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Innovator Interview: Randy Voss, Whirlpool


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What makes innovation a mainstay at Whirlpool? Randy Voss, Senior Manager of Global Strategy and Business Development, shared his ideas on balancing incremental and breakthrough innovation, the evolution of innovation metrics over time, and how their site – – is helping themselves and the innovation community share best practices.

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Innovator Interview: Randy Voss, Whirlpool

  1. 1. Randy Voss Senior Manager, Global Strategy & Business Development Whirlpool the innovator’s interview The Innovator’s Interview highlights unique innovations from a wide range of industries, and is an opportunity for futurethink and some of today’s leading innovations to share insights and ideas. May 2009 Turn innovation into action | Future Think LLC © 2005–09 Reproduction prohibited | New York NY
  2. 2. the innovator’s interview 2 Randy Voss the background This Innovator Interview series highlights leading innovators at Fortune 500 companies. In contrast to past interviews, focusing on a single innovation, this series examines the state of innovation at global organizations. We spoke with both innovation leaders and practitioners, within varying business units and organizational structures, across a broad range of industries both for–profit and not–for–profit. The interviews offer a unique insider’s view into the world of innovation—what makes it work, what holds organizations back, and what critical advice new innovators need to know to be more successful with innovation overall. the interview What makes innovation a mainstay at Whirlpool? Randy Voss, Senior Manager of Global Strategy and Business Development, shared his ideas on balancing incremental and breakthrough innovation, the evolution of innovation metrics over time, and how their site – – is helping themselves and the innovation community share best practices. You’ve mentioned pushing beyond incremental innovation as one of the biggest challenges in trying to make innovation happen. Why? Corporations are addicted to action. So, there’s a focus towards making things progress. And because of that, it’s obviously much easier to do the incremental stuff because it happens faster. Sometimes the bigger ideas or the bigger opportunities get harder to justify financially, or to rationalize actually doing those versus some of the smaller, more immediate things. So, once you get done with the incremental activities… now what are you left with? Well, now you’re back to the big aha, or the big opportunity, and there’s nothing in the pipeline for that because that hasn’t been the focus. Do you think that every company is capable of the “big leaps,” or the more breakthrough-type of innovation? That’s the conundrum, right? I think if you look at all the innovation practitioners that you talk to and have talked to, one of the biggest frustrations is that it becomes harder to do the bigger non-incremental things for many reasons. So it does become more of a challenge to do the more breakthrough things. How do you tend to manage the incremental versus the breakthrough-type innovations? How do you balance those two ends of the spectrum? For us, we have a pretty good scorecard and a pretty good metric system of where we are on the continuum on any given month. We have a reporting system that looks at all of the ideas in our innovation Anticipate. Innovate. pipeline. To even get into the pipeline, you have to pass certain | Future Think LLC © 2005–09 Reproduction prohibited | New York NY
  3. 3. the innovator’s interview 3 Randy Voss metrics to go in, and to qualify as innovation. Once you make it in the pipeline, your project and the innovation now has visibility across every department, all the way up to our Chief Executive Officer. That’s “I’m pushing the business to monitored on a monthly basis, in both operational reviews and project reviews. Now, saying that, what is happening is as you walk through the be more game-changing rather tollgates with your project and, if something becomes too incremental, than incremental, and to try that innovation would fall out of our innovation pipeline. to go for the bigger idea as So, it is a very dynamic process? opposed to the smaller idea.” It’s very dynamic, and it’s continually changing. I’ll give you an example. We just had an innovation, something that is pivotal to one of our businesses here that was removed from the product. Now, because of the removal of this specific innovation, the entire project, which is a fairly breakthrough program, doesn’t meet the financial requirements of our innovation metrics anymore, so it’s actually going to be recommended that the project be pulled off the innovation pipeline. So, what I’m trying to articulate to you is that there is a tremendous amount of rigor and time that’s spent looking at what’s actually in the pipeline at each different phase of our innovation process. Do you almost have a fixed allocation of how many breakthrough versus incremental projects that you