Change at Whirlpool: An Analysis

Topics: Innovation, Management, Stakeholder Pages: 16 (4457 words) Published: June 8, 2013
MGMT915: Change Management
Group Report
Change at Whirlpool : An Analysis

Word count (excluding references): 4000 (aprox)

Abstract
Over the years 1994 – 2003, white goods producers Whirlpool Corporation initiated and implemented changes to their business model to enable them to move from a previously engineering focused organisation to a more customer focused entity. The structure and processes they put in places has since embedded itself in the company’s culture. This report analyses the 2005 Harvard business Review case study ‘Change at Whirlpool Corporation’ using the Hayes and Hyde model of change, Higgin’s 8-S model, Hayes Stakeholder management grid and Kotter’s Model of leadership to examine how senior management were able to initiate and implement the new changes and steps they took to embed these new initiatives in the firm’s culture and value systems.

Introduction

In the late 1990s, Whirlpool encountered stagnating market share, profits and revenues. According to the company's analysts, this was due to the lack of innovation in the product line. Additionally, Whirlpool employees seemed out of touch with their customers' needs. Whirlpool hired a small consultancy firm, Strategos, to help them develop their strategy and structure to adopt a more pro-innovation mindset, which in turn would increase revenues and help revive the depreciating market share. The case also illustrates the steps taken by Whirlpool's management to implement the planned changes. These efforts by the Corporation created consistent growth, increase in market share and in revenue (Rivkin et al, 2005).

In 2003, the company reported earnings of USD 830m and sales of USD 12,176m. Their profit margin was 6.8% (Rivkin et al, 2005). Senior management attributed this increase in revenue to the direct effect of demand for Whirlpool's new innovative products produced and marketed by the company. The current CEO Jeff Fettig said that Whirlpool's performance was attributed to "innovation, productivity, and leverage from our global operating platform" (Whirlpoolcorp.com, 2006).

The 2005 Harvard Business Review case ‘Change at Whirlpool Corporation’ illustrates the steps taken by Whirlpool’s top management team to make innovation a core competence and to bring forward a change in their corporate culture. Analysts felt that these efforts had facilitated pursuant growth in Whirlpool's revenues since 2002. The HBR case illustrates the consistent improvement (OD) initiatives the Whirlpool put in place to create a new culture that focused on innovation and value creation within the organisation. Whirlpool had successfully managed to reinvent itself and to prevent itself from a possible loss of market share and revenue. Innovative corporate culture also helped them develop and accumulate the ability to further increase market share and compete in the competitive white goods market (Rivkin et al, 2005).

This report primarily used the Hayes and Hyde ‘process of change’ model (2010) to analyse the case study. It is vital to point out that the three part case study was viewed holistically when preparing this report. Another factor is that the change process in Whirlpool was dynamic and not a linear process and that there was planning, diagnosis and implementation at different stages of the decade long change process. Therefore, the report answers the following questions derived from the model: 1) What was the typology of change?

2) What were the forces for and against change?
3) How was the change process initiated?
4) Describe the diagnosis process with the 8S model.
5) How did Whirlpool's leadership facilitate the implementation process? 6) How did whirlpool sustain change?
Hayes & Hyde Process of Change Model (2010)
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Type of change

We would describe the change that took place at Whirlpool as a paradigm shift as the company was moving from a technical focus (engineering) to customer focused (emotion)....

References: Curado, C. 2006, ‘Organizational Learning and Organizational Design’, The Learning Organization, vol.13, no.1, pp. 25-48, accessed 18/07/2012, Emerald.
Hayes, J. 2010, The Theory and Practice of Change Management (3rd ed.), Macmillan, Palgrave.
Higgins, J.M. 2005 ‘The Eight “S’s” of Successful Strategy Execution’, Journal of Change Management, vol. 5, no. 1, pp. 3-13, accessed 15/07/2012, ProQuest.
Jamali, D. Khoury, G. & Sahyoun, H. 2006, ‘From bureaucratic organizations to learning organizations: an evolutionary roadmap’, The Learning Organization, vol. 13, no. 4, pp. 337- 352, accessed 15/07/2012, ProQuest.
Kotter, J.P. 1996, Leading Change, Harvard Business School Press, Boston.
Rivkin, J. W. Leonard, D. & Hamel, G. 2005, Change at Whirlpool Corp., case, Harvard Business Review, Boston.
Sackmann, S.A. Eggenhofer-Rehart, P.M. & Friesl, M. 2009, ‘Sustainable Change: Long-term Efforts Toward Developing a Learning Organization’, The Journal of Applied Behavioural Science, vol. 45, no. 4, pp. 521-549, accessed 22/07/2012, Sage.
Whirlpool’s Innovation Wheel (Rivkin, 2005)
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