Whirlpool in 2005 launched its flagship ?genius? refrigerator, marking the beginning of the end of bad times for the company in India. ?Genius?, an entry-level product, brought home profits in year one. It spoke specifically to the Indian market with a range of pastel and dark shades.
This journey of discovery had not been accidental. Sanjay Singh, vice-president-HR for Asia at Whirlpool is candid: ?Complacency had crept into the company, and added to that was the fact that we were not ready for the onslaught of the competitive threat from LG Electronics. LG Electronics brought along an agile Asian mindset, which was willing to adapt to the emerging Indian market. Whirlpool reflected the Euro?American mindset, which holds the belief that the rest of the world would follow their method of functioning.?
This difference in mindset could be seen in the products of both companies, while LG Electronics boldly experimented and offered its products in a range of colours and finishes, Whirlpool believed ?white goods were fundamentally white? and maintained similar ?classic styling? for its range of products in India.
After a setback in the market, Whirlpool realised its misplaced assumptions, and its Indian management put itself to a ?stress test? in 2003. The company then made two critical decisions. The first was to pay attention to the customers in the sub-continent, and next, to focus on its own strengths and not of its competition. These simple insights led to some concrete strategic and employee engagement actions, which were fully implemented by 2005. The benefits were very visible. Between FY05 and FY06 alone, Whirpool?s sales rose by over 30%, from Rs 1,066.46 crore to Rs 1345. 61 crore. What worked for Whirlpool was employee engagement.
Employee engagement
But employee engagement in any organisation can never be a stand-alone objective. It is interconnected with internal factors such as culture, business goals, employee morale and, as companies are increasingly realising, the broader external economic environment. Proprietors of small companies with 10 to 15 employees are able to involve themselves more deeply in employee engagement, whether it is in selecting office furniture or conducting a training session, a participation which becomes impossible to emulate in larger global companies or even mid-sized companies.
A way out is empowerment. The concept of empowerment is instrumental in building employee engagement in companies such as Accenture, which has 40,000 employees in India alone. Says Prithvi Shergill, HR head for Accenture India, ?If 40,000 employees were treated as one big mass, there would be no individual connect. To promote employee engagement for our workforce, we have identified people advocates from business within each of our delivery unit, which usually has 50 to 300 people. These individuals engage with their communities to understand career aspirations and issues, align employees with the organisation?s goals and help them outperform in this environment.?
HR here is the facilitator, which gives ?people advocates? the tools and training to perform their roles. However, Shergill reveals the catch in it, ?People advocates at Accenture also realise that by owning this responsibility they are not just going along with the Accenture culture but also owning it up as part of their own goals that will be measured in terms of their value-add to their team members.?
Accenture India propounded this mindset of employee engagement long before its headcount touched these heights. Circumstances led others, such as Whirlpool, to champion employee engagement. Whirlpool, with 2,100 employees in equal numbers in blue collars and white collars, entered India because of the promise the middle-class market held, but within a few years, in 2002, the company hit a rough patch.
After the 2003-brainstorming meet, the company started on a process of decentralisation across functions. It gave employees at the regional level control over their respective HR and trade, and marketing and sales activities were initiated. The impact of this was visible across the organisation; small suggestions made at the local level were incorporated at the national level. This enhanced Whirlpool?s product functions across markets.
Says Singh: ?Our total involvement teams at the shop floor, for instance, made suggestions on the type of fasteners needed and the location of pinholes within the refrigerators. This improved the reach of the foam and enhanced insulation within the refrigerator. Little adjustments as in the tray added under the refrigerator in the non-refrigerated space for storing potatoes and onions were appreciated by the Indian homemaker.? The company then adopted a philosophy of communication, which is the key for any leadership wanting to work well with people. More importantly, realities were told; the defects of the products and innovation slowdown within the company were pointed out. Finally, the company focused on inculcating a ?spirit of winning? within employees.
The company learnt to leverage its manufacturing base for over-capacity production during peak cycles in the summer; it beefed up distribution networks in big markets such as Kerala. It also started giving employees mid-year performance ratings, so that employees knew where they stood, and there were fewer surprises in the final rating given at the year-end.
For Singh, ?The acid test for HR during this period and to this day is that its every action should have an impact on business, which encapsulates pricing, cost and profits.? He adds, ?What the downturn taught the company is that employees have much higher thresholds for adaptability and were happy to take on combo roles such as service and institutional sales or similar service delivery and revenue generation roles.?
malvika.chandan@expressindia.com