Description of the video:

SCARPINO: I’m going to talk to you about Herman Miller and your association with them. Even though you’re more than Herman Miller, it’s a big part of your life.

DE PREE: You’re very good at this, Phil.

SCARPINO: I will tell you with this recorder on, I’m just so pleased that you were willing to talk to me. I’m going to start with Brian Walker again, the current CEO. He was ready, he knew what I wanted and he was pleasant. I’m sure he’s a busy man and he gave me about a half an hour. He told me on the phone that while the company was under the direct control of your family, he basically wanted to divide it into three phases; the leadership of your father, your brother and yourself. He said that your father established the basic principles of the corporate culture and moved the product line from traditional to more modern. He said your brother turned Herman Miller into a big business. And he said you codified the corporate culture so it could sustain itself after the family was no longer running the business. I want to ask you, as the guy who was there, is that a reasonable summary?

DE PREE: Well, if you had called Dick Ruch, who succeeded me as CEO and was CFO part of the time I was…

SCARPINO: Chief financial officer.

DE PREE: Yeah. He would give you a little different picture about what happened during the eight years I was CEO. I say this because I’ve heard him do this in public. He talks about the real growth happened then. I don’t remember the figures because I’m never good at figures, but the value of the company increased by five times in the eight years I was CEO. We did a much better job of growth. We reached the Fortune 500 during that time. I think the company tripled in size. Other than that, I don’t have a problem with how Brian saw it.

SCARPINO: I’m going to ask you questions sort of along that line. If I read correctly, you started at Herman Miller in 1947 at age 23, is that right?

DE PREE: In 1947, yeah, that’s right.

SCARPINO: You were a young man. Did you always expect to go into the family business?

DE PREE: No, there was a time before the war and while at Wheaton, I apparently thought I was going to be a doctor. I’m sure the experience in the Army changed me. I wasn’t interested anymore in all that. I guess I’d had a life full of that stuff.

SCARPINO: So here you are, a young man, and you’re going to start in the family business. Were you okay with that? Did you look forward to it?

DE PREE: Yeah, I did. Yeah, I really wanted to. I can also tell you, Phil, that one time one of the surgeons I worked for in France was from Grand Rapids, Michigan. That was quite a coincidence. I worked with him quite a bit. After the war, a few years after the war, my wife and I met him and his wife leaving a symphony concert in Grand Rapids and we had a great reunion. Afterwards, he said, “You should have been a surgeon.” He said, “He was a surgeon.” I loved surgery and I could do surgery. I mean we did surgery, you know. We were trained on the job.

SCARPINO: So in the situation you found yourself in, you actually with your level of training were operating on people?

DE PREE: Well, I could lay a guy on his belly and take all the shrapnel out of his back. I sent a lot of guys home with bad sewing…

SCARPINO: But alive.

DE PREE: That’s right. Scars, but they were alive. Yeah, I did some of those things.

SCARPINO: Did that help you put things in perspective when your kids fell down, stubbed their toes, had bloody noses or whatever?

DE PREE: Oh yeah, that’s right. One time our younger daughter tried to run through a storm door and cut her artery off, and it was perfectly natural for me to know what to do with that.

SCARPINO: When you started with Herman Miller, what did they have you do? How did you work your way around?

DE PREE: Well, the story starts earlier than that. In high school, my brother and I both worked in the factory during summers. Because we were the boss’ son, we did get some dirty jobs. They had counted on us to clean the boiler all the time. The millwright always loved giving us the dirty jobs because he had a little power. Then later, we both worked in a cabinet room and in the machine room. I don’t remember what else he did, but I became a master upholsterer before I went in the Army.

SCARPINO: So you were actually yourself sewing the upholstery?

DE PREE: Yes, I could do a sofa like that.

SCARPINO: As you worked your way up through the company, did the fact that you had done those things with your own hands, did that help you?

DE PREE: Oh yeah. That was a big help, because you work in a factory and there’s a society there and they all know a lot about what’s going on. One of the things I never did, I never underestimated people who worked with their hands. I knew what they were doing and I had done it, and I did some tough jobs in the Army, too. They know if you can do something, and they respect you if you do it. But then after the war, I remember doing jobs like scheduling and things like that. I remember moving up into purchasing and so on. My brother and I both did an awful lot of those jobs.

SCARPINO: So purchasing would involve the raw materials that went into the factory?

DE PREE: Yeah, and all of the additional parts. We didn’t make castings like that. We had to buy that stuff from other companies.

SCARPINO: How many years was it before you were working in a position that one might describe as junior executive or middle management?

DE PREE: Just guessing, I would think by the time I was 30 that people saw that the three De Prees were kind of running the company.

SCARPINO: By that time, you had done a great deal of different kinds of work.

DE PREE: Yes. And also, my brother and I had the feeling that we were going to be growing and we did a lot of going to school. We went to Michigan State for continuing courses. I went to the American Management Association in New York for continuing courses in management, leadership and so on. We developed those programs for a lot of people in the company.

SCARPINO: So you went to school, learned whatever it was that you wanted to learn and then came back and developed training programs?

DE PREE: Yeah.

SCARPINO: I’m going to talk a little more about the company and about leadership, but in order to do that and in order to help the people who are either going to listen to this recording or read the transcript, I have about three lines of company history here. I hope this is right, because I’m going to be embarrassed if it’s not. Herman Miller was founded by your father, D.J. De Pree, who bought the Michigan Star Furniture Company in 1923 with his father-in-law, Herman Miller, and a small group of local businessmen. The original plant was located near Grand Rapids. De Pree renamed the company Herman Miller Furniture Company after his father-in-law, who was a major shareholder. D.J. De Pree was a religious man who moved the company in the direction of moral responsibility and commitment to employees. Is that a reasonable thumbnail?

DE PREE: Yeah, but the company was always in Zeeland. It was not near Grand Rapids. D.J.’s own father was also an investor, and several of the sales people were investors. In fact, I was named after a man named Max Bath, who was one of the company’s sale reps.

SCARPINO: I hope this isn’t too silly of a question, but is the original building still there?

DE PREE: No, but it was destroyed only 10 years ago or so.

SCARPINO: In 2013, the American National Business Hall of Fame profiled your father. The first sentence of that profile reads as follows: “This is the story of a Christian business leader who proved by example that a highly successful business could be built on principles of faith.” Do you agree that your father was a Christian business leader who proved by example that he could build his business on the principles of faith?

DE PREE: No, not entirely. He was a Christian business leader, but he had to deal with people who would talk to him about this being a Christian company. He would always say, “No, theologically you can have a relationship with God but not as a company.” He used to talk about this is a place where there’s space for everybody. D.J. employed the first woman manager at Herman Miller, which was quite a big deal at the time. D.J. grew up in the business with important Jewish members of the company. He would never say this is a Christian company.

SCARPINO: Would it be fair to say that his faith influenced the way he led?

DE PREE: Yes, absolutely.

SCARPINO: You spent a lot of time with your dad, but what kind of faith-related principles influenced his leadership?

DE PREE: Well, in truth and fairness, he used to refer to the Book of James where it talks about how you treat people. He was an admirer of the Old Testament prophet, Amos, who wrote about some of that. There was even one period in time where he talked about sensing his obligation to meet the payroll as a biblical matter. Somewhere he found in the Bible that you pay your help almost daily or something. He went through a period where he struggled with that.

SCARPINO: The citation for your own Lifetime Achievement Award from the International Leadership Association describes your family management of the Herman Miller Company as covenantal. In 1993, another article by Manfred Kets de Vries describes the relationship between your family and the employees of Herman Miller as a “covenant that works both ways.” Lots of writers have used that word “covenant” or “covenantal” describes your understanding of the relationship between employees and employer at Herman Miller?

DE PREE: Yeah, I do. It’s basic. I wrote about it in one of my books, comparing it to the contractual relationships, that there’s a very important difference between a contractual way of working together and a covenantal way of working together. I don’t know who that person is that you quoted.

