Optimizing Innovation - Moises Norena of Whirlpool

by Braden Kelley

We are happy to bring you some of the key points and insights from Moises Norena's talk at the Optimizing Innovation Conference, which was held October 21-22, 2009 in New York City.

Moises Norena, Director of Global Innovation at Whirlpool, spoke about how his job is to lead a three person team that works on the infrastructure that enables innovation in the company. He commented about how the theme of the conference - optimizing innovation - creates a bit of a paradox because optimizing innovation is about taking out risk, but innovation is all about risk.

Moises spoke about how their innovation focus from the beginning has been to build a culture, not a group of innovators. They are trying to follow an embedded innovation approach. "Growing a bean plant instead of a can of beans."

Their initial goal was to create one definition of innovation:

• Unique and compelling consumer solutions


• Creating sustainable competitive advantage


• Creating superior shareholder value

Whirlpool's innovation process is organized by regions and brands and built around an s-curve with the following stages:

• Launch


• Proof of Concept


• Scaling


• Sustaining


• Creating Results


• Continuous Improvement

They go thru a process focused on discovery, synthesis, and realization. Challenging orthodoxy is one of the key components. In challenging the orthodoxy of appliances being purchased by women to go into the kitchen, we came up with the Gladiator brand for men to go in the garage (organization).

Whirlpool started with a centralized approach, but has since moved to a more decentralized model focused on training people to become i-Mentors and then embedding them in the business. i-Mentors are to innovation what black belts are to Six Sigma. They have about 1,000 iMentors out of 70,000 employees.

Whirlpool flags certain products as innovative in their systems, and tracks whether they drive greater earnings or greater customer satisfaction (consumer perceptions). They have four very traditional innovation focus areas:

• Innovating in the core


• Leveraging the core


• Expanding the core


• Exploring the whitespace

Whirlpool has been on their innovation for nearly ten years now and some of their key learnings have been:

• In their employee survey, the #1 employee engagement pillar continues to be that people like working for an innovative company


• It is crucial to identify the right customers and suppliers of innovation to create the bridges for success in innovation


• You must have people that focus on introducing the innovation in the marketplace - not just on its development

Unlike some companies, Whirlpool chooses to keep those that created the idea involved, even though others may be leading development and launch. They also choose to bring in industrial design early in the process, and fund new businesses from a seed fund at corporate.

And finally, when it comes to rewards and recognition, product groups have up to 1/3 of their bonus metrics focused on innovation (pipeline value and product value) and they also focus on other very visible rewards and recognition.

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Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.

Innovation Perspectives - What exactly is an innovation strategy?

This is the seventh and final 'Innovation Perspectives' article we will publish this week from multiple authors to get different perspectives on The Importance of Innovation Strategy:

by Rowan Gibson

At many companies, the term 'innovation strategy' refers simply to an agenda for new product development or a technology roadmap for R&D. This is like picking up a single leaf in the forest and calling it a tree. Innovation strategy is not merely about the next product launch or patent registration. It's about exactly how your company intends to become (or remain) a world-class innovation champion. Let's face it, not many organizations have so far managed to build a deep, enduring capability for innovation - one that consistently drives profitable revenue growth and that delivers a strong competitive advantage over the longer term. This should be the highest goal and purpose of any innovation strategy.

The real strategic issue facing every company is this: How are we going to create growth and shareholder value in the future?

Sounds like a simple question. But organizations have had a wide variety answers at their disposal over the last few decades. For some, the solution was going global, or cutting costs, or improving quality. For others, it was raising productivity, or offering the best customer service, or standing out with excellent product design. Today, however, these traditional strategies are running out of steam. They no longer offer very much potential for driving growth and wealth creation over the longer term. As marketing expert Steve Yastrow put it in a recent blog, they have become nothing more than "basic business hygiene - the 'brushing your teeth' of running a company."

There is a growing realization around the world that organizations have only one strategic option left for delivering growth, company value, market share and competitive advantage. And that's radical innovation - in products, services, technologies, processes, cost structures, marketing strategies, and business models. However, an honest assessment of the business landscape reveals that radical innovators are still very few and far between.

