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  • Herman Miller Case For Assignment 3

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    It all about the case

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    Herman Miller Case For Assignment 3

    Загружено:

    Sash Chatterjee
    It all about the case

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    © All Rights Reserved
    Скачайте в формате PDF или читайте онлайн в Scribd
    Отметить как неприемлемый контент
    из 10
    Frank Shipper, PhD Perdue eon Bases, Salsbury Usteaty ‘Stephen B, Adams, PAD Pore Seo! of Busnes, SalsaryUnvesty Karen P. Manz, PLD ‘Charles C, Manz, FuD Herman Miller: A Case of Reinvention and Renewal' Chater room eadetsip, ender Sebeo of Management, ivr of Masrochsss ‘Ax fst glance Herran Miler would appear 10 be Siva $13 bilion dolar manufacarer of ofce furniture, Herman Miler i however company that as known beyond farivre for its innova tion in products and process since D. J. De Pree became president ver 90 years ago Its one of oniy four organizations and the only nor-high technot ‘ony one selected Fortunes 100 Best Companies Wewonk For and Most Admired Compares, and FatCompany’ Most Invopanve Companies in oth 3008 and 3010, Theses heh echnologyonganira ‘ons elected were Micros, Cisco and Google, Not tal company fora fem in a matore industry and Uninly noe for an office foritre company. Ever Sloe D .De Pee bscamepeesident, Herman Mille has followed a diffrent path from most fms. eis tne ditinciely maked by rzventon and renewal “Ths path seed t wel Ezy in its hstory sucivd he Great Dpsson and mile ecesions inthe 20"cenur. le the ey parc ofthe 21 cents, it recovered from the ccm burt AS i enters 2010, eeman Miler once agin faes a eurulen econo. ‘Wil tis path allow it fous once again? Background Herman Mile’ os go back 1905 aod the Ste Fornture Company, + manufactrer of radional ulebedroom suite Zeeland, Michigan In 1903, Seo Fk Spy te wn os ire was renamed Michigan Stas Furniture Company aad [ied Dik Jan D.}) De Pree asa clerk D.J.De Pree became president in 1919. Four years later . con ince fs athe aw, Hecman Mile, to purchase the majority of shares and renamed the company Herman Mille Furniture Company in recognition of his supper in 1927, D. J. De Pree committed to testing all workers a individuals with spoil talents and potential This oeatred afer be vised she fami of Eillwright who ad dil unexpectedly. AX the st ‘be widow read sme pct. Je Pre asked he loidow who the post wens and was turpis 0 aro [twas the alah, This ed him to wonder wheter the mlweight was 4 geron who wrote Posy 0 ¢ poet who was also amallwrighe, Ths story spac of the eultual folklore at Herman Miler that contin (sto generate expect for al employes and fue the {gest o tap the cvesy ofits and lls eld by al 1930, the country was ia the Great Depesion and Herman Mile was nancial rouble. DJ: De Pree was looking fora way 20 save the company. At the same te, Gilbert Rhode, a designer from New ‘York approached D. J. De Pree and tld him about ths design philosophy. He thea asked fr an oppor pity to eeatea design ofa Bedeoom site at a fe of $1000, When DJ De Pree rested negative to sich 2 fos, Gilbert Rhode suggested an alternative 7 ‘ment pan, 3% royalty onthe ature sold to which Dy. agreed figuring char there was nothing to oe ive ar Ms tor ad Rear Cass 1A few weeks later. J received he Sit de sens from Rhode, Agaia, he reacted negatively. He ‘ough thc they looked a f chy had ben done for manual raining school and od himso, Gilbert ‘Rhode explained ina leer his design philosophy — Fret ater simplicity: no surface eaichmenty no Enrings, no. moldimgs” and socond, “hniare ‘Gould be anonynous. People are imporant, not fhrninue, Funiuce should be useful” Rhode de igor were antithetical to tadiional designs, but Def saw merit in them and tis st Henman Miller fea course of desigrng and selling foriure that fefecid a way of ite. fa 1943 Herman Miler produced is fs ofce facotare—a Gilbert Rode design refered to 38 the Executive Ofice Group. He did two years ater and De Pree began a seach fora naw desig eae, Based largely on an atl in ifesnazine, he hie! George ‘Naor as Herman Mile’ ist design drone In 1346, Chale and Ray Eames desgnts based in Lon Angles, ere hited to design frre. Inthe Tamme yeas, Charles Eames designs were ferred in the fe one-man foritue exhibic at New York’s ‘Museum of Modern Ar. Some of his designs ace tow par ofthe museums permanent collon. TH 1990, Herman Miller under the gudance of De. Carl Fos, rafeseort Michigan Sat ives tres the fat company the state of Mbigan 2 Ttaplement a Scanlon Pan. Underlying the Seanlon Plan ae the “principles of equity and juste for cv yore in the company». " TWO major finetional ‘ements of Seanlon Plans ate the use of coamitexs foc thacing ideas on improvements and 2 sroctare for shaing increased profiabiliy. The reatonship beaween De Frost and Herman Miler eon inued for lene fur decades During the 950%, Herman Miler introduced a number of new funiare designs incluing those by Alexander Girard, Charles and Ray Eames, thd ‘George Nelson. Specfealy, the Got molded Sbergass chairs were snuoduced and she Eames Jouige cir and otomnan were itrodcedon NBCS ome Show with Aeene Francs precursor the ‘Today Show. Also in the 1950s, Herman Miler toga its st overseas foray sling ts poets in the Earopean mask, tn 1962, D.