should have in play at any given time, or is that something that’s fluctuating constantly? It fluctuates constantly. There isn’t a number that says you have to have this many breakthroughs or this much game-changing innovation. Now, that being said, people that are responsible for innovating, or like myself as an innovation mentor within the organization, I’m pushing the business to be more game-changing rather than incremental, and to try to go for the bigger idea as opposed to the smaller idea. So, as you’re laying out your strategic plans and working on your technology roadmaps and things like that, and looking beyond the immediate horizon in your time window – let’s say three years or more out – that’s when you’re really starting to push on the more “forward-thinking”, “change the game” ideas as opposed to the incremental. Do you mind just talking a little bit more about the importance of metrics and whether they tend to evolve over time? Whirlpool is known as an innovative company, and has been for a number of years now. Would you say that the metrics that you use as part of your innovation program today are very different from the metrics that you may have used five or 10 years ago? I would call them more refined. I wouldn’t say that fundamentally they’re very different. One of the first keys for us was actually getting metrics in place and using them consistently. So for a while, let’s say at the beginning in 1999 when we started on this journey, it was more about idea generation and just trying to uncover new things that we could possibly do. That evolved into, “well, what about keeping track of these ideas and how many of them get commercialized, what is the value of those ideas, etc.” So, you will evolve your metrics over time. Probably the biggest one that has evolved, is a metric that exists for employees. Depending on your role in the organization, there is a target your Anticipate. Innovate. management appraisal, your performance appraisal, and innovation is | Future Think LLC © 2005–09 Reproduction prohibited | New York NY
  4. 4. the innovator’s interview 4 Randy Voss contained in that performance appraisal. Getting that put on to the senior leadership of the company as a deliverable to the organization was, from an evolution standpoint, probably the biggest thing that came after the core metrics were established, because that’s what ultimately was seen as a gap in terms of allowing innovation to happen between the CEO and the rank and file who were trying to drive innovation. That seems like a real cultural mechanism as well. So, after laying down the processes and the programs and the idea generation programs, the next leap, it seems, is to start holding people accountable. Absolutely. And you have to hold the right people accountable for the right things, as well. For instance, I have a metric for the innovation pipeline and the innovation revenue within the global refrigeration business. Now, do I work on 100 percent of the innovation ideas in that area? No, but it’s what helps me to focus and push on the business to make sure that they are thinking across incremental things and more groundbreaking, game-changing things for the future. What would you say, then, is the biggest indication of a healthy innovation program in your experience at Whirlpool, and then in general? It seems to me, from what I’ve read and what I’ve gathered, that the things that you have deemed and qualified as innovation, are those truly driving uplift and revenue increases at a percentage that’s higher than what your overall business growth is. It seems as if defining what constitutes an “innovation” is a critical step in this process of measuring the health of your program. Absolutely. To me, you really have to have the rigor around what your definition of innovation is because, if you have that, when people come to you and say, “Okay, I have an innovation program, great. I have people working on it. I’m spending money developing an innovation program,” and I’m the CEO and people come to me now and they say, “Okay, this is innovation,” I have a set of criteria that they had darn well better be able to look at it and say, yes, it meets all these measures, or exceeds all these metrics across the different elements. And then it becomes very compelling for me, as a leader or shareholder, to invest in them. What would you say the role of an innovation team, or an innovation office should be? And what should they or shouldn’t they do? Those are two different questions, so I’ll focus on, the innovation office. The innovation office is really the nucleus around all of the “what” that we’ve been talking about. What are the metrics? Are things adhered to in order to make sure that you have a healthy innovation program, a healthy innovation pipeline, etc.? So, these have to be people that can get innovation evangelized and embedded as an organizational competency. They do the training. They do the managing of the processes out in the field. They’re at the top of the pyramid, scanning to make sure that the “what” actually is happening. Anticipate. Innovate. | Future Think LLC © 2005–09 Reproduction prohibited | New York NY