When you pick up a copy of Forbes or BusinessWeek, you inevitably find yourself reading about the usual suspects - a small handful of innovation champions like Apple, Google and Gore. It simply seems incredibly difficult for all those other companies out there to make the transition from innovation laggards to innovation leaders. And that's why there's an urgent need right now for organizations to develop a corporate innovation strategy - a blueprint for building, sustaining, and managing an enterprise-wide innovation capability.

Nancy Tennant, co-author of Strategic Innovation, and former global vice president of innovation at Whirlpool, the appliance giant, says that an innovation strategy should encompass "a wide range of actions that assimilate, incorporate, internalize, and imbue the entire fabric or lifeblood of an organization with the mind-set and skills of innovation."

At the core of this strategy must be a broad-based vision of innovation embedment - a vision that is created and owned by the top team, that is accessible to all levels of the organization, that is both feasible and flexible, that can guide decision making, and that can be clearly and easily communicated. It must be based on a highly systemic view of the organization - a sense of connection, interaction and integration between all of the various parts of the system - where the whole is much greater than the sum of its parts. And it must enable each and every employee to understand the link between their own individual performance and the attainment of the company's strategic innovation goal.

Once this vision is in place and widely shared across the company, the next imperative is to turn strategy into action by making the necessary stepwise changes to leadership commitment and accountability, organizational infrastructure, management processes and policies, resource allocation, knowledge management, employee contribution, rewards and recognition systems, competence development programs, measurement and reporting systems, cultural values, and so on. All of these organizational components need to be hardwired into the company's innovation strategy.

"But stop", you say. "Is all of this actually possible?" Can companies really make the gargantuan leap from boring to breakout, and from insipid to inspired? Consider an encouraging example.

When Whirlpool's former CEO Dave Whitwam set out to define his company's global innovation strategy back in 1999, he chose to call it "Innovation from Everyone and Everywhere." This was a huge aspiration, considering that at the time Whirlpool had 68,000 employees in 170 countries, as well as 50 manufacturing and technology research centers around the globe. But Whirlpool rose to the challenge, and today the company has become a best-practice model for the embedment of innovation as an enterprise capability across a large, global organization.

The key objective of Whirlpool's innovation strategy was to help every single employee to think outside the traditional 'white box' of home appliances, and imagine exciting, customer-relevant solutions that create new wealth for the company. The outcome has been a stream of breakthrough ideas for products and businesses that have come from all over the Whirlpool organization- ideas that have delivered value to consumers in ways never before seen either at the company or in the industry. As a result, Whirlpool has seen a steep upturn in its annual revenues from innovative new products. In the three years between 2003 and 2006, for example, these revenues rose from $78 million to $1.6 billion (a figure over twenty times higher). And the whole strategic transition has made a massive contribution to growing Whirlpool's overall revenues and profits.

Today, the company has well over five hundred projects in its innovation pipeline, representing expected future revenues of $3.5 billion. And, having witnessed the power of Whirlpool's innovation strategy firsthand, current CEO Jeff Fettig is planning no change of course in the future. He told BusinessWeek, "If we keep innovating we'll keep growing."

What Whirpool's example amply demonstrates is that it is entirely possible to turn an 'old-line' industrial organization into a catalyst for continuous, break-the-rules innovation. But it can't be done piecemeal - an innovation reward program here, a corporate venture fund there, or a few days of brainstorming somewhere else isn't enough. Rather, a company has to be willing to recalibrate its whole organizational system around the paradigm of innovation. And that is never going to happen unless it develops a wall-to-wall, top-to-bottom, 'soup to nuts' innovation strategy.


You can check out all of the 'Innovation Perspectives' articles from the different contributing authors on The Importance of Innovation Strategy by clicking the link in this sentence.

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Rowan Gibson is a global business strategist, a bestselling author and an expert on radical innovation.

Keeping Innovation Ideas Flowing

It happened a few months ago, when I was meeting with some people from one of the world's leading consumer goods manufacturers. This is a company where you would expect innovation to have been honed down to a fine art because it has launched a slew of successful innovations over the course of its long, proud history.

