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Time for You Guys to Clean Up Your Websites!!!
As a trade press editor, I spend a lot of time looking at dealer websites. Unfortunately, I like less and less of what I see. Would you believe one of the largest Steelcase dealers in country has a News section on their site whose most recent press release is dated April 27, 2000? Or that there’s another large Steelcase dealer out there whose most recent tweet on Twitter was on June 11? Or how about one of Knoll’s biggest dealers with a Facebook wall that has their address, phone number and website URL—and nothing else! Simon De Groot
Or the Haworth dealer, also one of the country’s largest, whose most recent press release posting was April 22, 2004? And then there’s the Midwest Allsteel dealer who’s currently running an Ugly Chair contest on their website. Front and center the site proclaims the deadline for entries: February 26, 2010! Each of these dealers goes to market with a message that touts their expertise as office consultants and their ability to use state of the art products and technology to deliver increased productivity and efficiency to their clients. All any competitor needs do to undercut the credibility of that claim is to open up their own web browser and go to work. Putting it bluntly, there are far too many websites, Facebook pages and Twitter feeds out there right now sending a message to the market that’s 180 degrees from the one most dealers want to send. When was the last time you looked at your website and/or Facebook, LinkedIn or Twitter content and cut what needed cutting or updated what needed updating? And when was the last time you posted anything significantly new? If you don’t like the answers to those questions, stop embarrassing your dealership and making it harder than it already is for your salespeople. Do yourself a favor—start the new year off right by doing something about it now.
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news Some of the 50 creatively decorated ceramic plates that went on the auction block for the Salvation Army at King Business Interiors.
In Columbus, OH, King Business Interiors Hosts Special ‘Create for a Cause’ Holiday Fundraiser It’s beginning to look a lot like Christmas at King Business Interiors in Columbus, Ohio, and the Salvation Army couldn’t be happier! The dealership recently hosted its fifth annual “Create for a Cause” holiday charity event in support of the Salvation Army in Central Ohio. It not only gave an opportunity for some of the dealership’s most creative employees, A&D friends and customers to strut their stuff, but also helped raise some $6,500 for a deserving cause. Attendees—and this year there were close to 700 of them—took part in a silent auction to bid on 50 different creatively decorated ceramic plates. Bidding was intense, with some entries going for as much as $250! “We got the original idea for this effort from Bill Toutant at Advanced Business Interiors in Ottawa,” explains KBI’s Darla King. “It’s a very creative way to give back to the community and a great opportunity to build relationships with the A&D community.” continued on page 5
DECEMBER 2010
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Dealer News - continued from page 4 CWC Office Furniture Earns ‘Best Places to Work’ Honors, Opens New Showroom in Chattanooga
Caliber Office Furniture, CA Dealer, Earns Customer Service Kudos from Local Chamber
Congratulations to CWC Office Furniture in Atlanta who for the third year in a row, saw their dealership selected by the Atlanta Business Chronicle as one of the city’s Best Places To Work.
Redding, CA-based Caliber Office Furniture is not even one year old—the company opened for business last April—but it’s already making an impact on the market place.
CWC was selected from among more than 400 companies and organizations nominated this year and earned the honor from a combination of their own employees’ opinions and analysis by an independent HR consulting firm.
Last month it beat out over 100 other companies nominated to earn a special Customer Service Excellence Award from its local chamber of commerce.
“We talk a lot at CWC about building great places to work, so we ought to be ready to walk the walk as well,” says CWC vice president of sales Scott Marshall.
While the dealership is new, Caliber founder Chris Cable is no industry rookie, with some 12 years’ experience and a resume that includes sales and operations positions with several other dealers before starting his own business.
Among the reasons why CWC employees think it’s a great place to work, according to Scott: a culture that emphasizes transparency and open communications and a special Thank You breakfast hosted each month by senior management.
PBI Commercial Interiors, NC Dealer, Hosts Electronics Recycling Effort
Local business publication kudos aren’t the only things CWC has to celebrate these days. The company recently opened a brand new showroom in Chattanooga. The 5,000 sq, ft. facility will serve as CWC’s east Tennessee headquarters.
It’s certainly not hard these days to find dealers who are doing good things for the environment and advancing the cause of sustainability with their customers and through their own business practices. continued on page 6
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Dealer News - continued from page 5 In Asheville, NC, the folks at PBI Commercial Interiors took their own efforts in that area to a new level last month, with an innovative program tied in with the America Recycles Day event.
Kimball Announces New Dealers in Iowa, Tennessee Kimball Office recently announced the appointment of two new Select Dealers in Cedar Rapids, IA, and Knoxville, TN.
For two days, PBI served as a collection point for used computers and computer monitors, printers, scanners, cell phones and other electrical equipment, which were passed on to a local computer recycling operation for processing.
M. Hanson & Company Inc. was named a Kimball Office Select Dealer in Cedar Rapids, while Commercial Environments received the same appointment in Knoxville.
By the time they were finished, the dealership had collected over 2,500 lbs of equipment, practically filling an 18-ft. box truck.
M. Hanson & Company was established in 1993 in South Florida and opened a new location in Cedar Rapids earlier this year. Commercial Environments was founded in Knoxville in 2000.
“PBI has been a longtime recycler of vinyl-backed carpeting and this was a great opportunity to expand that effort and help keep even more products out of our landfills,” explained Daren Pinkerton, VP of sales and marketing at PBI. Items collected were either recycled or repaired and donated to local community groups, creating an impressive win-win for all concerned and generating some positive PR for PBI into the bargain.
