The paths which lead to a company’s growth are multiple, and include technological innovation, diversification, mergers and acquisitions, forecasting, with each one needing special attention. This was one of the key points which emerged at the Rencontres de l’innovation conference which took place on Thursday evening at the Espaces Reunions in Leudelange, attracting more than 70 directors of Luxembourg-based SMEs.
“Faced with challenges or downward trends, we must be able to react in innovative ways and not by putting our heads in the sand” explains Laurent Saeul, CEO of electrical equipment and professional lighting distributor Minusines during the course of his detailed presentation. “Even during boom times, we should still be preparing for a change in circumstances. This preparation includes staff training and awareness sessions in order to avoid being confronted by periods of sluggish growth.”
“Adapting our skills and training programmes is vital if we want to stay at the cutting edge of developments.“
Laurent Saeul, CEO of Minusines
In this regard, despite good sales figures and a positive outlook in terms of development, Minusines has been working on several ways to diversify its business activity. In collaboration with Luxinnovation – which mentors the company – pillars of the Minusines 2020 project include the creation of online catalogues, the diversification of services (in particular in the areas of photovoltaics and air conditioning/heating via the takeover of Spark Energie Solutions), as well as speeding up deliveries, among others. “Technology and the sector keep changing, so adapting our skills and training programmes is vital if we want to stay at the forefront.”
This need to keep ahead and stay abreast of market developments was also widely discussed in the roundtable forum that followed, for which Pharm. Biol. was also present. Udo Margraff (one of the partners at Laboratoires Réunis), Dirk Treinen (managing director of Luxforge), Alain Wildanger (partner at Genista) and Gérard Zoller (CEO of Peintures Robin).
At Genista, one and one must add up to more than two
“When we talk about changes in technology, the most important thing is the product,” noted Alain Wildanger, who is one of Genista’s three partners. “Firms like Nokia, Blackberry or Kodak, which did not react in time, experienced huge losses. But there are also technological changes which directly affect the customer, e.g. Uber, Airbnb or Amazon. Everyone is impacted. ”
And he used the example his own company, Sanichaufer – a long-time specialist in the installation of oil-fired boilers – being confronted directly with market developments and consumption patterns which now heat or gas boilers. “It became perfeclty obvious to us that our expertise as heating contractors needed to be complemented by an understanding of home automation, electricity and cabling. We were left with three options: to build on this knowledge ourselves, despite it being very difficult to find the right skills; to buy out another company without any guarantee of success; or to find a complementary partner to continue to grow, which is what we did in the end. ”
“When we talk about technological change, the product is what is most important at the end of the day.“
Alain Wildanger, partner at Genista
Genista emerged from a merger at the beginning of the year between Sanichaufer and Electro Security – two incumbent companies with strong brands and cultures. “The main thing with a merger is to remember that one and one has to add up to more than just two. Otherwise there’s just no point,” warned Alain Wildanger, who had this advice for business owners, based on his experience of recent months: “First of all, be honest with your partner. It is like a marriage, the slightest deceit will always come out in the end. It is also vital to communicate effectively with staff in order to explain the whys and wherefores of such a merger. And we must also be flexible in terms of our demands: when two companies with two very different cultures merge, it is inevitable that they will not agree 100% on everything upon becoming one joint entity. ”
Luxforge in introspection mode
Merging two companies is obviously not an option which is available to everyone. But it is not the only way to grow and develop a company. At Luxforge, a leading supplier of steel structures in the Grande Region, the company had to take a step back and look at itself in order to reframe its mode of operating: “As a young company we simply couldn’t say no when we were offered projects,” recalls Dirk Treinen, managing director of Luxforge. “We had a period during which we made a profit, but at the same time we had huge outgoings. At a certain point the situation became untenable. We knew that the market offered us great prospects for the future, but we had to change our way of operating, in terms of both management and production. We had skilled staff, but the processes we had in place were too chaotic. ”
With the help of an external consultant, Luxforge eventually bounced back and made improvements without having to invest in the production side of things. “We put together a comprehensive overview of all our processes on large pieces of paper. In the space of a week, we were able to solve a number of crises and relieve the stress we were experiencing. We would never have thought it could happen so quickly. ”
“It is vital to stop what you are doing sometimes and even take a step back in order to get a clearer overview.”
