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Contract furniture has been on wheels for some time, but simply making things roll does not make it completely mobile.
First Steelcase redefined its corporate culture, now its new Pathways system aims to reshape everybody else's office, too. Is corporate America ready for Pathways?
by Marc Spiegler
hen searching for the future form of America's offices, Grand Rapids, Michigan, might seem like the last place to look. Birthplace to Amway and the Meijer mega-store chain, the town lies flat, a series of strip malls, hotel complexes, and office parks interconnected by wide-shouldered midwestern avenues. Yet 40 percent of America's office furniture originates in this part of western Michigan, produced by such companies as Haworth, Herman Miller, and, most important, Steelcase, the behemoth that has long driven the Grand Rapids economy by pumping out its conservative corporate lines.
For months now, Steelcase has been ferrying clients to a low-lying warehouse just down the road from its corporate headquarters, where model layouts of its new Pathways system stand. Eight years in the making, Pathways is being pitched as the perfect office solution for an era when technology and market forces demand that companies move, mutate, and reconfigure themselves with hitherto inconceivable speed. NeoCon, the largest American trade show for contract furnishings (held every June in Chicago), marked the debut of the Pathways system in the design world at large. To Steelcase, the world's largest office-furniture maker, with annual sales of nearly $3 billion, Pathways represents not just another product line, but an entirely new way of conceiving of its clientele and selling them something called "Space Ware." The company spent $150 million to hone that concept, conducting a massive research and development effort. What emerged is much more than mere furniture--the line includes every element of an office, from flooring to walls to lighting, all designed to interlock seamlessly.
But before Steelcase could reinvent office furniture it had to reinvent itself. Founded in 1912 as Metal Office Furniture, the company needed to catch up with the changing of work in America, then build a system that could anticipate its evolutions.
The Pathways concept had been gestating within Steelcase for years; but like many experimental projects within a rigid corporate structure, its progress was glacial. The idea hatched in 1990, when two separate Steelcase teams were given the mandate of creating the company's next system. Forbidden from trading ideas and information, the two groups had 90 days to come up with something. The team headed by Jack Tanis, now the company's director of business development, conceived Pathways. "Steelcase had done a lot of research on work environments over the years, but much of it had not really been used," he recalls. "The architects and designers on my team used city planning models to approach our challenge. What came out was the need for space creation, including walls, posts, beams, flooring. We were thinking about creating pathways, both for people and for utilities, such as cables."
That need to constantly integrate new technologies into offices has been a prime focus for Pathways' designers ever since. Given the last decade's cyber-surge, that is hardly surprising. But Steelcase also realized that many clients were renovating older buildings, such as loft warehouses or existing offices, and facing prohibitive rewiring costs in the process. Plus, consultants from Xerox's research division had warned Steelcase that these issues would get only more complex over time. "They said wireless technology would mean more wires," Tanis says, "so we had to figure out a way around cable gridlock, which meant creating extensive cavities for cables."
What emerged after that 90-day challenge period, Tanis says, was remarkably close to the current Pathways system. So why are we only seeing it now? In part, because Steelcase wanted to do an incredibly thorough prototyping process. "Our experience, unfortunately, is that in-house R&D work isn't always relevant to how actual customers operate," Tanis says. "We wanted to test this out in actual offices." To make sure the system works for a wide range of clients, it sought test firms in fields ranging from mail-order processing to consulting. Some needed completely new office environments; others merely mixed Pathways prototypes into their existing layouts. Counting the alpha and beta phases of testing, refining the system took almost three years. As all-encompassing as Pathways seems now, it is scaled back from a more sweeping vision that included even fire walls and HVAC systems.
Inside Steelcase, the operative metaphor for the Pathways system is that of a computer's operating system, which orchestrates and provides a context for a machine's various applications. The analogy has its limitations, but it does convey the essential idea that the Pathways system offers more than the sum of its parts. True, any element--a wall, a door, a desk--can be used separately. But deployed together they create a seamless office environment where all wires run unseen, concealed underfoot, at waist height, and high above the top of doors.