SCARPINO: The first quote came from your International Leadership Association.

DE PREE: Yeah, but the guy in Europe?

SCARPINO: Manfred Kets de Vries. He’s a psychologist. He’s another award winner. He was born in Holland. He taught for decades in Paris.

DE PREE: Okay.

SCARPINO: In your mind, does the idea of a covenant have biblical roots?

DE PREE: Yeah, it does. In scripture, it’s kind of a regular thing where God refers to his relationship with us as being a covenant.

SCARPINO: Since a covenant is both an agreement and a promise, what do leaders who follow a covenantal approach promise to their followers? What promise do you make?

DE PREE: Well, I don’t want to sound trite, but I think the heart of that first book, Leadership is an Art, is an elaboration on this whole idea. Chapter by chapter, you can go through there and you find the roots are in this kind of thinking. By the way, the statement of “leaders don’t inflict pain, they bear pain,” that actually came from my friend David Hubbard. He was the origin, as far as I’m concerned.

SCARPINO: I have read most of Leadership is an Art, but maybe people will listen to this recording who haven’t read it. Could you explain what you see is the difference between a covenantal and a contractual model of leadership?

DE PREE: Well, that isn’t so easy. A contractual arrangement for work is one in which you can write down the elements of the contract and you can both understand them, and you can together measure them and reach a conclusion about what has happened or is not happening. For instance, if you’re hiring a baseball player and he’s got to hit 300 in order to stay the next year, you both know what he’s doing. In a covenantal relationship, there’s a different understanding about who each of us is and what our commitments are to each other. I, the leader, am going to make a commitment to your success, and I’d like you to do the same thing. I understand that you can’t do as much about that as I can. I do have some power, and that’s kind of crucial in this relationship. As a leader, if I’m going to make a commitment to a covenantal relationship, there are requirements of me that are not necessarily required of me if it’s only a contractual relationship. One of the things that comes back, I’m going to be concerned that because I’m meddling in your family affairs, I’m meddling in your life, so I’m going to try to spare you the pain. I’m going to try to bear some of your pain, and I’m really going to try to be your teacher. I really care about you because I understand that deep down what counts for me is how good you can be. I know from experience that if I’m going to treat you covenantly, the odds are much higher for good performance than if I’m going to just depend on a contract.

SCARPINO: Is that kind of relationship both more liberating and more challenging for the employee?

DE PREE: Yeah, it’s much harder. The leader has to work harder. One of the reasons a lot of the Scanlon plans have failed, including at Herman Miller, is because nobody wants to work that hard.

SCARPINO: We’re going to talk about Scanlon in a bit, but your assessment is that it ultimately failed at Herman Miller?

DE PREE: Yeah, they gave up.

SCARPINO: How did you feel about that?

DE PREE: Well, like Brian said, I moved on. Have a new life.

SCARPINO: Do you think it’s important for a leader, particularly the kind of leader you’ve been, to also be a role model?

DE PREE: Oh yeah. One time, walking through the plant, I stopped and I picked up some trash in an aisleway and put it in the dustbin. A little later I got a call from the guy who ran that department, the supervisor, and he said, “I just want to say thank you for picking up that crap you picked up this morning.” He said, “Now I don’t have to talk about it for a week.” Just the example, you know, people are watching all the time.

SCARPINO: Were you always cognizant of that, that people were watching?

DE PREE: Yeah, I figured that out I think in the Army. I think that’s when that started to dawn on me. A lot of things dawned on me in the Army.

SCARPINO: It has a way of happening, doesn’t it?

DE PREE: Yeah, it does. You watch people, and one of the things that I’m very aware of is that there are people who observe and who listen to other people. And then there are people who don’t pay attention. The ones who observe and listen gain.

SCARPINO: When you and your brother were in high school working in the plant, did you ever feel as though people were watching?

DE PREE: Yeah, we did.

SCARPINO: The boss’ kids and how you were going to respond and act.

DE PREE: Yeah, that’s right. One time I quit. They had a pay raise in the plant as a general increase and I didn’t get it. I went to the foreman that I worked for and I said to him, “How come I didn’t get that raise?” He said, “You’ve got to get it from your dad.” I said, “No, I don’t.” I said, “Either I get it from you or I quit.” He said, “I’m not going to give you a raise.” So I quit. Then I got out the door and I thought I can’t go home and just tell my dad I quit. So I spent a few hours and I found a job working in a hatchery in Zeeland.

SCARPINO: A fish hatchery?

DE PREE: A chicken hatchery. So when I got home that afternoon at quitting time, I arrived at the backdoor and I was pretty dirty. My mother said, “What happened?” I said, “Well, the guy wouldn’t give me a raise so I quit and I got a job at Cable’s Hatchery.” She said, “Good for you.” I got cleaned up and she explained to my dad what happened.

SCARPINO: Did you stay at the hatchery?

DE PREE: I stayed at the hatchery until I went to college.

SCARPINO: Why was it important to you that the foreman give you the raise and not your dad?

DE PREE: Well, I just felt that was the fair thing. I just felt I’m an employee here and you’re my boss, everybody else gets a raise, I ought to get a raise. I just thought that was fair.

SCARPINO: We’ve talked off and on about your leadership philosophy grounded in Christian faith and covenantal approach. How do you reconcile that with capitalism and factory production?

DE PREE: I think for me it enhanced my ability to be a worthy leader. I don’t have a theological or philosophical disagreement with the free market system, but I have a lot of disagreement with the way some people practice it. That’s really a pity. I believe that some of the people who are taking such a big share out of the system have no idea what they’re doing to the system. So I’m a little fearful about what’s going to happen because the more people misbehave, the more the government has to move in. That to me is a bit of a problem because I don’t see government as being very efficient. I think the generally agreed-upon principles of the free market system are probably the best system we could have. I think more people are better off under that system than anywhere else in the world. I think that’s pretty much established. One of the things that my brother and I did about this, and I think I was really the inspiration for this, is when we knew we were going to go public we made a deal with a group of the senior people, maybe a dozen of them, that one of these days we are going to grow and then go public and so we said, “We’ll make a deal. We won’t bring in anymore family. We’ll make a commitment to have no more nepotism here beyond the two of us, but then we want you to make a commitment to get to be the best managers you can be. We want you to go to school, we want you to do all these things to build up your ability. In return for that, we’re going to start selling you family stock at a favored price, so that if we do well, you’ll do well.”

SCARPINO: This is before the company went public?

DE PREE: This is long before the company went public.

SCARPINO: You were basically planning to go public and planning for succession?

DE PREE: Yes, we made a commitment that succession was not going to be inside the family. D.J. had about 14 grandchildren at the time, including my brother’s oldest son who was out of work at the time and his wife was pushing hard that that grandson should be in the business. But we felt we couldn’t do that. We couldn’t just keep adding family and be successful.

SCARPINO: Because that creates an opportunity ceiling for other people, right?

DE PREE: Sure it does. So the other people who were showing promise, they worked hard, they did the education requirements, we all did that, and they started buying stock from the family and every one of them did well. When we went public, they were just in good shape. Then later after we were public, we started a second program where everybody in the company for a year gets to be a stockholder.

SCARPINO: So they could buy the stock, or they were paid in stock?

DE PREE: They had to earn it. We didn’t give it to them. They earned it through profit. Part of the profit bonus was paid in stock. They were also given the opportunity to buy. They could have a deduction from their pay to buy more. So they all knew they had earned it. Do you know what an ESOP is? Employee Stock Option Program.

SCARPINO: I know what that is.

DE PREE: Well, we didn’t want that because that meant the employees could not sell their stock. In our program the minute they got it they could sell it.

SCARPINO: So they really owned it.

DE PREE: They really owned it. They were really stockholders.

SCARPINO: The better the company performed, the more they would get?

DE PREE: Yes.

SCARPINO: So there’s an incentive for them to work for the company.

DE PREE: That’s right, and they got dividends. They learned how to be stockholders, yeah.

