Bulldozer00's Blog

Herman Miller Inc, of Aeron chair fame, is a rare breed. They consistently morph with the times and remain profitable in turbulent waters. This article, Herman Miller’s Design for Growth, tells the compelling story of the genesis of a new suite of products named Convia that spawned a brand new subsidiary business.

The terrific strategy + business article not only recounts the technical story behind the convia product line, it tells the story of the innovative management practices employed by the company’s leadership over the lifetime of the company:

The creation of Convia might sound like a tale of pure product innovation, or even of technology adoption, but it is actually a story about management — and only the most recent of several similar stories at Herman Miller. Over many decades, the company has made itself a laboratory for testing new management ideas and turning them into effective practice.

First, the hard evidence that the company is highly successful despite its repeated forays into the unknown:

Herman Miller competes in an industry slammed by arguably the worst commercial real-estate crisis in a generation. Still, despite a 19 percent plunge in sales for fiscal 2009 (ending in May), the US$1.6 billion company reported a $68 million profit, albeit down from $152 million in fiscal 2008. Over the last 10 years, its stock has consistently outperformed the Standard & Poor’s 500 index.

Next, the snippets that yield insights into the off-the-beaten-path management mindset of the company’s leaders:

…two key principles that continue to inform the company’s management approach. One was a commitment to participative management; the other, a problem-solving approach to design.

Max De Pree, CEO from 1980 to 1987, drew broad attention to the culture at Herman Miller by writing the bestselling Leadership Is an Art (Dell, 1990). Of participative management, he wrote: “Each of us, no matter what our rank in the hierarchy may be, has the same rights: to be needed, to be involved, to have a covenantal relationship, to understand the corporation, to affect our destiny, to be accountable, to appeal, to make a commitment.”

He (Brian Walker, the company’s former chief financial officer, who took over as CEO in 2004) wanted everyone at the company to calculate the financial effect of decisions big and small. It didn’t matter if they were involved in buying, selling, building, designing, billing, paying, or financing. Or whether they were charged with controlling quality, reliability, inventory, waste, energy use, scrap, or the kinds of staples people used.

As Long (now director of the corporate HMPS team) toured the file cabinet plant recently, a visitor paused by a welding robot and asked, “Why don’t you use more robots?” “Robots,” Long said, “can’t make themselves better.”

The objective was to have top decision makers invest themselves in the work — to be companions on the journey, not simply judges of it. “The idea,” Miller says, “was to change the dynamic from traditional review-and-approve to advocacy.”

But Walker argued that in the feeble economy, the main goal was to keep the business sustainable, not to increase profitability at the expense of employees.

Walker says he has no regrets about paying people for time not worked, as the program generated a lot of goodwill and credibility for top management.

So, what do you think? Is the image of Herman Miller Inc. different from the stale corpo model entrenched in your brain?