An Interview with Herman Miller CEO Brian Walker

Brian Walker. Photo courtesy of Herman Miller

Earlier this year Herman Miller CEO, Brian Walker announced his intention to retire at the end of August this year, contingent on the Board of Directors having settled on his replacement. I immediately requested an interview and we settled on NeoCon as a convenient time and place.

Mr. Walker has been the President and CEO since July 2004 when he took the reins from his predecessor as CEO and the current Chairman of the Board, Michael Volkema. Much has changed since 2004 – both in the industry and at Herman Miller. Who would have guessed that 14 years later the “systems business” as we called it then, would have shrunk to a mere fraction of its 2003 size. Our industry hadn’t seen as major a product typology shift since the entry of systems furniture on the scene in the late 1960’s. And along with the other companies that enjoyed a major share of the systems market, Herman Miller has had to significantly reinvent itself.

Mr. Walker has overseen that ongoing reinvention; leading and participating in the development of a strategy that would enable the continued growth of the enterprise in the face of major changes in market preferences. So I was looking forward to interviewing him at NeoCon, all the more so when in the weeks just prior, Herman Miller announced three major new collaborative moves of strategic importance.

For background, the Herman Miller we know today has grown from a combination of organic internal product development and the acquisition of well established and familiar brands such as Geiger, Nemschoff, Maharam, and Design within Reach. An interesting feature of the investments announced this year is that they are more like collaborations or partnerships than pure acquisitions. (Read the announcements: HAY, here Maars Walls, here and Tech integration, here)

Bob Beck (BB): You’ve had a 14-year run as CEO of one of our industry’s most successful companies. So what are you most proud of?

Brian Walker (BW): That’s a big topic. What we started with was something great. The De Prees created a great legacy that would have been easy to mess up, but to me it feels like we’ve not only extended it, but I think we’ve actually amplified it.

I’ve just returned from Asia and I was struck by what great people we have there and in the end the only thing you can really do in this job is try to go get great people. So I’d have to say that’s the number one thing I’m most proud of – our people around the globe.

I’m super excited about the assemblage of capabilities we’ve been able to put together in the last ten years. We had to take some risks to do it, but I think we have one of the world’s best portfolios in the furnishing space; we can cover an exceptionally broad spectrum. I think we’ve sort of learned what the new world is going to be about, and I feel really good that we’re on solid ground. We’ve got great people and we have a legacy of values that lives on and also lives on in the partners we want to bring along with us

Mette and Rolf Hay, founders of HAY at the Herman Miller NeoCon 2018 Showroom. Photo Jeff Beck

I mean if you take something like our latest partnership with HAY, you get a couple like Rolf and Mette Haywho are attracted to the legacy of what Herman Miller stands for and they want to be part of that. When we met they told me that Herman Miller feels like it’s still a family owned company. And that’s not easy to do in today’s rough and tumble world with thousands of employees around the world.

HAY House, Copenhagen, Photo courtesy of HAY.

So to have people attracted to your company is a great asset and I give credit to people like, Don Goeman(EVP, R&D) and Ben Watson(Chief Creative Officer) who have really done a great job with the design side of things. And then through acquisition we got really good strong business leaders too. John Edelman(CEO Herman Miller Consumer) and John McPhee(President Herman Miller Consumer) were a super addition to the team.  And Tony Manzari (President, Maharam) has done a great job. Maharam has its own legacy that we found a way to build-in.

Andy Lock(President, Herman Miller International) has done an amazing job of building our international business. I’ve just returned from Asia with him and his touch with the people is second to none. And Steve Gane(EVP Specialty and Consumer Businesses) has transformed Geiger. Steve and I met through the Bifma Board and when he took over at Geiger it was a tough story and now it’s a gem. 

So really good people on our team and a good network of committed external design partners too. I’m super happy with the folks, I mean you walk around the NeoCon showroom today and see new products from Studio 7.5, Birsel+Seck,  Sam Hecht andKim Colin, and Jess Sorel,you look at the quality of those folks – I mean it’s a world-class set of collaborators.

Nemschoff Palisade Collection, design: Jess Sorel. Photo courtesy of Nemschoff
Maharam NeoCon 2018 Showroom. Photo Jeff Beck
Geiger NeoCon 2018 showroom. Photo Jeff Beck

BB:When we spoke right after the Design Within Reach transaction you’d already added Geiger, Nemschoff and Maharam to your portfolio, and you said you were about two thirds of the way along on the strategy.  So where are you now.

BW: I think we have a lot of the building blocks today that we needed for the strategy that we outlined about ten years ago. We set the vision around what the living office needed to be.  We really had a clear focus on three things: 1) we’ve got to do more in the contract office segment, 2) we’ve got to make the crossover to the consumer market, and 3) we’ve got to be global.