SCARPINO: I’m going to back up and ask you a question about something you said a little while ago. When I asked you about reconciling your faith-based philosophy of leadership with capitalism and a free market, you talked about generally agreed-upon free market principles were the best system we have. What do you think those generally agreed-upon free market principles are?

DE PREE: I think the first one is that every citizen has the right to own property. I think that’s basic to the system. I think another one is that we all agree that our actions are going to be governed by law and not by the rich or not by the government, but we’re going to have laws that we all agree on and that we will operate according to. The other one is that there will be a level of transparency, that everybody can be measured by how they behave, what they do. The other thing is that there is going to be a public method of accountability. Then you can all figure out the game.

SCARPINO: We already brought this up, but I want to make sure I have this all in one place. The company went public in 1970. Before the company went public, you and your brother had decided that in effect the survival of the company depended upon no more De Prees and that would then create opportunity for other people.

DE PREE: Yeah.

SCARPINO: So this was a plan to try to ensure the longevity of what began as a closely-held family firm?

DE PREE: That’s right. See, we weren’t saying none of the De Prees were able. They were able. We were saying, “Here’s a group of people who have already earned this; how can you take it away?”

SCARPINO: You became the CEO of Herman Miller in 1980.

DE PREE: Yes.

SCARPINO: Dr. Walter Wright, who we mentioned the other day, at least partially retired from Fuller Theological Seminary, told me that Carl Frost, the professor who originally introduced your father and brother to the Scanlon Plan, became one of your most important mentors.

DE PREE: Yeah.

SCARPINO: What did he do for you when you were about to take the reins of the company? They were right there and you were reaching for them.

DE PREE: Well, by that point, I had known Dr. Frost well for 30 years. We had been working together. So he had been a help all along in that. He had been my key mentor in terms of human relationships, although I’ll have to say that another key mentor in that field is my wife, Esther, who is a natural relationship builder. She makes friends everywhere, and keeps them, and she’s trusted by people. She was crucial to me in developing good relationships. But Carl Frost was a born teacher and he was a mentor, but he was also an instructor. He really did instruct us in a lot of things that had to be done in the business, in the same way that George Nelson did that. We were completely ready to accept George’s gifts in terms of design, but then it turned out he knew more about marketing than we did. That was kind of interesting. And Frost was no dummy when it came to marketing. Frost was a psychologist, but he understood the financial side of the business and so he was a great integrator of these various disciplines. On your question about getting ready to become a CEO, the other person who was a big help to me was Peter Drucker. He gave me both good business advice and occasionally fatherly advice.

SCARPINO: And you mentioned, you just made a cold call and said hi.

DE PREE: Yeah. In that first call, I told him, I said, “I’m with a company called Herman Miller, Incorporated.” He said, “Yes, I know all about your company.” That was a shock to me. Well, it turned out later that he and George Nelson were friends.

SCARPINO: Did you continue to apply or refine the Scanlon Plan during your years as CEO?

DE PREE: Yes. In fact, there was a period—I’m not clear on the dates for this, but there was, while I was there a very formal re-awakening about the Scanlon Plan. There were a number of people—I can name people like Roy Keech and Dick Ruch and Michele Hunt and others who took the lead in re-evaluating and re-establishing the Scanlon Plan because we had kind of run out of steam.

SCARPINO: And you mentioned it’s hard to do.

DE PREE: It is. It’s very hard work because you find yourself in endless meetings explaining to people what’s going on, but also those are teaching moments. You get in front of 30 or 40 factory workers. I know one time I got a question on the floor. We would have a monthly meeting with 300 people gathered there, and one time I tried to explain how the function of the credit department was directly connected to the quality of the product when it went out. A few days later I was on the factory floor and a woman stopped me and she said, “You know, I didn’t catch on to all that. Will you go back over that with me? How is my work connected to the credit department?” Well you see, I know a lot of managers who won’t do that. They’re not going to take their time for that. But if you want the benefits of a thing like the Scanlon Plan, you do it. With the Scanlon Plan, we worked hard on it, but we also made money and we had a good company.

SCARPINO: That’s the way business is supposed to work, isn’t it?

DE PREE: That’s right.

SCARPINO: So it wasn’t just altruistic? I mean it clearly was a way to make the company function more efficiently and effectively and profitably.

DE PREE: Oh sure. In certain ways, it was as hardboiled as you could get because we were so transparent with all the data and everybody would get these figures. But you have interesting experiences with this, too. I can tell you one little story. In one of those monthly meetings, we had about 300 people in the room and then we had people hooked up by telephone around the country. This was before digital. They were all on the phone. In the course of the question and answer period after we had given our monthly report and showed what the data were on how we did, a man named Harlan Moore, who was the manager of our Venice, California, factory, he just trapped me on something. He said, “Max, I’ve got a request for you.” He said, “I’d like you to do something about keeping your corporate seagulls out of here.” You know, I fell for that. I said, “Harlan, what’s a corporate seagull?” And you know what the answer is.

SCARPINO: I don’t know.

DE PREE: In front of all these people, he said, “These are some of your top guys, you know, that fly in, eat our lunch, shit on us and go home.”

SCARPINO: Oh my goodness.

DE PREE: Okay, you think you’re the CEO and the guy accuses your people of shitting on him, but that’s okay. You’ve got to be open to that stuff. It goes on. Even if you don’t think it goes on, it goes on.

SCARPINO: So in the end, that may have been helpful information.

DE PREE: It was.

SCARPINO: Although he definitely blindsided you.

DE PREE: Yeah. He could have been more diplomatic, but on the other hand, you see, he felt safe doing it. And isn’t that a wonderful thing?

SCARPINO: Yes.

DE PREE: I mean that’s something I can be grateful for.

SCARPINO: In 1960, Robert Propst, P-R-O-P-S-T, and your brother, Hugh, established the Herman Miller Research Corporation.

DE PREE: Yes.

SCARPINO: What was that all about and why is that important?

DE PREE: We—Bob Propst, and we, did not see himself as a designer so much as an inventor. He was interested in coming to work for us but not to design furniture and not to be in Zeeland, Michigan. He also didn’t want to go to New York. He was happy in Colorado. He was an outdoors guy. And I must say he was a special guy. He was in the Marines in World War II. Do you know what a beachmaster is?

SCARPINO: I don’t, no.

DE PREE: Well, when an army lands on a beach, somebody has to be in charge of that beach...

SCARPINO: Okay.

DE PREE: …and direct traffic. And he did that.

SCARPINO: My goodness.

DE PREE: Yeah, and he once told me, he said, “I knew then,” he said, “if I survived and I could do this,” he said, “I knew I could do anything.” Isn’t that interesting?

SCARPINO: That’s a life lesson, isn’t it? Because if you’re the beachmaster, you have to stay there.

DE PREE: That’s right. Yeah, that’s right. You can’t go back and you can’t go ahead; you’ve got to stay there and you’ve got to direct traffic. Yeah. So I think Hugh was—Hugh did a good job with us. He and Bob worked out a program where they would establish the Herman Miller Research Corporation. It would be in Ann Arbor; it wouldn’t be here. We asked Bob not to work on furniture, but in the end, you know, he invented the Action Office, which completely changed the company and the company grew out of that.

SCARPINO: I’m going to ask you about that in a minute, but Stumpf once said—and I’ll just read this quote to you. And now that you mentioned the Marine Corps, I understand this a little bit better. He said, “I work best when I’m pushed to the edge. When I’m at the point where my pride is subdued, where I’m innocent again. Herman Miller knows how to push me that way, mainly because the company still believes—years after D.J. De Pree first told me that—good design isn’t just good business, it’s a moral obligation. Now that’s pressure.”

DE PREE: Isn’t that something?

SCARPINO: Yes. So, do you see the same connection or a similar connection between design, business and moral obligation?

DE PREE: Yeah.

SCARPINO: Can you explain how that works for you?