}. boc chaizman of the board and his sn, Hogh De Pree, became president and chief xceuive officer DJ had served for ove 40 years se the presiden. ase Hemant & Cast Renton ad ere @ Daring the 19608, many new designs were nto duced both for home and the workplace, The most hotable desga was the Action Office Syntem, the hori fst open-plan modular office arrangement bf movable panels and atachmens. By the end of ‘he 19 Herman Miler had formed a subsidiary in England with sales and marketing responsibility tHeoughout England andthe Seandinavian counties, ‘sy it had exablished dealers in South sad Cen athena, Australia Canada, Europe, Asia the [Near East and Japan, Th 1970, Henan Miler went public and made ins Bat stock offering. The stock ceriate was de ened by the Eames OF8ce staf In 1971, itenered ‘Re heakthscence market, and in 1976 the Ergon ‘hai ts ist design based on scent observation Sin cagonomie poncples, was introduced. In 1979, {conjunction with the Unversity of Michigan, i Cceablhed the Facity Management Snsoture that ‘Stablshed che profession of faclty management, ‘hk, in che 708, Herman Miler continued to «x pand overseas and introdace new designs By 1977, over ball of Herman Milt's 2500 employees worked outide ofthe production ae ‘Thus, the Scanlon plan needed «© be ovecauled Tine it had been designed orginally fora produc ‘Son workiores. In addition, employees worked at ‘Re US and verses loations. Thus, i 1978, ‘Boho commites of $4 people from nearly every ament of the company was elected to examine the ed for changes ani to make recommendations By January 1979 the committee had developed a inal Take he plan established «new organization suc: {ue bis on work teams, caucuses and council All ‘Siployes were given an opportunity to smal roup String to discuss i On January 26, 1979, 96% of the employees voted to acepe the new plan ‘Nr 18 years Hugh De Pre stepped dows, and ‘Max De Fre, Hugs younger brthes,becate chair than and chit exceutve offcer in 1980, In 1381, enan Miller took a major inane t0 become Thor efent and enviconmentaly friendly. is En Gay Comer generated both electrical and steam power to runt lion square foot aity By bar ing waste In 1983, Herman Miller established = plan ‘wherchy al employes became shareholders. This TRisaive occured appeosimaely 10 years before SGagresional incensves fled ESOP (Employee Stock Ownership Pian) ged, su AS ae 1984, the Eguchi second chair based on ergonomic rnp, wa troduced alongwith many ‘the designs inshe 980% In 1987 theft monty member Dick Rach, beame che exzewve ofc By the end of he decade, the Egos chai was rc ‘ognized as a Dean the Decade by Time magazine ‘ison 1989, Hema Mier eabished is Envicon ‘mental Quaty Acton Team. Its 0". coordinate fnvronmental progam worldunde apd iavoie ab ‘many employees s posable” In 1990, Heeman Millr was 2 founding member ofthe Tropical Forest Foundation and was the only furntuce manufacturer to belong Tha sare yet, it bxcontnaed using endangered rosewood ints avard ‘winning Eames lounge char and ottoman, and sob- ‘Sitated chery and walnut fom sustainable sources also became a founding member of the US. Green Building Counei in 1994. Some of the buildings at Herman Miller have been sel to establish Leader. ship in Energy 8¢ Environmental Design (LEED) Standards, Because of te environmental eller, Fler ‘man Miler recive awards from Fortune magazine fd the National W life Federation in the 1980. Tn the 905, Hezaan Miler again inteoduced some round breaking designs. In 1994, neodves the Keron chair and almost mediately i was added to the New York Mastam of Modern Ars permanent Design Callestion In 1995, i won the Design of the Bucade frome Baviese Wesk and the Ina Designers Society of metic, Tn 1992, J. Kemit Campbell became Herman Miler’ fifth CEO and president. He was the fst person from oussice the company to hold either postion, In 1995, Campbell resigned and Mike olkems was promoted to CEO. Ar the sme the Jndusey was ina slump and Herman Miler was be Ing restructured, Sas were approxizaely 1 billion. Mike Volkema had been with Meridian, a company Herman Miler aeqired in 1990, for seven years, So wth approximately 12 years of experience with eh ther Herman Miler or its subsidiary and a the age 0f 39 Mike Volkems became CEO, 1a 1994, Hema Miler for