Steelcase's Strong Suit

CEO James Hackett discusses the tactics that have kept the furniture maker at the forefront of workspace innovation for nearly a century

By Jessie Scanlon

Several years ago, James Hackett, the CEO of Steelcase, saw a presentation at the TED conference by Bob Full, a Berkeley scientist who studies how bugs move. Full showed stop-motion videos of cockroaches on a treadmill to illustrate his findings, and explained how the bug's locomotion could be applied to robotics. Hackett was at the conference with his chief engineer, who saw a different application for the findings: furniture.

The lesson in insect movement inspired the spring mechanism developed for the Think chair.'s Jessie Scanlon spoke with Hackett about his best sources for innovation, how he fosters creativity, and the future of Steelcase. Excerpts of their conversation follow.

Where do you look for inspiration?

I had the opportunity to visit Bill Gates's house a few years ago. In his library are collections of writings by George Washington, Jonas Salk, and Abraham Lincoln. Gates's intellectual curiosity across domains inspires him in his domain. People often ask me if I'm reading the latest book by the CEO of X Corporation, and you know, I'm not. I would rather study peripheral things to learn how people think about problems in different areas. Seeing how people solve problems in other areas helps you in your own business problems.

Does Steelcase have a mechanism for fostering creativity?

First of all, we believe that space is really important, and after all, it's our business to create effective workplaces. We've also built a corporate learning center. The facility becomes the center of strategy, because strategy comes through stretching the mind.

We've also created a network of the smartest people in different fields, and we get them to come speak to our people. The Think Phase—the networking step—that's the real answer.

You have thousands of employees. How do you connect them to this creativity network?

For my direct reports, eight people, I have CEOs from [top] companies and other great thinkers come have dinner us. We're not trying to probe the depths of their practices. But we talk about how they solve problems. To reach people below the executive group, we bring the best minds to the learning center. We even do Webcasting.

How do conversations translate to innovations that affect the bottom line? What's the connection between inspiration and strategy?

You need a compass. Our compass is the user experience. Through our close association with Ideo, we've imported their user-centric methods.

When it comes to organic growth, what are the key areas of the business you look to for innovation?

There are two where the opportunity is huge. One is health care. We use the same principle of starting with the user. How satisfying is the patient/doctor/nurse experience? Steelcase started a research effort with the Mayo Clinic called the Spark project focused on creating world-class health-care spaces. That division of our business grew very fast last year. The second is education.

Health isn't surprising—there's so much money going into that sector. But education isn't an obvious growth area.

Schools are constrained by budgets year in year out, so the design of education spaces hasn't evolved quickly. We've invented a series of classrooms based on new technologies built for the classroom. For instance, we worked with Stanford on its Center for Innovations in Learning. These spaces aren't just about putting technology into the classroom—the same old space doesn't work. The education community is starting to see that.

Steelcase is located within miles of two competitors—Herman Miller and Haworth. Do you think that Steelcase has benefited from that innovation cluster?

The transfer of information calls them to "co-locate." I think it's much less vital today, given the nature of computer networks. You can do that at a distance now. There's a stronger pull for businesses to be near the educational institutions where the innovative thinking is happening. There's a need for closer co-location to the business and the educational institutions where the leading research is happening.

For tech companies, that means places like Berkeley and Silicon Valley near Stanford. A lot of the auto companies' R&D comes out of the University of Michigan mechanical engineering department in Ann Arbor. Western Michigan has some great colleges, but we're not near the universities doing social thinking, which is key to our work, so we've had to build those networks virtually.

Steelcase was founded in 1912, so your centennial isn't too far away. Can you imagine what kind of company Steelcase will be 100 years from now?

That's a very laudable time in a business' life. It's difficult to make those kinds of predictions, but as a leader, you have to try to imagine the future and paint a number of different scenarios. You have to have your mind ready for how it might emerge.

But one thing that we can predict with certainty is that the power of networks is changing the nature of IP, of trade policies, of communication in politics. It has socioeconomic implications—the people at the lowest end of the economic pyramid will have access to the same technology. Everyone can get into the network, and then knowledge becomes the key to competing. Networks don't get weaker with more people in them. They get stronger, and it's just better for the human race.

Most people would think of Steelcase as a furniture company, yet in talking about its future you seem to be focusing on technology.

Our business is about work. To make work efficient, you need collaborative tools—like Thunder, the collaboration tool developed by our PolyVision unit—and the furniture has to work with it. But it's just as important to have the right space, the social network, and the tools.

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