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Have you heard of “hidden champions”? We recently heard this tag, what it means, and who it’s talking about. And started thinking about all the amazing
champions in wood flooring. Pros who knock out beautiful wood floors every day, and stand tall and proud over their latest badassery before rolling
on to their next challenger. Like Muhammad Ali standing over Sonny Liston in ’65. Or like Conor McGregor standing over, well, anybody any time he gets
in the octagon.
It turns out there are a few specific “rules” a hidden champion in business has to meet to make that grade. But what are rules? That isn’t stopping us
from running with the hidden-champion idea and how it can apply to what you do in the wood flooring industry.
See what you can make of this.
We most often think of champions as having to do with sports. Besides Ali and McGregor, we all know of LeBron James, Jimmy Johnson, Ronda Rousey, Peyton
Manning, the Chicago Cubs, and Always Dreaming, the latest thoroughbred to win the Kentucky Derby. All definitely are champions, and definitely are
not hidden.
So, what is a hidden champion? It’s a phrase used to tag small- to mid-sized businesses that meet a few specific guidelines of success, shining light on
them as quiet examples of awesome.
Hidden champions are companies that kill it in their little-known slice of the money-making world. They often are family-owned businesses with expertise
in a narrow line of work and are known as leaders in what they do.
Officially, hidden champions have to meet these three specific bullet points:
The idea applies to all types of businesses all over the world. But it especially is attached to German companies. There are two reasons for that. The
man behind the research is Hermann Simon, a well-known German expert who started digging into these shadows more than 20 years ago. And he figured
out:
“Only about 1.1 percent of the world population is German, but 48 percent of the mid-sized world market leaders come from Germany.” Most recently, Simon
counted more than 2,700 hidden champion companies in the world, and more than 1,300 of those are in Germany.
We’re making a leap and assuming you draw less than $5 billion dollars in annual revenue. Check the box. That’s one hidden-champion requirement down.
We also know the public generally isn’t all that educated about the specialized skills and knowledge you have. They hire you to turn their wood floor installation,
sanding and finishing dreams into a lasting reality. Check that hidden-champion box. Two down.
Now, the third requirement: rank among top three in the world, or number one on your continent. The rule doesn’t work? Bend it. We’re rolling rogue on
this one, and turning this into the hidden-hidden champion playbook.
Most hidden champions specialize. In the bigger world, they make inconspicuous products – toothpaste tubes, car seat heaters, hammer-tone
green floor sanding machines – but in the market for these products they are ranked at the top. They focus on the key products they can produce better
than others and end up being more successful than average.
Apple is a great example of reaching explosive success because they cut the bull and stopped trying to sell a hundred products none of us needed or remember
now. Steve Jobs made the company refocus on a handful of world-changing products – iPod, iPhone, iPad – and now Apple is the richest company on the
planet.
Leaders and employees are driven by an “inner fire.” That fire to become, and to remain, number one in their industry lights ’em up like
nothing else. Hidden champions see the market as divided between “good” and “bad” market shares, or customers. They focus on avoiding the bad, like
trying to compete against overly aggressive pricing and discounts that devalue their products or services. They are driven to achieve good by building
a solid, reliable foundation and earning continued success through quality performance that lasts.
Hidden champions are close to their customers’ needs. What customers need and want are at the heart of what hidden champions produce.
They are the motivation for the quality, for improving how the work gets done, for learning more to be able to give their customers something more,
and for their innovations.
Customers add fuel to hidden champions’ inner fire to always do more and to produce the best quality they can.
Set the standard and keep on truckin’. A lot of hidden champions earn their stripes with a main product or service, and are able to have
a special position in the market. There tend to be few true competitors who can compete well with what they offer.
Hidden champions don’t gain competitive advantages by reducing price. They usually get their edge because of quality products and high performance, and
by being accessible to the customer.
Companies also get a bump from figuring out processes to do things in ways competitors can’t or don’t know to do. For example, Lägler designs and builds
custom tools to produce custom parts on-site in its factory in Germany as part of its custom processes that its competitors can’t replicate.
The values of hidden champions tend to be hard work, intolerant of under-performance, low sickness rates, and high employee loyalty. The
leaders of these hidden champions also strongly identify with the work of their companies. They also stay much longer with their companies and are
more invested in them than other leaders.
Training on the job. There’s been talk for years about where the skilled hands-on jobs in America have gone. And German companies have
been highlighted as an example of a country using a system that keeps cranking out those middle-class manufacturing jobs. A huge reason for that is
the training. Apprentices learn for years how to be the best at their specialized skill. (Read “The Secrets of Lägler’s Success“)
But there’s great news for wood flooring contractors, especially those in the U.S. and Canada. This is the hub of training and education for installing,
sanding and finishing wood floors. Several companies and one National Wood Flooring Association (NWFA) serve up the hands-on opportunities flooring pros need to make the run at becoming hidden champions.
Even the smallest or largest companies can learn from what makes hidden champions successful. So much business happens at the local level, even for global
companies. And that applies to local wood flooring businesses.
How do you stand out in your market? Do you stand still and bang out the exact same work day after day or do you keep adding to your flooring
know-how through training?
Lägler supports education through the NWFA and through Lägler Premium Sanding Technology (PST®) certification.
Other companies offer specialty training in sanding and finishing, too. Training and certification builds the flooring industry as a whole, and even
helps to raise the standards that builders and homeowners expect – and will pay more to get.
If the idea of being a hidden champion fuels your fire, aim for being the best wood flooring pro in your city or area. Then don’t let up.
Of course, to make the official hidden-champion list, you’ve got to keep your revenue under $5 billion a year, too. Good luck.
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Lägler North America, a division of Palo Duro Hardwoods, is the North American distributor of machines and parts manufactured by Eugen Lägler GmbH in Germany. We are North America’s machine repair center, and offer Lägler’s one-day Premium Sanding Technology (PST®) certification course.
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