Innovation: The great idea is just the start

Whirlpool is a well-known and trusted appliance brand, a company in business for more than a century, and it’s associated with gleaming refrigerators, polished stoves and above all, washing machines.


William Custodio, VP Latin America at Whirlpool International

So what do innovation and disruption mean to such a mature business, which provides products people will still need in any foreseeable scenario?

Quite a bit it turns out, explained William Custodio, VP Latin America at Whirlpool International, which oversees operations in 45 countries within the Caribbean, Central America and South America, excluding Brazil and Mexico. Custodio was the featured speaker at the WorldCity CEO Club held Aug. 5, 2016, in Coral Gables.

Kraft and Heinz

Johnson & Johnson and Kraft- Heinz

“Innovation is medium-to-long term,” Custodio, adding that disruption doesn’t happen overnight, though it may seem so.

To illustrate his point, he referenced ride-sharer Uber, which seems to have risen rocket-like. Three years ago, Custodio said, on a pre-Uber trip to England he needed at least one credit card and a working knowledge of the “Tube,” metro system. On a recent visit, “the only thing I needed was an iPhone and battery.”

Change is coming

Yet looking toward the future with an eye on fast-moving economic change is a must in any sector. Custodio asked audience members what they think could disrupt a business like Whirlpool.

Ferring & Medtronic

Ferring & Medtronic

Answers included competition from Asian manufacturers; a sudden lack of brand confidence; people’s inability to purchase big-ticket items and changes in what consumers need and want, which could range from disposable fabrics to cheap and convenient outsourced services.

The availability of water could also be an issue, remarked Edvard Philipson, VP Latin America, Ferring Pharmaceuticals.

“It’s not easy, this is the reality,” Custodio said, adding that appliances “are a mature market – almost a commodity.” The life cycle of today’s washers and ranges is about five years, with refrigerators typically lasting 10 years.

Against this backdrop, Cusodio shared some of what the company is doing to stay current and expand its customer base. That includes new products. One example is a multi-drink system launched in Brazil that can produce coffee, orange juice, cocktails and energy drinks – all dispensed with pre-packaged pods.



Some innovations are more behind-the-scenes. Today’s washers, for example, use far less water then they used to, and heavy steel components have been replaced with lighter-weight parts.

Ideas must lead to viable products

Getting the great idea may be the easiest part. Every product or service must be accompanied by practical plans to bring the idea to market. The customer’s needs must be kept in mind at all times.

Attendees wondered if burgeoning Latin America economies give companies like Whirlpool a new customer base.

“With the growth of the middle class in Latin America, people must be buying new (appliances) who never had a washer and refrigerator before,” said Donna Hrinak, president Latin America, The Boeing Company.

The market is certainly there, Custodio said, noting that less than 50 percent of Latin America households have clothing washers – with fewer yet owning fully automated models as typical in U.S. homes.

University of Miami

University of Miami

Three-Way Challenge to grow, build, expand 

Whirlpool has come up with a three-tiered approach to innovating.

  • Core innovation looks at how to grow the core business.
  • Extended Core looks at how to build on basic competency. For example, Custodio said, one approach is to sell water services and filters along with refrigerators.
  • Beyond the Core focuses on how to move into new territories. One approach being looked at is selling directly to consumers rather than to warehouses.

Direct sales is becoming ever-more relevant, Custodio said. “Now, people take one week to decide,” what they want to buy, compared to the days of pre-online research and sales, when shoppers would take a month or more to choose. While direct contact with consumers is an opportunity to build brand loyalty, Custodio cautioned “you can only build good Internet sales if you are dedicated.”

Appliances and tech: How to harness the Internet of Things 

Technology advances are touching every sector. With LG and Samsung recognized as innovators in the tech field, Joseph Ganitsky, director of the University of Miami’s Center for International Business Education & Research, wondered “how does your company cope with that challenge?”

CH Robinson

C.H. Robinson

Custodio acknowledged the centrality of technology going forward and explained how it might apply to Whirlpool.

To begin with, he said, “We own the kitchen.” That means the company has the opportunity to build strong brand loyalty from when people first establish homes and began acquiring appliances like refrigerators, washers and dryers. We reach out to consumers when they start their life cycle.”

Meanwhile, though people are fascinated by the idea of the Internet of Things – appliances and other personal goods sharing information online, “Nobody has found the Internet of Things that will really benefit the consumer,” Custodio said. At the same time, Whirlpool, along with others in the sector, are creating such products. One example: Whirlpool washer models that allow the consumer to remotely change the wash cycle.

When, asked Juan Morales, managing director, Stanton Chase International, is it time to pivot toward marketing to Millennials and give less promotional energy to Baby Boomers and Gen X-ers?

Whirpool’s approach, Custodio said, focuses more on shopping methods chosen by consumers, rather than by traditional demographics. “Then comes the digital part,” he said, adding that “Millennials look digitally.”

CEO Club is one of four event series put on by WorldCity to bring together executives in greater Miami on international business topics. CEO Club is sponsored by the University of Miami School of Business Administration, Berkowitz Pollack Brant and The Conroy Martinez Group.

The next CEO Club is scheduled for Sept. 9, 2016.