DE PREE: Yes. I think—one of the engines of modern design was the way people have to live. The great majority of the population in the Western world does not live in big mansions. They live in small apartments, and they have no business in these big Lazy Boy chairs and great big buffets and dressers, you know, and all of this large stuff. For one reason, it takes up room that they don’t have. For another reason, it goes against Gilbert Rohde’s dictum—is the most important thing in the room is not the furniture; it’s the people. And the other thing is that it nails you down. It’s very hard for you to take all that big stuff and be mobile, and society requires you to be mobile. So to me, it is a moral thing. You ought to have products that meet your needs; not that meet the needs of some interior decorator. You know, you go today at a hotel, where are you going to put eight pillows?

SCARPINO: On the floor.

DE PREE: That’s right. See, the decorators think there have to be eight pillows, and the room isn’t big enough. You don’t know where to put the pillows. And to me, that’s kind of immoral. It’s certainly dishonest, if it’s not… So, the other thing about it, Phil, is that the inside of our homes is probably the only place in Western society where we don’t gravitate to new and good design. Look how the world is leaving behind landlines.

SCARPINO: Yeah.

DE PREE: We’re ready to go. And look at our cars and refrigerators, and everything else is modern. But so that’s…

SCARPINO: Stumpf…

DE PREE: Stumpf, yeah…

SCARPINO: The Aeron chair?

DE PREE: Yeah.

SCARPINO: What did that mean to the company?

DE PREE: We think that was the harbinger of a lot of very well-designed, very functional office chairs which were the product of new research in how people work and how they sit and how their bodies work. Now, you know, many competitors now make good chairs like that, too, but we were kind of the first with the ergonomic chair that Bill designed. And then, you know, the outcome of that is his Aeron chair.

SCARPINO: A-E-R-O-N, for the transcriber.

DE PREE: Yeah, A-E-R-O-N, which I can say is probably the last product I worked on while I was at Herman Miller. And that chair is so good and so research-oriented that it is routinely part of a prescription from doctors if you’ve got back trouble. Hundreds of people buy that chair on a prescription.

SCARPINO: To support their backs?

DE PREE: Yeah.

SCARPINO: Aqua chair?

DE PREE: Yeah, that was in that whole progression of chairs by Bill Stumpf, yeah.

SCARPINO: So, let me see if I can remember this correctly. When Honda began to sell Accords in the United States 30 years ago, I don’t know, 25 years ago, they used to claim that they—that the Japanese products were superior because they were based on the science of ergonomics, that is they were supposed to fit the person.

DE PREE: That’s right.

SCARPINO: You were doing this well before Japanese companies.

DE PREE: Yeah, we were.

SCARPINO: Was Herman Miller a leader in this area?

DE PREE: I would say yes. Yes. And some automobile companies made strong efforts to work with us on developing new seating for cars, but we never could work together because we’re just a different—we’re just different animals. They have to know to the penny what it’s going to be and—and that’s a tough business.

SCARPINO: So your brother stepped down as CEO in 1980. You replaced him. As you pointed out, you were also Chair of the Board.

DE PREE: Yeah.

SCARPINO: You developed a plan in which the employees were allowed to become shareholders, which we talked about some. In 1984, Robert Levering and Milton Moskowitz included Herman Miller in “The 100 Best Companies to Work for in America,” and there are lots of other accolades.

DE PREE: Yeah.

SCARPINO: You stepped down as CEO in ’87 but remained as Chairman of the Board until 1995?

DE PREE: Yes.

SCARPINO: So that’s just for the record. When you took over in 1980, what kind of condition was the company in? Or I could ask it a different way: What did you think you needed to do in order to effectively manage the company? What did it need? You invited Peter Drucker to come and lend a hand, right?

DE PREE: Yeah.

SCARPINO: So you must have felt you needed something.

DE PREE: We’re on touchy ground because it has to do with some people.

SCARPINO: Okay, I’m not asking for proprietary; I’m just sort of asking for, you know, “personnel management” would be an answer or, you know…

DE PREE: …Okay, let’s say we had to rebuild the leadership team.

SCARPINO: Okay.

DE PREE: That was crucial.

SCARPINO: And did you contact Peter Drucker before you became CEO or …

DE PREE: Oh yeah. Yeah. I had known Peter for a number of years before that, but when it became clear to me that the Board was going to pick me—that wasn’t a given at the time because these were all the outside members, you know, I thought it but they were outside people. But when it looked clear to me that the Board was going to pick me, I made a special trip out to see Peter. We had been talking about it and I told him what I was doing, that I was pretty sure I was going to be the CEO. I remember one of the things that he did, he said, “You know, you’ve got one guy on the team there,” he said, “I think you ought to have him report to somebody else, not to you.” He said, “I picked up that he’s not one of your favorites, and that’s not a good thing.” He said, “If you don’t care for him, he shouldn’t report to you.” And I thought, man alive, this is like talking to Jesus Christ, you know; how’d he know that? Boy, he—he told me one time—when I arrived out there in the early relationship, I had mailed him a bunch of stuff and when I got there he started asking me questions about the company and zeroing in on some things. And I said, “Dr. Rucker, how do you know all this stuff, huh? How do you get at this stuff?” He said, “Balance sheets speak to me.” Isn’t that something? I mean something was speaking to him.

SCARPINO: Knowing how to read a balance sheet is a real gift, isn’t it?

DE PREE: Yeah, yeah.

SCARPINO: You mentioned Michele Hunt and she was the one person who you suggested I talk to but I wasn’t able to get a hold of. So I dug out some things that she read. She worked—she was a vice president at Herman Miller in the mid ‘80s.

DE PREE: Yeah.

SCARPINO: And years later, like in 2009, she wrote about her experiences and she’s now writing about the mid ‘80s. She said, “After decades of success we were becoming irrelevant. We learned the hard way that nothing fails like success.” Was that accurate? Were things kind of shaky in the mid ‘80s?

DE PREE: Yeah. She—I’ve heard that before. I think she—I think the main thing she was talking about was the need for renewal of the Scanlon Plan. I believe that, yeah. Well, one of the interesting things about an organization like Herman Miller—and I’ve had senior people who have retired and told me that what Herman Miller was, was Camelot. They said, “You know, you’ll never find it again somewhere.” And Michele has said that, too. But when you open up a company and everybody has a right to have their opinions and the license to say whatever they believe, you live with what they say.

SCARPINO: That’s true, isn’t it?

DE PREE: Yeah. And not everybody, including the CEO, knows everything. That’s it. You’ve got—that’s a risk a lot of people don’t want to take, you know, you’re exposed to what everybody thinks.

SCARPINO: While you were CEO, did Carl Frost continue to play a role?

DE PREE: He did.

SCARPINO: And that was with the refinement and rejuvenation of the Scanlon Plan?

DE PREE: Yes, but after Dick Ruch resigned…

SCARPINO: …who was the person who replaced you as CEO?

DE PREE: Yeah, that’s right. See, then came Kerm Campbell, who had a tough time. He was a mistake. And then the guy who replaced him, Mike Volkema, gave up on the Scanlon Plan. And so after that—and he told Carl Frost, “I don’t want you to ever come back.” But Mike Volkema doesn’t—doesn’t ever show himself in factories. So until Frost died, he was at home in the factory. He knew Volkema wasn’t going to find him there.

SCARPINO: Oh.

DE PREE: And Frost had friends, you know, and he kept coming until he died.

SCARPINO: So I mean you had Carl Frost and Peter Drucker on the team, so to speak, at the same time?

DE PREE: We did, yeah.

SCARPINO: Buckminster Fuller paid a visit.

DE PREE: Yeah.

SCARPINO: You had all these creative design people.

DE PREE: Yeah.

SCARPINO: What was it like? Well, I’m going to ask it a different way. Did you intentionally seek out smart and creative people to surround yourself with?

DE PREE: Yeah. Yes. Sure. I think that’s one of the secrets of leadership. Yeah. Leadership requires real breadth rather than a specialization, and you get your breadth from a variety of people. You know, Clark Malcolm knows me well, and one of the things that we talk about is the interesting array of people that I just seem to have been in touch with.