In some ways, the ideal Pathways client is a wealthy company moving into a completely raw space. With the help of Accelerate, a proprietary software product, the company's space planners could lay out a virtual office using the various components of Pathways interior architecture. Starting with its flooring systems, the designers could define private areas with the walls and doors, and customize the surfaces of exterior or immovable walls with the Pathways Addition components, selecting, for instance, facrics for acoustical privacy, whiteboards for meeting areas. Then, individual niches could be formed from the open spaces that remained, using two-foot and four-foot walls.
To create teamwork areas, the Pathways Conjunction system forms post-and-beam structures that can be closed off with curtains and fitted with shelving, whiteboards, and digital screens. Feeding off wiring run through the floor, Pathways' Hub posts and tables offer spots for free-floating workers to jack into the company's data flow. To top it all off, Pathways' new ambient lighting line can bathe the space in a soft glow. Once the designers are done, the Accelerate software generates blueprints, cost estimates, and order forms for electronic submission to a Steelcase representative.
Pathways, in short, marks the arrival of the plug-and-play office.
But it was not just exhaustive testing that held Pathways back: Steelcase's leadership threw down obstacles. "There was just no momentum behind it from the people above," Tanis explains; the higher-ups were focused on existing lines. Also, aside from the furniture, most of the proposed system represented new products for the company, no doubt sparking wariness about heading into uncharted territory. That changed in 1994, however, when Jim Hackett ascended to CEO.
At the time, Steelcase had been pushing old lines for too long; it needed to reassert itself as an office-furniture force within the market rather than a mere manufacturer. One of the earlier in-house sponsors of Pathways, Hackett had watched it soak up millions in research funds without an actual product emerging. Determined to either bring Pathways to market or deep-six it, Hackett assigned Jack Cottrell the Pathways project. Cottrell had headed up the Details company start-up for Steelcase, where he had successfully produced a line of ergonomic tools. With Pathways, his first job was deciding whether the project should continue to live.
Studying the market, Cottrell found a compelling reason to push Pathways: the ascendancy of what is now commonly called "knowledge work," and the people who do it. "People want to do great things, and they want systems in place that allow them to do these things," he says. "They don't want to be in some boring, old space. Marble foyers are not what get people psyched up to work." At the same time, Tanis adds, many CEOs have become convinced that their company's organizational structures need to be completely overhauled, starting with the physical spaces that define how workers relate. In selling Pathways, Steelcase has targeted these types of "visionary" CEOs. This effort got a huge boost this February, when Steelcase became a publicly traded company, points out officeinsight newsletter editor George Kordaris: "The whole process of becoming public was a great way to get the Pathways name out in front to all the financial institutions--and they make up a huge chunk of the furniture market."
Studying the new modes of work through methods that included time-lapse photography, the Pathways team discovered that some employees spent as much as 90 percent of their time doing teamwork. "It's not about having meetings," stresses Cottrell. "It's about actually getting things done." Striving to understand these new modes, the Pathways design team scrapped its own offices. "Two years ago, our space looked like any other office," says senior industrial designer Bruce Smith. "Then we took out all the workstations and replaced them with gatorboard walls. Each person had a six-by-six space. It was a test to see what they would do with the space, to show us what the furniture inside had to be. We learned a lot that way."
Neil Frankel, who recently retired as head of interiors for Skidmore, Owings & Merrill, has watched Pathways develop for years. But because it has been so long in coming, "for some designers, it could be sort of like going to see a highly touted film," he warns. "You walk out and say, What was all the excitement about?' You have to really work with Pathways for a while to understand how clever it is."
For insight into how a system like Pathways can emerge from a corporate juggernaut like Steelcase, visit the fourth floor of the company's Grand Rapids headquarters. The biggest desks in the airy facility go to the executives' personal assistants, not the head honchos themselves. CEO Hackett, for example, works in an earlier Steelcase product: the Personal Harbor, a small oval pod roughly the size and shape of Europe's single-person public toilets, complete with a sliding door for privacy. Six feet by eight feet, his office has a portable CD player, a few family photos, and the docking port for a laptop computer.
