The Herman Miller company became one of the world’s first manufacturers of sustainably-produced furniture almost by accident. Back in the 1950s, as the company became one of the biggest furniture manufacturers in the US selling now iconic designs from Charles and Ray Eames, George Nelson, and Alexander Girard. At the time, DJ de Pree, the founder of the company, made a couple of key decisions that still influence the way the firm operates today.

The first is that he believed that the company should make the most of the unique talents held by each of their employees. This is embodied today in their value for inclusion and diversity, which says “We’re all extraordinary.” In practical terms, this value led de Pree and subsequent CEOs to implement a participative management structure within the firm. This meant distributing decision-making authority much further down the corporate power hierarchy than normal. It also involved giving all employees an ownership stake in the company.

These moves support a second company value – ensuring quality. This is done through a unique decision-making structure where many important actions and strategies are initiated by teams of ordinary workers and mid-level managers, who DJ’s son Hugh referred to as Roving Leaders.

The final two company values at Herman Miller are Doing Good Well, which sets corporate targets for community service from the firm’s employees, and We’re All in This Together, which includes a pledge that the company will be an environmental sustainability leader. DJ de Pree said in the 1950s that the company “will be a good corporate neighbor by being a good steward of the environment.” Today, the actions that the firm takes to act on this value are impressive.

It started in the late 1980s, when a small group of Roving Leaders formed to support their shared commitment to environmental sustainability. The group quickly ended up playing a bigger role in the firm than they expected when they discovered a very unsustainable process in building one of their most popular products. Bill Birchard tells the story in his book Merchants of Virtue: Herman Miller and the Making of a Sustainable Company:

“Rosewood was the object of particular reverence. It adorned the celebrated Eames Lounge Chair a product so loved by designers and high-end furniture buyers that it still sold steadily after 45 years. A cradle of molded rosewood lined with irresistibly soft calfskin cushions, the chair was the company’s signature product. Though [expensive], its appeal luxuriousness, and iconic status – synonymous with Herman Miller – made changing its wood almost unthinkable.”

But the team of Roving Leaders did have to think about it. The rosewood came from trees that were becoming critically endangered in the rapidly dwindling Brazilian rainforest. It took several years, but the Roving Leaders Environmental team convinced first the CEO, then the Board, then the rest of the company that sourcing something other than rosewood was the right thing to do – even if it wasn’t required by legislation or a ban. If you buy an Eames Lounge Chair today from Herman Miller, or any of the other classic Eames designs that use wood, your choices in wood veneer are sustainably harvested cherry or walnut.

When the firm made the switch, they were concerned that it could kill the market for the Eames products. After all, they had been protecting these designs and manufacturing to them faithfully for more than 50 years – authenticity was a big part of what they were selling. The commercial results ended up surprising Herman Miller. Sales went up. A lot.

It turns out that a lot of their customers also care for the environment, and many of them will go out of their way to make sure that their purchases reflect not just style, and comfort, but the value of sustainability as well.

Over the next 25 years, Herman Miller continued to move towards more sustainable manufacturing. The first version of their famous Aeron Office Chair was made from 2/3 recycled materials. The proportion went up substantially in the second version of the Aeron, and this version was also 90% recyclable at the end of its lifespan – Herman Miller had instituted cradle to cradle manufacturing. Other environmental initiatives included eliminating solvent emissions, converting to 100% renewable energy, and the implementation of the Design for the Environment scorecard used to evaluate the sustainability of all of their products.

The drivers of this change were unusual, as Birchard points out:

“Surprisingly, the journey to sustainability at Herman Miller did not take root because a single top manager or the CEO demanded it. At Herman Miller, people like [the Roving Leaders], who worked deep within the organization, desired it. Because the company had a culture of giving its employees the power to make change – an approach it called “participative management” – the change emerged all over. Mid-level leaders, not just hot-shot bosses, led the campaign to bridge the sustainability gap.”

As they’ve done this, this devotion to their organizational values has led to great financial reward for Herman Miller. The company has continued to grow, even surviving the Global Financial Crisis more effectively than their competitors, in large part because they defend their values even more fiercely than the defend the legacy of Charles and Ray Eames.

Mary Parker Follett was one of the world’s first organizational theorists in a business school, and back in the 1920s she wrote:

“Leader and followers are both following the invisible leader – the common purpose. The best executives put this common purpose clearly before their group. While leadership depends on depth of conviction and the power coming therefrom, there must also be the ability to share that conviction with others, the ability to make purpose articulate. And then that common purpose becomes the leader. And I believe that we are coming more and more to act, whatever our theories, on our faith in the power of this invisible leader. Loyalty to the invisible leader gives us the strongest possible bond of union, establishes a sympathy which is not a sentimental but a dynamic sympathy.”

If we are trying to make our organizations more creative, and more innovative, shared purpose is essential. It is this that enables us to operate flatter hierarchies – and this empowerment of lower level employees is a key driver of innovation. Along with cognitive diversity, value-driven business isn’t just the right thing to do, it’s the best way to excel.

Purpose-driven Innovation from Tim Kastelle on Vimeo.

The video is from an online course I made that is currently one of the three that the University of Queensland Business School is offering as close to free as we could make it. I know there’s a lot going on right now, but if you have the bandwidth and desire to build your skills, all three courses are worth checking out.