Hackett: Knowledge Is Power

June 20, 2005
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GRAND RAPIDS — Jim Hackett thinks in terms of networks. He sees people as nodes along a vast network of intellectual interchange. He tends to talk in visionary, overarching themes, not businesslike minutia. He seems more concerned with the theory of human interaction than with the price of steel or the latest trends in cubicle design. In fact, during a 45-minute conversation with the Business Journal, he only mentioned one of his company's products — and only then to illustrate a point he made about relationships within the company.

This focus on the human side of business seems to have served him well. At 50, he is entering his 25th year with Steelcase. He has been CEO for a decade.

It has, however, been a tumultuous time. He oversaw the company's initial public offering in 1997 and the transition into being a publicly traded firm. He watched as the economic prosperity of the 1990s brought the company to all-time highs. Along with the rest of the industry, he watched as the "tech bubble" burst and demand for office furnishings dropped precipitously. As the company struggled to maintain momentum, the recently public stock's value fell to less than a third of its 1998 high.

Now, as so many companies are closing up stateside shops and heading overseas, Hackett is in the process of re-envisioning the structure of Steelcase.

"It is a recognition that we are a global company that's headquartered in West Michigan. That subtlety is a big change. We're not a West Michigan company doing business globally," he said.

To some that may seem like a matter of semantics, but to Hackett it is much more profound. He is building "a global network" — a Steelcase culture — that he hopes will supercede notions of national identity and location. This network is not a physical linkage of servers, workstations and T1 lines, but a philosophical connection between the thousands of individuals that make up the Steelcase system.

He hopes, for example, that a Steelcase employee in France will stop thinking of himself as a Frenchman working for an American company, but instead consider himself part of a knowledge system, irrespective of geographical location.

"That idea of 'I'm from Grand Rapids on a global network' is kind of the new view of how to see your state. If you can embrace that, you're much more powerful as an enterprise."

However, this restructuring has meant removing several hundred Grand Rapids "nodes" from the Steelcase network. The company announced recently that it would close its manufacturing operations in the city, taking 600 jobs with it. Hackett laments the loss of livelihood for those employees, but insists that the moves he is making are for the long-term benefit of the company.

"As a manufacturing company, we're behind some and ahead of others. I think the evolution of this (turn-around) is ongoing — I don't see a particular end-date. You know, Toyota talks about continuous improvement as a way of life. What I do know is that the progress we've made has been absolutely tremendous over the last three years. In fact, we're reaping the fruits of some of that this year. We're starting to see the amount of change we had to make and now the benefits are pretty good."

"The negative consequence is that there were a lot more people in West Michigan that lost jobs than we would have liked. But I don't know how (else) to rebalance the system," he said.

While Hackett has received criticism for moving jobs out of Steelcase's hometown, one area of his leadership that has garnered near universal praise has been his work in building and retaining a diverse workforce. He is being honored this week by the Grand Rapids Area Chamber of Commerce with a Visionary Award, celebrating his diversity efforts both with his company and throughout the community.

He is appropriately modest, suggesting that his high-visibility position makes him a likely winner, but not necessarily the most deserving recipient of this award. Nonetheless, Hackett has proudly championed diversity since early in his career. He served two terms as chair of the chamber's diversity council. He said that he brings an appreciation for the intermingling of cultures both from his days growing up in rural Ohio and, later, as a player under legendary U-M football coach Bo Schembechler.

Diversity, like so many other things for Hackett, is a question of networks in action.

Building knowledge networks from diverse human resources is not only his aim in attracting and retaining young professionals at Steelcase, it is also the motivation behind his involvement in the West Michigan Center for Arts and Technology (WMCAT), an education and training facility. By empowering participants with skills and knowledge, the center allows them to make positive social and economic change in the community. That also means a more diverse and qualified pool of potential employees in Steelcase's backyard.

"Knowledge is more powerful than anything in today's economy. It's colorless. It really doesn't understand class distinction," he said. "If people can't have access to networks, they're going to be lacking in terms of the knowledge that that network provides. They're going to be left outside."

WMCAT helps to fill that void, especially for individuals from lower socioeconomic groups.

"We've got to provide access," Hackett said. "We've got to allow knowledge to be colorblind — to not create class distinctions with information — because our community will be stronger, families will be stronger, business will be stronger, because everyone will have similar access. And here's the neat thing about this: Networks don't dissipate because you create more access; they only get stronger."     

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