Philosopher of capitalism

Nation's Business, March, 1986 by Susan Ager

Philosopher Of Capitalism

The 1985 report of Herman Miller, Inc., reflects a company whose esprit pivots around an old-fashioned conviction of Chief Executive Officer Max De Pree: We are all uncommon.

The report's covers and first 22 pages, more than half the total, are lined with tiny, full-length photographs of 2,900 of the 3,265 men and women who work for the international office furniture corporation. Many of them are hamming it up. Others are hugging each other. Some pose with umbrellas or bicycles or standing on one of Herman Miller's ubiquitous molded fiberglass chairs, of which there are some 5 million in the world today. One woman wears a grocery bag over her head. One man is standing on his hands. The 6-foot-4-inch De Pree rates no bigger picture than anyone else.

"Say hello to the owners!" says the report's cover, a reference to a three-year-old profit-sharing plan De Pree spearheaded. It awards shares of the company's well-performing stock to employees with at least a year's seniority.

"Let's face it," says creative director Stephen Frykholm of the report, "it was a little kooky, but Max liked the idea from the start." That is because, besides being one-of-a-kind, it captured for shareholders to see an idea he learned very early in life, growing up in rural and religiously conservative Zeeland, Mich.

"Our religious beliefs," says De Pree, 61, a member of the Dutch-founded Reformed Church in America, "include the conviction that each of us is made in the image of God. And if that's true, then you cannot make the assumption that some of us are uncommon, and some of us are common. If we are all made in the image of God, we are all uncommon. From a leadership perspective, that is a challenge that has to be responded to."

De Pree's response is to give his employees not only the tools and inspiration they need to get the corporate job done, but also to allow them to enjoy their work and find meaning in it. Then they will innovate--and Herman Miller has been innovative from the '30s, when it hired Charles Eames to design chairs.

Those convictions run in the De Pree family, which means they have run through Herman Miller since D.J. De Press bought a small furniture company in 1923 and named it after his father-in-law. It is still headquartered in Zeeland (pop. 4,700) and has become the town's largest employer, by far.

Max has worked for his father's company since high school, as a janitor, an upholsterer and in other factory work. He had no dreams of a career there--it wasn't much, really--and wanted instead to be a medical doctor. But World War II interfered, and when he returned from the army, "I didn't have any stomach for more school. I wanted to get married and go to work." He married his high school sweetheart and, against his father's advice, went to work for Herman Miller in 1947, when the company did only $400,000 in sales annually, or less than 1/1000 its current volume.

All three De Press who have led Herman Miller (first D.J., then eldest son Hugh and now Max) have envisioned the company as a design leader, not necessarily a market-share leader (it is second to Steelcase in sales and profits), and a good place to work rather than merely a job. In 1950, for example, long before participative management became the rage, Herman Miller adopted the Scanlon Plan, which created "work teams," monthly work team meetings and a bonus system that rewards employees whose divisions exceed their goals.

Since Max De Pree became CEO in 1980, corporate sales have increased 114 percent, from $230.3 million in 1980 to $491.9 million last year, while the number of employees has risen only 20 percent. Although it sells to diverse markets, including hospitals, its overall market share has increased 17 percent in five years. Since 1980, the company has opened manufacturing plants in England (wherre there are now two), France and Roswell, Ga., and a facility in Grandville, Mich., near Zeeland, which features a Herman Miller showroom and museum. Within 13 months recently, the company introduced two new product lines:

One is the Equa chair, a high-tech and high-comfort office chair with only one mechanical adjustment, for height. Development on it began shortly after De Pree took over. It was five years in the works--the longest of any Herman Miller product--but it has become a big seller. Production of the chair is expected to triple in this, its second year.

The other is Ethospace Interiors, a "new generation" office system. Its wallsa re composed of snap-in tiles that can be replaced to change the color and/or texture of an individual's work space, or removed to allow for even an aquarium or an ant farm. It is an updated version of Action Office II, which, when introduced in 1968, revolutionized the office environment worldwide by giving managers an erector set of options.

De Pree believes his company's products and its people are of equal value. Last year, he created Herman Miller's newest executive position--Vice President for People. Not human resources. Not personnel. People. He filled it with a 36-year-old black woman.