“The Select Dealer program represents the heart of the Kimball Office brand in terms of culture, integrity, experience, and professionalism,” said Allen Parker, vice president of marketing and sales for Kimball Office. “We’re excited to welcome M. Hanson and Commercial Environments to the team and look forward to building our relationship with these dedicated dealerships.”
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BIFMA OCTOBER NUMBERS:
Continued Market Strength; Overall Industry Forecast Raised for 2010, 2011 Earlier this month, the Business and Institutional Furniture Manufacturers Association (BIFMA) released its market statistics for October and as they have for several months now, forward progress on orders and shipments was very much the order of the day. BIFMA said October orders increased 25% compared to the same month last year, while shipments were up 13%. Industry analysts Budd Bugatch described October’s numbers as “once again very good,” though he warned that order growth will moderate going forward as prior-year comparisons get tougher. Bugatch also noted that despite improvements in corporate profits and business confidence, new office construction remains weak, citing research by the Conference Board that showed U.S. office space construction spending declined 26% year-over-year in October.
Government Market is Focus of NeoCon East More than 6,000 industry professionals who work in some capacity with city, county, state or federal buildings were in Baltimore at the end of October for the eighth annual NeoCon expo. “NeoCon East has grown tremendously since it was launched in 2003, which is an indication of how important the federal government has become to many manufacturers,” said Mark Falanga, senior vice president, MMPI. “Overall, our feedback from exhibitors was extremely positive DECEMBER 2010
Bugatch also pointed to a fall in October in the Architect’s Billing Index from the American Institute of Architects, to 48.7, down from 50.4 in September. Generally, 50 is considered the demarcation between expansion and contraction in the Index. In a separate announcement last month, BIFMA also boosted its overall 2010 and 2011 industry forecasts. Citing a modestly brighter overall economic picture, improving trends in business spending, expectations for additional hiring and better-thanexpected year-to-date office furniture demand, BIFMA said it now expects 2010 orders to increase 9.3% (previously +4.0%) and forecasts 2010 shipment growth of 4.4% (previously -0.5%). BIFMA also said it now expects 2011 orders and shipments will increase 5.6% and 8.3%, respectively, up from 4.3% and 6.7% previously.
about the show, so much so that we are already experiencing a strong exhibitor resign rate for the 2011 show in Baltimore.” Of the 241 exhibitors at the show, 174 were on the GSA schedule. NeoCon East also featured Government Interiors, which focused on products and services geared to federal government procurement specifiers, and a GSA Integrated Workplace Acquisition Center booth on the show floor to assist attendees. NeoCon East will be back at the Baltimore Convention Center next year. Dates are Nov. 2-3. For more information, visit
www.neoconeast.com or call (800) 6776278 (MART).
ECi Announces 2011 National Users Conference eCommerce Industries, Inc. (ECi), parent company of DDMS and TeamDesign among other industry software solutions, has announced details of its 2011 national users conference. Connect Conference 2011 will take place November 1–3 at the Renaissance Worthington Hotel in Fort Worth, Texas. continued on page 9
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Industry News - continued from page 8 “Customers look forward to our national users’ conference and the response we’re already receiving is very positive,” says Ron Books, president and CEO of ECi Software Solutions. “The Connect Conference 2011 will provide a chance for anyone who uses an ECi business solution to receive training on their software from our team of experts. They will also have access to our valued partners to learn about the ever-expanding technology to run their businesses more efficiently, grow revenue and increase profitability.”
over the coming months. To learn more, go to www.ecisolutions.com.
Configura Releases CET Designer 2.5 Configura, makers of CET Designer graphic software, has announced release of Version 2.5 of the program. Major improvements, according to Configura, include:
Added Books, “The 2011 conference will be the first time all ECi customers, business units, representative industries and preferred partners will be together. We are confident that all participants will quickly recognize the value of this collaborative event.”
n Enhanced scheme handling n Reworked lighting and rendering options n Enhanced calculation features and functionality n Ability to create custom panoramic backgrounds n Enhanced positioning and placement of objects n Improved support for CAD import n Google SketchUp 8 support n Faster 2D graphics
Registration for the conference will begin in March and more information on Connect Conference 2011 will be announced
CET Designer 2.5 is a free upgrade for existing users. For more information, visit www.configura.com.
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National Office Furniture Announces Second $25,000 Gift of Inspiration for Healthcare Environments Entries are now being accepted by National Office Furniture for possible winners of its second $25,000 Gift of Inspiration for Healthcare Environments. National is offering healthcare organizations the opportunity to win a $25,000 Gift of Inspiration that can be used to support the needs of healthcare environments in areas such as technology, the patient experience, staff morale, training and enrichment programs or facility enhancements. The deadline for entries is February 28, 2011. For more information, visit www.NationalOfficeFurniture.com/Healthcare.
continued on page 10
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Industry News - continued from page 9 HON Takes Leadership Role in Extreme Makeover for Nashville Pre-School selected the school for one of its shows and set out to rebuild the facility and position it for a successful future. Playing a key role in that effort was The HON Company, who provided its SmartLink classroom furniture, along with seating for students as well as for instructors and aides. The contribution of furnishings also included Vicinity desks and storage units, and chairs from its Ignition seating series. All told, HON furnished the entire facility including classrooms, a lounge, reception area and administrative offices.
