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A Design for Living: Herman Miller Case Study
October 20, 2008
85-year-old Herman Miller's Aeron chairs have become a symbol of Corporate America treating employees well. But how does the company motivate its own?
By Jenny Cromie
Profile: Herman Miller
Industry:Office furniture/environment manufacturing.
Challenge: To continue to create award-winning products and a company culture that encourages long-term customer and employee loyalty, innovation and learning.
Solution: Annual awards and incentives that recognize top-performing employees, spot rewards such as gift cards or small merchandise items, a tuition reimbursement program that encourages exploration and continued learning, flexible work schedules, paid time off to volunteer in their communities and length-of-service recognition
ROI: A 3 percent turnover rate, 23 percent of the workforce with 20-plus years, high employee engagement, award-winning products and company culture.
Gerb Kingma, customer experience senior manager, has sold Herman Miller furniture to clients all over the world for 30 years. But he's still amused when they walk into the company's headquarters in Zeeland, Mich. Sure, his customers might buy $3 million worth of furniture after a single visit, but usually they want something other than a few Aeron chairs and Noguchi tables by the time they leave the building.
After experiencing the company's sleek office environment, espresso bar, and a sampling of the company culture, many clients ask, "Are you hiring?" Most of the time, they're joking. Sometimes, they're not.
"They want to work for us, and here I am trying to sell them furniture!" Kingma says, laughing. While visiting, clients usually clue into something else about the company—Herman Miller isn't just about its popular Aeron chairs and office furniture. One client recently turned to Kingma and said, "You guys are selling more than furniture, aren't you?"
 Herman Miller also is about selling the kind of office spaces and environments that make employees want to stay, Kingma says. There's much more that goes into attracting and retaining employees than desks and chairs, but it's the idea of making employees comfortable, of taking care of the whole person in the workspace, that Herman Miller is really trying to sell, he says. And customers who visit the company see that in action. "We treat our employees as well as we treat our customers. We really practice what we preach."
For starters, the company uses its own office as a showcase for its award-winning furniture designs. And with more than $1.9 billion in revenue coming through the doors in 2007, the strategy appears to be working. The office-as-showroom tactic landed it on Fortune magazine's short list of Coolest Corporate Headquarters earlier this year, a designation shared only with Microsoft and S.C. Johnson & Son. Known for its innovative furniture designs, Herman Miller continues to win accolades year after year. In fact, many of its pieces reside in permanent collections at New York's Museum of Modern Art and Whitney Museum of American Art, Dearborn, Mich.–based Henry Ford Museum and the Smithsonian Institution in Washington, D.C. The museum pieces are testament to the fact that many prominent designers, including Gilbert Rohde, Charles Eames, Alexander Girard and Isamu Noguchi, have created cutting-edge designs for the company.
But employees who work at Herman Miller say there's much more to the 85-year-old company than its easy-on-the-eyes work environment. And it's not just the company's furniture that makes it stand out. Despite the fact that the company is situated only a few miles from Steelcase and Haworth—two competitors with household name recognition—Herman Miller has a low turnover rate of 3 percent. And nearly one-quarter of its employees have worked there for 20 years or more.
It's the way that the company does business that lands Herman Miller on prestigious lists year after year. This year alone, Herman Miller has earned 10 highly coveted designations. For the 20th consecutive year, Herman Miller was named the "Most Admired" company in its industry by Fortune magazine. It also ranked 96th on Fortune's 100 Best Companies to Work For 2008 list. It won a Great Place to Work Award from the Great Place to Work Institute, Fast Company magazine named Herman Miller to its Fast 50 list of the world's most innovative companies (at number 26), and IndustryWeek magazine included the company on its annual list of 50 Best U.S. Manufacturing Companies.
 Retention Tactics
So what is it about Herman Miller that makes its employees so loyal?
It's all about the company's culture and the way it treats and rewards its employees, says Dave Emenheiser, director of employee services. Herman Miller places a lot of emphasis on engagement and retaining talent, and as a result, the company offers a number of attractive incentives and programs that successfully convince almost all of its 6,800 employees to remain on board.
Susan Whitmer is a prime example of how well the company's retention tactics work. The education solutions integrator began working for Herman Miller 18 years ago at one of its facilities in Atlanta. Since then, the company has allowed her to explore various careers, and through its tuition reimbursement program, she earned her MBA and a master's degree in accessibility and inclusive design. Whitmer considered leaving the company at one point, but a home office position opened up in 1995, allowing her to fulfill her lifelong dream of living in Florida. She jumped at the chance. "I think flexibility has always been a real draw for me."
Whitmer is convinced that the company's flexibility has helped retain many other employees too. Allowing individuals to explore different career paths is closely aligned with core values at Herman Miller, she says. Encouraging that kind of curiosity and exploration in employees' personal lives also translates to more innovation, the heart of the company's research-and-design heritage, Whitmer says.
 Providing flexible work arrangements and learning opportunities to employees is part of Herman Miller's focus on taking care of the whole person, Emenheiser says. "We believe that what differentiates us is talent," he says. "So we try to allow for [flexible work arrangements] if there's talent that we want to keep."
The company also works to honor the gifts and diversity of each employee, Emenheiser says. Symbolizing this core value is a statue that stands near a small pond on the company's grounds. In the water, beams of light project the names of all employees with 20 or more years of service at the company. Called the "Water Carrier," the statue is based on the Native American belief that every job, regardless of title or level of skill required, is critical to the group's survival. To show its gratitude, the company gives employees with 20 years of service a Water Carrier award at a special ceremony held each year, Emenheiser says.
The company also recognizes employees with a variety of other awards throughout the year. Named after a longtime employee, there's the peer-nominated Pep award, which is given to employees who exhibit qualities that demonstrate some of the company's core values. Each year, employees who help salespeople achieve their goals receive crystal cube awards, while the top performer receives the prestigious brass cube award.
Throughout the year, managers also reward employees with gift cards, merchandise of moderate value, or cash for jobs well done, Emenheiser says. The gift certificates generally start at $25 and allow employees to purchase items at various local merchants. And to help employees combat high fuel and commuting costs, the company now is offering a $100 reimbursement toward bicycle purchases and a $500 reimbursement for purchasing a fuel-efficient car, he says.
The company also holds a number of events for employees and their families, like Spirit Week, an annual weeklong celebration for employees and their families. This year's event included a picnic as well as free nights for employees and their families at a local movie theater and other locales.
 Herman Miller spreads its goodwill out into the community, too, Emenheiser says. Employees receive eight paid hours to do volunteer work each year. This year, the company's goal is to donate a total of 10,000 hours of volunteer work in the surrounding community and beyond. Many employees donate their time to Habitat for Humanity and other organizations. But many also start their own programs. One employee started a bike challenge to raise money for cancer patients. Another started a program to fill backpacks with school supplies for area school children—an effort now supported by volunteers companywide.
Giving back to the community and creating a better world are part of Herman Miller's core values, Whitmer says. "We're an organization that is about relationships."
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