Chapter 11 case study B

Adrianna is the CEO of Luxury Designs, an office furniture company that has been in business for forty years. The company both manufactures its own furniture and assembles furniture from a few manufacturers overseas. Although Luxury Designs is profitable, revenue has declined slowly for five years. In today’s meeting with her top management team, Adrianna is going to discuss the need for innovation.

“We are meeting today on a topic we have talked about in the past. I also sent you an e-mail on this topic just two days ago to give you an opportunity to think about today’s meeting. My concern is that we are not doing anything radical enough to deal with today’s market for office furniture. A big hurdle we face is that the market for fashionable office furniture is shrinking as more and more private offices and even cubicles are being eliminated. Almost any old work table and chairs will do in an open-space office.”

Seth, the director of new product development, signaled that he wanted to comment. “We are right with you, Adrianna. We are in the design phase of some interesting concepts in open-office design. We are thinking of some really cool tables, chairs, and whiteboards that will excite our consumers.”

Adrianna replied, “Seth, I am confident that you and your group will tweak our product line to have something new to offer. But the challenge I have for us as company leadership is to find a way to be disrupters. Our long-term prosperity depends on disrupting the industry, rather than just adapting to trends.

“You have heard about disruption. The PCs disrupted the mainframe computer industry a long time ago. Cell phones and smartphones disrupted the traditional telephone makers. The ZIP Cars disrupted the car rental business. Uber and Lyft disrupted the taxi business. I want somebody, somewhere in Luxury designs to come up with an idea to disrupt the office furniture industry. If we have to cannibalize some of our traditional business, that’s okay.”

Diane, the CFO said, “Maybe we should run a one-time disrupter campaign, and pay a big bonus for the best idea. We have to figure out how to encourage a few disrupters.”

Adrianna said, “Diane, your idea has some merit. But we have to go beyond a one-time gimmick to get us on the right path. Let’s all meet one week from today to reintroduce the topic of disrupting the office furniture industry.”
Questions 

1)What do you recommend that leadership at Luxury Designs do to facilitate having a disrupter within the company?

2)What thought should Adrianna and the other members of the leadership team at Luxury Design give to going beyond the confines of the office furniture industry in order to be a disrupter?

3)In what way is this case about creativity and innovation?