You don’t need a Ph. D. in economics to know that schools of just about any kind are under severe budget pressures these days and struggling against the double wammy of growing enrollment and a weak economy. But when Mother Nature gets in on the act as well, then the challenge can get daunting, indeed. That’s what the folks at Nashville’s Lighthouse Pre-School found out earlier this year, when record floods literally sent their building floating down the local highway. Fortunately, some good angels came to the rescue in the shape of the team at ABC-TV’s Extreme Makeover: Home Edition, who
DECEMBER 2010
“Extreme Makeover is a special reality show that celebrates the indomitable American spirit and illustrates how important collaboration and cooperation are among individuals,” said Shelley deSilva, HON vice president of marketing. “These are The HON Company’s core values, as well, so we felt especially privileged to participate in this project.” Not too surprisingly, school officials liked the idea, as well! “Tohave our new pre-school building be supplied by HON is truly anhonor,” commented principal Brian Sweatt.” We know that this furniture will enable our teachers at Lighthouse to continue to offer these precious little ones an excellent education.” Our congratulations to the teachers and students at Lighthouse and hats off to the folks at HON for yet another example of the unique spirit of generosity that is such a key part of our industry.
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OFDA Launches Planning Task Force for 2011 Conference OFDA has organized a task force of dealer, installer and manufacturer members to plan the educational program for its 2011 Dealer Strategies Conference, scheduled for September 24-27 at the Marriott Starr Pass Resort in Tucson, AZ.
industry consultants/other experts; and
Members of the conference planning task force include:
BIFMA, an association of leading North American and international industry business and institutional furniture manufacturers, has recently boosted its 2011 industry sales forecast. A growing number of OFDA dealer members also are beginning to experience increased activity and potential in their markets, although significant market and general economic challenges remain. Building flexible, robust organizations to thrive in the decade ahead is a key theme of next year’s conference.
n Bill Stoops, Elements (2011 OFDA Vice Chair and Planning Task Force Chair) n Kevin Baker, Florida Business Interiors n Paul Barr, Premier Interior Solutions n Kristen Haren, Inside Source n Sandi Jacobs, Sidemark n Dave Jarka, JEI Corporate Services n Phil Pearce, Haworth/Groupe Lacasse n Bob Rohlman, National Office Furniture n Tom Vande Guchte, Storr Office Environments Chris Bates, OFDA president, is providing administrative and other staff support for the Task Force. Other association members and prospective members with an interest in shaping next year’s conference program are invited to share their ideas or join the task force. Please contact Chris Bates (cbates@ofdanet.org; Tel: 70-3/5499040, x 100) for further information or to voice your interest in participating. Drawing upon input from members attending the 2010 OFDA fall conference, the task force is working to: n Further enhance the practical content of the educational agenda using appropriate dealer panelists and DECEMBER 2010
n Lengthen breakout sessions from 60-75 minutes to 75-90 minutes to allow for more in-depth, valuable discussions and participant interactions.
To date, task force members have identified several priority topics to be covered in 2011: n Effective business-redesign and exit strategies for dealers, installers, etc. n Attracting, developing and retaining next-generation talent for our industry n Emergence of young Internet buyers – how dealers can respond as more facility managers become buyers n Creating your own competitive advantage with differentiation of valueadded to clients n Roundtable on where growth opportunities are emerging as industry recovers n What will the dealer of the future look like (new business structures, service offerings, business models, emerging market opportunities)?
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n Driving change in core business processes to boost efficiency, lower costs, increase customer service and improve margins n Integrating new technologies and staying abreast of customer expectations on effective technology use to support bids, project management, etc. n Best practices in leadership development, new business and market development, services business entry/growth/execution, Internet marketing and project management n Holistic approaches toward reducing the complexity/cost of installation – professional installer panel n Building a profit-oriented culture within your organization – “ownership thinking” n Leadership/change management – change is coming faster and is less predictable; how can we embrace change and prosper from it? n Manufacturer, A&D, commercial real estate/developer expectations for the future of the industry n And more! OFDA will maintain its successful 2010 program format (Sunday 1 PM – Tuesday 1 PM), utilizing a mixture of in-depth workshops, general sessions, networking functions and a variety of breakout sessions. Plan now to attend, registration at special “super saver” rates is now available through Dec. 31, 2010 at www.ofdanet.org.
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By Alicia Ellis
n By 2029, all of the baby boomers will be age 65 years and over. As a result, the population age 65–74 years will increase from 6% to 10% of the total population between 2006 and 2030.
economy (4.4%). By 2019, national health spending is expected to reach $4.5 trillion and comprise 19.3% of GDP. According to CMS, “Despite the slowdown, national health spending reached $2.3 trillion, or $7,681 per person, and the healthcare portion of gross domestic product (GDP) grew from 15.9% in 2007 to 16.2% in 2008.
individuals at VHA and UHC organizations, 52% of responding facilities have seen an increase in admissions of severely obese patients since 2006. In addition, 28% of responding facilities invested in physical renovations to accommodate obese patients with a median estimated cost of renovation at $100,000.
n As the baby boomers age, the population 75 years of age and over will rise from 6% in 2006 to 9% of the population by 2030 and continue to grow to 12% in 2050. By 2040, the population age 75 years and over will exceed the population 65–74 years of age.
n Researchers at the American Institute of Architects (AIA) found that even though many areas of nonresidential construction decreased by as much as 45% this year, healthcare posted the smallest decline at 6.5% and is expected to grow by 5.1% in 2011.
n The number of annual procedures for primary total knee replacement is projected to jump by 673% to 3.48 million in 2030, an annual 8% growth rate.
n According to Brian Bascom, partner of Velocity Partners and author of U.S. Healthcare Furnishings Market Estimates, a study released in October 2010, “demand trends have significantly shifted as leading healthcare systems increasingly are reallocating their healthcare construction funding and design resources to primarily focus on multiple new smaller, standalone ambulatory and medical/surgical facilities over the traditional large acute care construction programs.”
