How do you keep tabs on all the innovations circulating in a company with 68,000 employees, 14 major brands, and more than 70 manufacturing or R&D facilities around the world?
We spoke with Moisés Norena, Global Director of Innovation at Whirlpool Corporation, to understand how the Michigan-based maker of appliances and home products uses its internal innovation dashboard. You can see the dashboard below; just click the image for a larger view.
What the dashboard does: It’s a mechanism that allows innovation to be present when our executives have operations meetings. When they’re discussing market share, profits, and sales, we also want them to be able to look at innovation. We have three basic metrics for innovation. The first is what is in the innovation pipeline [“iPipeline,” below]. For that, we estimate the value for a given project, once it hits the market. The second is innovation revenue [“iRevenue,” below]. Once a product hits the market that we have categorized as an innovative product in our SAP system, we measure that revenue separately, so we can have a good feel for the mix. And the other metric is EOP lift. [Within Whirlpool, EOP stands for External Operating Profit — but think of it as earnings.] We believe innovation has to have differentiated shareholder value. The way that manifests in the financials is a higher percent of EOP than a base business. The dashboard is interactive, so you can click around it by region or by product.
What the colors mean: Green is on target, yellow means it’s not quite on track, and red means we’re behind the target.
Who has access to the dashboard: We share the top line data with the whole organization, and when we report to Wall Street. But not everybody at Whirlpool can use the dashboard. It’s primarily there for the people within each business that have innovation accountability, mostly VPs and above.
How new businesses fit in: If it’s not something like a washer, dryer, or refrigerator, it’s in an Independent Business Unit. Those are businesses that have to be isolated from the core business, like the EveryDrop water filter, or Gladiator GarageWorks organization system. Those are new things that need some incubation. There is a separate reporting environment we use to look at all of those emerging business units, so they can be seen separately, not just as part of this overarching view.
Why we have an interactive dashboard: I do think what really matters are the metrics behind it. But the fact that it is visual and interactive just makes it more appealing. This particular iteration of the dashboard was developed in 2011, when we launched a program internally called Innovation Turbocharge.
Who built and maintains it: We built it internally. It’s updated quarterly by the finance group, and also the global product organization. To try to avoid overburdening people, we didn’t think we needed to do it monthly. I’m more of a custodian of the dashboard, and I was part of the design process.
Explaining the acronyms: Under iPipeline, where you see “Post WDT,” WDT means Winning Definition Tollgate. That is the initial tollgate on our stage gate product development process. And lower down, when we talk about “EOP Lift,” that means that innovations must deliver higher EOP than a base business, therefore EOP “lift” (how much higher than base is it) is reported. EOP stands for External Operating Profit. Basically, earnings.
Questions for Moisés? Post them below…
(Note: Some sensitive data has been concealed.)