the Home was * launched to foes onthe residential market I rein troduced some ofits oder classic designs from the 40%, 50 and 60's well as new designs In 1998, Imohome om wats opt tap this marke. ‘Additional marhsing iniitves were taken to focus on small and mise bosineses. A network of 180 cetalers wat exablibed to focus on stall businesses and 2 3-D design computer program was rade availabe t9 midsize cosemers. In ado, fonder enty was digially linked among, Herman Mile, suppliers, dstbutors and customers to expe die onder snd improve thee accuracy, The 2000's “The 20005 started of spectacularly with ecord prof its and sales in 2000 and 2001 An Employee Srck (peon Plan (ESOP) wa offered in July of 2000 and the Hames molded plywood chai was selected os 2 design of the cenary” by Time magetine- alee had more than doubled inte six yats that Nike ‘olkema had been CEO. “Then the doucom bubble burst and the events ‘of September 11, 2001 occured in the US. Sales kopped 34% ffom $2236,200,000 in 2001 to '1,468,70,000 in 2002. Inthe same eats pe. fs" dropped. from §148,100000 10 lowes of $56,000,000, Ian interview for FaxCompasy sagen in 2007, Volker si "One sight I went toed gern and woke ap the town sin” Although sales continted to drop in 2003, Herman Miler returned to profitability in that yar “To do so Herman Miles had vo drop loag-held tradition of lifelong employment. Approximate sn Georgia wa closed: Mike Volkema an Bin Wilkes then President of Herman Miler Nort ‘Aerie, met with ll the worker to el them what ‘was happening and why it had to be done: One of the workers being lid off wat s0 moved by thir Presenton that ake cold them she fle sory for them having to personaly ly off workers To replace the adi of if long employment, Mike Volkemay with input from many, developed what i efeed toa the new social tac He ‘xpi a fallow We ate» commercl enarprie, andthe comet has to Be on erm tage, 50 we have to fst A re our whether oor and lente a mats rth th era snd wants of hi conse ete Prise If hey doa, then we want to wish you te es but we do eed roel you sat! don ave 3 jobfor you sie now. ‘As par ofthe implementation ofthe scil coe trac, benefits such 85 educational reimbursemett sn 401K plans were designed to be mote pots~ le "This was done to decease the cost of changing Jobe for employees whore gifs and talent no longer rnatched eostomer needs. ‘Sales and profits began fo climb from 2003 10 2008, In 2008, even though sales were ne at an all tine high, profits wets, Daring this perod, Brian ‘other became president ia 2003 and clef exeew Te olfcer in 2004, Mike Volkema beam chaiman ‘ofthe board in 2008 “Then Herman Milles was ht by the recession of 2009, Seles dropped 19% from $2,012 billion in 3008 10: $1,630 ilion in 2009, Ia the same years ‘rots dropped from $152 milion to $48 milion Th March, Mark Scharmaa, Director of Extertl CCommuniations at Hetman Mille, predicted chat the changes made to recove from the :001-2003 ‘feesion woul help beter weather the 3007-2009 Herman Miller Entering 2010 Herman Miler has codified is Tong practiced ores- ‘isonal vals and publishes them on ts Webste tinder page ented What We Believe cs be Heh ae Amended asa base for uniting allemployees bullng rlsionships, and contributing comme ie Thowe belief sated in 2005 an remaining In fet in 2010 ae s follows + Curiosity & Exploration: These ae eo of our fests scenths They be behind ow heritage of scarch-driven design How do we kexp ou ust ‘hy? By respecting and encourabing ik, and by Drontcing forgiveness. You eant be sriows and Fale Ia oe sense, if you never make 9 mis take you're not exploring new ideas oten cn Every makes mistakes we ought celebrate honest mistakes, fom the, and ove ov. ‘+ Engagements For us i is about bei owaers— evely commited to the ie of thiseommamty Called Herman Mile, sharing ints success and Sik Stock ownership i an iniprcar ingredient, boris not enough. The strength andthe payott Tally come when engaged people own problems, ohutons, and fehamoe. Ackzowlege respon Stig, choowe to step forward and be counted Care abou this community and make a diference Tesformance: Performance is requited for leader hip, We wat co be leaders 50 we are comit- {edo pevfoming at the highest level posible Performance isn't choice IS up to everybody at ‘Herman Miler to perform a iso he best. Our ‘wn high erfoxmance—however we measure — orice our lines as employes, delights on cus fumery aed cene lle for our shareholders Inclusvenss To succeed a8 «company we must include all the expressions of human talent and potential tha socey offers. We value the whole peso and everything each of us has to offer, ob Flour or not so abioue, We believe that every person should have the chance to realize his oF er potential pares of colo, gender, ag, tal sienttion,edocational background, weigh Fight fay et hl level—ihe st