Jan, I have not been ignoring your response to my note about Max DePree. I
just wanted some time to carefully reflect on my answers to your
questions.
You asked,
>What "recent goings on" do you mean? Is Herman Miller making losses? Is
>this because they took to much into account their people's gifts, talents
>and skills? Did they let go of their vision?
Let me see if I can summarize for you what has been going on at Herman
Miller over the past half-year or so.
On 17 May 1995 it was announced in the Grand Rapids (Michigan) Press that
Herman Miller was eliminating 60 white collar jobs (out of a total
workforce of about 6,500). This was in response to a 62 percent earnings
drop from the prevous year ($11.2 in 1994; $4.3 in 1995). It was rumored
at the time that substantially larger cuts were in the offing.
In a 18 May 1995 UPI wire story, it was reported that the initial 60 job
cuts were part of an on-going 'reengineering' effort and that "other jobs
at all levels will be reviewed." A spokesperson for Herman Miller was
quoted in the article as follows: "We won't know how many of those [other
jobs] will be eliminated until the end of the quarter."
On 22 May 1995 a second article appeared in the Grand Rapids (Michigan)
Press. This article reported that Herman Miller had named a new
president, Michael Volkema, and that Max DePree was retiring as chairman.
Herman Miller's new chairman, J. Kermit Campbell, was quoted in the
article as saying that one of Volkema's responsibilities will be
overseeing a "substantial number of additional white-collar job cuts to
come." In my experience in corporate America over the past 20 years, a
scenario such as the one outlined in the Press article usually suggests:
(1) an unresolvable disagreement between the board and the chairman; (2)
the need for a scapegoat; or (3) both.
On 5 July 1995, it was reported in the Grand Rapids (Michigan) Press that
the next day, 6 July, an additional 150-200 Herman Miller workers would be
notified that their jobs were being eliminated. The company line, quoted
in the article, was that Herman Miller "plans to continue making changes
to its structure and processes, but the cuts are the end of a 'major
realignment activity'." Stephen Viscusi, an 'industry watcher', was
quoted in the article as saying that "Herman Miller was too long holding
on [to] the 60's image of the employer; the freebies, the giveaways, the
'be nice to employees'. Herman Miller is becoming more realistic." A
former Herman Miller training manager was also quoted in the article: "I
think certainly it's not congruent with what they used to say about caring
for the human spirit." The employee went on to say that "[I]t's a good
old American corporate downsizing, and its just unfamiliar to Herman
Miller culture."
It turned out that only about 70 people were fired as part of the early
July cutback. This was characterized by Herman Miller as "the last major
round of cuts (Grand Rapids [Michigan] Press, 7 July 1995)." There was,
however, a good deal of criticism as to how the cuts were handled. What
is more interesting, however, was the industry reaction. Here is how
Steve Viscusi, the aforementioned 'industry watcher' (and president of a
New York-based executive search firm) characterized the situation: "Herman
Miller is changing the corporate philosophy to be more competitive with
other companies who are more bottom-line oriented." So much for Max's
philosophies!
About a week after the aforementioned cuts, chairman Campbell resigned
from the company. In an article in the 7 July 1995 Grand Rapids
(Michigan) Press, it was reported that the ostensible reason for
Campbell's departure was the "board members displeasure over the way the
job eliminations were handled." The apparent reasons for Campbell's
departure were clarified in an article in the 20 July 1995 issue of
_Fortune_. _Fortune_ attributed the ousting to a serious disagreement
between Campbell and Herman Miller's CFO, James Bloem, over the need to
sigifcantly cut costs. Interestingly, Campbell was characterized by the
_Fortune_ reporter as "a perfect steward of the DePree legacy. He nearly
out-Maxed Max, stating in an annual report: 'I truly believe that there is
something in human nature that wants to soar . . .'."
Campell subsequently told the Grand Rapids (Michigan) Press, in an
interview published on 27 September 1995, that "because the world is
changing as dramatically as it did when we moved from a farming to an
industrial age that companies must change, as well. The old 'command and
control' method of managing will not work any more. The wise corporation
. . . has different motives (aside from monetary gain) and success will
come as a by-product." This is really an interesting statement when you
think about it. Is Campbell talking about the 'old' Herman Miller or the
'new' Herman Miller? Under the DePrees -- and under Max, in particular,
the company was clearly not of the 'old command and control' school. And
it surely sounds as if the 'new' Herman Miller clearly has monetary gain
(i.e., increased profits) in mind.
What is particularly interesting about all of this is that the entire
scenario seems to be the result of a reengineering exercise based,
largely, on the ideas contained in a single book: Michael Treacy's _The
Disciplines of Market Leaders_ (Reading, Mass.: Addison-Wesley Pub.
Co.,1995). This assumption, hinted at by Herman Miller insiders, seems to
borne out in Herman Miller's new organizational 'alignment', reported in
the 2 October 1995 issue of "The Monday Morning Quarterback": three
[process-focused] divisions focusing on value, innovation, and customer
service. What is even more interesting is that Thomas Davenport, one of
the 'creators' of reengineering, recently acknowledged the 'death' of the
reengineering fad, observing that "[r]eengineering didn't start out as a
code word for mindless corporate bloodshed. It wasn't supposed to be the
last gasp of Industrial Age management (_Fast Company_, Premier Issue, p.
70)." Davenport further acknowledges that "today, to most businesspeople
[sic] in the United States, reengineering has become a word that stands
for restructuring, layoffs, and too-often failed change programs (Ibid.,
p. 71)." Davenport notes, in addition, that "[t]he rock that
reengineering has foundered on is simple: people. Reengineering treated
people inside companies as if they were just so many bits and bytes,
interchangable [sic] parts to be reengineered (Ibid.)." I think Max --
and the 200 or so people who ultimatley lost their jobs at Herman Miller
-- would agree. Herman Miller's management team may do well to re-read
things like Weick's _The Social Psychology of Organizing_, in addition to
things like _The Disciplines of Market Leaders_.
>In my view a good ROI, ROA and other measures are the result of good
>leadership, teamwork, learning, innovation, cooperating, in short by being
>a "learning organization". What is an object lesson?
I couldn't agree more. This is what DePree and, as noted above, his
successor Campbell have stated on many occasions. As far as object
lessons are concerned, what would you say the major lesson to be learned
is from the Herman Miller experience?
Duncan Sutherland
-- dsutherland@gc.net (Duncan Sutherland)