so if you're not enjoying what you do, you need to find someplace else, because being unhappy not only affects you, it affects everyone around you. So, if you walk through our door wanting a job but it looks like you're going to be a stick in the mud or create a lot of drama, we'll say thanks, but then hire the next guy, instead.

Q. What challenges are you facing in terms of your people practices?

A. Right now, there are two areas that we need to work on. The first is that job-performance reviews are still too closely linked to salary when that shouldn't be the case. Yet, it seems that when you sit down with an employee to tell them they're doing a good job, there is an expectation that it comes with a financial reward. We do have profit sharing and a bonus incentive program in place for people who contribute to our success, but I don't believe a good review should be necessarily tied to salary. The other challenge is our pension plan. We put one in place for Canadian employees two years ago, but at the same time, we had to cut the 401K plan in the U.S., where profitability continues to be a challenge in our industry. The plan was costly, plus it was only being utilized by a fraction of employees, and only the higher-paid ones, at that. So we decided to defer it until we became more profitable in the U.S., but now that the American economy is slowly rebounding, I can envision us bringing it back sometime in the future, which we promised our people that we would do.

Q. What is the most valuable lesson about leadership you have learned through the years?

A. It goes back to our founders, Frank and John Dyck, and what I learned from the way they handled that warranty issue back in the 1990s. Yes, we bought a product that was bad, but Mrs. Homeowner doesn't care that we were sold bad glue. All she knows is that she bought her countertop from us and that it needed to be fixed. What I learned from that is not only to take responsibility for everything you sell, but stand by your commitment to customers. If someone is unhappy, even if they have been provided with a perfect product and flawless installation, we've got to work our butts off to satisfy them. There is nothing more important than looking after the customer.

-- With reporting by Barbara Chabai

John McFerran, Ph.D, F.CHRP, is managing director of Boyden Global Executive Search. He can be contacted at jmcferran@boyden.com

Republished from the Winnipeg Free Press print edition March 31, 2012 H1