Overall, according to Bascom’s research, the demand for office and contract furniture and furnishings for all healthcare environments in North America from 2011 through 2014 is estimated to grow by over 12% annually from 2010 levels. This could translate up to a $2.4 billion office and healthcare furniture product opportunity in 2014.
The numbers pretty much tell you all you need to know about why so many office furniture dealers are making a special push towards the healthcare market these days:
n The number of annual procedures for primary total hip replacements will increase by over 174% to 572,000 in 2030. n The Centers for Medicare & Medicaid Services (CMS) projects that between now and 2019, average annual health spending growth (6.1%) will outpace average annual growth in the overall DECEMBER 2010
n According to the 2008 Bariatric Supplies Survey, a study that asked 505 OFDEALER
OFDealer found a number of dealers who are succeeding in the healthcare arena and were willing to share their thoughts on selling, marketing and gaining ground in healthcare furnishings. A large dealer with four offices in Washington and Alaska, BiNW (formerly Business Interiors Northwest) with the tagline “Delivering Spaces that Inspire” had been involved on a small scale in healthcare for about 15 years. continued on page 13
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Healthcare Furnishings - continued from page 12 All that changed 18 months ago when approached by Herman Miller to become a Herman Miller Healthcare dealer. Prior to its alignment with Herman Miller, only 15% of business was from healthcare sales and although revenue has only grown to 20% this past year, BiNW president, Sean O’Brien expects business to increase to more than 25% in the next three years with his five healthcare dedicated salespeople. According to O’Brien, Herman Miller has spent the last 18 months training BiNW’s sales team and designers on the healthcare industry, products applications and
design; eventually helping them to become PEAK (Product, Environment, Application, Knowledge) certified. A Nurse Consultant through Herman Miller is always available for project planning and BiNW even had their delivery and installation team trained on the differences between commercial and healthcare environments. “The healthcare customers’ priorities are different from all other areas,” said O’Brien. “There is no room for punch lists or product failures. We can’t wait for something in a patient room or emergency
department. Installs must be quick. A hospital can’t shut down for a week so you can install furniture.” “With Herman Miller as our strategic partner and Nemschoff, Brandrud, Cabot Wren, and Arcadia as primary partners, we have developed a full patient showroom in our Washington location and plan to unveil a second in our Alaska showroom in early 2011,” said O’Brien. “We have a specific A&D exposure plan and thanks to the support of Herman Miller, are able to build on our expertise and our reputation.” continued on page 14
Herman Miller
DECEMBER 2010
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Healthcare Furnishings - continued from page 13
Steelcase “Our healthcare team knows the requirements of everyone in the hospital and can discuss relevant topics like infectious control or safety issues,” said O’Brien. “We have the credibility and expertise that pulls us into opportunities we have never imagined before.” “We have gotten great referrals from hospital staff,” said O’Brien. “They are a tight group and they talk. Most hospitals have outpatient clinics and doctors’ offices that need furnishings and we’re at the forefront of their interest because of the level of service they see every day.” “The key to success in healthcare is the people who sell to and support these healthcare environments,” O’Brien continues. “At the end of the day, you must have people at your dealership who are passionate and dedicated to healthcare environments.” While Todd Custer, healthcare specialist at Custer HealthWorks, a division of Custer Workplace Interiors in Grand Rapids, MI, agrees with O’Brien about the need for education and a dedicated healthcare team,
DECEMBER 2010
his company takes a unique approach to marketing its expertise to A&D and hospital administrators. “In addition to traditional sales efforts, we have done a combination of print media and social media to target healthcare accounts,” said Custer. “We have numerous ads in healthcare publications, as well as a separate healthcare site on our Custer website and Twitter and Facebook pages for Custer Healthworks.” And the outreach is working. A mid-sized Steelcase and Nurture by Steelcase dealer, HealthWorks expects that overall revenue from Healthcare customers this year is close to 35%; up from 15% just a few years ago. “Our motto is for the client to test any piece of furniture/equipment before they buy,” said Custer. “We have 40+ pieces in our demo program that represents our entire line.” The team approach for HealthWorks includes dedicated designers for specific Healthcare accounts, an on-staff nurse consultant and a consultant who helps OFDEALER
with electronic medical record (EMR) implementation. According to Custer, more and more people are trying to call on healthcare accounts because they have been the most active with other projects, but what some dealers don’t see initially is that healthcare accounts are very complex and sometimes it can be challenging trying to navigate through all the players. “You are often working with numerous manufacturers on one project, whether it’s a 10k project or a 100k project,” said Custer. “There are a lot of projects that call for ‘niche’ type products and no one manufacturer has it all but I have found that most of them are well versed in this market and have a lot of experience.” David Torrence, VP of sales and general manager for Interior Workplace Solutions in Allentown, PA, has seen healthcare generate about 35% of revenue on a steady basis over the past three years and anticipates more of the same in the future. With a full showroom and utilizing Nurture, continued on page 15
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Healthcare Furnishings - continued from page 14 KI, Carolina, Legacy and other manufacturers, Interior Workplace Solutions has enjoyed a long run with a local hospital network. Torrence says having a dedicated healthcare sales organization certainly breeds confidence and credibility in the marketplace. “The ability to align with key vendors to provide affordable, good quality (warranty is very important), robust statement of line that appeals to both off-carpet clinical areas as well as on-carpet support spaces is important,” he stresses. “Communicating to the ‘right’ audience the value of the knowledge and experience your sales organization can bring to the table that is not just related to on-carpet, administrative spaces. The key differentiator is being able to provide effective, affordable solutions for healthcare clients’ public spaces, patient and exam room requirements.”
