CEO without an Office
March 1 1997 by Judith Rehak
James Hackett will never make the list of the 10 toughest bosses in
If that sounds hokey, consider where Steelcase was before Hackett, 41, took the helm as CEO two years ago. After significant layoffs due to elimination of jobs, discontented workers threatened to unionize. Morale slumped with a $70 million loss for 1994-the first in the privately-owned company’s 82-year history.
One of the key problems, says Hackett, was that management was more focused on profits than people, an error in judgment that ultimately hampered growth. “I think our people would say that it didn’t feel like a warm, fuzzy, small, family business,” he says. “It felt like a large corporation that was more interested in the bottom line.” That corporate culture was a far cry from the days of yore-prior to the arrival of Hackett’s predecessor-when the atmosphere was characterized by small business, family ownership, and leaders committed to taking care of employees. Hackett, a 16-year veteran at the company, certainly has a basis for comparison. “We had a great legacy here, starting with Bob Pew and Walter Idema, prior to him. These people saw the business beyond its commerce potential, but as a social entity that could help people achieve their dreams. “
Hackett’s efforts to restore the company to its original values of trust and teamwork appear to be working. Steelcase is back on track, and morale is renewed, industry observers agree. And the $9.5 billion office furniture industry has been cooperating with Hackett’s objective, recovering from a painful downturn during the recession to boost Steelcase sales to $2.6 billion for fiscal year 1996, up from $2.5 billion in 1995. “I expect this year to be the best we’ve had this decade,” he says.
But getting there won’t be a walk in the park, as Hackett knows. While Steelcase’s archrivals, Haworth and Herman Miller also based in
Forced to keep pace with the more nimble technology players, Steelcase and its competitors today have the task not only of monitoring which systems are currently hot, but of trying to anticipate the next wave, and then designing space to support it, he says.
A testament to Hackett’s capacity as visionary is the “Leadership Community” project at Steelcase headquarters, where he and 25 executives have traded their spacious offices for 100 square-foot areas in a grouping of furniture and systems where executives can close off their private space, or move into a larger area for meetings.
And at its expanding R&D facility, Steel-case is working on a major innovation scheduled for launch this year: an engineered environment, code name “Pathways,” that will “fundamentally alter the performance-cost equation for companies that want to retrofit older properties,” says Hackett. As for further details on this new project: “that’s the secret part,” he says. “But buckle your seat belt because it’s going to be dramatic.”
Still, the company is experiencing its own growing pains, currently in the process of migrating legacy systems to a more sophisticated infrastructure with software from Germany-based SAP, Inc., that facilitates the automation of all processes from manufacturing to receivables. Maintaining the same level of productivity and efficiency while transitioning is tricky, he says. “It’s a massive undertaking because you’re literally changing the engines on the plane while it’s flying.”
But Hackett is well aware of the need for fast change, though never at the expense of core values. And long-time industry observers like George Kordaris, publisher of industry newsletter “Officelnsight,” say a careful balance of both is precisely what will keep Steelcase out in front. “That’s what makes Jim such a great guy, because he understands the shoulders on which he’s standing, but he also has a vision of where he needs to take things,” says Kordaris.
And as far as Hackett is concerned, the formula for success is pretty simple: “If we worry about our people, everything else will take care of itself. The moment we forget that, everything falls apart.”
President and CEO
Family: Wife, Kathy; sons: Patrick, 16, and Rob, 13.
Car: Black Lexus 400
Favorite books: All-time favorite: “One Day in the Life of Ivan Denisovich” by Alexander Solzhenitsyn. “I’ve read all those management books, but I don’t get much out of them. They’re too anecdotal.”
Major influence: “Bo Schembecker, my football coach at
Leisure interests: Swimming, watching football