Steven Feldman

Driving down the 407 in Toronto a couple of weeks ago, I was a part of a small piece of history. The 407 is North America’s first all-electronic toll highway system that identifies vehicles by license plate imaging. To avoid delays, there are no toll booths to accept cash or coins. Each time a car travels on the 407, the toll charges are based on distance traveled, time of day and day of week.

This Express Toll Route is a prime example of innovation.

Peter Barretto, president and CEO of multi-product supplier Torlys, is a big fan of innovation. In fact, it’s what drives him and his company. But it goes beyond innovation. He is a subscriber to the Jack Welch philosophy, “You can’t behave in a calm, rational manner. You’ve got to be out there on the lunatic fringe.”

Talk to Barretto for 30 minutes and the word “lunacy” will be mentioned multiple times. In fact, one of his favorite phrases is “We don’t do normal.” He goes on to explain: “Everything we do is based on what the competition cannot and will not do.”

For example, many companies subscribe to the 80/20 rule. That’s why Barretto “fired” his 80%. Lunacy or brilliance? You decide. Torlys cut its Canadian customer base from 1,200 to 800 and then 400. And business doubled. “Now 100% of our business comes from 20% of the retailers in Canada,” he said.

Torlys is now looking to expand into the U.S. market. It is currently piloting a program with Minnesota distributor Erickson’s, and as one would surmise there’s more “lunacy.” The new world order is a 100/10 rule. “We will deal with only the top 10% of U.S. retailers,” Barretto said, admitting it will take five years. He is looking at a minimum account of $100,000 to $150,000, and an average of $150,000 to $200,000 per location.

That investment translates into a 200-250-square-foot boutique, which is also quite unconventional at its size and cost of $10,000 to $15,000. “No one else has that type of hard surface footprint.” He also envisions a dedicated Torlys salesperson in every store that will be Torlys-trained. “We will not do any consumer advertising. So, while we may not bring anyone into the store, once they’re inside, the boutiques will help close sales.”

Then there is the logistics “lunacy.” Barretto’s model is to deliver product to U.S. retailers from four locations—Vancouver, Toronto, Kalamazoo and the Southeast—only once a week. “All deliveries in the U.S. will be on Mondays. That’s it,” he said. In return, dealers will have territorial exclusivity on Torlys items.

The interesting thing is the more he talks about lunacy, the more he makes sense. Capitalizing on the green movement, Barretto’s goal for Torlys is for it to become the first company to have 100% reusable flooring. The platform is reduce, renew, reuse. Everything it sells—hardwood, laminate and cork—is constructed with the Uniclic locking system, which Torlys claims to be the most advanced, gap-resistant joint system on the market. Because the click joint is reversible, the floor can be re-used up to three times under warranty. “Environmental is the position we will own.”

Barretto wants to take the concept beyond wood, laminate and cork within three years. He talks about using the Uniclic system for leather, porcelain, rubber, bamboo, granite, vinyl and so on. He also wants to do it at no increased cost to the consumer. “93% of consumers want environmentally friendly product but 85% won’t pay more for it.”

Innovation or lunacy? You decide.