Innovationm at Whirlpool: Creating a New Competency

SUBMITTED BY NITHIN PRERANA RAHUL JAISWAL UJWAL

WHAT IS SHRM?
Strategic human resource management has been defined as the linking of human resources with strategic goals and objectives in order to improve business performance and develop innovative organizational culture that foster innovation and flexibility.

OBJECTIVE:
This case is about the organization development (OD) initiatives undertaken at Whirlpool Corporation (Whirlpool) to create a new core competency in the form of building an innovation culture within the organization.

Introduction:
The Whirlpool Corporation is an American multinational manufacturer of major home appliances headquartered in Benton Charter Township, United States. In 1911, Three brothers-Frederick , Louis and Emory Upton- set up a company, Upton Machine Corporation at St. Josephs , Michigan , USA. In 1929, Upton Merged with Nineteen Hundred Corp of New York , USA began entering global markets, and sold its washers in Europe and Asia. In 1950, Nineteen Hundred Corp officially changed its name to Whirlpool.

April 25, 2006 ,Whirlpool Corporation net sales = US$3.5 billion Net earnings during that period = US$118 million Analysts attributed this increase to the company's innovative products.

Whirlpool had come a long way from where it had been in the late 1990s . According to analysts, this was a direct result of the stagnation in its product line caused by very little attention being paid to innovation.

Top managements conclusion by late 1999 - cut 10% of its international workforce and initiate restructuring of its global operations.

HR Strategy used by Whirlpool

Efforts by David R. Whitwam, chairman and CEO of Whirlpool, in 2000. change in the company's corporate culture and embed innovation as a core competency.

Mr.Whitwam's organizational goal - Increase sales and customer loyalty within 2 years.

HR strategy : to make innovation a core competency at Whirlpool.

Steps taken to align the organizational goal with human resource:

In late 1999, HR dept started the innovation initiative by inviting ideas from all the employees.
25 best employees from the company's European arm sent to the headquarter at Italy.

Their assignment - brainstorm and come out with ideas regarding new products or services. I-box" strategy.

RESULT
Revenues from innovative products were almost US$800 million in 2005 as compared to just US$10 million in 2001. The share price had also doubled.
Between 2003 and 2005, Whirlpool's revenues had grown at an average of 9% per annum

As of April 2006, Whirlpool's innovation pipeline had 568 projects under development of which 195 were being scaled up for commercial launch. The company expected these new appliances to rake in another US$ 3.3 billion in annual sales once they were launched

CONCLUSION

HR strategies when aligned with the business goals of the organization, at whirlpool, worked as a turnaround strategy and changed the face of the company completely. Every organization can thus, rely on the HR strategies partially, if not completely, and create the magic of success.

Thank You.