Description of the video:

SCARPINO: I’m going to talk to you about Herman Miller and your association with them. Even though you’re more than Herman Miller, it’s a big part of your life.

DE PREE: You’re very good at this, Phil.

SCARPINO: I will tell you with this recorder on, I’m just so pleased that you were willing to talk to me. I’m going to start with Brian Walker again, the current CEO. He was ready, he knew what I wanted and he was pleasant. I’m sure he’s a busy man and he gave me about a half an hour. He told me on the phone that while the company was under the direct control of your family, he basically wanted to divide it into three phases; the leadership of your father, your brother and yourself. He said that your father established the basic principles of the corporate culture and moved the product line from traditional to more modern. He said your brother turned Herman Miller into a big business. And he said you codified the corporate culture so it could sustain itself after the family was no longer running the business. I want to ask you, as the guy who was there, is that a reasonable summary?

DE PREE: Well, if you had called Dick Ruch, who succeeded me as CEO and was CFO part of the time I was…

SCARPINO: Chief financial officer.

DE PREE: Yeah. He would give you a little different picture about what happened during the eight years I was CEO. I say this because I’ve heard him do this in public. He talks about the real growth happened then. I don’t remember the figures because I’m never good at figures, but the value of the company increased by five times in the eight years I was CEO. We did a much better job of growth. We reached the Fortune 500 during that time. I think the company tripled in size. Other than that, I don’t have a problem with how Brian saw it.

SCARPINO: I’m going to ask you questions sort of along that line. If I read correctly, you started at Herman Miller in 1947 at age 23, is that right?

DE PREE: In 1947, yeah, that’s right.

SCARPINO: You were a young man. Did you always expect to go into the family business?

DE PREE: No, there was a time before the war and while at Wheaton, I apparently thought I was going to be a doctor. I’m sure the experience in the Army changed me. I wasn’t interested anymore in all that. I guess I’d had a life full of that stuff.

SCARPINO: So here you are, a young man, and you’re going to start in the family business. Were you okay with that? Did you look forward to it?

DE PREE: Yeah, I did. Yeah, I really wanted to. I can also tell you, Phil, that one time one of the surgeons I worked for in France was from Grand Rapids, Michigan. That was quite a coincidence. I worked with him quite a bit. After the war, a few years after the war, my wife and I met him and his wife leaving a symphony concert in Grand Rapids and we had a great reunion. Afterwards, he said, “You should have been a surgeon.” He said, “He was a surgeon.” I loved surgery and I could do surgery. I mean we did surgery, you know. We were trained on the job.

SCARPINO: So in the situation you found yourself in, you actually with your level of training were operating on people?

DE PREE: Well, I could lay a guy on his belly and take all the shrapnel out of his back. I sent a lot of guys home with bad sewing…

SCARPINO: But alive.

DE PREE: That’s right. Scars, but they were alive. Yeah, I did some of those things.

SCARPINO: Did that help you put things in perspective when your kids fell down, stubbed their toes, had bloody noses or whatever?

DE PREE: Oh yeah, that’s right. One time our younger daughter tried to run through a storm door and cut her artery off, and it was perfectly natural for me to know what to do with that.

SCARPINO: When you started with Herman Miller, what did they have you do? How did you work your way around?

DE PREE: Well, the story starts earlier than that. In high school, my brother and I both worked in the factory during summers. Because we were the boss’ son, we did get some dirty jobs. They had counted on us to clean the boiler all the time. The millwright always loved giving us the dirty jobs because he had a little power. Then later, we both worked in a cabinet room and in the machine room. I don’t remember what else he did, but I became a master upholsterer before I went in the Army.

SCARPINO: So you were actually yourself sewing the upholstery?

DE PREE: Yes, I could do a sofa like that.

SCARPINO: As you worked your way up through the company, did the fact that you had done those things with your own hands, did that help you?

DE PREE: Oh yeah. That was a big help, because you work in a factory and there’s a society there and they all know a lot about what’s going on. One of the things I never did, I never underestimated people who worked with their hands. I knew what they were doing and I had done it, and I did some tough jobs in the Army, too. They know if you can do something, and they respect you if you do it. But then after the war, I remember doing jobs like scheduling and things like that. I remember moving up into purchasing and so on. My brother and I both did an awful lot of those jobs.

SCARPINO: So purchasing would involve the raw materials that went into the factory?

DE PREE: Yeah, and all of the additional parts. We didn’t make castings like that. We had to buy that stuff from other companies.

SCARPINO: How many years was it before you were working in a position that one might describe as junior executive or middle management?

DE PREE: Just guessing, I would think by the time I was 30 that people saw that the three De Prees were kind of running the company.

SCARPINO: By that time, you had done a great deal of different kinds of work.

DE PREE: Yes. And also, my brother and I had the feeling that we were going to be growing and we did a lot of going to school. We went to Michigan State for continuing courses. I went to the American Management Association in New York for continuing courses in management, leadership and so on. We developed those programs for a lot of people in the company.

SCARPINO: So you went to school, learned whatever it was that you wanted to learn and then came back and developed training programs?

DE PREE: Yeah.

SCARPINO: I’m going to talk a little more about the company and about leadership, but in order to do that and in order to help the people who are either going to listen to this recording or read the transcript, I have about three lines of company history here. I hope this is right, because I’m going to be embarrassed if it’s not. Herman Miller was founded by your father, D.J. De Pree, who bought the Michigan Star Furniture Company in 1923 with his father-in-law, Herman Miller, and a small group of local businessmen. The original plant was located near Grand Rapids. De Pree renamed the company Herman Miller Furniture Company after his father-in-law, who was a major shareholder. D.J. De Pree was a religious man who moved the company in the direction of moral responsibility and commitment to employees. Is that a reasonable thumbnail?

DE PREE: Yeah, but the company was always in Zeeland. It was not near Grand Rapids. D.J.’s own father was also an investor, and several of the sales people were investors. In fact, I was named after a man named Max Bath, who was one of the company’s sale reps.

SCARPINO: I hope this isn’t too silly of a question, but is the original building still there?

DE PREE: No, but it was destroyed only 10 years ago or so.

SCARPINO: In 2013, the American National Business Hall of Fame profiled your father. The first sentence of that profile reads as follows: “This is the story of a Christian business leader who proved by example that a highly successful business could be built on principles of faith.” Do you agree that your father was a Christian business leader who proved by example that he could build his business on the principles of faith?

DE PREE: No, not entirely. He was a Christian business leader, but he had to deal with people who would talk to him about this being a Christian company. He would always say, “No, theologically you can have a relationship with God but not as a company.” He used to talk about this is a place where there’s space for everybody. D.J. employed the first woman manager at Herman Miller, which was quite a big deal at the time. D.J. grew up in the business with important Jewish members of the company. He would never say this is a Christian company.

SCARPINO: Would it be fair to say that his faith influenced the way he led?

DE PREE: Yes, absolutely.

SCARPINO: You spent a lot of time with your dad, but what kind of faith-related principles influenced his leadership?

DE PREE: Well, in truth and fairness, he used to refer to the Book of James where it talks about how you treat people. He was an admirer of the Old Testament prophet, Amos, who wrote about some of that. There was even one period in time where he talked about sensing his obligation to meet the payroll as a biblical matter. Somewhere he found in the Bible that you pay your help almost daily or something. He went through a period where he struggled with that.

SCARPINO: The citation for your own Lifetime Achievement Award from the International Leadership Association describes your family management of the Herman Miller Company as covenantal. In 1993, another article by Manfred Kets de Vries describes the relationship between your family and the employees of Herman Miller as a “covenant that works both ways.” Lots of writers have used that word “covenant” or “covenantal” describes your understanding of the relationship between employees and employer at Herman Miller?

DE PREE: Yeah, I do. It’s basic. I wrote about it in one of my books, comparing it to the contractual relationships, that there’s a very important difference between a contractual way of working together and a covenantal way of working together. I don’t know who that person is that you quoted.