So you look at it today and our global business is super strong. The consumer business has really gotten in stride.  John Edelman and John McPhee have done a really good job of building that and it feels like now with HAY we can really get after these younger consumers, which we need to do, and it also gives us some vibrancy in the contract side, and it’s a big add internationally.

I think another thing that’s happened in the office landscape, is the need for some way to delineate space and add topography. It is something that’s been missing but with our own new products along with Maars, we have a really big portfolio around how to create those spaces.  So to me it feels like we’ve got a lot of the building blocks in place on the product side, and we’ve got a good set of building blocks on the channels side, because I think we have the most diverse set of distribution channels of anybody in our space. I don’t know if there’s anybody else in furnishings that is global, is brick and mortar retail stores, is online catalogue, plus contract dealers.  That’s a pretty unique combination and I think it gives us a really interesting window into the world of those we’re trying to serve.

Maars Living Walls, Linea Cube, Photo Maars Walls

BB: Acquiring is one thing, integrating is another.

BW: In some ways I think one of the hardest things for the bigger players is – what’s that old saying – “You have to be able to figure out how to make an elephant dance.” And as we’ve acquired companies and formed partnerships we’ve all had to figure out how to dance in a different way.

There’s been a tendency in this industry to go acquire things and then try to homogenize them and make them all one brand and all that.  And every time we’ve tried that – somebody used the term the other day, you end up with furniture mud.

So one of the things that we’ve tried very hard to do is let each of the personalities that we’ve acquired keep their personalities and dance the way they dance. And then let them dance together. Max De Pree always used to talk about creating jazz and in some ways, that is exactly what we’ve tried to do strategically, is to create jazz.  We weren’t trying to get everybody to play the same instrument the same way and that’s somewhat unique.

BB: How you consolidate the books in partnerships like these, where you don’t necessarily have a controlling interest?

BW: We have been very careful to say, ‘We don’t have to drive it by whether we can consolidate it, we have to drive it based on whether or not we can get a return on the capital we put in to it,’ and we have to believe that it creates value for our customers, our employees and for our dealers and their employees.  And if we get that right, whether we consolidate it a hundred percent in sales or we simply get income, we’re ok with it.

Look at Warren Buffet, he’s the smartest investor in the world and he doesn’t believe he has to own a hundred percent of everything, in fact he seldom does. So why should we feel like we have to be in that spot? Now, it does mean we have to be very clear in terms of our expectations and influence, because we have to actually say, ‘How is this good for both of us?’

So in the case of HAY, not only do we have the partnership with Rolf and Mette Hay, but we have a co-founder, Troels Holch Povlsen, who came along in the deal. He’s got big experience in the retail world, especially in Asia, that is very interesting and helpful to us. So we said we want you to be a part of it – not we want you to go – we want you to stay as a partner with us. Now, it may not be forever, but he’s a very smart man who’s built a heck of a business, including building HAY with Rolf and Mette. We really want his influence.  It may be odd for some people to think of it that way, but I think it the right way to do it.

BB: What do you see on the horizon? What’s next?

BW: Of course there’s still plenty of work to do. In particular there’s work to do on making it easier for our dealers and customers to buy from the group of capabilities we’ve put together. And there’s still work to do on the whole digital front. I think of it from three angles on digital.  There’s 1) the ERP infrastructure of the company that we need to operate every day, I think we’re getting to a point where we have to think about those things. 2) There’s digital in terms of how can we help customers and the A&D community both envision and select products in a way that’s easier – that makes that process closer to what it needs to be, and then 3) I think there’s a whole front around how we use digital tools to create another layer of experience for the users.  So defining “digital” as those three areas, I think digital is one of the big issues or opportunities that the next group is going to have to really spend a lot of time on.

BB:  What are your thoughts on VR?

BW: We’re doing more and more VR today. There’s no doubt that one of the challenges on our world is that you can’t possibly show everything. We couldn’t build places big enough, unless we’re going to build like a Nebraska Furniture Mart, which is not the kind of experience we want to create. But on the other hand I think what we have to do is figure out how showrooms and VR work in tandem.  Just as I think the idea of brick and mortar versusonline is a false choice, I don’t think it is VR versusshowrooms, I think it’s showrooms with VR.

I think as an industry we have to figure out how to recreate the experiences of showrooms, and incidentally, we may have to figure out how recreate the experience of NeoCon because the next generation may not necessarily think that wandering around showrooms for three days is how they want to spend their time.  So we’re going to have to constantly work on adapting our current tools to align with what our customers want to experience.

 

BB: We all wish you the very best in the next chapter of your life and of course we will be watching with great interest to see how the building blocks you’ve put in place transform Herman Miller and contribute to the transformation of our industry.

Brian Walker and Bob Beck at the Herman Miller NeoCon 2018