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As Torrence explains, most hospital organizations try to leverage group purchasing organization (GPOs) as the first line of defense when developing "best" pricing scenarios, but then quickly jump into negotiating the "final" purchase. “The biggest challenge we have is trying to be a mediator between what a caregiver/department head wants in order to provide better quality care for the patient and their family and what the materials management or purchasing department says they can afford,” he continued. “It comes down to the best products for the best price. What can a hospital or medical practice do that will address patient needs, be durable and comfortable, BUT also be affordable?” Sometimes however, it comes down to more than simply cost. It was service and support that enabled Rebecca Denison Shultz, principal of d2p in Indianapolis, to win a five-year contract to supply health-
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care furnishings to over 120 Clarian Health locations in the state of Indiana. Two years ago, the small, three-year old dealership was chosen as a Kimball Office Select dealer and went from 0 to 50% healthcare in one year and expects revenues of nearly $10 million next year; much of which is healthcare related. With ten people on staff, including four designers and Rebecca and her husband as the sole sales staff, two years of hard work and dedication to the healthcare industry are finally paying off and there’s no stopping them now. “The Clarian contract is a great study in listening to clients and giving them what they want,” said Schultz who says that the customer is a dealer’s best resource for selling the healthcare market effectively. “There was a very aggressive bid process and we were the smallest company bidding.” continued on page 16
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Healthcare Furnishings - continued from page X
Herman Miller
“Clarian told us they were not serviced well and many bidders came back with a ‘we can take care of you from one location’ scenario which had failed them in the past,” said Schultz who considered an alternative to the traditional contract. “Working with Kimball Office, we sought out other Kimball Office dealerships to service the 122 branch offices, thus creating a network of service that Clarian could rely on. d2b is in Indiana, Clarian is in Indiana, and even Kimball Office is based in Indiana. In addition to being a great collaborative effort, this project will definitely help support Indiana’s economy.” Since winning the project, d2b is planning to open a dedicated healthcare showroom in the next six months that will encompass 1,000 sq. ft. of space and include a patient room, reception area and nurses’ station. “Understanding the unique needs of those who work in healthcare is vital when planning, bidding and installing healthcare furnishings,” said Schultz. “The last thing a nurse in the NICU wants to think about is whether her chair works right.” Regardless of size of dealership, client or project, one thing is clear. You can’t offer healthcare furniture unless you understand the total healthcare environment. How it works, how it moves and how it, in the end, provides a much needed service to those who work and stay in the clinical environment.
For more information on Velocity Partner’s U.S. Healthcare Furnishings Market Estimates, visit www.velocitypartners.com.
Herman Miller DECEMBER 2010
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You Can’t Look Forward Until You Look Back By Libby Wagner
What were our top three successes this year? What are the things we can do to capitalize on those successes?
1
What were our top three failures? What did we learn, and what will we definitely not do again?
I love this time of year in business, even though I confess I’m not always successful at resisting the frantic pace of end-of-year activities along with the upcoming holiday season. I love it because I’m a big fan of reinvention, and even though I believe in and encourage leaders to reinvent at any time of year, there are some natural rhythms to December that allow us to participate in the sort of reflection and projection the emerging year can bring. There is something special about the countdown to the end, the hopeful look toward the future. Don’t let this opportunity go by for you this year to truly take time to reflect upon 2010 and what you intend the New Year to bring. Often, in my work with executive coaching clients, I urge them to carve out designated time for the strategic work that only they can do, and to treat it as sacred. I’d ask myself at least these courageous questions: DECEMBER 2010
2 3
If I could envision anything for our business for next year, without any obstacles or “yeah, buts,” what would that be?
What sort of culture or environment would we need to create or cultivate to make the answer to Question 3 happen?
