1991 Global Outlook Optimas Award ProfileBRWhirlpool Corp
You could send out 140 memos listing all their phone numbers and hope that they network. Or, you could do what Whirlpool did—bring all the company's top managers together for a conference where they could meet each other, talk strategy and become true architects of the new global company. As you might guess, the second plan was the better choice, and was one of Whirlpool's key tools in going global.
When Whirlpool acquired the $2 billion appliance division of N.V. Philips Gloeilampenfabrieken of the Netherlands in 1989 and created Whirlpool International B.V., it was both an exciting and challenging opportunity. In one fell swoop, Whirlpool now operated the largest European division of a major American home appliance manufacturer and had become the largest white goods company in the world. Only 10% of Whirlpool was global before the purchase. Today, 40% is global.
It was a tremendous responsibility—and Dave Whitwam, the company's president and CEO, was ready for it. On paper, the sale was final, but the real work had only just begun. Whitwam knew the company's international and domestic managers needed to be integrated into one cohesive global team, and he knew just how to do it—by starting with a meeting of the minds.
That's exactly what happened. For a week in June 1990, top executives from the company's U.S., North American and European operations from 16 countries attended "Winning Through Quality Leadership: One Global Vision," a worldwide leadership conference in Montreux, Switzerland, that Whirlpool created exclusively for them. It was so successful that Whirlpool has made it a yearly event, and this year, they all met again in Washington, D.C., to continue the conversation.
Those first seven days in Montreux, however, launched the company ahead in time by an estimated three to five years in the integration of its global management team, and saved the company millions of dollars in the process.
For its unique globalization efforts, Whirlpool was recognized by PERSONNEL JOURNAL as a 1991 Optimas Award winner. The award is given annually to 10 companies displaying excellence in human resources management from competitive advantage to managing change.
Whirlpool is the winner in the Global Outlook category, which is given to an organization that has developed a program or strategy to help the company succeed in the world marketplace. Faced with an ever-shrinking American market, Whirlpool management first developed its global strategy back in 1983, six years before the Philips purchase, in anticipation of expanding into new commerce frontiers.
Although Whirlpool had equity positions in Canadian and Brazilian appliance manufacturing firms for several years before the Dutch acquisition, the company essentially had been a mid-western U.S.-based firm since its creation 80 years ago.
When the vision finally became a reality, Whirlpool's executive committee decided to create an open forum in which all the managers could develop the new organization from the inside out, and the idea of a worldwide conference was born. The conference was designed to achieve four objectives:
- Advance a unified vision of the company's future
- Instill the idea of embracing the future as one global company
- Establish a keen sense of responsibility within the leadership group for creating the company's future
- Identify and initiate explicit steps toward integrating various activities and ideas throughout Whirlpool's worldwide operations into a unified whole.
Whitwam called on the HR department to design the conference around these objectives, with the help of qualified consultants, such as Howard Perlmutter, professor of social architecture and management from the Wharton School at the University of Pennsylvania.
Whirlpool's corporate vice president of HR, Ed Dunn, headed up the team that put the conference plan together. He was assisted by Tom Helton, corporate director of leadership and organization development, and Nancy Snyder, director of organizational effectiveness.
One of the first questions that the conference designers grappled with was: Could a midwestern firm, in which a significant number of U.S. senior managers didn't even have passports, accelerate into becoming a global company by internalizing a group of people working in a Dutch company?
The answer, according to Perlmutter, was a resounding yes. "My view is that, while we think of Americans as not really having international experience, I had enormous faith in midwesterners' capacity to operate at the level of individual to individual," says Perlmutter, who has more than 30 years' experience consulting with firms that have taken their places in the global business community.
The conference architects determined that the first goal of the conference was to encourage managers to think of each other not as foreigners, but rather as business partners. The second goal was to give them the right amount of time and tools they needed to identify the company's challenges and create solutions to move Whirlpool's worldwide businesses forward.
But what did the participants really want to accomplish? What did they not want to see happen? What would make it a success in their eyes? If they were going to be the architects of a new global company, they might as well start by helping design the seminar by giving comments and suggestions. So nine months before the conference was to begin, the meeting planners asked them—all 140 of them.
"We wanted to ensure that this conference truly reflected the hopes and concerns of Whirlpool leaders worldwide," says Helton. "The only way of achieving that aim was to get out there and listen to what they had to tell us."
Interviews were scheduled with each conference delegate in the U.S. and in Europe, by members of the design team consisting of five American and six European managers, mostly from human resources. All information was confidentially gathered and stored on a database file which was fed back to the U.S. team via a direct computer link.
One delegate summed up the group's primary concern: "I want to be able to pick up the phone and discuss my problem with my colleague on the other side of the Atlantic. Today, I don't even know who he is."
Another manager focused on the other widespread concern: that the meeting shouldn't be a pep rally, without a solid focus. "The worst thing that can happen is that we all get wildly excited about the vision, but we leave without a clear idea of how we're going to turn it into reality."
