Story:
Closing Whirlpool’s Innovation Process with a Bow

The Genesis

Whirlpool has seen great success after a decade of practicing innovation. And, we have gone through a number of different iterations of innovation structure, a major acquisition and more recently, we’ve been hit by the economic crisis with which we are all painfully too familiar. All of these events impacted the way the innovation process was driven, the economic crisis has caused us to be vigilant on extracting the maximum possible value. As we embarked on a broad diagnostic of our global innovation capabilities, we discovered what seemed like a gap in our process: once in the marketplace, innovations were handed out to category teams who in some cases tended to treat these products as part of “the line” – some category leads have quickly come up with an answer when things don’t work:

• “The product doesn’t fully deliver its promise” – we need a new line
• “The price is too high” – we are not competitive
• “We need to promote” – consumers need to be converted.

When it comes to innovation (and even for non-innovations) we know that success doesn’t necessarily depend on these factors.  How can the organization then be encouraged to “keep turning rocks” in search for value extraction?

My team was charged with finding the answer for that. The only thing we knew was that while this process may identify product opportunities, the focus was on the go-to-market.

In Search of  the Answer

Several factors influenced our approach to go after this opportunity; not only that, we had to align many heads around this abstract concept before we could actually start the work.

Choice #1: Selecting the right pilot

The first decision that we made was to make this bullet proof. We would not do it in “the lab,” instead we would use a real project and run it as a pilot, and we would do this in what can be considered Whirlpool Corporation’s “bread and butter”. While a recent innovation in the laundry business would not seem a logical choice for a project like this as it would be harder to break new ground in a known territory, this choice would challenge every orthodoxy we have and deal with the complexity of a mature and robust business.

Choice #2: Thought leadership for the project

While we have a mature process and people that drive it day in and day out, it would have been hard to bring a team that would challenge our structure and processes deep enough to make implementation recommendations that would not impact their day-to-day; therefore, we decided to bring the firm that helped us introduce the double diamond in 2001 back to help in this endeavor. This decision would also assure the process was consistent with the innovation principles of the double diamond process they brought in the first place.

Choice #3: Innovation and PMR

Our Corporate Vice President of Strategic Competencies, Nancy Tennant, challenged our initial drafts of the pilot.  She had the vision that the place in which this phase would operate would require close interaction of the innovation competency with the marketplace management -one we call PMR (Price and Margin Realization). This required deep thinking and charter iterations to integrate core elements of this left brain discipline with the principles of innovation.

Choice #4: Business leads

Our last decision to make was who to assign to lead the project. While all set-up and conceptualization had been done by our group, Whirlpool University, it was necessary to assign business leads to make it relevant for the business. Ken Whah, fabric care business lead and Mohit Jain, PMR director for North America embraced the idea, made adjustments to the plan and presented the project to the 50 top leaders during our annual leadership conference in Chicago.

Growing pains

The choices made proved to be the right ones, but working in a 100 year old category came with its challenges. Leaders and middle management seemed to agree with the concept of “maximizing value extraction”, but challenging established processes and conflicting priorities came as part of the challenge.

With some exceptions, the cross-functional team did not report directly into the business unit. It was defined this way so we could gain insight and be able to impact the whole value chain. The team members were expected to give 20% of their time.  And, it turned out that some put way more than that while others faced challenges to keep this commitment and balancing their priorities, demonstrating the role that leadership alignment and air cover continues to be an essential ingredient in innovation.

One of the things we quickly uncovered was the “we already know that” syndrome, the process allowed us to discover tacit knowledge of things we tried in the past and market knowledge/wisdom. The process combined with Whirlpool’s values of teamwork, respect, diversity and collaboration were important success factors. The team then moved into ideation based on a total immersion, engaging the challenges, the new learnings and calibrating their discovery with tacit knowledge.

Managing an existing, large scale business brought challenges that every established organization will likely face. Going after new knowledge in search for opportunities of an established business started to crossover in people’s “sandboxes”.  The trade-offs that some teams would have to make are hard to balance with the day-to-day operations of an established business.  This begs a need for openness about learning and experimentation as it is not intended to challenge initiatives or decisions made in the past, but to explore upside opportunities in a learning organization. 

Birth of a new process

The “bow” of our innovation process is now documented in the proprietary Growth and Innovation playbook that contains the principles and tools that are necessary to replicate this process. As with “normal” innovation projects, successfully executing an initiative also requires the right level of expertise.

One of the big findings was that this process has applications beyond the way it was originally conceived. Not only can Third Diamond be applied as a post-launch effort, it can create value in other instances. The first one is the application after a concept has been locked in our stage-gate process. This applies particularly well for projects that didn’t go through the innovation process (i.e. cost/quality initiatives) or for innovations that require innovative go-to-market approaches not conceived during the front-end process. Another potential application of the process is just before the launch when significant disruptions in the marketplace put our original assumptions at risk. These two applications have been embedded in our product development process.

One of the biggest challenges in the creation of a process like this is the scale-up phase and operationalization.  Processes like this require the right level of demand from the business and push from leadership. While the business benefits are evident, organizations are tight in resources and have a tendency to focus on established mechanisms – doing something new that requires setting time aside requires a significant behavioral change, so some push from leadership is required to grab the attention of business leaders and executors. At the same time, there’s got to be a good balance of value-added activities to keep the focus and attention of a team.