4
Certainly, there are benefits to having this discussion with your leadership team, or even with the overall company itself, but the leader’s job, for sure, is to do this work so that you can lead from the front as you move forward to the next, grand adventure. Imagine that your company is like a garden. It’s one which you’d like to grow, see flourish, and bear fruit. In that context, your cultivation of the right environment and conditions is what your culture can do to support the business results you want. And frankly, that snazzy new tractor you’re thinking about buying
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continued on page 18
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You Can’t Look Forward... - continued from page 17 for the harvest will be a waste of money if you don’t have rich soil, the right seeds, careful care and maintenance, and someone to bring the harvest in. The right environment and conditions equates to your organizational culture. Are you creating the sort of place where you can get the results you want? Culture matters, and you’ve got one: it’s either accidental or intentional. My suggestion is to evaluate and purposefully cultivate a Profit Culture—an environment in which people work together to create positive outcomes for their organizations or groups. A Profit Culture is a culture of abundance: there is more than enough! More than enough to go around, more than enough to do the good work you’re doing, more than enough to grow, more than enough to invest in the future, more than enough to reap benefits and rewards. In for-profit businesses such as yours (because a non-profit business can also have a Profit Culture!), your bottom line profit is only one indicator of your culture, and only one indicator of whether, as you look toward the future, you will be able to sustain your direction and/or develop resilience. The problem with the bottom line is that it’s at the bottom! There are many things that have to happen in that garden before you can bring the harvest home. The old adage is true: You will reap what you sow. How can you tell if you have a Profit Culture? In addition to your bottom line being in the black, you would also see evidence of the following: n A sense of hope, excitement or passion about the organization’s purpose or mission n A sense of positivity, creative problem-solving and shared decisionmaking n Creativity and innovation—people’s willingness to think “out of the box,” DECEMBER 2010
challenge the status quo and look for ways to raise the bar n Resilience in tough times—a sense of determination and conviction that helps people stay focused during tough market changes, leadership shifts and business challenges n Loyalty, faith and a sense of “family” commitment to the business or team n A sense of helpfulness, generosity and shared responsibility—there’s minimal instances of “that’s not my job,” silo-ing or the blame game If you had to rate your company or team with 1 as Low and 5 as High, how do you stack up? Where are your areas for growth and development? And, most importantly, what are you doing about it? What is the vision and plan for how to cultivate that Profit Culture for 2011?
How often do you hear yourself saying no or resisting when a simple shift or creative turn can help you examine possibility? This seems so simple, and it is, but it is a very important and disciplined distinction to get yourself on the right track. No tool I can offer, no model I can share can overcome a negative, limited mindset—that trumps the good stuff every time. Here are some phrases to get you started when you find yourself focusing on the negative: n “I wonder what that might look like?” n “If money were no object, how might we do it?” n “How can we be creative inside the current situation (i.e. budget, constraints, limits, etc.)?”
First things first: The most important step you need to take in cultivating a Profit Culture is to begin with you.
n “If we could create the best version of this (i.e. proposal, customer interaction, project that’s gone wrong, downturn in the market, etc.), what would that look like?”
Leading well involves gaining clarity and ideas around three key elements: Being, Thinking and Doing.
Notice that all this language contains possibility, the potential for “more than enough.”
It’s really important not to skip to Doing if you’ve really not spent some good time on Being and Thinking first.
Begin today: Utilize the four questions at the top to reflect, then look forward and give yourself permission to imagine how a true Profit Culture in your workplace can be the fertile soil for your results!
You want to create alignment among these three elements because that will make you more effective, efficient and less stressful or frustrated, and because it creates congruence. Congruent leaders—leaders whose values, beliefs and principles form the foundation for their Thinking and Doing—are more effective leaders for the long-term and are those that are able to create committed Profit Cultures. In order to cultivate the right mind-set for a Profit Culture, you need to examine your language and your thinking. How often in your mind and in your communications are you speaking of lack or scarcity?
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Have questions about Profit Cultures, defining your Leadership Voice or creating a stronger team? Contact Libby Wagner at 206-906-9203 or libby@libbywagner.com. Look for more “how to” on Creating and Sustaining a Profit Culture in OFDealer’s 2011 February issue. Check out “Leaders Look Forward and Back” at www.libbywagner.com for some practical suggestions on how to use this reflective time for yourself to plan for next year!
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profile Project: Spectrum Health Blodgett Hospital A Total Healthcare Package By Alicia Ellis It’s not unusual that in the office furniture business, the better the relationship, the better the chances of repeat business. A dealership’s dedication to customer satisfaction goes a long way in today’s market, where service is often the defining factor in whether you win or lose a contract. In Grand Rapids, Custer HealthWorks, a working division of Custer Workplace Interiors, had already helped Spectrum Health Blodgett Hospital convert many of its older double rooms to single patient rooms, so when the hospital announced a $98 million patient tower expansion, the dealership was poised to win one of its biggest contracts to date. Beginning with the bid process, Todd Custer, healthcare specialist with Health-
Works, was confident about Custer’s chances. “GMB Architects and Engineers from Holland, Michigan, were brought in to oversee a formal bid process that was necessary because of the size of the project,” explained Todd. “But I believe the trust we had built over the past couple of years helped us win in the end.”
Health Blodgett team which included the design and construction team, nurse managers and Blodgett administrators,” said Todd. “We had numerous detailed interviews with each unit nurse manager so we could better incorporate all the details needed to ensure a highly efficient and effective space.”
The project, a new patient tower that was approximately 158,000 square feet, would include 132 private patient rooms, eight new operating rooms, six nursing units and a 36-bed post-anesthesia care unit. The project also included staff offices, consulting rooms, staff break rooms, conference rooms and public areas.
“Our lead product was Steelcase for all the nurses’ stations, offices, breakrooms, consulting rooms, patient rooms and public areas,” continued Todd. “We used Steelcase Answer systems and storage throughout, Steelcase Criterion and Cachet chairs, and Nurture by Steelcase Xtenz sleeper sofas on casters in the patient rooms. We also used Wieland Cove recliners and Plyfold chairs in the patient rooms,
“To prep for the project, we worked very closely with all members of the Spectrum
continued on page 20
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Project Profile continued from page 19
Nemshoff Bariatric recliners and Nemshoff Brava lounge product. For the nursing alcoves, we used a swing-away chair from Clarin.” HealthWorks also included custom nurse stations that used a Steelcase Answer frame system with Acrovyn fronts and Designtex fusion standoffs with custom lighting and Corian tops. Swing away chairs were also customized from Clarin, Nemschoff Serenity bariatric recliners were a hit and a special Krug “hip chair” was incorporated for the Orthopedic unit.