But these executives candidly admitted they had a problem. They had started an initiative to solicit ideas from across their organisation. It started well in the first year, slowed down in the second and was almost at a standstill by the third. Like the parents of a delinquent child, they asked "Where did we go wrong?" and it didn't take me long to find the answer.

It's quite typical these days for companies to set up an online suggestion box and ask their employees - perhaps also their customers - to send in ideas. The reason these initiatives tend to start with a bang and then dwindle down to nothing is that most people already have one or two ideas in their pockets.

They may even have been kicking them around in their heads for some time. So the minute somebody asks for suggestions and offers an incentive for submitting them, all those would-be innovators come out and post their ideas.

But soon after this low hanging fruit has been picked and processed, a company usually finds that less and less suggestions are coming in despite the fact that the same incentives are being offered and management continues to beat the innovation drum with the same intensity.

Here's why: people find it far easier to submit ideas they already have than to go through the intellectual work of coming up with new ones.

Don't get me wrong. I'm not against electronic suggestion boxes or idea management software per se. Indeed, one of my key messages is that companies should involve as many minds as possible - inside and outside the organisation - in their innovation efforts. So, essentially, these platforms are a good thing.

The reason they so often fail is that they are way too passive. They simply sit there waiting for lightning to strike. They don't do very much to create the conditions that produce the lightning in the first place.

They don't trigger innovation by inspiring people with new insights and perspectives. They don't train people how to stretch their thinking along new lines. They don't create a thick matrix of connection and conversation between many different voices. And they don't guide would-be innovators on how to turn a wild idea into a concrete business plan.

If you cling to the notion that innovation is something enigmatic and ethereal and that an electronic suggestion box will somehow just pluck ideas out of the ether like a radio antenna, your innovation efforts will not get very far. Instead, you need to build your idea collection system on a deep understanding about how the innovation process actually works.

To put it simply: big ideas are born from breakthrough insights. Go back and look at any case of successful business innovation over the last few decades and you will invariably find that it was about challenging conventional wisdom about how things are done or recognising the power of some nascent trend to upend an industry or leveraging some competence or asset in an exciting new way or discovering some deep, unarticulated customer need.

These kinds of insights are the raw material out of which radical innovations are built. So it follows that, if we want people to continually come up with powerful new ideas and growth opportunities, we have to continually inspire them with a constant stream of fresh, strategic insights.

Indeed, we have to teach them to discover such insights themselves by giving them the right thinking tools and training them to use them. We have to show people how to use eye opening insights to generate eye popping innovations.

One company that has done this highly successfully is Whirlpool, the global appliance manufacturer. Instead of just setting up a passive electronic suggestion box, the company established a sophisticated IT infrastructure several years ago called 'Innovation E-Space' which is open to anyone at Whirlpool who has intranet access.

With just a few clicks, Whirlpool employees can look for inspiration by perusing insights captured on the system, they can use these insights to spark new thinking, they can submit their own ideas and insights, they can build on existing ideas, they can follow an online tutorial on how to turn ideas into business concepts and they can find innovation coaches and mentors in their region who can help them organise seed funding for their ideas.

Whirlpool also instituted a leader led training process (like GE's Work-Out) aimed at enabling their people to continually apply the system to their own jobs.

Over the last five years, Innovation E-Space has had hundreds of thousands of hits from Whirlpool's employees worldwide and has become indispensable to the way people share ideas, learn together and collaborate on innovation projects in the company.

Rather than starting out with a torrent of ideas and ending up with a trickle, the system has gone from strength to strength and has been instrumental in making innovation a daily reality at Whirlpool. Most importantly, it has also helped the company add billions of dollars in innovation generated revenue to its top line.

As for the organisation I mentioned at the beginning, I told them they would have to do much more than just ask for ideas and then sit back and wait for them to come. In fact, I recommended that they take a good look at Whirlpool. And if your company is facing a similar struggle to maintain the momentum on innovation, you might want to do the same.

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Rowan Gibson is a global business strategist, a bestselling author and an expert on radical innovation.