goes on dnd on. When we are tal inclusive, we go be ond toleration to understnding all the qual: Tisha make people who they are that make us longue, and most important, hat unite Denn: Design for ur is = vay of looking at the woe an how ie works—or doesn. is 2 {reshod foe getting something done, for solving problem, To design solution, ater chan simply ving one, eguizes cesar, chought, some finer stating owt istenng, and ara. Some times design tess ia. memorable occasions, ‘Stes chairs or relly fa partis. Design is jt the way something Loks, isn jus the way omething Works het, Foundations The past ean be a tik thing—an Enchor or siya ter o a sunching pad. We Salve and respect our pas without being eed by Jeihe stories people, and expesinces in Herman Millers pase forin a unique foundation, Our ust teache us about design, buman compss Fon leadessip, staking, seeking out change, nd working sogethe From that foundation, we En move forward together th @ common fa (goge, oc of owned bells and understandings. ‘eval oat ich legacy more fr what it shows th we might become than as a picture of what sree been 1 beter Worl: Thies atthe hears of Herman ‘Mile and the el reason why many of come ovwork eve doy Wecontnbute to better world by pusuing sustainability and environmental wadom. Envtonmental advocacy is pat of out Fertage and a espansibley we gladly beac for fama generations, We teach fora beter word by svg time and money to our commomites aul caustsoutsecheeompany through becom iia good corporate czen worlwide; and even inthe (not 0] snple act of adding beauty co the ‘hod. By particpating inthe effort, we it ovr Spirits and he spits of those around us, + Transparency: Teanspazency begins with lt fing people see how decisions aee made and towning the decsions we make. So when you Inake 2 decision own it Confidentiality has {place at Hervan Miler, but if you ean tell faybody about decision you've made, you've probably made » poor choice. Withowt trans patency its impossible co have trast and ince Fry Without cust and integrity, is imposible to be tanspareat All employees ae expected to live these values In desepton afte cure processes that follow, humerous examplesof these vales in ation can be found Management Mike Votkema is sureeely the chaienan of the bad, and Brian Walker isthe president and chef txccrive fcer Walker’ compensation was listed 1 Bloomberg Bosineseck 21 $658,685. Comper huon for CEO's a four compestocs was listed by Bloomberg Businessweek to range trom $792,000 10 '$1,100,000, Wales and four other top executives at Ferman Mile took «10% pay cui Janvary 2008, land they took anode 10% pay co along with all Sllasied workets in March 2009. The production workers were placed on 39 day into weeks work Tehadule effsivelycuting tei pay by 10% as well “Tha he executives would take » pay cut Before al thers and twice w mich i just one way human Compassion is pracied at Herman Miles. By Sceuies ae Exchange Commission regula tions a publly trad company must have a boar tof directors, By comporate poi the majriy of che 14 members of the board must be Independent. To te jndged an independent, the individual as mi rman must mest the NASDAQ National Market, Fequirements for idependene directors [NASDAQ Sock Market Rule 4200), In aldition, the ind vidual most aot hive any “other mater elation Thip withthe company its affiates or with any executive offts of the company or his or her af files” Moreover, any "wapsatrion berween the Company and any executive officer or director ofthe ‘Company (including thar persons spouse, children, epeiletn, paren, steppe’, sings, parent Inlow, childen-in-levy sibliagstlaw and persons Sharing the sume residence] must be disclosed 0 the Boatd of Diretor andi subject the approval of the Board of Directors othe Nominating and Gov tance Commitee unless the proposed transition iS pave of 2 general program avaiable 10 all dre tom or employees equilly under an existing policy or 2 purchase of Company producss consistent with the price and terms of other tansactons of sim lar see with other purchasers.” Furthermore, “Its the policy ofthe Board thrall directors, consistent tw thetesponsblities tothe stockholders ofthe Company se 2 whole, hold an equiy interest in he ompany. Toward this end, the Board requte that feck eitector will have an equity inerest after one Seaton the Board, and within five yeas the Board Encourages the diectors to have shares of common Sock ofthe company with a value of at leat tree times the amount of he ans etaine® pid 0 each rector" In ether words, board members are hel to standards consistent withthe comporae belies aod its ESOP program ‘Although Ferman Mile has depariment, the most fequennlyreletenced work units a eam Paul ‘Morcay Dieetor of the Environmental Heath and Safety explained their zlatonship as follows: As Heaman Miles sem hs st