Whirlpool Management Journal Deals with Serious Issues (1994)
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Holmes Report

Whirlpool Management Journal Deals with Serious Issues (1994)

Whirlpool, however, was facing new issues of global competitiveness. Like many corporations, it was coming to the realiza­tion that in order to remain a market leader it needed to improve quality and service.

Paul Holmes


When the first issue of Whirlpool Management Journal hit the desks of employees at the $7 billion appliance man­ufacturer's Michigan headquarters, the first article most readers turned to questioned the necessity of the publication they were reading, indeed the necessity of any but the most basic employee communications.

"Are communicators right about the importance of employees? Do quality improvement and other change method­ologies also require a change in the basic relationship between management and employees? Is it time at last to recognize that employees have a right to know far more about their company's plans than the bland platitudes recorded in the company newsletter? The logical answer to these questions is `no'."

The article, written by management consultant John Dodge, went on to argue that people are a commodity resource, expendable when the company encounters a scarcity in its most precious resources—customers and shareholders—and easily replaceable, particularly in an economic environment in which supply outstrips demand.

Bruce Berger, Whirlpool's vice presi­dent of corporate affairs and the man most responsible for creating the Management JYournal, argued the opposing viewpoint in an adjacent article. He suggested, as he had to Whirlpool manage­ment when pitching the concept behind WMJ, that cultural change and a commit­ment to continuous communication was essential to any organi­zation that wished to be globally competitive in the 21st century. And he lambasted tra­ditional change or quality oriented employee communica­tions.

"Newsletters print the mission, announce the strategies, describe the plans, and promise training on the skills and tools. Manage­ment speeches rein­force the mission, declare commitment to the strategies, call for execution of the plans, and promise training in the skills and tools. At this point, the communications function has completed its one-time effort and steps aside to serve as cheerleader for all the success stories that start rolling in."

That was pretty much the way Whirlpool communicated with its employ­ees prior to Berger's arrival in 1989. Like most American corporations, the mainstay of employee communication was a newslet­ter, Vision, the content of which was very carefully controlled by management.

Says Berger: "It was designed not to upset workers, not to be controversial. It was designed to provide management with evidence that it was communicating, not with evidence that communication was being received by workers, or that it was having any impact."

Whirlpool, however, was facing new issues of global competitiveness. Like many corporations, it was coming to the realiza­tion that in order to remain a market leader it needed to improve quality and service. Like many corporations, it realized that an empowered, enthusiastic workforce was crucial if such improvements were to occur.

"Most companies in this business have access to the same resources," says Berger. "They have access to the same informa­tion, the same technology. The only real difference is how well people execute and how strongly they are committed to what they are doing. Winning the trust and commitment of employees, therefore, becomes vital."

The year after his arrival, Berger con­ducted a "Climate Survey" of Whirlpool employees. It re­vealed that little more than a quarter of the company's workers had "a lot of trust in the current business unit upper manage­ment" and that about 40% of people claimed to have "no trust" in the same group of leaders.

More than 85% of employees felt man­agement did not understand employee concerns and fewer than 25% agreed with the statement, "When management tells us something, we believe it." Fewer than 20% of respondents agreed with the statement, "Vision magazine is valuable and believ­able."

Vision was revamped. It was produced on a strict schedule and won several awards. Yet focus groups in 1992 revealed that 50% of recipients still felt it was neither credible nor timely. Vision articles were criticized as "too long and preachy" and its style and language were considered "out of touch" with the workforce.

The corporate affairs department then conducted a worldwide survey of key com­munication personnel and communication suppliers, asking open-ended questions about topics ranging from quality issues to work processes and practices to communi­cator-supplier relations.

"The responses demonstrated that nei­ther group viewed communication as a process, but as a series of projects, pro­grams, events and `fire drills'," says Berger. "Accordingly, their process knowledge and skills were relatively undeveloped, although they were highly skilled in deal­ing with extraordinary time pressures and chronic resource deficits."

While communicators and suppliers were strongly committed to quality, Berger says, both groups saw themselves as locked in a reactive mode that left little opportu­nity for planning or the pursuit of long-term strategic objectives. Communicators were almost unanimous in their feeling that communication was an afterthought.

"Whirlpool was clearly experiencing a trust and credibility problem consistent with the overall climate in corporate America," says Berger.

