Sunday, October 12, 2003

Furniture Company Culture

I still treasure my visit to Herman Miller. I have vivid memories of the guest house, a converted lake-side mansion, which manages to be luxurious without being opulent. The people were friendly and energetic, yet reserved. I was reminded of them when I attended a course on organizational culture based on Bill Schneider's research, Herman Miller is a cultivation culture company par excellence.

I'm greatly taken with Schneider's work, and I'm trying to figure out how to recognize a company's culture. I decided to compare the web sites of Herman Miller and their arch-competitor (and nearby Michigan neighbor) Steelcase.

These are evidently very different companies. Even though the content of the sites is very similar, the presentation is starkly different. Herman Miller's home page - and, indeed, the whole site - is a study in understatement. Text is sparingly used against a white background; the only colour is hints of blue in highlights and navigational elements. Steelcase's page and site is elegant, too - come on, both companies are selling design - but it is more animated and colorful. Pictures of people (all of them evidently "talent") and saturated colors are used throughout.

While Steelcase shows many people, it doesn't talk about individuals. It prefers objective statements about excellence, while Herman Miller gets its points across with anecdotes. Take how they talk about their values:

Steelcase: "Steelcase was founded in 1912 by a few people with a strong commitment to integrity and doing the right thing for their customers, employees, business partners, associates and neighbors. Their principles became the foundation of our company, passed on from decade to decade. Living our core values is essential to our identity, reputation and success today, just as it was in the past. "

Herman Miller: "Our founder, D.J. De Pree, committed Herman Miller to "modern" furniture in 1936 partly because he saw a moral dimension to Gilbert Rohde's clean designs, honest materials, and lack of ornamentation. In 1984, a major impetus behind Bill Stumpf and Don Chadwick's Equa chair was a desire to give a reasonably priced, comfortable, good-looking chair to everybody in offices--not just the higher-ups. "

Herman Miller comes across as serious and a little rueful. Here's what the site has to say about taking risk: "Another aspect of innovation - risk-taking - is just as important. Herman Miller tries to maintain its appetite for risk. As we have grown larger and become responsible for more equity, the pressure to minimize risk has mounted. Nevertheless, getting behind promising new products - that sometimes become innovations - remains a risk we are happy to embrace. " It's clear that they regret that they can't take as much risk as they used to, but they forge ahead with a determined expression.

Steelcase is serious, too, but they won't admit weakness. Here's how they answer the question, Who Is Steelcase? "Whatever you need to accomplish, Steelcase can provide you with the environment and the tools to do it better, faster and more effectively. That's because we're passionate about unlocking the potential of people at work. It's the fundamental principle on which our company was founded in 1912 and it remains our single-minded focus in the 21st century. We make it our business to study how people work, to fully understand the ever-changing needs of individuals, teams and organizations all around the world. Then we take our knowledge, couple it with products and services inspired by what we've learned about the workplace, and create solutions that help people have a better day at work. " It makes me cringe that they can unburden themselves of such drivel with a completely straight face. The Copy Droids have taken over.

Steelcase shows many signs of being a "competency culture" company. According to Schneider: "This culture is all about distinction. It fundamentally exists to ensure the accomplishment of unparalleled, unmatched products or services. Conceptual systematism means that the fundamental issue in a competence culture is the realization of conceptual goals, particularly superior, distinctive conceptual goals." Competency culture is about excellence, continuous improvement, and competitions for its own sake.

On the other hand, a cultivation culture company like Herman Miller is about enrichment. "It fundamentally exists to ensure the fullest growth of the customer, fulfillment of the customer’s potential, the raising up of the customer. This culture is all about the further realization of ideals, values, and higher order purposes." Cultivation culture emphasizes creativity, dedication, and values.

So, which is better? What a competency culture question! I'd rather work at Herman Miller than Steelcase, if the web site is any guide. By the numbers, though, there's nothing in it. Evidence, if it were needed, that a company's culture alone doesn't determine its success.

Herman Miller has a P/E ratio of 88; Steelcase has been losing money, so the PE is undefined. S&P is "bullish" on Herman Miller while it's "neutral" on Steelcase. Steelcase employee base shrank by 17% over the last year, and Herman Miller by 13%. Furniture's a lousy business right now...

It's hard for a lay person to decide between them in terms of design; both cite reams of design awards. Both companies show up on Fortune's Most Admired Companies list, and CareerGraph's equivalent. On the other hand, Herman Miller was selected as one of the companies on's list of the world's top 20 sustainable stock picks. Herman Miller ranked 49th in the 2003 Information Week 500, a ranking of the country's most technologically progressive companies.

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