been te gem that has ben ese the Sano Pan andthe De Pers bought ito Hasan Mile, Aad Pekin hy we ae tat snot exe ‘The deparement—as a epartnen we lp tate Theo ear And 0 tey ae as dearest ‘Teams ae often crossfenctional. Membership ‘on a tain is based om abiity to contibute ro ts team, As Gabe Wing, Design for the Eniconmest ead Chemical Enginer described it You gab he appropriate ereentive who can bt Ielp yous teas chee pal Teds se 1 Ann bed one shed on whos he air to pu dive cu iver war vt a Teams ae often based on product develop ‘When hac product has been developed, che meme ase3; Humans of enero ar ene of that tear ae edtributed to new projects. New projets can come rom any level inthe organization, Ae tierman Miler leadership is shared. One way in tthich chi is done i heough Herman Miller's con epcof talking up and down the lade” Workers at levee are encouraged 9 put forth sew ideas. As ‘Rudy Bartels Environmental Specials ai, 1 hy ty soreing that hey ave ols sere sha ti lp tense hve for berm Aad by ding Tischer beter she requesaprsece of ne (hos oan eno uty "Yah koi a ges iden Thats ow aloe ia be ora on wor, Because the workers fel empowered, 2 new ‘manager ean un into some behavior that ca stare them, As Pool Murray sealed, 1 can emerber my Bs dy 0 the oh 1 ok my Ssiety sane ff and an emloyesteped fo trad and iy Ger your ney lass back on” AL Compu Xe Compa iter wa ey eal thoy hee ee led 0 = ypervoo i hat ach [eS he sopranos sages Te ee fo jour fey en the wok ce hae empowered “The belies are abso etnforced thmogh the Ea ployee Gifts Commie, and Environmental Quality ‘Retion Team. Tre to is practice of shared leader ‘hip the Employee Gifts Commitee dieibutes funds fn other rewusces based on employee involvement ‘As explained by Jay Link, manager of Corporate ‘Giving the program works a follows out fpr onorazariaions where ‘ur emaloyc are faveled We beve hat pont thet we eagendes Kindo ong spit or employes se Haow they Loled in esnitionich going toe were we ave TTomulctring pest, then our ging Kind of fons along orpnnacons hatte rivaled Sith So thats oar st peony In aii, all employes can work 16 paid hour year with he charitable organ zation of their Chote, Herman Mile sex goals fo he number of ‘Employee volunteer hours contibutedannvaly tits Communities Progress toward meeting those gous is reported tothe CLO. “The Environmental Afsits Team has respons bility for such areas ap solid waste ecyling and designing prodacrs from sustainable resourees. I ‘was forme in 1988 with the authorvacion of Max De Pree. One succes that it has sin che reduction ‘of solid waste taken tothe landfil In 1991, Fler- man Miller wat seading 41 milion pounds to the Tandfl By 1994 i was down v0 24 milion pounds snd by 2008 it was seduced to 3.6. 5uch improve Iments ace both environmentally friendly and cost sffecive “These bli ate caried over to che family and community. Gabe Wing ated how, “T'e got the wars lawn in my aetghborhood. That's bocasse 1 don’ spread pesticides oni and I don' pot ferl= fuer down. He weat on f0 say how his wile and he fad to make a dificult decsion cis che suum of 2009 because Herman Miller has a policy “to avoid VC (polyvinyl chloride) wherever possible” i re storing their home, they chose fiber cement board fver PVG siding even though ie was considerably tore costly. Gabe went on ay, "Seven yeas ago, 1 Aida really think about Ry Bartle involved ina youth soccer asso- ciation, Asis typical needs to rie money to buy Uniforms. Among oer fund raisers tha it has done js colting newspapers and alominum cans. AS he tll "When il speak they sy, "Yeah, thar’ Ry Hes Herman Maller You should—you know whee gonna have to dose.” “These belies cary over tall functional areas of the business Some of them age obviously beneficial nd some of them ae simply the way Herman Miles has ehouen to conde business Marketing Herman Miler products are_sold_ iteration lly through wholly-owned. subsidiaries in. vai- tus countries incling Canada, France, Germany, Tals, Japan, Meso, Avstaia, Singapore, China, India, andthe Netherlands. is products are offered through independent deslershis. The customer base is spread over 100 countries. Herman Miler uses Green Marketing to sll its peovdcts, For example, the Miea Chai introduced {in 2003 with Portree Technology wat developed {fom its inception co be environmentally friendly (Crake to cradle priniples) These chairs are made ff 459% reyeed atx and 96% of ther mate fale areresyelabe, In sdtion, they are assembled ting 100% renewable-energy. Builders chat wse “Henman Mills products in tee uilngs can earn Environmental Design) cert Th addition, Herman Miler engages in coopers sive sdversing wh strategie partners. For example Briton Garden Inns, some rooms are euipped th Herman Miler's Mises chairs: On the desk he room is a card explaining how ro adj the hair for