SCARPINO: The first quote came from your International Leadership Association.

DE PREE: Yeah, but the guy in Europe?

SCARPINO: Manfred Kets de Vries. He’s a psychologist. He’s another award winner. He was born in Holland. He taught for decades in Paris.

DE PREE: Okay.

SCARPINO: In your mind, does the idea of a covenant have biblical roots?

DE PREE: Yeah, it does. In scripture, it’s kind of a regular thing where God refers to his relationship with us as being a covenant.

SCARPINO: Since a covenant is both an agreement and a promise, what do leaders who follow a covenantal approach promise to their followers? What promise do you make?

DE PREE: Well, I don’t want to sound trite, but I think the heart of that first book, Leadership is an Art, is an elaboration on this whole idea. Chapter by chapter, you can go through there and you find the roots are in this kind of thinking. By the way, the statement of “leaders don’t inflict pain, they bear pain,” that actually came from my friend David Hubbard. He was the origin, as far as I’m concerned.

SCARPINO: I have read most of Leadership is an Art, but maybe people will listen to this recording who haven’t read it. Could you explain what you see is the difference between a covenantal and a contractual model of leadership?

DE PREE: Well, that isn’t so easy. A contractual arrangement for work is one in which you can write down the elements of the contract and you can both understand them, and you can together measure them and reach a conclusion about what has happened or is not happening. For instance, if you’re hiring a baseball player and he’s got to hit 300 in order to stay the next year, you both know what he’s doing. In a covenantal relationship, there’s a different understanding about who each of us is and what our commitments are to each other. I, the leader, am going to make a commitment to your success, and I’d like you to do the same thing. I understand that you can’t do as much about that as I can. I do have some power, and that’s kind of crucial in this relationship. As a leader, if I’m going to make a commitment to a covenantal relationship, there are requirements of me that are not necessarily required of me if it’s only a contractual relationship. One of the things that comes back, I’m going to be concerned that because I’m meddling in your family affairs, I’m meddling in your life, so I’m going to try to spare you the pain. I’m going to try to bear some of your pain, and I’m really going to try to be your teacher. I really care about you because I understand that deep down what counts for me is how good you can be. I know from experience that if I’m going to treat you covenantly, the odds are much higher for good performance than if I’m going to just depend on a contract.

SCARPINO: Is that kind of relationship both more liberating and more challenging for the employee?

DE PREE: Yeah, it’s much harder. The leader has to work harder. One of the reasons a lot of the Scanlon plans have failed, including at Herman Miller, is because nobody wants to work that hard.

SCARPINO: We’re going to talk about Scanlon in a bit, but your assessment is that it ultimately failed at Herman Miller?

DE PREE: Yeah, they gave up.

SCARPINO: How did you feel about that?

DE PREE: Well, like Brian said, I moved on. Have a new life.

SCARPINO: Do you think it’s important for a leader, particularly the kind of leader you’ve been, to also be a role model?

DE PREE: Oh yeah. One time, walking through the plant, I stopped and I picked up some trash in an aisleway and put it in the dustbin. A little later I got a call from the guy who ran that department, the supervisor, and he said, “I just want to say thank you for picking up that crap you picked up this morning.” He said, “Now I don’t have to talk about it for a week.” Just the example, you know, people are watching all the time.

SCARPINO: Were you always cognizant of that, that people were watching?

DE PREE: Yeah, I figured that out I think in the Army. I think that’s when that started to dawn on me. A lot of things dawned on me in the Army.

SCARPINO: It has a way of happening, doesn’t it?

DE PREE: Yeah, it does. You watch people, and one of the things that I’m very aware of is that there are people who observe and who listen to other people. And then there are people who don’t pay attention. The ones who observe and listen gain.

SCARPINO: When you and your brother were in high school working in the plant, did you ever feel as though people were watching?

DE PREE: Yeah, we did.

SCARPINO: The boss’ kids and how you were going to respond and act.

DE PREE: Yeah, that’s right. One time I quit. They had a pay raise in the plant as a general increase and I didn’t get it. I went to the foreman that I worked for and I said to him, “How come I didn’t get that raise?” He said, “You’ve got to get it from your dad.” I said, “No, I don’t.” I said, “Either I get it from you or I quit.” He said, “I’m not going to give you a raise.” So I quit. Then I got out the door and I thought I can’t go home and just tell my dad I quit. So I spent a few hours and I found a job working in a hatchery in Zeeland.

SCARPINO: A fish hatchery?

DE PREE: A chicken hatchery. So when I got home that afternoon at quitting time, I arrived at the backdoor and I was pretty dirty. My mother said, “What happened?” I said, “Well, the guy wouldn’t give me a raise so I quit and I got a job at Cable’s Hatchery.” She said, “Good for you.” I got cleaned up and she explained to my dad what happened.

SCARPINO: Did you stay at the hatchery?

DE PREE: I stayed at the hatchery until I went to college.

SCARPINO: Why was it important to you that the foreman give you the raise and not your dad?

DE PREE: Well, I just felt that was the fair thing. I just felt I’m an employee here and you’re my boss, everybody else gets a raise, I ought to get a raise. I just thought that was fair.

SCARPINO: We’ve talked off and on about your leadership philosophy grounded in Christian faith and covenantal approach. How do you reconcile that with capitalism and factory production?

DE PREE: I think for me it enhanced my ability to be a worthy leader. I don’t have a theological or philosophical disagreement with the free market system, but I have a lot of disagreement with the way some people practice it. That’s really a pity. I believe that some of the people who are taking such a big share out of the system have no idea what they’re doing to the system. So I’m a little fearful about what’s going to happen because the more people misbehave, the more the government has to move in. That to me is a bit of a problem because I don’t see government as being very efficient. I think the generally agreed-upon principles of the free market system are probably the best system we could have. I think more people are better off under that system than anywhere else in the world. I think that’s pretty much established. One of the things that my brother and I did about this, and I think I was really the inspiration for this, is when we knew we were going to go public we made a deal with a group of the senior people, maybe a dozen of them, that one of these days we are going to grow and then go public and so we said, “We’ll make a deal. We won’t bring in anymore family. We’ll make a commitment to have no more nepotism here beyond the two of us, but then we want you to make a commitment to get to be the best managers you can be. We want you to go to school, we want you to do all these things to build up your ability. In return for that, we’re going to start selling you family stock at a favored price, so that if we do well, you’ll do well.”

SCARPINO: This is before the company went public?

DE PREE: This is long before the company went public.

SCARPINO: You were basically planning to go public and planning for succession?

DE PREE: Yes, we made a commitment that succession was not going to be inside the family. D.J. had about 14 grandchildren at the time, including my brother’s oldest son who was out of work at the time and his wife was pushing hard that that grandson should be in the business. But we felt we couldn’t do that. We couldn’t just keep adding family and be successful.

SCARPINO: Because that creates an opportunity ceiling for other people, right?

DE PREE: Sure it does. So the other people who were showing promise, they worked hard, they did the education requirements, we all did that, and they started buying stock from the family and every one of them did well. When we went public, they were just in good shape. Then later after we were public, we started a second program where everybody in the company for a year gets to be a stockholder.

SCARPINO: So they could buy the stock, or they were paid in stock?

DE PREE: They had to earn it. We didn’t give it to them. They earned it through profit. Part of the profit bonus was paid in stock. They were also given the opportunity to buy. They could have a deduction from their pay to buy more. So they all knew they had earned it. Do you know what an ESOP is? Employee Stock Option Program.

SCARPINO: I know what that is.

DE PREE: Well, we didn’t want that because that meant the employees could not sell their stock. In our program the minute they got it they could sell it.

SCARPINO: So they really owned it.

DE PREE: They really owned it. They were really stockholders.

SCARPINO: The better the company performed, the more they would get?

DE PREE: Yes.

SCARPINO: So there’s an incentive for them to work for the company.

DE PREE: That’s right, and they got dividends. They learned how to be stockholders, yeah.