When the former University of Michigan football player took over Steelcase in 1994, the company had just suffered a $70 million loss, its first bath in red ink. With the status quo so clearly ineffective, Hackett asked his executives to ditch their traditional fifth-floor offices and set up an entirely different workplace one level below. Called "The Leadership Community," the space has an outside ring of open spaces with no walls dividing one executive's area and the next. In the middle of the floor lies "The Center," where each seating area is wired for employees to hook into the community's data flow with their laptops. Walls at either end of the room turn into curved display screens. The Center also serves as the floor's site for large-scale teamwork as well as for tête-à-têtes and confidential gatherings, during which a massive set of doors close off occupants from others' sight and earshot. There is also a snack area, "The Den," with tables set up to foster casual exchanges. Nine other enclaves create extra spaces for heads-down individual work or smaller meetings. Cornell University professor Franklin Becker, who directs the school's international workplace studies program, has consulted with Steelcase since the late Eighties. To him, the Leadership Community embodies the change in the company's culture. "Under Hackett, Steelcase has become more open, and there's been a reduced importance placed on status," Becker says. "He's made an enormous difference."
Before setting up the new space, Hackett offered his executives a no-risk plan, promising to move them back onto executive row if they hated the new layout. Having himself left the traditional cube world behind when he headed up Steelcase's Turnstone division, the new CEO felt confident. After an intensive period of prototyping, consultation with outside experts, and internal focus groups, the fourth floor layout took form. In terms of its total size, the 25,500-square-foot space was 25 percent smaller than its predecessor. But the difference lay in its common spaces, which now made up 80 percent of the floor, a huge leap from the 12 percent in the older model (almost all of it hallways between offices).
For years Steelcase had functioned as an archetypal midwestern corporation, living up to its staid name. What lay behind the radical revamp? Observing how his own company worked, Hackett had noticed that executives often fled headquarters to do their brainstorming, organizing corporate retreats and the like. "The reason people go off-site is because they feel like they can't do knowledge work in their offices," he says. We're an officing company; why should we have to go off-site to do our thinking?"
What does it mean when the world's dominant office-furniture maker decides to redefine the office? The Pathways team stresses that the system is not meant to be "prescriptive," but rather, match customer needs. Still, there's little question that they envision dramatic changes in the workplace. Pathways marketing director Diane Turnwall explains, "We want to meet clients where they are, but we also want it to appeal to people who are ready to evolve."
Granted, there's resistance to such ideas. The officers of an English bank told Hackett they preferred their own hierarchy-based layout. "I asked them to name the most important project they had going on," he says. "They told me it was a merger. So I asked them where that project was being handled. It was a war room,' where teams would meet surrounded by charts." Unwittingly, the bankers had made his point for him. Official titles, Hackett argues, become meaningless when actual work needs to get done. What matters more is the various roles required to complete projects, and those roles should drive the design of the office environment. "With ubiquitous computing becoming a reality, you have a constant flow of information, and that undercuts hierarchy," he explains. "Teamwork becomes inescapable, and so does a more free-form decision-making process."
But the growing presence of computers has another effect: that of driving the surge in telecommuters and "road warriors," for whom offices have become little more than a place one calls to check voice mail. Steelcase is betting on several factors to keep the office thriving. Rick Moore, manager of advanced solutions, points to the trust that develops between colleagues through face-to-face interaction and to the difficulty of solving complex teamwork problems remotely. Also, Hackett puts the onus for the office exodus on designers and bosses, saying, "If spaces are dehumanizing, people leave them"; Pathways is meant to reverse the demoralizing effect of the "cubicle farms." Kordaris of officeinsight agrees with Hackett in principle, but wonders just how many companies will change in the dramatic way Steelcase has, saying, "I'm not sure how enlightened people are out there in the business world."