  5. 5. the innovator’s interview 5 Randy Voss The teams themselves are a completely different matter because it’s really hard to have an innovation department that’s totally separate. They’re responsible for the ideas and all of that other rigor that I just mentioned. Because if you build the separate silo, now you really have a separate silo, and those walls create more “not invented here” thinking. And how do you get engaged with the rest of the organization to say, “Hey, we’ve got this great idea, let’s put it in the business. They say “Well, yeah, thanks, but we’ve got these other ideas we’re working on here.” You really have to have these things very deeply linked across all of your operations. Our teams live everywhere all the time. You’ll have teams in factory operations, you’ll have teams working at the strategy level. They’re all over the place, very cross-functional, and very diversified. And are they reporting, basically, into a central innovation office? Not the individual team itself. I’ll give you an example. I work within the Global Refrigeration Strategy Group. So, we’re responsible for managing the refrigeration pipeline. Now, all of the teams globally – and there’s hundreds of them – we make sure to work with the regional leadership that’s out there to make sure that all of the activities that have been deemed innovation are being reported on, recorded, managed, tracked, and understand where they are on any given day. So, the people with the accountability for the innovation pipeline need to know where all those groups are that are working on the projects that support the pipeline, because what you don’t want to have is some resources being spent on something that you really don’t have a lot of visibility to, then all of a sudden it just dies and falls away. That’s what creates frustration in people – their idea dies, and then what? Nothing. So, hypothetically speaking, if you were to start an “innovation program” or “innovation team” at Whirlpool from scratch, what would be the first thing that you would do in order to gain traction and start building momentum? Wow, that’s an interesting question, because it’s hard for me to purge my brain and turn back the clock and forget all the things that we’ve done that have actually been successful. So, let me answer your question another way, because we’ve been at it 10 years. I think that some of the reasons we haven’t been wildly successful all the time is because innovation is just plain hard. We all tend to be event-based. And when I say “We,” I’m talking about business in general. Everything is event-based. So, you do something, you stop, and you move onto the next thing. Well, that’s not innovation. Innovation is a living, breathing entity. And it changes and it reshapes itself, and it finds a different way, and there’s no good idea/bad idea kind of thing. There’s different degrees of, “is it time?” Is now the time for this idea? And that’s what also makes it hard, is that we’re very black and white, in society and in business. You win, you lose. There’s no, “Well, I tried, I learned, and I made this turn to the right and this turn to the left, and now I’m on a different path that may yield me a different answer.” So as you talk to innovators, I’m sure you’ve heard resoundingly from people who have said, “The hard part is I get frustrated because I see a lot of big ideas, I Anticipate. Innovate. see a lot of game-changing stuff. I can’t get any traction.” And you ask, | Future Think LLC © 2005–09 Reproduction prohibited | New York NY
  6. 6. the innovator’s interview 6 Randy Voss “well, why is that?” Well, because it is hard, and you have to stay after it and stay after it and stay after it because it is all about shades of gray. “The struggle for people, The struggle for people, organizations and businesses, is that they start out without a clear definition of what it is they’re trying to accomplish. organizations and businesses, So, what is your definition of innovation? What is your ultimate goal? I mean, it’s like setting any other strategy in motion. If you don’t is that they start out without have a clearly defined set of objectives, a clearly articulated set of a clear definition of what it is requirements, you’re not going to meet your expectations. And that’s why companies and people struggle at this. They say, “We’re going to they’re trying to accomplish. have innovation.” “Great, what is that?” “Well, we’re going to go do idea generation.” “Okay, great, I have 100 ideas. Now what?” I don’t know. So, what is your definition Can you take those 100 ideas and commercialize them? Any of them? of innovation? What is your One of them? Is that a win? People who start and clearly don’t know where they’re going, they get on this superhighway and they just drive. ultimate goal?” They never get anywhere because they’re just driving and saying, “Well, we’re innovative.” Really? What’s the evidence of that? So, you really have to understand that. So, if I was starting this tomorrow, that would be my number one goal. I would be able to clearly show: What are my priorities? What are my