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How Whirlpool Changed an Industry

And how women can drive it!

Dr. Nancy Tennant April 13, 2011

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

A NEW CENTURY OF OPPORTUNITY

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

Whirlpool Corporation

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

~$18B+ Revenues
#1 Global Share

EUROPE REGION ~$3.2B Sales 12,000 Employees

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

ASIA REGION ~$900 M Sales 5,000 Employees

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

99 Years of Transformation

Blue Shield

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

Heading Towards a Commodity


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

1992 1993 1994 1995 1996 1997 1998 1999


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

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What Is Innovation About?

FROM

TO

Blue Shield

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

Leading Innovation
1999
First Steps

2000 - 2002
Embedding Innovation

2003 - 2004
Leadership Tension

2005 - 2007
Innovation Burst

2008 - 2009
Focused Innovation

2010+
Turbo Charge

Composure

Competitiveness

Confidence

Composure

Focus

Composure

Blue Shield

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

Whirlpool Corporations 10-Year Transformation

Blue Shield

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

Leadership Challenge #1
1999
Beginning

2000 - 2002
Embedding Innovation

2003 - 2004
Point of Leadership Tension & Transition

2005 - 2007
Innovation Burst

2008 - 2009

2010+

Focused Innovation

Turbo Charge

CEO sees opportunity for sustainable growth


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

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CEO Sees Growth Stagnating

Innovation from Everyone and Everywhere


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

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Many Possible Innovation Approaches


Rejected
Cookie Cutter Approach Great Man Theory Training only Skunkworks R&D only Hiring Consultants to innovate

Adopted
Innovation must come from Everyone Tap the best thinking in the world Expect investment upfront without immediate pay-off Big change requires a massive scalable approach over time

Blue Shield

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

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Innovation Approach
Embedded innovation

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

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Outcomes Enabled by Management Systems


OPERATIONAL
Driven by the strategy

ORGANIZATIONAL
With the right governance

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

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Management System

Change the Systems.Free the People


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

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I-Heroes

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)

One

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

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Leadership Challenge #2
1999
Beginning

2000 - 2002
Embedding Innovation

2003 - 2004
Point of Leadership Tension

2005 - 2007
Innovation Burst

2008 - 2009
Focused Innovation

2010+
Turbo Charge

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
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Blue Shield

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

Leadership Conference 2004 13 Charter Airplanes

Blue Shield

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

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

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Transformational Leadership: Theme throughout the Week

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

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Leadership Challenge #3
1999
Beginning

2000 - 2002
Embedding Innovation

2003 - 2004
Point of Leadership Tension & Transition

2005 - 2007
Innovation Burst

2008 - 2009

2010+

Focused Innovation

Turbo Charge

Leaders owning and driving Innovationnew CEO/Chairman driving scale


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

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S-Curve of Embedded Innovation The Tipping Point in 2004


More Output than Resources

Steady State/ Continuous Improvement Sustaining

P U L

2004
Breakthrough

L
P
More Resources than Output

U
Scaling

S
Launch Proof of Concept

H
Time

Blue Shield

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

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Triple Diamond Process


OPEN INNOVATION TOOL-KIT

Nurture

Blue Shield

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

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EXAMPLE STEP 1
A commodity business

Discover

What were our industry orthodoxies? Buy once, come back in 10 years Consumers wont pay for a premium filtering system

Blue Shield

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

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EXAMPLE STEP 1
A commodity business

Discover

What were our industry orthodoxies?

Buy once, come back in 10 yrs


Consumers wont 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


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

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EXAMPLE STEP 2

Develop

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 cant trust delivery service Its a hassle! Identified the viability of a new business model
2011 All Rights Reserved. Based on the book Unleashing Innovation, Snyder & Duarte, 2008 Jossey Bass. Nancy_A_Tennant@whirlpool.com

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EXAMPLE STEP 3
Orthodoxies
We sell hard goods

Nurture

Challenges?
Why not sell a water service?

Result: Eco-House

Customer Insights:
Consumers are wiling to spend $X a month in water

New needs?
A simplified process to bring it home

Core Competence:
A sales force in the market place

Leverage?
A natural extension to maintain a rental business
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Blue Shield

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

Innovation Results Products and Services

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

Blue Shield

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

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Innovation Results Top Line Revenue


$375
Before innovation embedment Innovation embedded

$350
ASV CAGR +3.9 % 02 09

Average Ticket ($)

$325
ASV CAGR (3.4)% 97 02

$300

$275

$250

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

Blue Shield

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

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Innovation Results Pipeline


$ Billions
4.00 3.30

4.70 4.20

3.50
3.04 3.13

2.00

2.50 1.60 0.75

1.30

0.10

0.20

2003

2004

2005

2006

2007

2008

2009

Blue Shield

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

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Leadership Challenge #4
1999
Beginning

2000 - 2002
Embedding Innovation

2003 - 2004
Point of Leadership Tension & Transition

2005 - 2007
Innovation Burst

2008 - 2009

2010+
Turbo Charge

Focused Innovation

Maintaining composure in the face of turbulent times


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

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Focused Innovation

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

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Drive the Right Portfolio

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

X%

Y%

Z%

Blue Shield

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

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Innovation Results Products

Vantage laundry pair


First washer with a USB port
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Gladiator Bike Claw


A new solution to an old problem
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2011 All Rights Reserved. Based on the book Unleashing Innovation, Snyder & Duarte, 2008 Jossey Bass. Nancy_A_Tennant@whirlpool.com

Four Leadership Lessons in our Journey


4
More Output than Resources

Leaders need to focus efforts in challenging business environment


Sustaining

Steady State/ Continuous Improvement

P U L L

1
More Resources than Output

Breakthrough

Support from the top of the organization


Scaling Launch Proof of Concept

3
Leaders need to challenge content feeling in the organization

P U S H

2
A few leaders will be Innovation heroes
Time

Blue Shield

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

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Leading Innovation
1999
First Steps

2000 - 2002
Embedding Innovation

2003 - 2004
Leadership Tension

2005 - 2007
Innovation Burst

2008 - 2009
Focused Innovation

2010+
Turbo Charge

Composure

Competitiveness

Confidence

Curiosity

Focus

Composure

Blue Shield

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

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Blue Shield

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

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Blue Shield

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

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