SCARPINO: I’m going to back up and ask you a question about something you said a little while ago. When I asked you about reconciling your faith-based philosophy of leadership with capitalism and a free market, you talked about generally agreed-upon free market principles were the best system we have. What do you think those generally agreed-upon free market principles are?

DE PREE: I think the first one is that every citizen has the right to own property. I think that’s basic to the system. I think another one is that we all agree that our actions are going to be governed by law and not by the rich or not by the government, but we’re going to have laws that we all agree on and that we will operate according to. The other one is that there will be a level of transparency, that everybody can be measured by how they behave, what they do. The other thing is that there is going to be a public method of accountability. Then you can all figure out the game.

SCARPINO: We already brought this up, but I want to make sure I have this all in one place. The company went public in 1970. Before the company went public, you and your brother had decided that in effect the survival of the company depended upon no more De Prees and that would then create opportunity for other people.

DE PREE: Yeah.

SCARPINO: So this was a plan to try to ensure the longevity of what began as a closely-held family firm?

DE PREE: That’s right. See, we weren’t saying none of the De Prees were able. They were able. We were saying, “Here’s a group of people who have already earned this; how can you take it away?”

SCARPINO: You became the CEO of Herman Miller in 1980.

DE PREE: Yes.

SCARPINO: Dr. Walter Wright, who we mentioned the other day, at least partially retired from Fuller Theological Seminary, told me that Carl Frost, the professor who originally introduced your father and brother to the Scanlon Plan, became one of your most important mentors.

DE PREE: Yeah.

SCARPINO: What did he do for you when you were about to take the reins of the company? They were right there and you were reaching for them.

DE PREE: Well, by that point, I had known Dr. Frost well for 30 years. We had been working together. So he had been a help all along in that. He had been my key mentor in terms of human relationships, although I’ll have to say that another key mentor in that field is my wife, Esther, who is a natural relationship builder. She makes friends everywhere, and keeps them, and she’s trusted by people. She was crucial to me in developing good relationships. But Carl Frost was a born teacher and he was a mentor, but he was also an instructor. He really did instruct us in a lot of things that had to be done in the business, in the same way that George Nelson did that. We were completely ready to accept George’s gifts in terms of design, but then it turned out he knew more about marketing than we did. That was kind of interesting. And Frost was no dummy when it came to marketing. Frost was a psychologist, but he understood the financial side of the business and so he was a great integrator of these various disciplines. On your question about getting ready to become a CEO, the other person who was a big help to me was Peter Drucker. He gave me both good business advice and occasionally fatherly advice.

SCARPINO: And you mentioned, you just made a cold call and said hi.

DE PREE: Yeah. In that first call, I told him, I said, “I’m with a company called Herman Miller, Incorporated.” He said, “Yes, I know all about your company.” That was a shock to me. Well, it turned out later that he and George Nelson were friends.

SCARPINO: Did you continue to apply or refine the Scanlon Plan during your years as CEO?

DE PREE: Yes. In fact, there was a period—I’m not clear on the dates for this, but there was, while I was there a very formal re-awakening about the Scanlon Plan. There were a number of people—I can name people like Roy Keech and Dick Ruch and Michele Hunt and others who took the lead in re-evaluating and re-establishing the Scanlon Plan because we had kind of run out of steam.

SCARPINO: And you mentioned it’s hard to do.

DE PREE: It is. It’s very hard work because you find yourself in endless meetings explaining to people what’s going on, but also those are teaching moments. You get in front of 30 or 40 factory workers. I know one time I got a question on the floor. We would have a monthly meeting with 300 people gathered there, and one time I tried to explain how the function of the credit department was directly connected to the quality of the product when it went out. A few days later I was on the factory floor and a woman stopped me and she said, “You know, I didn’t catch on to all that. Will you go back over that with me? How is my work connected to the credit department?” Well you see, I know a lot of managers who won’t do that. They’re not going to take their time for that. But if you want the benefits of a thing like the Scanlon Plan, you do it. With the Scanlon Plan, we worked hard on it, but we also made money and we had a good company.

SCARPINO: That’s the way business is supposed to work, isn’t it?

DE PREE: That’s right.

SCARPINO: So it wasn’t just altruistic? I mean it clearly was a way to make the company function more efficiently and effectively and profitably.

DE PREE: Oh sure. In certain ways, it was as hardboiled as you could get because we were so transparent with all the data and everybody would get these figures. But you have interesting experiences with this, too. I can tell you one little story. In one of those monthly meetings, we had about 300 people in the room and then we had people hooked up by telephone around the country. This was before digital. They were all on the phone. In the course of the question and answer period after we had given our monthly report and showed what the data were on how we did, a man named Harlan Moore, who was the manager of our Venice, California, factory, he just trapped me on something. He said, “Max, I’ve got a request for you.” He said, “I’d like you to do something about keeping your corporate seagulls out of here.” You know, I fell for that. I said, “Harlan, what’s a corporate seagull?” And you know what the answer is.

SCARPINO: I don’t know.

DE PREE: In front of all these people, he said, “These are some of your top guys, you know, that fly in, eat our lunch, shit on us and go home.”

SCARPINO: Oh my goodness.

DE PREE: Okay, you think you’re the CEO and the guy accuses your people of shitting on him, but that’s okay. You’ve got to be open to that stuff. It goes on. Even if you don’t think it goes on, it goes on.

SCARPINO: So in the end, that may have been helpful information.

DE PREE: It was.

SCARPINO: Although he definitely blindsided you.

DE PREE: Yeah. He could have been more diplomatic, but on the other hand, you see, he felt safe doing it. And isn’t that a wonderful thing?

SCARPINO: Yes.

DE PREE: I mean that’s something I can be grateful for.

SCARPINO: In 1960, Robert Propst, P-R-O-P-S-T, and your brother, Hugh, established the Herman Miller Research Corporation.

DE PREE: Yes.

SCARPINO: What was that all about and why is that important?

DE PREE: We—Bob Propst, and we, did not see himself as a designer so much as an inventor. He was interested in coming to work for us but not to design furniture and not to be in Zeeland, Michigan. He also didn’t want to go to New York. He was happy in Colorado. He was an outdoors guy. And I must say he was a special guy. He was in the Marines in World War II. Do you know what a beachmaster is?

SCARPINO: I don’t, no.

DE PREE: Well, when an army lands on a beach, somebody has to be in charge of that beach...

SCARPINO: Okay.

DE PREE: …and direct traffic. And he did that.

SCARPINO: My goodness.

DE PREE: Yeah, and he once told me, he said, “I knew then,” he said, “if I survived and I could do this,” he said, “I knew I could do anything.” Isn’t that interesting?

SCARPINO: That’s a life lesson, isn’t it? Because if you’re the beachmaster, you have to stay there.

DE PREE: That’s right. Yeah, that’s right. You can’t go back and you can’t go ahead; you’ve got to stay there and you’ve got to direct traffic. Yeah. So I think Hugh was—Hugh did a good job with us. He and Bob worked out a program where they would establish the Herman Miller Research Corporation. It would be in Ann Arbor; it wouldn’t be here. We asked Bob not to work on furniture, but in the end, you know, he invented the Action Office, which completely changed the company and the company grew out of that.

SCARPINO: I’m going to ask you about that in a minute, but Stumpf once said—and I’ll just read this quote to you. And now that you mentioned the Marine Corps, I understand this a little bit better. He said, “I work best when I’m pushed to the edge. When I’m at the point where my pride is subdued, where I’m innocent again. Herman Miller knows how to push me that way, mainly because the company still believes—years after D.J. De Pree first told me that—good design isn’t just good business, it’s a moral obligation. Now that’s pressure.”

DE PREE: Isn’t that something?

SCARPINO: Yes. So, do you see the same connection or a similar connection between design, business and moral obligation?

DE PREE: Yeah.

SCARPINO: Can you explain how that works for you?

