Dear Stephen,
I own a medium sized Knoll dealer. Business was obviously quite a bit off in 2020, the pandemic year. We're slowly recovering in 2021, but still well below my 2019 numbers. I'm a hands-on owner, meaning I have my own accounts. (I know your eyes are rolling and you must think I double dip, which I do!) Yet being the face of my dealership means I stay involved with our customers which has resulted in substantial financial rewards. I've tried to build a great sales team, I started hiring young professionals years ago and I've grown and trained them, but I still need more salespeople. Every dealer does. Here's my dilemma, not a day goes by when someone who works here or someone I know does not ask me if we're for sale, have been sold, or, worse, they're saying "I hear we're merging with so-and-so..."
After Herman Miller's acquisition of Knoll there's probably more dealer distribution than is needed. In fact, just last week I heard two major Knoll dealers merged in NYC. This is a logical next step for distribution, yet, it's disruptive to my team's morale and concentration on my business. It's even beginning to affect my bottom line because end-users, owner's reps, and A&D firms hear the same rumors that we all do. Obviously, they're concerned that if I'm to be absorbed into some other company in the future, whether or not I will be included in the RFP process. Even if my company is included, I may be denied a job because of idle gossip, since the customer may be wondering if I'll be around six months from now or if they will be dealing with someone else.
Here's the thing: all of us dealer owner's know each other, we pretend to be friends. So, I've frequently talked to the owner of one of the largest Steelcase dealers. I know the owners of my large Herman Miller and Knoll competitors. I'm even friends with the Haworth guy. In fact, I recently said to our sales manager: if owners of furniture dealers spent as much time talking to their own staff as they do to one another, we may all have better businesses. Why do we talk so much? It's mostly posturing to see who may merge with who, or to find out what the "backlog" of business my competitor has, as well as to commiserate on all our businesses being down 10-50% percent in 2021. Misery loves company and I guess rich people just like to talk to other rich people.
I often say if there is smoke there is fire, yet, I have no intention of selling my business. A couple of other dealers have approached me by not even wanting to really buy my business with cash, instead they just want to pay me out from the revenue that comes in. If I were to ever sell, that's not what I'm looking for. I want a big number up front! Like I said, I have friendly competitors but none of them want to put their money where their mouth is. What I'm wondering is, how do I tame the static around the fact that dealerships might be sold or in flux while trying to recruit people at the same time? On top of that, we and other dealers are all losing good people all of a sudden. Another second big shot jumped from a Herman Miller dealer last week in NYC. What is going on? It’s like rats leaving a sinking ship!
There's a lot of buzz around dealerships including mine being sold or merged, that static has a direct effect on my ability to hire and keep people. In my case, it's without merit - I'm not going anywhere! (for now). How do I change the dialogue with me, my employees and my customers? We are not for sale!
Signed,
The Boss
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Dear Mr. "Boss",
You have a very interesting dilemma. I hear the same story from dealers all across the country, but particularly from Herman Miller and Knoll dealers. Consolidation of the dealers may be a natural next step in the evolution of the merger between these two major brands. This chatter you describe affects morale of the people that already work in a dealership, and it makes it incredibly difficult to recruit new people if they don't know, or don't believe, that their boss will be the same individual six months from now. And yes, there are a lot of people at dealers moving around. I wish everyone would stop blaming it on the MilllerKnoll acquisition and hear me out.
My advice to everyone: first of all, a handful of people leaving one major dealer for another is not analogous to rats leaving a sinking ship. My experience is that these are just senior executives who are focused on their own careers, not "richy-rich" owners like you, and so the way that they can make more money and get a greater career opportunity is to leave. This is the perfect business climate in the contract furniture industry to do that.
As far as your real question, how do you stop the gossip and rumors about your imminent acquisition or merger: you can't. It’s not your company's culture, morale or staffing issues that's the problem here. The reason there is so much disruption in terms of personnel moving around everywhere is as simple as this: you all, the owners, need to be physically visible in the office in front of your employees and they need to be required to come in. I'm not saying that you don't do this, but allow me to elaborate...
My professional opinion as to why all of this recruiting is happening in the dealers today has nothing to do with the MillerKnoll acquisition, but everything to do with employees working remotely. Or, shall we say, the new "hybrid-workplace" phenomenon. Stop blaming everything on this acquisition! That's not the problem, that's the best thing to happen in the contract furniture industry in years!
My advice to all dealer owners and manufacturers is that hybrid workplaces should not be allowed in the contract furniture industry. The truth is, if you cannot see your employees face to face in a safe office environment, they will interview behind your back in-person or through Teams and Zoom. That's what's happening here. Owner's need to leave their fancy second homes, wherever they are, and get their asses back in the desk chair! Monkey see, monkey do. You sell office furniture, you should be in your office every day, showing that offices are important to the culture. To me, this act alone will squash the rumors and you will be able to interact in-person with your employees on a daily basis.
I understand that business is down for dealers across the country, but in 2022 business will pick up. Many of the super dealers who are doing lots of recruiting this year are still working virtually and losing face time with their employees because of it. To me, they seem to be prime next-targets, simply because their employees have more time to interview by not being in the office.
Let me put it in crystal clear terms for you: when you tell your employees to come in on Monday, Wednesday & Friday and allow them to work remotely on Tuesday and Thursday... Guess what! On Tuesday and Thursday, either I or someone like me is sending them on interviews. Capeesh?
Signed,
Stephen Viscusi
Stephen Viscusi is the CEO of www.viscusigroup.com, an executive search firm that specializes in the interior furnishings industry. Hires made through The Viscusi Group are guaranteed a two year free replacement. Please share your story or comment on this article and send your workplace questions to stephen@viscusigroup.com.