Official Biography

Lars von Kantzow is president and chief executive officer of Pergo, Inc., the pioneer and market leader of laminate flooring in North America. The company's headquarters are in Raleigh, North Carolina.

Lars joined Pergo in Sweden in September 1990, as executive vice president of sales & marketing. He was promoted to president and CEO in April 1992. In the fall of 1995, Lars moved to North Carolina to personally oversee Pergo's increasing investments in North America. The introduction of laminate flooring in the U.S. was a tremendous success, leading Pergo to open a U.S. manufacturing plant in Garner, North Carolina in 1996. Pergo is now one of the most recognized names in the flooring industry.

Before joining Pergo, Lars worked for Swedish Match for nine years, serving in various international marketing positions in the company's disposable lighter division. From 1977 to 1982, Lars worked in brand marketing for Procter & Gamble in Geneva, Switzerland.

Lars holds a graduate degree in business administration from the University of Geneva in Switzerland. He is a member of Wachovia Bank's Eastern Regional Board and Chairman of the Swedish American Chamber of Commerce of North Carolina. He also serves on the boards of the Wake County Economic Development Program, the Floor Covering Industry Foundation, Carolina Ballet and Duke Children's Classic.

Interview with Lars von Kantzow
CEO, Pergo, Inc. (division of Perstorp AB)

Leonard M. Fuld conducted the following interview with Lars von Kantzow for the CI Savvy CEO Award.

LMF: On a 1 to 10 scale, how would you rate your seriousness about business intelligence and why?

LvK: I am very serious about Business Intelligence. I guess I have to rate myself at least a 9. I have taken a very active interest in CI ever since I started with Pergo back in Europe over 10 years ago. One of the reasons is that we were a very young industry in Europe at the time, and there were a lot of new competitors; we were getting competition from outside of the flooring industry. There wasn't a lot of information available, so it almost came naturally that we just had to be at the forefront of Competitor Intelligence because we didn't know much about it. It wasn't like the computer industry where one can at least read a lot of things like annual reports; there was nothing to read about many of our competitors.

LMF: How often do you use the word/phrase "intelligence" when talking with your people?

LvK: I'm not sure I use the word intelligence, because it is not my native tongue, and I would probably just ask for competitive information and what the competitors are up to. I may use CI. It is almost several times a week if not daily. I have developed a network here in the US of people both within the company - obviously David Sheehan is the guy I rely on mostly in the company - but also outside the company. I have a network of vendors, consultants and customers that have become friends or associates or part of this network. Almost every day I receive some sort of quote or e-mail or conversation about some form of competitive intelligence. I have seen the need for this network of people; I don't only rely on David - I rely on my own network of information that I always share with David, so that he becomes the focal point for gathering the information and then putting it on our ID cards, as we call it; we have ID cards for all of the competitors that he updates regularly and also presents to our internal business meetings and the board. We don't have a board meeting without a session on CI. Every board meeting has it on the agenda. I put it on the agenda and either David or I present; if it is in the US, David will always present the information.

LMF: Can you recall one or two incidents where your and the company's use of intelligence has helped turn around a business strategy or some tactical objective?

LvK: When we had the first War Game that Ben Gilad helped us organize the first time - through the analysis we did at the War Game, we concluded that one of our competitors had been increasing market share very rapidly. One of the groups (it happened to be my group) penetrating that competitor concluded that there was no way they would be able to sustain that type of market development and advertising effort. Because they were losing money, they were over-exposed and there was a leveraged buyout. So we said with the brand name that they have and their lack of resources, they would be an ideal takeover target for us. We actually started pursuing an acquisition. Clearly, we changed direction after the War Game because we didn't have enough insight before; but prior to the War Game, David had done a great job putting binders together and collecting all the information. So that was one important turn in our thinking that could have a long-term effect.

Recently we have been working on our floor panels…our floor panels are joined together by glue and you have to apply the glue yourself; at the recent trade show in Europe, David and a few other of our people noticed that there was one competitor who was showing product that was pre-glued, which means the glue was already on the panels - basically you only had to put them together. We had a very important meeting coming up with our largest customer here, Home Depot, a product line review where you show them your product range and what you propose for the future. Even though we had a similar pre-glued technology, we hadn't planned to show it because it was in its infancy. However, as a result of that CI, we decided to show it, and obviously we were not outdone by anyone else, even if we had to say we are in the early stages. We had not planned to show that product until we found out that other people were working on it in Europe.

LMF: In the near future, with the expected economic downturn, how do you feel competitive or business intelligence will help keep Pergo ahead of the market? Can you offer evidence of this tool as it will be used for market leadership?

LvK: It will be more important than ever, because it is going to be a tighter market, a more competitive market in the future. We are seeing some shrinkage in the total flooring market; we have not seen it in laminate flooring yet, but the total flooring market did not do well in the fourth quarter, and it is not off to a good start this year. That's going to put much more pressure on the competition. Weaknesses will be exposed, and there is not going to be as much room for everybody, so CI will be more important. Product development and being at the forefront of what competitors are doing, making sure you don't loose a beat, is going to be very important. We are working on CI much more actively now than we ever have. Quite frankly, having David in a dual role where he is both in charge of CI and PD, or at least some of the PD projects, has been very beneficial, because he now naturally meets with everybody - in his PD role, he has an open door to everybody he wants to see.

LMF: Even in spite of an economic downturn, do you expect to spend at least as much or more money in this area of intelligence?

