Sometimes we need to go back to basics when things aren't working as well as we think they should. For many companies, achieving consistent and predictable returns from spending on R&D and innovation is a nagging problem. This is not the case at Whirlpool, the global leader in large household appliances. Whirlpool defines innovation well. They also teach it well.
We interviewed Randy Voss who gave us some insights into his company's "Innovation 101" program. He is a headmaster well suited to the task, being Whirlpool Corp.'s Senior Manager, Global Strategy and Business Development. Randy came to Whirlpool after 22 years at Panasonic where he earned the distinction of being their Salesman of the Year in 1989. At Whirlpool, Randy is a Certified Innovation Mentor which he described as an "Op X black belt."
Roughly $4 billion of Whirlpool's 2008 $19 billion in revenue results came from their innovation areas. This compares to $2.7 billion the previous year and $1 billion the year prior for this Benton Harbor, Mich.-based company.
According to Randy, the big changes started happening in the late 1990s when then CEO David R. Whitman and consultant Gary Hamel started giving shape to programs. Randy credited VP Nancy Tenant Snyder, who has published books on innovation, with driving some of these changes.
Q: What is Whirlpool's definition of innovation?
A: We struggled with this like a lot of companies and now have a good set of qualifiers. If you came to the company two to three years ago and asked "What's innovation?" you would have been given different answers all over the place. We now have a definition that is clear, crisp and to the point. Our three definitive criteria for innovation are:
- It allows us to have a unique and compelling solution that a customer validates,
- It offers us a real and sustaining competitive advantage in the marketplace,
- We get extraordinary value from it -- better payback -- something above what we earn today.
Innovation is an interesting buzzword. It is on every corporate jargon list out there right now. It is on every mission statement. It has become a catchphrase for everything. It cannot be that. What comes to mind is the IBM commercial with people lying on the floor staring at the ceiling "innovating." It needs to be something more real than that and there needs to be measurable returns.
Q: What about your definition of marketing? How does that definition change as you go to different parts of your organization?
View article on one page