A Seat at The Table - I

The remarkable history of Herman Miller

The missus and I have a ritual – we rewatch Mad Men once a year. By the third go, Jon Hamm and January Jones’ good looks are a little less overwhelming. The characters and writing become familiar, though no less brilliant. What stands out, more and more, is the art design. The bar is high for a period drama- you want everything to be accurate and timeline-correct. But Mad Men takes it to a whole other level with its recreation of the mid-century modern aesthetic of 60’s East Coast homes and offices.

You could pick any random still from the show (like I have above) and marvel at the detailing that’s gone into the design. This is not just for the main elements like couches and tables, but also the accents, the decorative elements, the lighting. It’s all gorgeous. Clean lines, unified themes and complementary colours.

American offices and homes weren’t always so pretty though. It took one company and many, many brilliant minds to will it into creation. This is their story.

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We begin in Zeeland, Michigan. The town had been founded in 1847 by Dutch settlers, part of an organised church group. This early sense of community permeated every aspect of daily life, so when the town’s only canning company went bust, they all came together to revive it. The obvious pivot was to making furniture, for two reasons. The nearby town of Grand Rapids was nationally renowned for its prowess, and hopefully some that aura and talent would rub off on Zeeland. The second, and related reason, was that the Dutch had a rich history of furniture making, dating back to the 17^th century.¹

The new venture, started in 1905, was named the Star Furniture Company, and shares were broadly held amongst the townspeople. The first products were bedroom suites. In 1909, the company made probably its most important hire – Dirk Jan (D.J.) De Pree, fresh out of high school, was tasked with low level administrative work. By 1919, he rose to be president of the little outfit. In 1923, the majority stockholder and GM, Jacob Elbenaas, decided to move to Texas to cash in on the oil boom. D.J. convinced his father-in-law to acquire Elbenaas’ stake, and borrowed some money to buy the rest. D.J became GM of the new company, which was renamed after newly appointed president and D.J.’s father-in-law: Herman Miller.

For the first couple of decades, the company had been playing the game like everyone else. The furniture industry at the time was fragmented and directionless. Dozens of little ventures like Star would churn out the same designs of home furniture pieces every year, which were themselves recycled from the past couple of centuries. Sometimes Louis XVI would be trending, and sometimes it would be the Queen Anne style. But what drove these cycles?

The tastemakers at the time were the salesmen, mercenaries who worked on commission, represented seven or eight factories at once and could make or break a factory’s entire season. After all, they controlled access to the large retailers. Exhibition buildings came up in major furniture markets, and factories were doing up to four collections per year! If they misread the trend, or missed the mark on the pricing, the entire season would be a washout, and they’d have to liquidate the collection at pennies on the dollar.² These conditions did not allow for innovation, or a feedback loop from the end user to the factory’s inhouse designer. Naturally, factories continued to make what had always worked, and hoped that they got their timing right.

The Grand Rapids area was under a more specific threat- new factories were coming up in the Southern states, closer to lumber sources and (ahem) with much cheaper labour. D.J. didn’t know it, but he was steering his company into the perfect storm. 1929 and the Great Depression rolled around. Sales nosedived, and many stores and factories shuttered. Herman Miller had only one year of runway left.

For the first time, D.J. sat down and took stock of his situation- the treadmill of sales cycles, the lack of scale, the missing connect with the end user. Where the whole world saw an existential threat, D.J. saw an opportunity to course correct. He knew things had to change, and it was the right time to change them. But how?

Before we get to the answer, we should take a moment and consider D.J. De Pree. Born in 1891, a lifelong company man, and now, GM of this little town enterprise. He was 37³ when one of his employees, Herman Rummelt, passed away in his sleep. As any GM should, D.J. visited Rummelt’s widow. She took him around the house, and showed him all the lovely little things Rummelt had handcrafted. She brought him a sheaf of papers – his poetry. The pastor later read some of this poetry in Rummelt’s funeral.

This day had a profound impact on D.J. As any manager does, he had mentally abstracted his workers as “resources”, akin to lumber or electricity. A look at Rummelt’s rich personal life and back story tore down that façade. He had an insight that would require you or I a large dose of psychedelics to get to.

“Well, walking home from there, God was dealing with me about this whole thing, the attitude toward working people. I began to realize that we were either all ordinary or all extraordinary. And by the time I reached the front porch of our house, I had concluded that we are all extraordinary. My whole attitude had changed.”

- D.J. De Pree, President, Herman Miller

This tale is a part of company lore. And sure, it has probably been festooned a little with every telling. But in everything I have researched about Herman Miller’s and D.J.’s future journey, this was a pivotal moment for them both. It actually does explain many of his future choices, and the unusual pivots the company made. It also explains D.J.’s response to the 1929 crisis: not panic or despair, but to think deeply about the industry, and his place in it.

That’s the thing about epiphanies: one is never the same again. D. J.’s would set the stage for the creation of the largest furniture company in the world. More importantly, it would demonstrate a new way of doing business - world-changing, path-breaking and yet inclusive and collaborative.

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This is the first of a multi-part series on the fascinating history of Herman Miller. I’ll update with a link to the next part here, but subscribing is the best way to ensure you don’t miss it.

This post, and any analysis I’ve offered, is not investing (or life) advice, only my personal opinion. I may hold positions in any of the securities discussed. Do your own due diligence. Don’t depend on random newsletters from internet strangers to make portfolio decisions.

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1. The Dutch were a colonial power in the times of wooden ships: woodworking is bound to be a core strength.

2. One can’t help but see the echoes with today’s fast fashion brands.

3. Nearly the age I am now, incidentally.