Three years ago,
the nation's biggest appliance maker, $10 billion Whirlpool
(WHR),
seemed to have reached a dead end. Sales growth had stalled. Price
pressure was unrelenting. And though profits were holding steady, it
was partly because of brutal cost cuts the company had imposed
throughout the 1990s. As for the opportunity to turn things around
with a breakout product -- well, let's face it: Washing machines are
washing machines. "It's a stalemate industry," Whirlpool vice
president Nancy Snyder admits. "If you walk into the appliance
department at any retailer, everything looks the same. We call it
the sea of white."
David Whitwam, Whirlpool's chairman and CEO, came up with an idea
to save the 90-year-old American brand from ossification: He'd put
his employees in charge of helping to plot the company's future.
Whitwam called corporate innovation guru Gary
Hamel, whose consultancy Strategos was known for helping
companies launch employee-run skunk
works. A Strategos team parachuted in and picked two dozen
workers from every part of the company's U.S. operations to head up
a new-ideas team. Whitwam set aside $50 million, or 20 percent of
Whirlpool's entire research and development budget, to get the ideas
launched.
The first results of that experiment are finally in. In November
the company unveiled Gladiator, its first major brand in nearly 50
years, joining Whirlpool, Kenmore, KitchenAid, and several others.
But Gladiator doesn't wash clothes, do the dishes, or make dough. It
consists of slick-looking appliances for tidying up a garage: hooks
for a wall organizing system, tool chests, even a "Beer Box" -- a
supersize fridge for suds. While the old Whirlpool machines appeal
mainly to women, the new Gladiator line, called GarageWorks, beckons
to workshop-proud males between 35 and 55. Now on sale in 850 Lowe's
(LOW)
stores around the country, Gladiator is expected to generate $300
million in annual revenue by 2007. Whitwam is so encouraged that he
has since upped the skunk-works budget by 60 percent to $80 million.
Gladiator's emergence from the suggestion box could be considered
a small miracle. Some execs fought Whitwam's program at first;
others were simply nonplussed. When Todd Starr, a former warehouse
manager and logistics expert, was chosen to join the ideas group, he
went to his boss and asked, "Can you make that go away?" But
eventually he warmed to the task. First, Starr and others set up an
intranet site where any of Whirlpool's 25,000 U.S. employees could
post ideas for new products. The team tracked an idea as either
"gearing up," "in limbo," or "shelved." If it had legs, the employee
who suggested it would pair up with a "sponsor" like Starr, then
pitch the "I-Board" -- a kind of internal venture capital outfit --
for R&D funding. After a group of marketers and engineers sent
in their brainstorm for the garage, Starr led Gladiator from concept
to working prototype in six months. (With trial came error, of
course; last year 73 new ideas were mothballed, including
"KleenShoe," a gizmo that cleans your brogans while they're still on
your feet.)
New additions to Gladiator continue to pop up on the company
intranet. Last year six workers at a Whirlpool manufacturing plant
in Oxford, Miss., asked company president Jeff Fettig to check out a
mock-up. What they had built was an all-in-one tailgate party system
for the car, with a microwave, refrigerator, and beer tap all built
in. Called Gater Pak, it fits snugly in the back of a minivan or SUV
and slides under the Gladiator workbench for handy storage. It's due
in stores in time for next football season. Gater Pak's product
manager? Erstwhile warehouse boss and reluctant innovator Todd
Starr. 
Suggestion-Box R&D Ideas from the rank and file that got Gladiator
to the garage. |
Concept to prototype: 6
months Target customer: 35- to 55-year-old
male Projected revenue by 2007: $300 million |
| 1. Tough-guy tread
plate. A worker at one of Whirlpool's manufacturing
plants suggested using muy macho tread plate -- the
nonskid steel surface on the bumpers of fire trucks -- to
finish the cabinets. |
| 2. A nod to
neatniks. Flecks of gray in the "hammered granite"
paint help disguise dust. |
| 3. Supersize
everything. Casters and door handles are all larger
than necessary, making the cabinets look extra-sturdy. |
| 4. Creature
comforts.The 2-foot-wide Beer
Box keeps frosties cool in the summer, and its built-in heater
keeps them from turning into ice blocks in the
winter. |