In the simplest terms, “overdrive” is defined as a state of heightened activity. So when Herman Miller announced a few weeks ago it was moving from its “Shift” strategy into “Overdrive,” it wasn't really a change of direction, but more like putting the work the company has already done over the past five years into high gear.
Over the last five years, Herman Miller has established the underpinnings for its future success (through the Shift strategy), says Chief Executive Officer Brian Walker. Overdrive capitalizes on the progress already made through Shift and accelerates Herman Miller's “transformation into a modern lifestyle brand.”
“Shift, which began with the Living Office (Herman Miller's move to provide a blend of products to work in a variety of settings — from work to home) and the infrastructure was put into place, from products to solutions,” he says.
The company worked on Shift the last five years as a process to change Herman Miller in anticipation of changes in demographics, technology, markets and the ways people work. The company envisioned four “shifts” to help navigate the changes going on in the way people worked and lived. The four shifts were: from product focus to complete solutions; from North America-centric to global; from office products to products for everywhere; and from an industry brand to an industry and consumer brand.
Going through Shift represented a monumental change for Herman Miller. It forced the company to look differently at its business, its geographies, its customers and the ways they portrayed Herman Miller's products, business, and community to the world.
According to spokeswoman Kimberly Oliver, the four shifts remain Herman Miller's north star and have driven significant changes in its business. “In order to serve the diverse needs of our customers in an increasingly interconnected and global community, we developed and acquired new solutions and built our global, multi-channel distribution capability,” she says. “Today, we have a greatly expanded customer base and a growing portfolio of world-renowned brands as part of the Herman Miller family.”
As it moved from an office furniture maker to what it considers a consumer brand, Walker says the company did not have the talent base or channels to do it. A key to the shift was the acquisition of Design Within Reach. DWR gave Herman Miller the talent and knowledge to move into the consumer realm.
Overdrive is a signal to the organization that it is time to rev up the implementation of the strategy — to go from putting the strategy together to actually using it, Walker says. The organizational restructuring the company announced is part of this overall strategy. Restructuring is often associated with job cuts, but Oliver says Herman Miller retained all its senior leaders through the process.
The move to Overdrive streamlines its senior leadership structure to speed strategic execution and allow greater leverage of resources in vertical segments, Walker says. “Over the past five years, we have increased our market opportunity through geographic and customer segment expansion. This includes the acquisition of many brands that we believe are important to our long-term growth. These changes will further our efforts to build on their individual strengths and capitalize on the natural synergies within the segments.”
The new organizational structure includes the following changes:
- Centralizing leadership for the North American contract business segment, comprised of the company's North American Work, government, health care and education businesses, to streamline operational capabilities and improve service to dealers and contract customers
- Creating a centralized leadership structure for Geiger, the Herman Miller Collection and Maharam within the specialty business segment to accelerate growth while enhancing the product and service offering for architects and design professionals
- Combining the functions of strategy, mergers and acquisitions, channel development and information technology to drive the integration of acquired companies, expand channels to market and develop new technological capabilities
- Merging creative direction and new product commercialization to foster innovation, elevate design execution and increase speed to market.
Those changes caused a shake-up of the leadership team.
- Greg Bylsma, previously chief operating officer of Herman Miller North America (work and learning), has been promoted to North America Contract president
- Steve Gane, previously executive vice president and president of Geiger and Herman Miller Collection, has been promoted to Specialty Brands president
- Jeremy Hocking, previously Strategic Planning and Business Development senior vice president, has been promoted to executive vice president for Strategy and Business Development
- Ben Watson, previously executive creative director, has been promoted to chief creative officer.
- Other members of the leadership team who will continue to serve include Jeff Stutz, chief financial officer; Andy Lock, president, international; John Edelman, CEO, Herman Miller Consumer; John McPhee, Herman Miller Consumer president; and Michael Ramirez, People, Places and Administration executive vice president.
Between Shift and Overdrive, Herman Miller is changing the way it thinks about the market it serves, Walker says. The company, which has traditionally been good at reaching large groups of customers through dealers, found it needed to be able to focus on the individual as well. He stressed it is not about choosing one over another. The new strategy is to do a good job serving both.
Herman Miller's goal is to become a lifestyle brand with its roots in modernism. Walker says he wants Herman Miller to make up the tapestry of the room, whether that is in an office or at home. “Modernism is an optimistic point of view,” Walker says. “It is a way of life where you want to live better and work better.”
Herman Miller can help individuals and organizations envision that modern lifestyle through a mix of knowledge and products, he says. When a customer visits a DWR location of Herman Miller's flagship in New York City, Walker says the experience is not about furniture. It is about people. “We've always had that to a certain extent,” he says, “but we were not all the way there. You felt that when you come to the Design Yard (a Herman Miller hub in Holland, Michigan). We don't want our customers to copy us, but they can copy our thought process.”
That happens through multiple channels to meet the customer where they are. The company had (and continues to) tune its message and “speak about what they care about, in their voice, not in our voice,” Walker says. Its marketing message over the past two or three years has changed as well to put more focus on the audience and not the product. Sales also have changed through a series of sales boot camp events.
Walker likened some of the changes happening at Herman Miller to the differences between urban and suburban settings. In urban settings, people can walk across the street and find a variety of products and services, while suburban settings have limited offerings that are harder to get to. Herman Miller wants to be like the urban setting, where everything is handy and readily available to its customers.
“We have tried to build a diverse set of brands with our own aesthetics; a place customers can come to without having to go to all these vendors. I believe one of the advantages we have is a richness and variety to create that urban setting — that one partner to bring all of it together,” Walker says.
Even though Shift has been going on for a few years, and Overdrive is just beginning, he says the process of change is about 60-70 percent complete. All the pieces are there, but Herman Miller needs to find a way to reduce the friction and tap into the capabilities the company created.
“There is always work that needs to be done,” Walker says, “but there are many more things in place today that we didn't have five years ago.”