Additional data from the delegates' input indicated that nothing should be left to chance. From the time Whirlpool executives arrived in Montreux to the time they left, each hour would be organized for each participant. Even seating assignments would be predetermined with an on-site, computer-generated "spreadseat" plan, so that individuals from various cultural backgrounds would sit next to each other and could mingle during lunch and dinner.
In some cases, European managers didn't know each other, although they had worked in the same company, so this also gave them an opportunity to put faces with names.
Encouraging a cultural mix between the managers during the meeting was crucial, although the conference designers knew they'd have hurdles to overcome. For example, the entire conference was conducted in English, although for 50% of the attendees, English was a second language. Delegates came from such countries as Sweden, France and Spain. It can be tiring for these individuals to listen to English all day, and their tendency usually is to take breaks with other managers who speak their native language.
"People gravitate to their own national backgrounds, or cultural cocoons," says Perlmutter. "They were told up front: 'Don't do that.'"
Although some non-native English speakers wanted to practice their English throughout the conference, others could get direct translations of speakers' presentations or any other materials through on-site interpreters in French, German, Italian or Spanish.
The conference plan might seem overly structured, but the result was just the opposite. Because managers didn't have to think about their every move, they were free to involve themselves in the true work of the conference—meeting, getting to know, and working with, their colleagues.
"That's what made this unique," says Dunn. "There are other companies that bring everybody together, have dinner and then go home. We made sure ours wasn't like that." Not only did managers have to attend, they had to participate. Because they had to put more into it, they got more out of it.
"If it had just been a let's-get-to-know-each-other conference, it wouldn't have been enough. I know you, you know me, but so what?" says Perlmutter. They also needed to focus on critical, problem- solving issues.
Each participant asked to attend four of five workshops on the topics of:
- Strategic planning
- Human resources
- Research and development.
Each workshop was three hours in length and was conducted by a cross-national team. The vision and quality workshops were mandatory. Whitwam also conducted four small group meetings to discuss the company's vision in an interactive question-and-answer session with every manager.
Executive committee members conducted group presentations, which the conference design committee helped them prepare. Whirlpool's philosophy is that its leaders are its best teachers—so they created discussions around tightly honed topics that would be of greatest interest to managers. Each of these sessions also included time for one-on-one discussions of the topics at hand.
"The traditional role of HR has been that of the teacher, the trainer. The role of HR in the future isn't that of trainer, but is to prepare the leadership of the corporation to do the teaching," says Helton.
In addition, nine world-class speakers from outside the organization, such as professors Yves Doz from France's Instead University and Stan Davis from Harvard, spoke to conference attendees on global and future-oriented topics. The conference planners also spent a great deal of time with the speakers to fill them in on Whirlpool history and direction; then all the speakers' presentations were closely scrutinized for content before the conference to ensure applicability with corporate and conference objectives.
One of the most-interesting projects of the conference was an invitation for managers to identify which major areas of the company's operations needed work. Delegates met in small groups during the first few days of the conference to focus on topics of concern. Some topics were suggested by the conference designers to get them started, but managers were encouraged to submit their own. More than 200 areas were identified by the groups, then were boiled down to 15 topics by Whirlpool's executive committee.
Fifteen cross-functional and multinational groups were created to study these 15 topics, and then each manager was assigned to one of the groups, which were called "Whirlpool One Company Challenge" teams (WOCCs). In most cases, the multinational teams consisted of half European managers and half U.S. managers. Their goal was to study and develop their individual topics in the next year, and present their conclusions and suggestions at the next worldwide leadership conference in Washington, D.C.
The 15 WOCC committee challenges included such themes as: global management reporting systems, concept to consumer-product delivery cycles, global product strategy reviews, global quality initiatives and development and management of the corporate talent pool.
In the year following the Montreux conference, WOCC team members conferred with each other by phone and group meetings (as many as 12), and reported their progress in The Leading Edge, the company's newsletter for Whirlpool's worldwide leaders.
They also were encouraged to solicit ideas and feedback from other managers in other WOCC teams through individual consultation and the newsletter.
Each group submitted a paper on its topic and made a short 5 to 10- minute video presentation at the Washington, D.C., conference in June 1991, for which the theme was "Creating Value." Whereas the first conference dealt with the company's "software" (its managers), the second was geared more toward "hardware"—more-specific corporate business, says Dunn.
Post-conference interviews also were conducted after each worldwide meeting to see if the conference goals were achieved. Although you never can please everyone, says Helton, response from delegates has been quite positive.
"The first day these were 140 strangers, but by the last day, they were 140 very close colleagues," says Dunn. "You can't globalize your company unless you first globalize your people." To be effective, employees need to know and understand each other before they can work together, he says.
Although the conferences are only one part on a continuum of leadership activities for Whirlpool managers, they've been the focus for globalization.
One Whirlpool employee describes it on a more human scale: The first conference was like getting to know a new lover. By the second conference, the honeymoon was over. After having lived with each other for a while, the two now are more aware of each other's bad habits and how to figure out daily tasks, such as balancing a checkbook.
For Whirlpool managers, although the initial excitement has passed, they understand better how important the basic relationship is and have found a global way to keep it going.
Personnel Journal, December 1991, Vo. 70, No. 12, pp. 39-45.