Dirk Treinen, managing director of Luxforge
Once the administrative/organisational side of things had been dealt with, all that was needed was to apply the major points to our production operation, by continuing to disseminate key information in a minimalist – but very visual – way. “Every person, at each and every stage of the production chain, was better informed about what he or she had to do every day. We managed to save an enormous amount of time – up to one and a half hours each morning – by reorganising how the assembly line operated and by motivating staff to become ever more conscientious. “. There is a lesson here about following structures and procedures during periods of rapid growth. “Otherwise, costs soar. “It is vital to sometimes stop what you are doing and even take a step back in order to get a clearer overview of the situation.This paves the way for a lot of progress to be made. ”
Innovation as part of everyday life at Laboratoires Réunis
Managing rapid growth has also been a challenge for Laboratoires Réunis, a provider of precise and high-quality medical analyses. “What patients need first and foremost is a local service,” says Udo Margraff, partner at Laboratoires Réunis. “But the developments we need to address must meet both the demands of clients and prescribing physicians. ”
The company is benefiting from the current trend in hospitals outsourcing their lab work. But this did not prevent it from investing in other areas, including medical report preparation. “We do far more than the public realise,” says Udo Margraff. “But it is always difficult to find specialists and staff in Luxembourg. It is a constant battle to stay afloat and remain independent. ”
In this regard, Laboratoires Réunis bought out a private laboratory in Liège and invested in a new genetics laboratory in Trier. “But our operations stretch well beyond Europe, and we have opened an ultramodern laboratory in Morocco for example”.
“Optimising is also very often a way of innovating.”
Udo Margraff, partner at Laboratoires Réunis
But growth is also seem in terms of innovation, “which is something we reflect on on a daily basis, regardless of whether we are talking about the role of cleaners or laboratory technicians”. Several times a year, Laboratoires Réunis conducts an analysis and inventory of the situation in order to continually be able to update its processes. An improvement that is all too often synonymous with streamlining, but not optimisation. “Optimising is also often a way to innovate. And in this case, staff have to be included in talks. It is vital to define what responsibilities each party is prepared to assume”.
In 2007, Laboratoires Réunis also diversified its operations by creating Fast-Track Diagnostics, a start-up specialising in the field of molecular diagnostics. Ten years on, the company employs 70 people and sells “Made in Luxembourg” diagnostic kits in over 80 countries.
Robin: more than just a painter-decorator
No satellite company this time, but rather a continual interest in diversification and improved RDI at Peintures Robin. The company, founded 90 years ago, now employs more than 100 people at the Useldange and Leudelange production sites (where there is also a sales outlet), while awaiting the launch of two logistics warehouses in Bissen. “When we found that we were stagnating in an extremely competitive market, we decided to develop new products and set up new departments to ensure growth,” explains Gérard Zoller, CEO of Peintures Robin.
With the support of Luxinnovation, the company embarked on a completely new approach which involved moving away from having oil as its primary resource and replacing it with vegetable or mineral oils instead. The Verdello range of products, which is not only the first organically sourced paint in Luxembourg (sold at prices comparable to classic paints for the same quality), area also made entirely from European raw materials. The company was awarded the Prix de l’environnement by industry federation Fedil in 2013 which led to new horizons opening up for it. “We began to get involved in projects with a high added value like developing colours that would conduct electricity, meaning that painting would also have a functional value. ”
“Creating new departments to ensure growth.“
Gérard Zoller, Director of Peintures Robin
Peintures Robin has developed an in-house research and development section with a laboratory that today employs seven chemical engineers. But the company does not work alone and liaises with researchers from the university and the LIST on a permanent basis. “We really want to focus on our R&D efforts and also be more aggressive when selling to local retailers”.
Fit 4 Innovation at the service of businesses
In any form, innovation is obviously one of the key levers of growth for the SME sector to the extent that it is almost a must when it comes to guaranteeing its long-term existence. In order to support small and medium-sized enterprises as they implement innovative approaches, in 2014 Luxinnovation founded Fit 4 Innovation, a national programme dedicated to improving the competitiveness of SMEs in Luxembourg whose aim is three-fold: increasing sales, boosting productivity and improving customer satisfaction in terms of quality and deadlines.
The idea is to facilitate a significant and measurable improvement of the performance of the companies, generating profits that make it possible to invest sustainably in innovation in the long run.
After a first diagnostic phase which takes the form of a 360-degree analysis of the company and its activities, the second step consists of implementing the recommendations arising from this initial inventory.
In three years, no fewer than 51 companies followed suit and 32 of them conducted the “project” phase. “The accumulated return on investment for all companies amounts to almost 500% since the the program launched,” explains Arnaud Duban, head of SME performance at Luxinnovation.