Latest / The Pivot Podcast with Fexingo: How Businesses Change Direction and Survive Disruption / How Herman Miller Pivoted to the Home Office Revolution
Transcript
- Lucas: In 2020, as offices emptied, Herman Miller saw its commercial furniture revenue drop by 40 percent in a single quarter. The company had been making office furniture for over a century — it was built for cubicles and conference rooms. But instead of hunkering down and waiting for the return to the office, they bet everything on your living room. Luna: That sounds like a huge risk. I mean, their whole brand was about workplace design. How do you pivot that to a market where people are working from their kitchen tables? Lucas: Exactly. And it wasn't just about selling a few extra chairs to consumers. They had to rethink their entire supply chain. For decades, Herman Miller sold almost exclusively through office furniture dealers and corporate contracts. direct to consumer was a tiny fraction of their business. So they had to build an entirely new channel — fast. Luna: What was the first move they made? Lucas: They launched a standalone e-commerce site, specially designed for home buyers, within a few months. But the really smart play was product. They took their most iconic piece — the Aeron chair, which debuted in 1994 — and repositioned it from 'corporate ergonomics' to 'the ultimate home office upgrade.' Suddenly the Aeron wasn't a chair your employer bought you. It was a status symbol you bought for yourself. Luna: And that worked? I remember the Aeron was already pretty popular, but mainly as an office staple. Lucas: It worked remarkably well. By 2022, home office sales accounted for about 30 percent of Herman Miller's total revenue — up from single digits before the pandemic. And the margins on direct to consumer sales are actually higher than on corporate contracts, because there's no middleman taking a cut. So their profitability improved even as total revenue initially dipped. Luna: But didn't they have supply chain issues? I remember hearing about long lead times for the Aeron during the height of remote work. Lucas: They did. Demand surged so fast that lead times stretched to 12 weeks or more. But rather than try to expand capacity for a demand they weren't sure would last, they did something clever: they introduced a more affordable line called the Sayl chair, specifically designed for the home market, which used less material and could be sourced more flexibly. That helped capture the budget-conscious buyer without diluting the Aeron's premium image. Luna: So they essentially tiered the market. Aeron for the serious remote worker, Sayl for the casual home office user. Lucas: Right. And they kept innovating on the home side. They introduced height-adjustable desks, monitor arms, even lighting — all sold directly to consumers. By 2024, their home office segment was generating over a billion dollars annually, which is roughly what their entire commercial business did in a good year pre-pandemic. Luna: But let's talk about the challenge. Not every company can just flip a switch and start selling directly to consumers. What about their dealer network? Those dealers must have been furious. Lucas: That was a real tension. Herman Miller didn't want to cannibalize its dealers, who still handle larger corporate orders. So they limited the direct to consumer channel to products and configurations that were less commonly bought in bulk. For example, you can't buy a full open-plan office setup from their website. That keeps the dealers happy. And in some cases, they even partnered with dealers for local delivery and assembly of home office products. Luna: Smart. So they managed the transition without burning bridges. Lucas: Exactly. And it's a lesson for any legacy manufacturer facing disruption. The temptation is to protect the existing channel at all costs. Herman Miller showed that you can build a new channel alongside the old one, as long as you're careful about the boundaries. Luna: I'd love to know what the financials look like now. Has the home office boom lasted, or has it faded as people return to offices? Lucas: Good question. By mid-2026, we're in a hybrid world. Office occupancy is still well below 2019 levels — around 50 percent in major U.S. cities. So the home office market hasn't gone away. In fact, Herman Miller's home office revenue has remained steady, with some growth, because people are upgrading their setups over time. They've even started selling to small businesses and co-working spaces through a dedicated small-business channel. Luna: So the pivot wasn't just a pandemic blip. It became a permanent part of their business. Lucas: Exactly. And that's the key takeaway: they didn't just react to a crisis. They used the crisis to accelerate a shift toward a more resilient, diversified business model. Today, Herman Miller is less exposed to the cyclical nature of corporate office construction. That's a huge strategic advantage. Luna: It makes me think about how many other manufacturing companies are stuck in their old ways, waiting for things to go back to 'normal'. Lucas: Right. And that's a dangerous mindset. Look at what happened to companies like Sears or Blockbuster. They waited too long. Herman Miller didn't wait. They listened to what the market was telling them — people were working from home and they wanted good furniture. And they moved. Luna: I think there's a parallel here with the way we produce this show. We're always trying to adapt to how our listeners consume content — shorter formats, better audio, more specific topics. And the fact that we can do it without ads, without sponsors, is a choice we've made. And that only works because listeners who appreciate it choose to support us. Lucas: Yeah, that's a really good point. If these conversations have moved your work or your thinking forward in some small way, you can help keep them going. It's a simple thing — buy me a coffee dot com slash fexingo. That's buy me a coffee dot com slash fexingo. And it genuinely lets us stay independent, focused on the stories that matter, without having to chase ad dollars. Luna: And it's not a big ask. Every little bit adds up. So thank you to everyone who's already done that. It makes a real difference. Lucas: Alright, back to Herman Miller. One more angle I think is worth highlighting: their pivot into the hospitality and healthcare sectors. They realized that the same ergonomic expertise that worked for offices could apply to hotel lobbies, hospital waiting rooms, and even airport lounges. Luna: I didn't know that. So they diversified beyond just home office. Lucas: Yes. By 2025, about 15 percent of their revenue came from non-office commercial spaces. They designed chairs that could withstand heavy use in a lobby but still look stylish. It's a smaller market, but it's growing fast as more businesses invest in creating comfortable, flexible public spaces. Luna: And I imagine the margins there are pretty good too. Lucas: They are. And it reduces their dependence on any single segment. So when office construction slows, hospitality might pick up the slack. That kind of diversification is exactly what a legacy company needs to survive multiple decades. Luna: So what's the final lesson from Herman Miller's story? If you're a business leader listening, what should you take away? Lucas: I'd say there are two. First, don't wait for the old normal to return. It won't. Start experimenting with new channels and new products now, even if they're small. Second, protect your core business while you transition. You don't have to blow up your dealer network to start selling online. You just carve out a new lane. Herman Miller did both, and they came out stronger. Luna: And they turned a crisis into a catalyst. That's the sign of a truly adaptive company. Lucas: Absolutely. So next time you sit in an Aeron chair, remember — it's not just a piece of furniture. It's the result of a company that refused to be stuck in its own history.