How Whirlpool Changed an Industry and Women Can Drive It!

2011© All Rights Reserved. Based on the book Unleashing Innovation, Snyder & Duarte, 2008 Jossey Bass. [email protected] Shield

How Whirlpool Changed an IndustryAnd how women can drive it!

Dr. Nancy TennantApril 13, 2011


A NEW CENTURY OF OPPORTUNITY

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~$18B+ Revenues

#1 Global Share

Whirlpool Corporation

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NORTH AMERICA REGION• ~$9.6B Sales• 29,000 Employees

LATIN AMERICA REGION• ~$4.7B Sales• 25,000 Employees

EUROPE REGION• ~$3.2B Sales• 12,000 Employees

ASIA REGION• ~$900 M Sales• 5,000 Employees

2011© All Rights Reserved. Based on the book Unleashing Innovation, Snyder & Duarte, 2008 Jossey Bass. [email protected] Shield 4

99 Years of Transformation


Heading Towards a Commodity

-2.3% CAGR from ’92 -’99

1992 1993 1994 1995 1996 1997 1998 1999

Ave

rage

Tic

ket

($)


FROM TO

What Is Innovation About?

6


Leading Innovation

First

Steps

Turbo

Charge

Embedding

InnovationLeadership

Tension

Focused

InnovationInnovation

Burst

1999 2010+2000 - 2002 2003 - 2004 2005 - 2007 2008 - 2009

Competitiveness Confidence

Composure

Composure

Composure Focus

7


Whirlpool Corporation’s10-Year Transformation

8


Leadership Challenge #1

Beginning Turbo

Charge

Embedding

InnovationPoint of Leadership

Tension & TransitionFocused

Innovation

Innovation

Burst

1999 2010+2000 - 2002 2003 - 2004 2005 - 2007 2008 - 2009

CEO sees opportunity for sustainable growth

9


CEO Sees Growth Stagnating

Innovation from Everyone and Everywhere

10


Adopted …

Innovation must come from Everyone

Tap the best thinking in the world

Expect investment up-front without immediate pay-off

Big change requires a massive scalable approach over time

Rejected …

Cookie Cutter Approach

Great Man Theory

Training only

Skunkworks

R&D only

Hiring Consultants to innovate

Many Possible Innovation Approaches

11


Innovation Approach

Embedded innovation


Outcomes Enabled by Management Systems

OPERATIONAL ORGANIZATIONAL

Driven by the strategy With the right governance

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Management System

Change the Systems….Free the People

14


I-Heroes

“One who acts for a larger

purpose in the face of risk and

beyond the actions expected

in the role he or she occupies”Schulman (1996)

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Beginning Turbo

Charge

Embedding


Tension

Focused

Innovation

Innovation

Burst

1999 2010+2000 - 2002 2003 - 2004 2005 - 2007 2008 - 2009

Chairman & CEO and Executive Committee

Sense of urgency

Customer-focused

Willing to take risk

Breakthrough mind-set

Transitioning

CEO/Chairman role

Senior Leadership Group

Content with the current

state

Internally focused

Risk averse

Short-term execution

mind-set

Wait and see on new

leader

16


Leadership Conference 2004

13 Charter Airplanes


Learnings

Emotional experience that caused our leaders to:

• Deeply question why they were not embracing innovation

• Realize they had not engaged their organizations in idea generation and innovation embedment

• Commit to lead with impact, passion, and drive results

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Transformational Leadership: Theme throughout the Week

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Beginning Turbo

Charge

Embedding



Innovation

Innovation

Burst

1999 2010+2000 - 2002 2003 - 2004 2005 - 2007 2008 - 2009

Leaders owning and driving Innovation…new CEO/Chairman driving scale

20


S-Curve of Embedded InnovationThe Tipping Point in 2004

Steady State/Continuous Improvement

Launch

Scaling

Sustaining

Proof of Concept

Time

Breakthrough

Mo

re R

es

ou

rce

s

tha

n O

utp

ut

Mo

re O

utp

ut

th

an

R

es

ou

rce

s

P

U

S

H

P

U

L

L2004


Triple Diamond Process

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OPEN INNOVATION TOOL-KIT

Nurture


EXAMPLE STEP 1 Discover

A commodity business

What were our industry

orthodoxies?

• Buy once, come back in 10

years

• Consumers won’t pay for a

premium filtering system

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EXAMPLE STEP 1 Discover

A commodity business

What were our industry

orthodoxies?

• Buy once, come back in 10 yrs

• Consumers won’t pay for a

premium filtering system

Why limit ourselves to:

• Sell once and not again in 10 years?

• A commodity market

Idea: a water service delivery business

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We immersed in the consumers’

world:

• Purified water is a priority, I need

something I can trust

• Families are busy and they miss

the weekly delivery

• Consumers can’t trust delivery

service

• It’s a hassle!

Identified the viability of a new

business model

EXAMPLE STEP 2 Develop

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A sales force in the market place

Consumers are

wiling to spend $X

a month in water

We sell hard

goods

A natural extension to maintain a rental business

A simplified process to bring it home

Why not sell a “water service”?

Core Competence: Leverage?

Result: Eco-House

New needs?Customer Insights:

Challenges?Orthodoxies

EXAMPLE STEP 3Nurture

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Eggo Countertop

washer

In-sink dishwasher

TM

Innovation Results – Products and Services

Eco-House

Rental business

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Average

Ticket ($)

$250

$275

$300

$325

$350

$375

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

ASV CAGR (3.4)%

‘97 – ‘02

Before innovation embedment Innovation embedded

ASV CAGR +3.9 %

‘02 – ‘09

Innovation Results – Top Line Revenue

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20032004

20052006

20072008

2009

1.30

2.00

3.30 3.50

4.00

4.70

4.20

0.10 0.20

0.75

1.60

2.50

3.04 3.13

$ Billions

Innovation Results – Pipeline

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Beginning Turbo

Charge

Embedding



Innovation

Innovation

Burst

1999 2010+2000 - 2002 2003 - 2004 2005 - 2007 2008 - 2009

Maintaining composure in the face of turbulent times

30


Focused Innovation

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Drive the Right Portfolio

Examples

- Right forums, right

decisions

- Set the right

dimensions

- Alignment to strategy

by assigning goals

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X% Y% Z%


Innovation Results – Products

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Gladiator® Bike ClawA new solution to an old problem

Vantage™ laundry pairFirst washer with a USB port


Four Leadership Lessons in our Journey

Steady State/Continuous Improvement

Launch

Scaling

Sustaining

Proof of Concept

Time

Breakthrough

Mo

re R

es

ou

rce

s

tha

n O

utp

ut

Mo

re O

utp

ut

th

an

R

es

ou

rce

s

P

U

S

H

P

U

L

L

Support from the top of the organization

1

A few leaders will be Innovation heroes

2

Leaders need to challenge content feeling

in the organization

3

Leaders need to focus efforts in challenging business environment

4


Leading Innovation

First

Steps

Turbo

Charge

Embedding

InnovationLeadership

Tension

Focused

InnovationInnovation

Burst

1999 2010+2000 - 2002 2003 - 2004 2005 - 2007 2008 - 2009

Competitiveness Confidence

Composure

Composure

Curiosity Focus

35



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How Whirlpool Changed an Industry and Women Can Drive It!

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