comfort and then sts a Hilton Garden Inn ‘Website where the chaircan be purchased Production/Operations Heaman Miller is sloelly posioned in ems of Tanufscuring operations. Inthe United States, its IManufscrring opecstions ae located in Michigan, Goougie and Washing’on. In Europe, i has con. Sderable manufacturing. presence in the United Kingdom, ts lsgese marker ouside ofthe United Sree In Ania, has nanofacturing operations st Niagho, China. Heoan Diller manufactures products sting a sjatem of lean sanefactaring techniques colle Uielyeferred to as the Herman Mile Psformance Syst (FIMPS), lt srives ro maincain effcen hs and cost savings Fy munimizing the amount of ‘Soonnoey em band hacia a JT Justin Tie) pro Some supplies dever pars to Herman Miller Srodution facts ve or ix dines pee da. Peedoction orderdriven with tect materials and componens)purcaaed a4 needed to meet de ‘hand The sandard lead sme forthe major of is Prvicts 10 $0.20 days. As ares, te ete of Fvcntory turnover it sigh, These combined factors ould exte inveneary eves to appear atively OW Detaion co aes wouae, A Key element of nae ‘tacuring strategy is lic xed producion cons you sobreng compent pat rom srategic SUP lcs This sategy fas allowed i 0 increase che rable narre of ie cost structure while retaining Joprctary contol ove those production procsscs Tat Herman Mills believes provide a competitive Gvantage,Becaose othe sraegy, manuiaturing Operations ae largely asembly-based The sacs ofthe Herman Miler Pexformance Sytem (IMPS) was the revul of much bard work, Foroxomple, in 1996 the ntegrated Metals Tech Felogy (IMT) subsidy was sor going wel IMT ‘applied pedestal to ie parene company Herman Miler es prices wese high led time long, and gual oy was inthe 70% range. The leadership ofthe sub ry decided to hire the consltng acm of Toyota, Toyora Supplier Support Center (TSSC) was hired Sipncant improvements were made by ingiting Shalyings and “ening help and ideas of every Shes For example, quality delet in parts pee mil ion decreased frm approximately 9000 in 2000 to 1300 in 2006. Concurenly, on-time shipment i: proved rom 60% to 100% and sfery incidents pet {oo employes droped fom 10103 per ext "The organizanonal values mentioned adie were incorporated into the design of The Gre Fosse, Herman Mill's rnin peodvesion fey in ‘Michigan The building was designed tobe environ rently friendly. For example, Wakes advantage tf arurl light sed landseaping. Nacve plans are frown without the ose of fesilizrs, pesticides, or Ejgtion. After the lacy was opentd aggresive paper wasps found the design +o their liking, Eo ayes and pests were ns quently. n keeping tith Ferman Mir belels a solution was sovght “Through research it was learned that honey bees ad ‘paper wasps ae incompatible. Therefore, 600,000 Pebey bees and thir 12 hives wer colocated onthe ropeey The wasps 400 Tel. Two additional cor Egnences were that duct gollnation bythe bess SpeUEte naa ee fay bloome wth wll fowers ‘Tha Inge movie of honey is produced. Gusts © ihe home ofc ae given a forounce bore ofthe honey symbolizing its corporate belie Human Resource Management Human fesource management is considered @ ‘erength for Herman Mile (i routinely sted on Foveanes 100 Best Companies co Work For includ ing 2010. had appronsmately 278 applicants for okey job opening Ir the 2008 downturm, Herma Millereu ts workogce by more than 15%, redoced pay of the remaining, workforce by atleast 10%, Tia ruspeoded 401 (k) contaibutions, employees Drased management for handling the downtare Jah elas and doing what i est fr the collective hole” according to Fortune magazine’ Febr by 8, 2010 sue Foran also estimated wotarY furnovet tobe les than 2%. On une 1, 2010, the time-and-pey cut of 10% begun in the spring of 200 were discontinued due 10 Herman Mille’ (gk tumaroand, Hernan Miler prassices “Business 2s Unusual” spointed out maay yeas ag0 by Hugh De Pre, for fhe president, and appears pay ofa both god in tough ems, Herman Mille shares the gains a All asthe pane with employees especially ne aed to compensation. Pay is geared frm performance and stakesmany foc at Herman Mill Asin other ompanis all ‘eoployess receive base ay Inada, all employ fer pereciate in 8 prafiesharing progam whereby taployees receive stack based on the empany’s a ‘al nancial performance Employeesarcimmediaely hold nth plan upon joining Herman Mis and Srmedaely ves Profi sharing is ied on corpo ‘ae performance because a one employe explained: “he problem we se you get 1 swans whee Pros X coor habs pene oppstniy fe Faces ofthe bess rt wat iin ll thee fol othe ned rice inode 0 ‘por the entity ofthe basins whe they wee ete competed spstely on their orton of {he bese So yoo woald pet ia some ut si {ate EVA (Economic Value Added) coenzensacion to pve thos type of a asks, The company oles an Employes Stock Put chase Plan (ESP?) through payrll deductions at 2 13% discount from the market price. Also allem ployes are offered a 401 (k) where they fective 2 Soe match for the frst 6% of their salaries that the employe contibues, Again, employees ae im neatly clgble ro parécpate in tt plan wpon Foining Heenan Millet and immediate vested. The Company match was suspended in 2009 due to the ‘Scaenion Through the peo sharing and the ESPR ‘he employees own approximately 6 of the ou ‘anding stock Furthermore all employees are fered a retire iment income plan whereby the company deposits {ino an account 4% of compensation an which intr tats paid quarterly, Employees are immediately li [Sie to pariate inthis plan oponjaining leeman Mle tot are requited to patxipate for ive years Tefore being vested, Additionally a length of sevice onus paid after years of employment. Finally the company pays a universal annua, bonts tall {Employees based on the company’s performance against Beonomic Value Added (EVA) objectives. EVA ta elevation ofthe company’ net operating profi, after tax mins a “charge” forthe cost of Fhareholder capital. This i in ation 10 the ther Compensation programs, including prot sharing, ‘Sih che same caleulston used 10 determine both ‘employee and excite bonus potential "Ths, pay takes 2 numberof forms at Herman Miles but mos all forme are at least partially i ot ‘wholly contingent on corporate performance. One {Employee summed up pay as follows, “You ean dip {eo Ferman Millers pocker several times based on the performance ofthe company” Ghee benefit also tke many forms at Hesman Miler Employees are given range of Benes 38 they ae in many organizations. Some are, however, [gute diferent fom chose Fue ia other organizn ons such a5 2 $100 rebate on a bike purchase. It is jsfed as "part of our comprehensive programy detiened fora bees world around you.” Other ben ‘Gutthat Herman Miller provides that are identified bythe company as"unigue" ace, + 100% tuition reimbursement { Hlable schedules: job sharing, compresed trorkwesks and tlecmanating options + Concierge services direcaons, dry clear Sy retin cards ora meal to take home—these {ervices make it easier for you to balance work tnd home lle Employes product purchase discounts 1 Onis serves incading massage therapy, ca ‘Seria, banking, eal series, ness center, tes lasses, an personal siness Herman Miller in keeping with ts belies offers extensive wellness benefits inclding fines faci ‘ievor subsiiad gym snemberships, health services, mplayer asstance programs, wellness programs! ‘ses, and health rik assessments. The ote ben ffi that ae offered that mest large organization ho offer inca ealh nsorance dental insurance, ‘sion eae ple, prescription plan, exible spending “rsounes short and long tern disability, ie isu Shee acedental death and disability insurance and ical ilines!ersonalacidenvlong-erm care Al benefits ae avalable ao to domes paren. ‘When appropriateg Herman Miller promotes people within the organization. Education ad ai iene seen as key to preparing employees to take € ) co new esponsbilties Pr example, Rudy Batls, Environmental Special, g well ab muliple vice presidents, began their sarees at Herman Miller on the peoducxon floor ‘Thre other benfteate unique to Herman Miller Fiat every family that has or adopes acid receives {Herman Miller rocking chai Second, every em ployer that ces aftec 25 years withthe company nd is 55 years or olde receives an Eames lounge aie Third Herman Miler has no executive reteat, but docs have an employee reweat, The Marigold Lodge, on Lake Michigan. Ths retreat is available ro teplopers for corporate elated event, such a Sirement partic and other celebatons, and in some Instances includes invited family and gests Finance sing normal economic mes, Snancial manage rent at Herman Miler would be considered conser ‘ative. Through 2006, ts leverage ratio as below the industry average alts dimes interested cared fatio was over twice the industry average. Doe t0 the drop-off in busines the debe to equity ratio rose precipitously from 118in 2006 to 47.56 in 2008, To Improve this cai, over 3 milion shares were sold in eal year 2009 ln the fur previous fiscal yeas, Heenan’ Miler had bein repurchasing shares The debe ro equity ratio wa reduced 103.81 bythe end '9f 2009, To improve shore term asc dividends pet Share were cut by approximately 70% and capital ‘expendiires were reed to 240 in 2008, For sal year 2008,15% of Hleman Mille’ ‘nes and 10% of rots were Kom son-North ‘American counties. I 2007, noa-North Amerian ‘ountres accounted for 16.5% of retenuts and ap proximately 20% of Human Miles profits Financially, Herman Miler holds true 10 its beliefs: Even in downturns, invests ia esearch and development. In the decom downuen i inveed tens of millions of dolars in R-& D. laside Her ‘man Mile thisiavestment projec was cade named