How to branch out from core businesses?

There are three aspects in my view that have marked Tarkett’s recent years:Open innovation (or innovating better), solutions (customer service) and environmental engagement. Even today, we are engaged in social commitments – we take interest in and try to respond to social trends.

Tarkett changed its innovation model 5 years ago. We went from a closed system (internal experts, few patents and external collaborations) to an Open Innovation model, managing the interface between our internal capabilities and the outside world.Since this transition, we have doubled our R&D resources. During the economic crisis of 2008, whilst our competitors were reducing their research funds, we took the decision to boost our R&D as it’s only during a difficult period that the most significant differences can be made.Under this model we have developed an innovation strategy and completely changed our internal organization. For example we’ve appointed a Director of Technology Scouting to identify the necessary external technologies/competencies and a Director, Prospective & Opportunity Exploration to feed our innovation funnel with market insights and social trends.

2.NEW SOLUTIONS – CUSTOMER SERVICES

In this transition, we have also moved from a model in which Tarkett was a manufacturer and retailer of high volume floor coverings, to one where Tarkett offers solutions and services to its clients.

To give you an example, I’ll take the most recent innovation that we have launched: ‘the flooring that detects falls.‘

This is a perfect example of a global solution that we offer our clients.

We don’t only manufacture floor covering, we also supply the sensor (a Tarkett technology for which we have globally exclusive rights), and we provide the customer with an installation, electronics, IT, user guidance and after-sale service.

We have moved from our core business and this is why we have had to acquire knowledge & technologies that we did not have previously, through external partnerships and hiring new skills.

Providing solutions for our customers has become one of Tarkett’s signature traits.

3.THE ENVIRONMENT – A CORNERSTONE OF OUR INNOVATION STRATEGY

Tarkett has made a true commitment to the environment, focusing 50% of our R&D effort therein, not so long ago.

We have a partnership with “EPEA” (The Environmental Protection Encouragement Agency who introduced the eco-concept “cradle to cradle”) and we were the world’s first company to be awarded a C2C silver certification for Linoleum flooring.

This involves a revision of our policy on all raw materials. We only use sustainable raw materials. We remove all materials that could present a health and environmental risk. We are wary of all materials where we suspect there could be a risk or where there is a possibility of them being banned. We therefore use materials that present less and less risks for the end user, as well as for Tarkett’s employees.

The second aspect of this C2C commitment is what we call ‘the cycles’, i.e. the biological or technical cycles.

Biological cycles refer to the fact that at the end of the product use by the consumer, it gets put back into the environment.

In the technical cycle, the product is introduced into an infinite recycling process, in-flooring application or the other valuable applications. Recycled products are no longer waste; they are nutrient to produce new floor covering.

DURING THE PROCESS OF TARKETT EXPANDING ITS BUSINESS, HOW DID YOU ORGANISE YOURSELF WITH REGARDS TO THE SEARCH FOR EXTERNAL PARTNERS?

From the innovation strategy, we identify all our needs and then we assess what we lack internally.

Either we have the technology internally, and in this case everything is fine and we can implement it, or else if we don’t have it, we are forced to source it externally.

In order to source it externally, we launch a scouting process and a search for the right expertise. This means we carry out “screenings” of universities or expert centers – we research around the world for the best experts in the domain. We do this using the tool Expernova. We can also do this using tech solvers, i.e. we work with an external partner to map out the universities of interest in order to assemble the large centers of expertise and the best professors.

We have often discovered that  the core of a center of expertise is a person.

For the knowledge part, we rank the centers of expertise against a number of evaluation criteria to create a shortlist. Next, we contact them and go through the necessary steps towards a partnership.

The objective is to then create a true “win/win” partnership in order to obtain the knowledge we require.

It’s the same process for a technology. Through analyzing patents, scientific literature and information found on the web, we identify technologies and the owners of that technology.

We then go through a process of evaluation of potential partners, of their technology and their own partners.

The partner is just as important as the technology. It is important to develop a common vision with the partner. If we can’t achieve this, the partnership will never be successful.

According to the technical and human criteria defined thanks to the scouting process (research and evaluation), we move towards creating a model with the partner. There are various possible scenarios. It is possible to acquire patents or companies, to engage knowledge transfer, to set up a joint-venture, to invest into the companies, etc. We challenge the different scenarios to find the best one for the partnership. Once the scenario is decided upon, we launch the partnership!

Sources:

Testimony extracted from the White Paper: “The Best Practices for Leading an Open Organization” => Discover the entire White Paper