Big Project, Big Challenges “The biggest challenge we had was meeting time deadlines,” said Todd. “We had to build stations while numerous other trades were in the facility completing their jobs. It was key for our project manager from Custer to coordinate trucks from our manufacturers with the schedules set by the General Contractor and the hospital. “ Another major challenge of the project was getting product into the facility. As Todd explained, trash and packing debris was not al-
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lowed on site due to the hospital’s LEED certification goals. The majority of the products had to be unpacked off site and brought in during designated hours. “We made a commitment to use the same dedicated team for the install throughout the entire project,” said Todd. “It gave us a team who knew the expectations set by the client, the facility and all the players from the GC and Blodgett team.” “It was key for our Custer project manager and lead designer to be on site helping to coordinate all of this and answering questions,” said Todd. “If we did not have a close working relationship with the contractor and client, this never would have been possible.” Within five months of the start, the project was completed and Spectrum Health Blodgett's official patient opening was held on October 10 of this year. According to Todd, Custer met their timelines, had minimal punch items and was able to keep everything within budget. And the overall look and feel of the project is conducive to a healing environment that is not only good for the patient but the staff as well.
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Greater Opportunity, Greater Risk Developing Multiple Scenarios Can Help By Bill Kuhn
Last December, when I was gazing into the crystal ball for 2010 and knowing a significant turnaround would not occur until at least 2011, I posed 50 tough questions and stated that the coming year would be one that saw “survival of the fittest.”
do not include the education and healthcare markets where many dealers have been expanding.
Most of the questions I raised back then are still critical—if not even more so than they were a year ago because of the additional challenges we can expect in 2011.
Words of caution
The good news Having now seen modest growth in orders for the past seven months, it looks like we really did finally hit bottom earlier this year. BIFMA now projects a 9.3% increase in orders in 2010 with a 4.4% gain in shipments. For 2011, they predict a 5.6% increase in orders and an 8.3% increase in shipments. That’s a significant improvement from the 30% decline in 2009. The news is even somewhat better because the BIFMA numbers only reflect office numbers. They DECEMBER 2010
It’s been a long time since we’ve heard such encouraging news.
However, constraints limit industry growth. With a nationwide office vacancy rate of 17.6%, there are still a lot of empty desks and workstations. Many companies have just stopped buying furniture. And design changes are requiring fewer square feet of office space per employee. Most everyone agrees that we may again achieve the $10 billion level of 2005 to 2008 (current shipments are just under $8 billion), but that our industry will never return to the level of $13 billion seen in the year 2000. If dealers are to achieve the volumes they once had, they need to find new markets, new products and services, and/or expand OFDEALER
geographically. As OFDA president Chris Bates pointed out at this year’s OFDA Dealer Strategies Conference, dealers are being squeezed by manufacturers, confronted with customers wanting lower prices and more service, and being faced with stiff competition on all sides. Add to that the tight credit situation with small businesses. Chris also said that industry changes will continue to accelerate and, for dealers to succeed, they need to make strategic adjustments to create agile and resilient business models. I couldn’t agree more! We remain in a period of economic uncertainty, which is one of the reasons that major corporations are holding on to record cash reserves. Dealers are in a much more precarious position because many have very little cash reserve and the lack of cash is the primary contributor to bankruptcy. continued on page 22
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2011: Greater Opportunity... - continued from page 21 These industry characteristics impact not only the weaker dealers, but also have affected some of those dealers who, in their desire to grow, have acquired others only to find there is not adequate cash to fund the acquisition. Unlike major corporations with their cash reserves, many dealers are experiencing cash ebb. This dearth of cash will intensify during a “return-to-growth” mode as growth companies experience a cash ebb, just like those in survival mode. In spite of the encouraging news, the risks may indeed have intensified since a year ago. Many dealers are struggling to maintain liquidity. They are excited when they have a couple of good months, only to see business taper off again. While BIFMA projects a somewhat steady growth, the peak and valley nature of office furniture sales does not create such a steady trend line. Furthermore, in terms of risk, the main difference between this year and next is uncertainty—we just don’t have a handle on what will happen in 2011. Going into 2010, we knew the entire year was going to be pretty flat—not much growth, but not the type of decline we had in 2009. Will 2011 have modest growth? Quite likely, but what about the saw-tooths of good months and bad? Could we see a double-dip recession? Unlikely, but not impossible. Or might we be in for a real industry growth spurt? That could well be, particularly in certain market areas. Dealers must be ready for any of these possibilities and be equipped with the agility to quickly and smoothly adjust to any declines or take advantage of any return-to-growth opportunities.
So, what’s the game plan? The key in today’s economic and industry climate is to strategically manage opportunities and risks. The opportunities were never better. In contrast to the commercial office furniture market overall and more recently, the gov-
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ernment sector, the expanding education and healthcare markets hold tremendous growth potential. Consider the many new products and services that dealers are offering—just read those many dealer success stories of new products and services that appear monthly in this publication. As an example, as companies downsize, many are moving from one space to another. Just think of the many service aspects of move management. Consider geographical expansion, which enables you to have your eggs in more than one basket, usually lowers costs as a percentage of sales and typically gives an added boost to market power. Not only opportunities, but the risks may have never been higher. Just for starters, there’s tight credit, intense competition, demanding customers, diminishing cash, the cyclical nature of our industry, and perhaps most importantly, the lack of foresight and ability to be flexible and react quickly, whatever the market circumstances.
