How Whirlpool Changed an Industry and Women Can Drive It!

How Whirlpool Changed an Industry
And how women can drive it!

Dr. Nancy Tennant
April 13, 2011

2011© All Rights Reserved. Based on the book Unleashing Innovation, Snyder & Duarte, 2008 Jossey Bass.
Blue Shield Nancy_A_Tennant@whirlpool.com

A NEW CENTURY OF OPPORTUNITY

Blue Shield Nancy_A_Tennant@whirlpool.com 2

Whirlpool Corporation

NORTH AMERICA REGION EUROPE REGION
• ~$3.2B Sales
• ~$9.6B Sales ~$18B+ Revenues • 12,000 Employees
• 29,000 Employees

#1 Global Share

ASIA REGION
LATIN AMERICA REGION • ~$900 M Sales
• ~$4.7B Sales • 5,000 Employees
• 25,000 Employees


99 Years of Transformation


Heading Towards a Commodity

-2.3% CAGR from ’92
-’99
Average Ticket ($)

1992 1993 1994 1995 1996 1997 1998 1999


What Is Innovation About?
FROM TO


Leading Innovation

1999 2000 - 2002 2003 - 2004 2005 - 2007 2008 - 2009 2010+
Composure
First Embedding Leadership Innovation Focused Turbo
Steps Innovation Tension Burst Innovation Charge

Competitiveness Confidence Composure Focus

Composure


Whirlpool Corporation’s
10-Year Transformation


Leadership Challenge #1

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

Beginning Embedding Point of Leadership Innovation Focused Turbo
Innovation Tension & Transition Burst Innovation Charge

CEO sees opportunity for sustainable growth


CEO Sees Growth Stagnating

Innovation from
Everyone and Everywhere


Many Possible Innovation Approaches

Rejected … Adopted …
 Cookie Cutter Approach  Innovation must come
 Great Man Theory from Everyone
 Training only  Tap the best thinking in
the world
 Skunkworks
 Expect investment up-
 R&D only
front without immediate
 Hiring Consultants to pay-off
innovate
 Big change requires a
massive scalable
approach over time


Innovation Approach
Embedded innovation


Outcomes Enabled by
Management Systems
OPERATIONAL ORGANIZATIONAL
Driven by the strategy With the right governance


Management System

Change the Systems….Free the People


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)



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

Innovation Tension Burst Innovation Charge

Chairman & CEO and Executive Senior Leadership Group
Committee
 Content with the current
 Sense of urgency
state
 Customer-focused  Internally focused
 Willing to take risk  Risk averse
 Breakthrough mind-set  Short-term execution
mind-set
 Transitioning
 Wait and see on new
CEO/Chairman role
leader


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


Transformational Leadership:
Theme throughout the Week



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


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

S-Curve of Embedded Innovation
The Tipping Point in 2004
More Output
Resources

Steady State/
Continuous Improvement
than

P
Sustaining
U
2004 L
L
Breakthrough

P
U
More Resources

Scaling
than Output

S
Launch
H
Proof of Concept

Time


Triple Diamond Process

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


Discover
EXAMPLE STEP 1

What were our industry
A commodity orthodoxies?
business
• 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


Develop
EXAMPLE STEP 2
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


Nurture
EXAMPLE STEP 3

Orthodoxies Challenges? Result: Eco-House
We sell hard Why not sell a
goods “water service”?

Customer Insights: New needs?
Consumers are A simplified
wiling to spend $X process to bring it
a month in water home

Core Competence: Leverage?
A sales force in A natural
the market place extension to
maintain a rental
business


Innovation Results – Products and Services

EggoTM Countertop
washer
Eco-House
In-sink dishwasher
Rental business


Innovation Results – Top Line Revenue

$375

Before innovation embedment Innovation embedded

$350
ASV
CAGR
+3.9 %
$325 ‘02 – ‘09
Average ASV
Ticket ($) CAGR
(3.4)%
$300 ‘97 – ‘02

$275

$250
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009


Innovation Results – Pipeline

$ Billions
4.70

4.00 4.20

3.30 3.50

3.04 3.13
2.50
2.00
1.30
1.60

0.75
0.10 0.20

2003
2004
2005
2006
2007
2008
2009



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


Maintaining composure in the face of
turbulent times

Focused Innovation


Drive the Right Portfolio

Examples

- Right forums, right
decisions
- Set the right
dimensions
- Alignment to strategy
by assigning goals

X% Y% Z%


Innovation Results – Products

Vantage™ laundry pair Gladiator® Bike Claw
First washer with a USB port A new solution to an old problem

Four Leadership Lessons in our Journey
4
Leaders need to focus
More Output
Resources

efforts in challenging Steady State/
Continuous Improvement
than

business environment P
Sustaining
U
L
L
Breakthrough
1
3 P
Support from the top
Leaders need to
of the organization U
challenge content feeling
More Resources

Scaling
than Output

in the organization S
Launch
H
Proof of Concept

2
A few leaders will be Time
Innovation heroes


Leading Innovation

1999 2000 - 2002 2003 - 2004 2005 - 2007 2008 - 2009 2010+
Composure
First Embedding Leadership Innovation Focused Turbo
Steps Innovation Tension Burst Innovation Charge

Competitiveness Confidence Curiosity Focus

Composure


How Whirlpool Changed an Industry and Women Can Drive It!

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