Purple” Tn the December 1, 2007 issue of FastCom- pany magazine commering on this projec, Clayton CChestensen, Harvard Bsiness School profesor and suthoe of ‘The Immovairs Dilemma is quoted 38 ‘aying, “Barely one out of 1000 companies woald flo what they did ie wus daring bet i terms of Section A fuss ee Sy increasing spending for the sake of comorrow while ‘uting back to survive today Accessories Team: An Example of HM's Strategy, Leadership, and Beliefs in Action “The Accesories Team was an outgrowth of project. “Purple” One of the goals of this project Was to stretch beyond the normal business Boundaries. OF fice accesories sone area in which Herman Miler has no ben historealy involved even ehough it isa big pare of what the independent dealers sel, Once ‘dented, “Robyn was tapped to put together a eam to zally explore this asa product segment that we ‘ould get more involved with,” according #0 Mark Schurman, Diretor of External Communications a Herman Milez Tn 2006, Robyn exablished the ream by recric ing Larry Kallio o be the head engineee and Wayne Baxter to lead sales and mackesng.Togetes, hey semble fesible eam to launch anew product it 16 months. They eeruted people with diferent ci Splines newded to suppor that goal, Over the next to years, they remained a group of sx Some people reed withthe eam a them go through hae pce of work, they weat ont diferent roles within the company. The team during its frst eight months ret wie week for hal day. Twenty months out iemee only once a week “The group ats with a fie amount of atonoms, bur ie does aot wane complete autonomy because, ‘We don't want to be out there completely on our ‘own becase we have such awesome resources here at Herman Milles" Robya explained. The group reaches ou to other arent in the company whes di {erent disciplines are needed fra particular produ, snd ap people that could allocate some oftheir tine fo suppor it ‘Wayne described what happened onthe ream a, follows: We alle wo havea vey song voice reprding lise ny tong it aeuly gu ad ae “yaa Weal hve Kindo ur roles on he eam bart think other than mayer engncering we ind of tapped ato ker roles se stl ed fe ‘ohelpeach tera much as we cul Another member of che accessors team de- scribed decison making 2s follows: we wanted to debate and cinch nl get ary [nae would go being hr aking boot fee thing that weve done, we'd sl searing Beata sense we sly upon oa gt 2, whi Tok tt ed ofthe dy ast fe becuse techie cobugh expen, Were ne exper, bat Tove abe ling so ae risk pd we nso “Thus leadership and decision makng is shared oth within the tm and acoss the organization Teas nd other coatubutions to the secess of the team are accepted from al sources ‘Out tho prose has grown what is known 1s the “Thrive Colecion” The name was cho Sa to indicate the focus on the indvol and the idea of personal confor, conteol and ergonomic health, Produce incladed in che eollson are the Ardea® Personal Light, the Leaf Pesonal Light, Fo® Monitor Arm, and C2* Climate Control. All ff heat ate designed for improving the individual's ‘orking enviroament. Coaiaing Herman Milles aden of innovative design the Arde light earned bath Gold and Silver honors from the International Psion Excelence Awaeds (IDEA) in June, 2010 The Industry Offce equipment tan economically volatile indus try. The office furicoe segment ofthe industry was It had by the recession Soles were expected to drop by 263% from 2008 to 2008. Herma Mil’ sles topped 19%, Herman Mile’ stock market valve fof $1095,323,000 atthe end of 2009 represented 5.3% ofthe total sock market vale of he indostey demaed by Seandaed 8 Poor Reserch Insight 35 ‘thee Services 8 Suppl. According to Hoover’, Hetman Millers top teeecompetzorsare Haworth, Inc, stelease, aad HNL "Phe industry has een impacted ty a coupe of trends Fs, eleconmatng has decreased the need Ol large companies to have office equpment for al mployees, Some companies such as Oracle have a ‘Sbstatal percentage of thee emplayees telecon muting. The majority of Je Be reservation clerks telecommute Second, mare employes spend more Fouts in font of computer sreen thun ever belor. @ Duet this trend the need for ergonomically corret ffcefurivare bas inereased. Such furniture helps to decease faigne and injuries suchas capel tunel syisome ‘As with mosindusties, the cost of raw materials ‘and competition from overseas has had an impact. ‘These tends ted to impact the lovecost produces more than the high-quality producers The Future In Jone 24,2010, pres lease rian Walker, Chil xectine Officer sated "One ofthe hallmarks of fur corapany’s history bas been the abi to emerge from challenging, periods wieh eansformational provdets and process | Believe our commitment fo new products and market development over the pat two years has pu sina postion

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