The next step was benchmarking. The corporate affairs department studied best practice at companies such as Federal Express, Milliken, AT&T and Xerox (all winners of the Malcolm Baldrige Award for quality improvement) and found that the aver­age investment in communication, edu­cation and training was around two per cent of revenues, compared with about 0.4% at Whirlpool. The "best practices" of these companies included:

  • clear accountabilities and objectives for communication company-wide. (Federal Express establishes communication requirements and measurable communica­tion objectives for each level of supervision and management.); 
  • regular climate surveys. (Xerox lists "employee satisfaction" as one of its four permanent corporate objectives.); 
  • senior management has a high profile among all employees. (Fed Ex ceo Dave Rebholtz spends 20% of his time interact­ing directly with employees.); 
  • publications have a clear architecture, and each has a specific purpose, goal and audience; 
  • extensive face-to-face communication processes are practiced, including channels that allow employees to communicate directly with management; 
  • there is significant use of technology, with heavy emphasis on video. (AT&T holds live television "press conferences" at which employees can question manage­ment.); 
  • management bonus compensation is tied, at least in part, to employee evalua­tion of communication performance. (At Fed Ex, no manager receives a bogus if employees rate communication Orfor­mance worse than it did in the previous year.); and 
  • communication training is an ongoing activity for both communications and man­agement personnel.

"Analysis of all these research results made it quite clear that the power of com­munication was largely untapped at Whirlpool," says Berger.

Applying the ideas and practices identi­fied through the research to the existing employee communication situation at Whirlpool led to the identification of seven critical communications issues: changing an outdated "mental model" of communi­cations; elimination of employee distrust; elimination of company speak; establishing of clear accountabilities; remedying defi­ciencies in communicators skills and train­ing; ensuring that communication reflects the Whirlpool strategic plan; and the development of new communication tools.

Berger had long felt that there was a glaring discrepancy between Whirlpool's primary communications vehicle—a newsletter—and the ways in which workers were receiving most of their information outside the workplace. Thus one of the first priorities was to introduce an elec­tronic communications network, called Newsline, which provided straightforward information to employees.

Segmenting the audience, a new newsletter was created for production workers, with an editorial group that con­sisted largely of production workers, and with those workers helping with design and production, and having a significant influ­ence on the content. And Whirlpool Management Journal was created, targeted at the company's 5,000 management per­sonnel and unlike anything Whirlpool had ever seen before.

"We wanted something that would chal­lenge people to think differently and was a clear symbol of Whirlpool's commitment to change," says Berger. "WMY is very visi­ble, and it's very different from anything that people had seen before. There's no strong company line. There are no slogans or sound bites. There's no jargon. We didn't want people to absorb information, we wanted them to think about what we were saying, to question it."

There was, Berger says, some disquiet among senior management about the notion of such a fiercely independent pub­lication, containing open criticism of the company and the way some divisions are managed, particularly after Berger insisted that no one in senior management could review the content before it went to press. There were also questions about whether a serious publication, full of lengthy, intellectually challenging articles and with almost no color and no art, could hold the interest of the supposedly short attention span audience of today.

Fortunately, Berger had the support of senior management. "The purpose of WMJ is to help create an information-rich environment in which Whirlpool man­agers are free to question, think, debate, learn and speak openly about matters of importance to our company," says CEO and chairman David Whitwam.

"Our rationale for this is simple. We have deliberately chosen to lead our indus­try, to become one of the world's most successful companies, and to compete aggressively in a global market character­ized by continuous change. Our role as managers in such a market is not simply to manage and to execute orders, but to lead, with intelligence, imagination and a pas­sion for winning.

"History shows us that it is remarkably easy for organizations to repress these qualities in its people. It is possible, how­ever, to encourage the expression of such qualities where they do exist, as they do at Whirlpool. That will be the primary focus of our internal communications efforts in the future: to send a clear message that we want all of our people to use their minds to the best of their ability, and to express their ideas and opinions even if this results in the surfacing of divergent views."

Whitman warned recipients of the first issue of WMJ that it would deliberately cultivate the practice of presenting diver­gent views, both from inside and outside the organization, and acknowledged that its mission represented "a significant departure from traditional management newsletters" both at Whirlpool and in cor­porate America.

Indeed, the publication stepped on a few toes. A reporter was dispatched to work on a production line and came back with a first person account intended to chronicle one white collar staffer's journey from stereotyping manufacturing work­ers to a full apprecia­tion of the people who work the pro­duction lines. It was a frank account, and included typical con­versations among production workers, including gossip about who was sleep­ing with whom.

There were anonymous letters criticizing the piece (all from management, Berger says; the work­ers themselves loved the article and pinned it to their bulletin board) and even a letter to the editor from Dave Whitwam, ques­tioning whether such reporting had a place in a corporate magazine. "Such reporting does great disservice to the vast majority of our people who find such behavior inap­propriate," he wrote.

Others have been alarmed by equally uninhibited discussions of sexual harassment in the workplace, a taboo subject for most employee magazines, and other con­troversial topics.

Berger is clearly delighted by the contro­versy, first as an indication that people are listening, and second as an indication that the publication is credible. When the company CEO feels compelled to write crit­icizing an article, at least readers know he did not get to censor it before it hit the presses.

Formal tracking mechanisms reflect that Berger's pleasure is justified. Although tar­geted at management, which totals about 5,000 people, the magazine is available to anyone who wants it, and currently has a print run of about 10,000. A recent survey indicated that 95% of readers found it credible, compared to the 20% ratings previous publications had achieved.


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