objectives? Who do I need? What are the roles in the company? “If you don’t innovate, be Obviously it’s no surprise, you’ve got to have top management involved. creative and look to the Your CEO has to support it, and you have to have appropriate resources assigned to do it. Those are the short, easy ones, and they’re not so future and the possibilities easy. Once you have that, you can build the right discussion around, “These are my top objectives,” and put a time limit on that – here’s what of what will evolve over time, I’m going to do in year one; here’s what I’m going to do in year two, you will cease to be relevant.” three, etc. Calibrate, and recalibrate, and continue to march forward. That’s what I would do. What are the programs and the mechanism that are in place that help to maintain the energy and the enthusiasm for innovation? Is it something that, at this point, is very organic within Whirlpool? Or is it something that’s facilitated or managed somehow? We have an online portal that is what we call our Idea Central Database. So, if you have an idea and you want to contribute it to the company as, “I have this aha,” you go online and you submit it, and it goes around the company to a group of innovation mentors to look at and either build on or continue to scrub, if you will, to see if it’s something that we could take and drive to some level of commercialization. So, you’re encouraged to participate in the dialogue. We came up with our innovation website that’s called Unleashing Innovation ( Whirlpool created it with the goal of getting people who are innovative to just dialogue with one another as a community of practice in an extended community. So, it’s not something that is just germane to one company or an organization. It’s appropriate for companies to do because, to me, innovation has no distinction between survival and death. If you don’t innovate, be creative and look to the future and the possibilities of what will evolve over time, you will cease to be relevant. I don’t care how long you go Anticipate. Innovate. back. The world is full of organizations and cultures that stopped being | Future Think LLC © 2005–09 Reproduction prohibited | New York NY
  7. 7. the innovator’s interview 7 Randy Voss relevant, and they’re not here anymore. So, how did other ones stick around? Because they changed, they morphed, they grew, they evolved. It’s a continuum. What, in your mind, makes someone good at innovation? You can teach a little bit about processes. So, how do you use tools and innovation doesn’t make a good innovator. It’s more like being a good sports star. How is a guy like Derek Jeter different than just some guy that sits on the bench all the time, and yet he’s still a major leaguer? But, why doesn’t he start? There are these little subtleties and degrees of differences. But, to a large degree, really good innovators, it’s in their DNA. They think differently. They’re wired differently. At the end of the day, you can learn some things, certain elements can be taught, but the areas of creativity, the areas of passion and enthusiasm, the areas of being a visionary, all of those things are attributes of somebody who ends up becoming a good innovator as opposed to somebody who has only learned the practice. Another big question mark in the world of innovation, is how do you reward innovation? Do you reward innovation outside of normal performance metrics and other regular reviews? We really don’t. And some of the reasons why are, because we’ve embedded this at an organizational level, people draw their own rewards off of their innovation. Sometimes just getting my ideas heard and my ideas into the pipeline, that’s good enough for me. Being able to have this discussion with you about what do we do and how do we do it, that’s a huge reward for me, because people recognize we’re good at what we do, and they want to know more about it. So, being able to be recognized in that way, to me, is phenomenal. So, there really isn’t a financial reward inside our organization, because the way we look at it is, again, it’s part of our DNA, and it doesn’t have a distinction for us between who we are, what we are, and our ultimate survival, so we just do it. Anticipate. Innovate. | Future Think LLC © 2005–09 Reproduction prohibited | New York NY
  8. 8. the innovator’s interview 8 Randy Voss What can you learn from innovation leaders like Whirlpool? • Balancing incremental and breakthrough innovation: Do you have the desired balance between enhancements (incremental ideas) and breakthrough ideas? How are you measuring the proper balance of idea types in your innovation portfolio? • Setting innovation metrics: Do you have a set of established metrics for innovation? How do you see these metrics evolving or improving over time? • Sharing and communicating best practices: What channels are available for teams to learn from each other around innovation efforts? To learn more about the research, tools and training you need to better anticipate change and move innovation forward, visit us at Anticipate. Innovate. | Future Think LLC © 2005–09 Reproduction prohibited | New York NY