Apresentação de Nancy Tennant No 3º Congresso de Inovação

Washing Machine
Innovation Machine
UNLEASHING
I N N O V A T I ONN
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©Dr. Nancy A Tennant All Rights Reserved
2009 Based on the book Unleashing Innovation, Snyder & Duarte, 2008 Jossey Bass.
Nancy_A_Tennant@whirlpool.com

Innovation is the process
that transforms ideas into
commercial value

Innovation is the conversion
of knowledge and ideas
into a benefit, which may
be for commercial use or for
the public good; the benefit
may be new or improved
products, processes or
services
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I N N O V A TT II OO NN
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THE
WHIRLPOOL CASE
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I N N O V A T I O N
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Global ~ $20 Billion in Sales
Unit
Share (%) – ~ #1 Global Market Share
253 million
units ~ 70 manufacturing and
technology centers
“We sell 1.5 appliances per second ~ over 5,000 in the next hour”
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1911-1948 1948-1980 1980’s 1990’s 2000+
1 2 3 4 5
Single Product, Brand
Single Multi-Product Multi-Brand, Focused
Customer, and Whirlpool International Globalization Value
No Brand Brand Expansion Creation
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No consumer
differentiation
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-2.3% CAGR from
’92 -’99
Average Ticket ($)
1992 1993 1994 1995 1996 1997 1998 1999
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Rejected … Adopted …
 Cookie Cutter  Innovation must come

Approach from Everyone
 Great Man Theory  Tap the best thinking in
 Training only 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
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2000 2004 2006 2009
Start Up Focused Value Extraction Re-Igniting
75 Diverse People Defining Innovation Value Capture Emphasis Recession Impact
Regional I-Boards Branded I-Boards I-Box for innovators to judge Open Innovation
Seed Funds Trained 18,000 Salaried themselves Process, Non product
450 Leaders Trained Tied Capital to Innovation Focus on Global Leverage Training Thousands of New
People
Innovation Tool Kits Redesigned Product Dev’t. Trade Partner/Supplier Innov
Social Network Innovation New Business Model
Resources: People & Funds Balanced Scorecard
Beginning to become stagnant Go To Market Innovation
I-Pipe Sr. Leader Compensation
Knowledge Management Metrics and Reporting
Internal Communication I-Mentors
Hardwiring
. . . Hundreds . . . Thousands . . . Tens of Thousands . . . New Spaces
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The Business
Case for
Diversity
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2000 2006
$2,398
$698 Dryer Match Rate=96%
Dryer Match Rate =15% Pedestal Match Rate=60%
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2006 2008
$2,398 $3,000
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$375
$350
Innovation
Average impact is
Ticket ($) $325 significant
$300
$275
$250
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
'97-'02 CAGR = (3.4)% '02-'06 CAGR = +5.9%

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$ Billions
Pipeline Innovation
Revenue
5.00
4.00
3.50
3.30 3.30
2.50
2.00
1.30 1.60
0.20 0.75
0.10
2003 2004 2005 2006 2007 2008

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Q1. How do you make innovation:
 Scalable
 Sustainable
 Second-Nature
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Innovative
Organizations
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I N N O V A T I O N
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Innovative
Entrepreneurs Organizations
thru Diverse Teams
Inventors
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Organizations Innovative
That innovate Organizations
 Big innovation require “special  Innovation is a “common cause”
cause”  Continuous flow of innovations,
 Partner, consultant, non repetitive big and small
processes  Predictable and casual
 Present energy  Disrupts status quo
 Change-based innovation  Organizational confidence to
 Car can race but not built to race innovation—present and
 Often one hit wonders or potential energy
intermittent innovation  Car built to race
 Migration paths institutionalized
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than Resources
More Output
Steady State/
Continuous
Improvement
Sustaining
Breakthrough
Resources than
Scaling
Output
More
Launch
Proof of Concept
Time
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Launch
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Scaling
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A FISH…no matter how well sighted, cannot
see the WATER in which he swims.
Attributed to S. Ghosal, INSEAD
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1
Strategic Architecture
Aligned vision and goals
3 Governance Rewards 10
Business Operating Systems

Re-engineer and/or Adapt
Standard and
4 Common
Operating Talent 9
Practices
5 Metrics and
Reporting Resources Key Initiatives Learning 8
6 7
Change the Systems….Free the People