LvK: At least as much. I really am prepared to spend more, but to be honest with you, I don't want to lose David. That's why we've asked him to hang on to it because quality is every bit as important as quantity in terms of Intelligence; David is very good at what he is doing. I've known him now for a long time, six or seven years. He is not reporting to me directly, but he has open door access to me - a couple of offices down the corridor here. I rely on him; I trust him; we have a very direct relationship; he's very good at what he's doing, but he has some career objectives that take him more into the product development area. As long as I feel he is doing enough in CI, I want to continue the way we have it, because it is very hard, I have noticed over the years, to find good CI people. There is a temptation to hire young, junior, inexperienced guys, and you don't pay them much. But that is not what this is all about. They are not able to ask the right questions, to interact with the right level people, so when you find someone like David, you want to hang onto him. And quite frankly, in his Product Development role, he naturally meets with all these people. Certainly, if you have Competitor Intelligence on your business card, it's not so easy to meet with everybody. But if you are product development, there are a lot of people who will tell you all kind of things just because they hope they will be doing business with you.

LMF: What in your background motivated you to support business intelligence?

LvK: Mainly, I don't think I got this from P&G or Swedish Match, but rather from Pergo, new industry, new competitors…I was kind of forced to dig into competition and then it became a way of life. If you go back 15 years, I wouldn't have been as committed.

LMF: You're a European operating a subsidiary in the US. Do you feel that European corporations are ahead of or behind US companies in their use of intelligence? How have your European roots given you insight that a US CEO might not have with respect to the application of intelligence? Or, are CEOs just CEOs the world over?

LvK: I would go with the last statement. I'm not sure I am in a position to answer. There are some cultural differences and some management style differences, but I don't know, and I am not aware that European CEOs would be more or less inclined to do CI than the Americans. Generally, I would say that Europeans are a little bit more international than Americans; Americans might have more of a tendency just to look at America. From that point of view, maybe we are looking more across the pond than at a lot of European competitors in our CI (efforts), and Americans might not necessarily do that. I don't think there is less interest in America than in Europe, but the perspective of Europe is more global. My gut feeling is that Americans are more sophisticated, but the Europeans are more global in their perspective. How that washes out in the end I don't know. Americans tend to limit themselves to the border - and say if it is not in America, it can't be worth anything, while Europeans know that there are a lot of things being developed outside of Europe.

LMF: What are some of the principles of business intelligence that you have espoused, that you have incorporated in your business or in the way you conduct business?

LvK: What I have done that is perhaps a little bit different from that of other CEOs is to develop an efficient network of "agents". I have one guy who has been in the industry for about 40 years, who calls me almost on a daily basis, with little tidbits of information.

LMF: So you try to get into the marketplace as often as possible?

LvK: Yes, I do. With my sales and marketing background, I have an inclination to be more out in the market and talk with the customers than being out at the plant. The other thing is that I've made it clear in the organization that David has a direct access to me on CI, even though he doesn't report to me. So, he is in my office at least once a week, in addition to voice and e-mail. We have a very close connection. He proved his trust and his ability to handle sensitive projects. I took an immediate liking to him. Then we hired him in Asia, and for various reasons he wanted to come back to the US, which is when we hired him in CI. By that time, I had relocated here and we needed a person and hired him for CI.

We have done War Games every year for the last three years. We will continue with the War Games, direct contact with the CI person, the network of agents; we really don't miss an opportunity to share with the whole company what we are doing with CI.

LMF: How do you go about promoting the intelligence process?

LvK: We have regular meetings around the company, apart from our management team meetings every two weeks. I mentioned about the board meetings; we always have CI on the agenda. We have it in the annual budget process; we have business planning meetings that we always kick off with CI. We just recently had a big product development meeting. We started with the business units and David presenting CI to the whole group of people coming in from Europe, and we wanted to bring them up-to-date. Every quarter we have informational meetings for the whole company, including all the shifts in the factory, etc. Depending on the agenda, David gives a state of the business and a state of the market. Talking about competition, how we are doing, market share, what people are up to - their expansions, we have a number of ways that we share this information within the company.

LMF: Do you give incentives to your own sales force to provide information of any kind or is it basically a tacit understanding?

LvK: More of an understanding. They have a monthly report that they send in, and one of the labels on it is "CI". At the sales level is usually a question of promotions in the field or new pricing information, new products.

LMF: Have you emphasized the need to develop a professional intelligence staff? To what extent has he gone to ensure this is the case?

LvK: I haven't found a better person in the company than David, and I'm hesitant to hire someone from the outside who doesn't know the industry and doesn't know our company. What is going to happen going forward is that we will have to groom somebody from within the company and then let him/her take over David's role within the next year or so. For now, I want to hang on to him because I get the quality I am looking for.

LMF: Any advice to give to other CEOs regarding the use of CI and its value?

LvK: I definitely do…and that is to do it and get actively involved personally. I learned that the hard way in Germany. We were very successful in one part of the market, and we didn't see another part of the distribution channel opening up. We were way too slow to react; we didn't see it happening at all - it was not as though we saw it happening and didn't take action. We didn't have the intelligence, and others ran away with that part of the market. In Germany, they have 70% of the business, and we are not there. Even though I was involved with CI in Europe, I certainly learned a lesson for life: If you don't know what is going on in the marketplace, you are going to be outdone and outsmarted, and you might lose your business. This was Germany, not all of Europe. If it happened to us in the US, and we lost 70% of the market because we didn't open our eyes, we would be doomed. I have learned it the hard way. Even with the level of interest I had while in Europe, one has got to be at the forefront of information.

For further information about the Award, contact:

Patti Kane
Gumpert Communications
Tel. (781) 444-5543
Fax (781) 449-2128
pkane@gumpertcom.com