Develop multiple scenarios Uncertainty in this economy means that you cannot focus on just one forecast or one set of strategies for the coming year. Planning today must consider any number of possible scenarios, with strategic actions developed to meet the challenges of any of these possible scenarios. While we can’t predict the future, we are able to focus on how different forces can shape our own futures and result in different outcomes. The purpose of scenario building is to find those solutions that will hold up in the face of the different scenarios that may confront us. I propose dealers develop four different scenarios (you may want to add others): A fairly steady and consistent growth, as BIFMA projects, of 5-6%. Steady growth—which is more manageable than those peaks and valleys— might occur, particularly among furniture OFDEALER
dealers who are less dependent upon contract business. An overall growth for 2011 of that same 5-6% rate, but with those peaks and valleys. From one month or quarter, could your dealer volume double or be cut in half? Your prior experience and order backlog will help to determine the magnitude of those ups and down. A significant growth spurt in your market in any of the key market sectors (education, healthcare, government or commercial furniture), which could lead to significant opportunity and growth in 2011. While unlikely, a double-dip recession. You need to be ready and prepared for the good and the bad. Successful dealers use scenario building as a tool to devise alternatives and find the best solutions and strategies that will meet upcoming challenges whatever the future economic, industry, and local market conditions might be. One of the best books on the subject of scenario building is The Art of the Long View—Planning for the Future in an Uncertain World, by Peter Schwartz. In preparing for 2011, determine the various scenarios that are the best for you to explore, and develop models for the three or four that could have the largest impact upon your dealership. I label 2011 as “the Year of Uncertainty.” And that means now is the time to develop plans for the coming year that address multiple scenarios and build strategies for each scenario that can help you optimize your opportunities and minimize your risks. Bill Kuhn, principal of William E. Kuhn & Associates, is a noted industry consultant, writer, and speaker with over 35 years of industry experience. He consults with dealer principals and their management teams in areas of strategic planning, leadership and organizational development, marketing, financial management, valuation and merger/acquisition. For more information, contact Bill by phone 303-322-8233, fax 303-331-9032, or e-mail: BillKuhn1@cs.com.
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a final message from Barry Coyle it’s all about the learning
A few months ago, we received a note from Barry Coyle, principal of the SolomonCoyle consulting firm. Direct and to the point, much like Barry himself, he told us he would no longer be seeking treatment for the cancer that plagued his body. There was nothing more that could be done and he was going home to be with his family for as long as he could. And it was with his family that Barry died November 15. If you were privileged to work with Barry, read his articles or hear him speak at an industry conference, you knew he played a very special role in the office furniture world. Barry loved the office furniture industry. He was passionate about the dealer’s role and had an insight and perspective on the industry that few could match. And, of course, he was never one to hold back his opinions on the things that mattered to him. It came as no surprise, therefore, that Barry took us up on our offer to take a look back at the industry he loved and share some final words with the dealer community. One final article and one final lesson from a true professional who dedicated his entire career to our industry…
I’ve been fortunate in being able to explore virtually every corner of the office furniture world over my 33 years in the industry…to analyze over 125 businesses from the inside out…to broaden understanding of best practices through training and publishing…to meet many thoughtful and hard-working people and build cherished friendships. And I’ve seen some important changes occur. Thirty years ago, the contract furniture world was all about products and sales. Today, dealers know they need to understand the economics of their business and pay attention to their financials because it makes them better business people. They’ve learned how to manage the cost side of their business as well as the sales side. They’re learning the service side of the business and discovering new sources of profitability as service providers. They’re getting much more sophisticated about sales and marketing. They understand the importance of having and enforcing strong processes. Through the OFDA’s leadership, there now are financial models that dealers can use to benchmark their business. (“Dealer financial model” was a foreign concept when I came into the industry!)
With support from its Board of Governors and Barry’s wife, son and close friends, the OFDA has established a special fund within its Association Scholarship program in memory of Barry and his extraordinary commitment to higher education, training and continuous improvement through best practice exchanges. The goal is to raise sufficient funds to create a named scholarship in Barry’s honor. Tax-deductible contributions may be made in Barry’s name. For more information or to make a donation, visit http://www.ofdanet.org/Barry-E-Coyle-Memorial-Scholarship-Fund DECEMBER 2010
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And the very same models are helping manufacturers to gain a better understanding of dealerships and a much clearer picture of what it means for a dealer to be operationally and financially healthy. If you’ve ever worked or talked with me, then you know that all these signs of business maturity within the dealer community are central to what we preach in the SolomonCoyle consulting practice. I’m confident that my partner, David Solomon, will continue to offer leadership and counsel in these areas because he, like myself, knows from firsthand experience that financial acumen, effective processes, a strong service orientation and all the rest are absolutely critical to the vitality, success and sustainability of any dealer business. We cannot know what lies ahead. But we can be pretty certain that our ability to meet the challenges of the future depends largely on how much effort we put into identifying and applying today’s best practices. And don’t worry about running short or keeping it all to yourself. There’s an unending supply of improvement potential because there’s always something you’ve overlooked, always something new to be learned. If I did even one small thing that helped you achieve success, please know that it was my great pleasure, my calling.
Barry Coyle Ojai, California October 22, 2010
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