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Hardwire
Innovation to
Your
Management
Systems
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1. Unique and compelling
consumer solutions
2. Creates sustainable
competitive advantage
3. Creates superior
shareholder value
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WHIRLPOOL I-BOX To be completed for all innovation projects
Project name:
Project leader: name of person leading this project Region: e.g. Latin America, Europe, India
Last C2C tollgate: enter last tollgate passed Brand: e.g. Whirlpool, Brastemp, Consul …
Market launch date*: quarter and year e.g. Q3 2009 Category: e.g. Cooking, consumables, license
Steady state net revenue: enter revenue run-rate** Concept score: Uniqueness – A, B, ..
(if applicable) Likeability –
Type of innovation: VE 2: new product VE 3: new business
(circle) VE 1: core products/ VE 4: new channel/
replacement business model
Project description: Insert Product or project photo(s)
 Insert a brief description of what the project is and does –
(product/service/process or cost innovation)
 Possibly include how it works
 …
 …
Consumer insights and benefits:

1. Insert top 3 reasons to believe for a consumer at the point of
purchase – why will a consumer think it is innovative? What are
the benefits offered?
2. …
3. …
* Market launch = open to ship date

** If VE 1 run rate after 12 months, if VE 2-3-4 then run rate after 24 months
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Shareholder value
Innovation
6.5
3.0
3.0 6.5
Customer loyalty
A) Compelling consumer solution (5 points)  Use 3 or 4 key bullet points to outline the customer needs
Outline customer needs and related solution(s) which and the related solution(s) which address these needs.
address these needs. (Circle number)  How are these aligned with the top needs/attributes for the
0 1 2 3 4 5 product category and brand e.g. cleanability etc? Does this
align with the brand performance curve?
 Include evidence to prove that this is a compelling consumer
Little proof Moderate proof Strong proof solution e.g. VOC data, concept test scores, influencer
(low scores and no (medium scores and (high scores and network comments, habits/practices research …
supporting research) positive research data) strong research)
 What experiments were run to confirm the reaction of
consumers?
B) Willingness-to-pay or market share gain (2 points)  Describe any pricing research or evidence that consumers are
0 1 2 willing to pay more for this innovation over a comparative
product – if so, how much more?
Little proof Moderate proof Strong proof  If there is no gain in pricing, what is the expected gain in
(No research or (Pay a little more with (Will pay more market share (%)?
market share gain) no share gain) and gain share)
C) Unique consumer value (3 points)  Will any competitors in the region offer this solution at any
Outline differentiation from competition at time of price point or have a close alternative at the time of launch?
launch (not today).  How is this solution different from the competition?
 Would a consumer be able to understand the improvements?
0 1 2 3
 Would our trade partners be willing to displace a
competitive product on the floor or add new floor space for
Nominal advance Significant advance Disruptive advance this solution?
(meets competition) (clearly outperforms (step change better
competition) than competition)
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Shareholder value
Innovation
6.5
3.0
3.0 6.5
Customer loyalty
D) Competitive Advantage or sustainable migration  How is this solution driving towards the „dreamspace‟ for
path (4 points) this category or business? Show the migration path (separate
(Circle number) supporting page)
 How long will this solution have an advantage over
0 1 2 3 4 competitors? (1-year, 2-years, …)
 Is there any IP to protect? Patents or IDS filed?
Weak short term Moderate advantage Dominant,  Are there other reasons to believe that there is a sustained
advantage or with reasonable defensible long-term advantage e.g. partnerships, distribution network, planned
defensive move protection position
cadence of innovation?
E) Differentiated Shareholder Value (6 points)

“Bigger projects are better” “Must generate more margin” “Less capital higher return is better”
Balance of Sale (%): EOP Lift (%): EVA/capital index:
% of total branded product group % higher than regional, brand product EVA $ divided by capital required $
x 2.0 points family average (comparative base) x 2.0 points
x 1.5 points x 2.0 points x 1.5 points
x0.5 points x. 1.0 points X 0.5 points
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 The innovation “machine” is a set of processes and mechanisms
that enable innovators to convert ideas into innovations.
 This machine carries innovations from idea to commercialization.
 It is often a series of stages where ideas progress with key decision
points known as tollgates.
 I-pipe’s key job is to not allow too much structure to kill the idea in
its formative stages and to reduce risk to the enterprise by
experimentation and learning as it matures through the pipeline.
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I-mentors are to
innovation what
master black belts
are to six sigma
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I N N O V A T I O N
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Discovery Synthesis Realization
Create
Breaking Generate Generate EXPERIMENTATION
business
Frameworks Domains ideas
plan
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DISCONTINUITIES
COMPETITIVE CORE New