DE PREE: Yes. I think—one of the engines of modern design was the way people have to live. The great majority of the population in the Western world does not live in big mansions. They live in small apartments, and they have no business in these big Lazy Boy chairs and great big buffets and dressers, you know, and all of this large stuff. For one reason, it takes up room that they don’t have. For another reason, it goes against Gilbert Rohde’s dictum—is the most important thing in the room is not the furniture; it’s the people. And the other thing is that it nails you down. It’s very hard for you to take all that big stuff and be mobile, and society requires you to be mobile. So to me, it is a moral thing. You ought to have products that meet your needs; not that meet the needs of some interior decorator. You know, you go today at a hotel, where are you going to put eight pillows?

SCARPINO: On the floor.

DE PREE: That’s right. See, the decorators think there have to be eight pillows, and the room isn’t big enough. You don’t know where to put the pillows. And to me, that’s kind of immoral. It’s certainly dishonest, if it’s not… So, the other thing about it, Phil, is that the inside of our homes is probably the only place in Western society where we don’t gravitate to new and good design. Look how the world is leaving behind landlines.

SCARPINO: Yeah.

DE PREE: We’re ready to go. And look at our cars and refrigerators, and everything else is modern. But so that’s…

SCARPINO: Stumpf…

DE PREE: Stumpf, yeah…

SCARPINO: The Aeron chair?

DE PREE: Yeah.

SCARPINO: What did that mean to the company?

DE PREE: We think that was the harbinger of a lot of very well-designed, very functional office chairs which were the product of new research in how people work and how they sit and how their bodies work. Now, you know, many competitors now make good chairs like that, too, but we were kind of the first with the ergonomic chair that Bill designed. And then, you know, the outcome of that is his Aeron chair.

SCARPINO: A-E-R-O-N, for the transcriber.

DE PREE: Yeah, A-E-R-O-N, which I can say is probably the last product I worked on while I was at Herman Miller. And that chair is so good and so research-oriented that it is routinely part of a prescription from doctors if you’ve got back trouble. Hundreds of people buy that chair on a prescription.

SCARPINO: To support their backs?

DE PREE: Yeah.

SCARPINO: Aqua chair?

DE PREE: Yeah, that was in that whole progression of chairs by Bill Stumpf, yeah.

SCARPINO: So, let me see if I can remember this correctly. When Honda began to sell Accords in the United States 30 years ago, I don’t know, 25 years ago, they used to claim that they—that the Japanese products were superior because they were based on the science of ergonomics, that is they were supposed to fit the person.

DE PREE: That’s right.

SCARPINO: You were doing this well before Japanese companies.

DE PREE: Yeah, we were.

SCARPINO: Was Herman Miller a leader in this area?

DE PREE: I would say yes. Yes. And some automobile companies made strong efforts to work with us on developing new seating for cars, but we never could work together because we’re just a different—we’re just different animals. They have to know to the penny what it’s going to be and—and that’s a tough business.

SCARPINO: So your brother stepped down as CEO in 1980. You replaced him. As you pointed out, you were also Chair of the Board.

DE PREE: Yeah.

SCARPINO: You developed a plan in which the employees were allowed to become shareholders, which we talked about some. In 1984, Robert Levering and Milton Moskowitz included Herman Miller in “The 100 Best Companies to Work for in America,” and there are lots of other accolades.

DE PREE: Yeah.

SCARPINO: You stepped down as CEO in ’87 but remained as Chairman of the Board until 1995?

DE PREE: Yes.

SCARPINO: So that’s just for the record. When you took over in 1980, what kind of condition was the company in? Or I could ask it a different way: What did you think you needed to do in order to effectively manage the company? What did it need? You invited Peter Drucker to come and lend a hand, right?

DE PREE: Yeah.

SCARPINO: So you must have felt you needed something.

DE PREE: We’re on touchy ground because it has to do with some people.

SCARPINO: Okay, I’m not asking for proprietary; I’m just sort of asking for, you know, “personnel management” would be an answer or, you know…

DE PREE: …Okay, let’s say we had to rebuild the leadership team.

SCARPINO: Okay.

DE PREE: That was crucial.

SCARPINO: And did you contact Peter Drucker before you became CEO or …

DE PREE: Oh yeah. Yeah. I had known Peter for a number of years before that, but when it became clear to me that the Board was going to pick me—that wasn’t a given at the time because these were all the outside members, you know, I thought it but they were outside people. But when it looked clear to me that the Board was going to pick me, I made a special trip out to see Peter. We had been talking about it and I told him what I was doing, that I was pretty sure I was going to be the CEO. I remember one of the things that he did, he said, “You know, you’ve got one guy on the team there,” he said, “I think you ought to have him report to somebody else, not to you.” He said, “I picked up that he’s not one of your favorites, and that’s not a good thing.” He said, “If you don’t care for him, he shouldn’t report to you.” And I thought, man alive, this is like talking to Jesus Christ, you know; how’d he know that? Boy, he—he told me one time—when I arrived out there in the early relationship, I had mailed him a bunch of stuff and when I got there he started asking me questions about the company and zeroing in on some things. And I said, “Dr. Rucker, how do you know all this stuff, huh? How do you get at this stuff?” He said, “Balance sheets speak to me.” Isn’t that something? I mean something was speaking to him.

SCARPINO: Knowing how to read a balance sheet is a real gift, isn’t it?

DE PREE: Yeah, yeah.

SCARPINO: You mentioned Michele Hunt and she was the one person who you suggested I talk to but I wasn’t able to get a hold of. So I dug out some things that she read. She worked—she was a vice president at Herman Miller in the mid ‘80s.

DE PREE: Yeah.

SCARPINO: And years later, like in 2009, she wrote about her experiences and she’s now writing about the mid ‘80s. She said, “After decades of success we were becoming irrelevant. We learned the hard way that nothing fails like success.” Was that accurate? Were things kind of shaky in the mid ‘80s?

DE PREE: Yeah. She—I’ve heard that before. I think she—I think the main thing she was talking about was the need for renewal of the Scanlon Plan. I believe that, yeah. Well, one of the interesting things about an organization like Herman Miller—and I’ve had senior people who have retired and told me that what Herman Miller was, was Camelot. They said, “You know, you’ll never find it again somewhere.” And Michele has said that, too. But when you open up a company and everybody has a right to have their opinions and the license to say whatever they believe, you live with what they say.

SCARPINO: That’s true, isn’t it?

DE PREE: Yeah. And not everybody, including the CEO, knows everything. That’s it. You’ve got—that’s a risk a lot of people don’t want to take, you know, you’re exposed to what everybody thinks.

SCARPINO: While you were CEO, did Carl Frost continue to play a role?

DE PREE: He did.

SCARPINO: And that was with the refinement and rejuvenation of the Scanlon Plan?

DE PREE: Yes, but after Dick Ruch resigned…

SCARPINO: …who was the person who replaced you as CEO?

DE PREE: Yeah, that’s right. See, then came Kerm Campbell, who had a tough time. He was a mistake. And then the guy who replaced him, Mike Volkema, gave up on the Scanlon Plan. And so after that—and he told Carl Frost, “I don’t want you to ever come back.” But Mike Volkema doesn’t—doesn’t ever show himself in factories. So until Frost died, he was at home in the factory. He knew Volkema wasn’t going to find him there.

SCARPINO: Oh.

DE PREE: And Frost had friends, you know, and he kept coming until he died.

SCARPINO: So I mean you had Carl Frost and Peter Drucker on the team, so to speak, at the same time?

DE PREE: We did, yeah.

SCARPINO: Buckminster Fuller paid a visit.

DE PREE: Yeah.

SCARPINO: You had all these creative design people.

DE PREE: Yeah.

SCARPINO: What was it like? Well, I’m going to ask it a different way. Did you intentionally seek out smart and creative people to surround yourself with?

DE PREE: Yeah. Yes. Sure. I think that’s one of the secrets of leadership. Yeah. Leadership requires real breadth rather than a specialization, and you get your breadth from a variety of people. You know, Clark Malcolm knows me well, and one of the things that we talk about is the interesting array of people that I just seem to have been in touch with.