Ironically, some of the largest companies in America have proven quickest to adapt. When IBM, Alcoa, and Monsanto built new headquarters, Cornell's Becker points out, they went toward a model with a small core of less luxurious executive offices and massive ranks of essentially similar individual workspaces. "Change is afoot," he says. "But whether it lasts depends on whether it proves to be a better way to work."
In its few months on the market, Pathways has scored big. When it was officially announced in March, Steelcase had already sold out its first six months' worth of production. Hackett says he's especially buoyed by the interest of conglomerates such as Proctor & Gamble. An alumnus of the mega-marketers, Hackett knows the company's culture well, and says, "With the inertia companies that large face, their willingness to consider this kind of change gives me great optimism."
The main client frustration with Pathways, Tanis reports, stems from the fact that the entire Pathways system has not yet been released. Realistically, though, most Steelcase clients cannot afford to simply abandon their current setups in favor of a wholly new design. But even getting a few Pathways elements mixed in with older models establishes a foothold for the whole system. When the time comes down the road to replace other parts of the office, the interconnectivity with the other Pathways products will create a natural incentive to buy it. Given equal costs, what client would not choose components that snap into place? "We've had a half-dozen years with a good economy, and companies are starting to roll over' their offices," Moore says. "They may just pick and choose pieces. But we're not just selling them a new chair. Look at something like Conjunction, which takes a circulation area that's currently wasted and makes it productive. I remember one client who came in really resistant, like he'd already made up his mind to buy from someone else. Halfway through the tour, he suddenly looked at me and said, You're going to change the game, aren't you?' "
Whatever pioneering it is doing, Steelcase hardly holds a monopoly on the ideas that underlie its new system. It can expect that competitors will bring their own versions of Nineties officing to market as well. "We have a huge head start, but it's not insurmountable," Hackett says. "The challenge will be to stay ahead through smarter R&D." In the drive to perfect Pathways, Steelcase gained a huge advantage earlier this year when it bought IDEO, one of the nation's premier industrial design and engineering consulting outfits, which made its name with projects that involve alternative officing and innovative products. In one sense, IDEO was only the latest in long series of partnership deals Steelcase has cut with smaller companies, such as Vecta and Metro Furniture. IDEO continues to operate as an independent entity, with a wide range of corporate clients besides Steelcase. Involved since the 90-day brainstorm period--where it contributed to the furniture's design--California-based IDEO has a long history with Pathways. But by buying IDEO and having its designers set up a branch office in Grand Rapids, Steelcase benefits even more from the consultants' knowledge, and will rely on them to make sure the system stays apace of new technologies that come humming down the pike. "We bought IDEO because there was a huge demand for that expertise," explains Hackett. "They had 100 electrical engineers on staff; we only had 10. We needed to get much closer to the culture of Silicon Valley."
Much as he prides himself on the Pathways line, Cottrell admits that "it's not all figured out. There are new products needed, and some things we're not happy with yet." David Gresham, who worked with Cottrell at Details, has moved up to head Steelcase's design team; his focus has been on refining the look and feel of Pathways.
As much as Steelcase may tweak Pathways, though, its success lies largely in the hands of their clients' designers. According to Frankel, the design community seems split on Pathways. Some feel its all-encompassing approach constrains their creativity, while others welcome its precision engineering, especially in an age where solid construction cannot be taken for granted. Designers in massive numbers had the opportunity for up-close evaluation of Pathways at NeoCon, where the system was introduced.
Pushing Pathways toward designers, Steelcase will give the Accelerate design software to anyone who wants to take a course on the Pathways system. The software is as important a part of Pathways as any furniture, says Cottrell, because only those who "get" the system will reap its full potential. "There's extraordinary benefits for inventiveness with this system," Frankel says. "But in the worst-case scenario people will just order off the pictures, rather than making offices geared to their actual companies."
© 2005 Marc Spiegler or the publication of origin. All Rights Reserved.