LANDSCAPE COMPETENCIES Creativity
Business Go To Market
Tools
CUSTOMER
ORTHODOXIES EXPERIENCE
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BIG IDEAS Ideas

From What We (Big and Incremental) EXPERIMENTATION
Don’t Know from What We Know
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Whom do
•Consumers, B2B,
we
serve? Segments
•Products, solutions,
What we services, benefits,
provide? knowledge, safety,
conformance,
•Cost/pricing/value
Economic
Engine models for making
money
Differentiate
•Brands, reputation,
and
sustainable marketplace cadence
•Direct,
How do
partnerships,
we
provide it indirect, publish,
reports, audits
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Expand
New
Explore new
Products, services
the core opportunities

and processes
Existing
Win in our
Leverage
core
the core
businesses
Existing New
Channel or business model

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I N N O V A T I O N
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 Civil and Political Rights: Right to life and liberty, freedom of expression and
equality before the law.
 Social, Cultural and Economic Rights: Right to participate in culture, the right
to food, the right to work and the right to education.
Organization Rights
(Freedom from Drudgery)
The right to learn, create, dream, become a hero and

experience the spirit of winning through innovation.
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Maslow's hierarchy of needs
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• Learn
• Create
• Dream
• Heroes
• Spirit
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Phase I Phase II Phase III Phase IV
(A) Expansive (B) Idea (C) Problem

Thinking Forming Solving
Idea Converting Providing

Collecting
Generating & Ideas to unique
insights
Screening innovations solutions
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• Creativity is the ability to solve
problems and the ability to
create knowledge
• Need to CREATE is built into
our DNA
• Most organization have
established barriers to
creativity...ON PURPOSE
• Tools and training are only the
food on the table for creativity,
rational drivers must enable it
Whatever creativity is, it is in part a

solution to a problem
–Brian Aldiss
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A negative space to be filled with
action
3 types of Dreams:
• Working dreams-- bringing ideas
from the subconscious into the
workplace
• Dreamspace– the vision or
imagination to think outside the box
• Social dreams—building on each
others dreams in a ideation session
“Dreaming is an act of pure imagination, attesting in all men a creative

power, which if it were available in waking, would make every man a Dante
or Shakespeare
~H.F. Hedge
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• The process of innovation
creates “Heroes”
• Classical Heroes …
• With personal sacrifice
achieve a personal gain
• Willing to go to great
personal risk and sacrifice for
the good of their community
• Are warriors that beat the
odds while overcoming
obstacles to bring NEW
knowledge to the world
Heroes create circumstances,

circumstances create heroes
~Chinese proverb
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The Spirit of Winning
Morale and Engagement at Work
Spirit creates a virtuous cycle of

innovation
Esprit de corps: competitiveness,

confidence, composure and
focus
“Morale is the state of mind. It is steadfastness and courage and

hope. It is confidence and zeal and loyalty. It is élan, esprit de
corps and determination “
-George Catlett Marshall
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Apresentação de Nancy Tennant No 3º Congresso de Inovação

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Apresentação de Nancy Tennant No 3º Congresso de Inovação

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Washing Machine

1992 1993 1994 1995 1996 1997 1998 1999

 Cookie Cutter  Innovation must come

. . . Hundreds . . . Thousands . . . Tens of Thousands . . . New Spaces

'97-'02 CAGR = (3.4)% '02-'06 CAGR = +5.9%

2003 2004 2005 2006 2007 2008

Business Operating Systems

Change the Systems….Free the People

Consumer insights and benefits:

* Market launch = open to ship date

E) Differentiated Shareholder Value (6 points)

COMPETITIVE CORE New

BIG IDEAS Ideas

the core opportunities

Channel or business model

The right to learn, create, dream, become a hero and

(A) Expansive (B) Idea (C) Problem

Idea Converting Providing

Whatever creativity is, it is in part a

“Dreaming is an act of pure imagination, attesting in all men a creative

Heroes create circumstances,

Morale and Engagement at Work

Spirit creates a virtuous cycle of

Esprit de corps: competitiveness,

“Morale is the state of mind. It is steadfastness and courage and

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