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Herman Miller Inc.: The ongoing case of Reinvention and Rene

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on 21 November 2013

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Transcript of Herman Miller Inc.: The ongoing case of Reinvention and Rene

Herman Miller Inc.: The ongoing case of Reinvention and Renewal
Brief History
Herman Miller designs, manufactures, and sells office systems, products, and services internationally. Based in Zeeland, MI.

Mission: "Inspiring designs to help people do great things."
Preliminary thoughts on HM
HM always looking to improve - "A Better World"
Compassionate and Conscientious Company
Innovative and Modern products but still "Classic"
Learn and adapt from past experiences
Started in 1905 - D. J. De Pree
Originally called Star Furniture Company
Designed + Manufactured bedroom sets until 1942
1942- New York Designer - George Rhodes designs modern bedroom set.
Direction of Herman Miller changes
1944- De Pree hires George Nelson as first design director
1946- Nelson hires Charles + Ray Eames (smart hire)
1950s-Expand operations Internationally
1950s-Eames Lounge Chair
1968- "Action Office System"
1970- Turn Public
1981- Initiative to become more efficient/eco-friendly
1983- All employees become shareholders
1984 - Equa Chair
1994-Founding member of U.S. Green Building Council
Establishes Leadership in Energy + and Enviormental Design Standards (LEED)
1994-Aeron Chair
1995- Industry Slump - Hire Mike Volkema as CEO
2000-2001- Record Profits
Post 9/11 - Sales drop by 34%
Volkema makes changes - cuts 38% of employees
2003-2008- Sales are stable but profits hit all time high
2009-Sales down 19%- CEO cuts pay 10%
Everyone shares the pains and the gains - profit sharing
Employees own 8% of company
Shared leadership- "talking up and down the ladder"
Team Dynamic
Scanlon Plan - equity/justice for all at HM
SP: involves committees for sharing ideas on improvements + a structure for sharing increased profitability
2010- Fortune's "Top 100 Best Companies to work for"
Green Initiatives
Reduction of solid waste from 41M to 3.8M lbs from 1991- 2008
2003- Miura Chair Top 10 Green Products
HM headquarter's office building is first to get LEED certified
Ran 1M sqft facility on energy from burning waste -sustainable
Environmental Quality Action Team- coordinate worldwide programs + involve as many employees as possible.
Spreading their Zero Footprint Goal
Design/ Innovation
Vulnerable to heavy losses in bad economy
Reliability on shrinking government contracts
Volatile debt to equity ratio
International market expansion
New Product lines/Services
Strategic Partnerships
Increase in demand for ergonomic furniture
Certified Pre-Owned HM
Take a lesson from the Automotive industry
Buy back used HM products and sell it at certified discounted rates
Small/Mid size companies don't have massive budgets
Cheaper alternative
New Market Segment
Find +Buy 3D Printing company who has ability to develop HM products
Design/Market a line of 3D printed office furniture
Cheaper, more green, innovative alternative
Supply chain shrinks
Hedges the risk of price volatility of raw materials
Partner w/ Education
Market "Living Office" in real life trial run.
Example: Boston-"Innovation District"
Redevelop interiors of old Public school buildings with "Living Office" concepts, supply furniture and show value of HM's philosophy.
Change the landscape of how offices and schools look and operate in order to "attract, nurture, enable and foster innovation and execution"
"HM collaborates with schools in an ongoing project to test new design approaches for educational spaces."
Constantly evolving and innovating
Improve products and processes - Hire Toyota
JIT Inventory
Equa Chair - Design of Decade - TIME
Aeron Chair - Design of Decade - Business Week
Eames Lounge Chair - Chair of the Century - TIME
2001 - Invest Millions in R+D while taking hit from economy (-34%)
Brand Recognition
Product Portfolio
Company Culture
Known as Green/Innovative company
Dedicated to "A better World"
Lean Manufacturing Techniques
Ability to survive multiple recessions
R+D - ergonomic design
Company Transparency - "What We Believe"
Competitive Industry: Hawthorne, Steelcase, HNI Corp.
Volatile Industry
Cheaper alternatives
Businesses now operating mobile or from home
Cost of Raw Materials
Reinvent + Renew
Adapt Business Model
Change the environment

Living Office
"Tomorrow's offices need to attract, nurture, enable, and retain talent that will drive innovation and execution, and bring an organization's strategy to life."
Workforce is changing
Expectations of workers are changing
How work gets done is changing
Tools of work are changing
New Landscape of work
Everything else is changing, so the office needs to adapt.
"At Herman Miller, we're building what's next: a more natural and desirable way of working that fosters greater performance, engagement, well-being, and ultimately greater prosperity for all."

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