Herman Case

Topics: Aeron chair, Charles and Ray Eames, Eames Lounge Chair Pages: 12 (7823 words) Published: January 25, 2015
Herman Miller Inc in 2012
Frank Shipper Salisbury University

Steven B. Adams Salisbury University

Karen Manz Author and Researcher

Charles C. Manz University of Massachusetts

Herman Miller was widely recognized as the leader in the office furniture industry and had built a reputation for innovation in products and processes since D. J. De Pree became president over 90 years ago. Herman Miller was one of only four companies and the only non-high-technology enterprise named to Fortune's "Most Admired Companies" and "The 100 Best Companies to Work For" lists and also to FastCompany's "Most Innovative Companies" list in both 2008 and 2010. The three high-technology organizations selected for these lists were Microsoft, Cisco, and Google. Unlike most firms, especially those in mature industries and most of its office furniture rivals, Herman Miller had pursued a path distinctively marked by reinvention and renewal.

This path had served it well over the decades. It survived the Great Depression early in its history and multiple recessions in the 20th century In the early part of the 21st century, it recovered from the dot-com bust. In 2012, Herman Miller once again was facing turbulent and uncertain economic conditions. Would its propensity for using innovation to reinvent and renew its business once again allow the company to flourish and grow? How far and how fast might the company be able to push its annual revenues above the 2011 level of $1.6 billion?

COMPANY BACKGROUND
Herman Miller's roots went back to 1905 and the Star Furniture Company, a manufacturer of traditionalstyle bedroom suites in Zeeland, Michigan. In 1909, it was renamed Michigan Star Furniture Company and hired Dirk Jan De Pree as a clerk. De Pree, became president in 1919 and four years later convinced his father-in-law, Herman Miller, to purchase the majority of shares; De Pree renamed the company Herman Miller Furniture Company in recognition of Millers support.

In 1927, De Pree committed himself to treating "all workers as individuals with special talents and potential." This occurred after he visited the family of a millwright who had died unexpectedly. During the visit, the widow read some poetry Upon asking the widow who the poet was, De Pree was surprised to learn it was the millwright. This led him to wonder whether the millwright was a worker who wrote poetry or a poet who worked as a millwright. This story was part of Herman Miller's corporate culture, which continued to generate respect for all employees and fueled the quest to tap the diversity of gifts and skills held by all.

In 1930, the United States was in the Great Depression and Herman Miller was in financial trouble. As De Pree was looking for a way to save the company, Gilbert Rhode, a designer from New York, approached him and told him about his design philosophy. Rhode then asked for an opportunity to design a bedroom suite for a fee of $1,000. When De Pree reacted negatively to such a fee, Rhode suggested an alternative payment plan—a 3 percent royalty on the furniture sold—to which De Pree agreed, figuring that there was nothing to lose.

A few weeks later, De Pree received the.first designs from Rhode. Again, he reacted negatively. In response, Rhode wrote De Pree a letter explaining his design philosophy: "[First,] utter simplicity: no surface enrichment, no carvings, no moldings, [and second,] furniture should be anonymous. People are Important, not furniture. Furniture should be useful" Rhode's designs were antithetical to traditional designs, but De Pree saw merit in them and set Herman Miller on a course of designing and selling furniture that reflected a way of life.

In 1942, Herman Miller produced its first office furniture—a Gilbert Rhode design referred to as the Executive Office Group. Rhode died two years later, and De Pree began a search for a new design leader. After reading an article in Life magazine "about designer George Nelson, De Pree hired Nelson...
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