Cleaning Up At Whirlpool

How Michael A. Todman applies innovative tactics and powerful communication skills to achieve the home appliance giants goal: global dominance

Whirlpool President Michael A. Todman

Age: 53
Title: President, Whirlpool International and member Whirlpool Corp. Board of Directors
Education: Bachelor’s, Business Administration, Georgetown University
Corporate Headquarters: Benton Harbor, MI
Home Life: Married to Lynn, with two children: Sean, 24, and Melanie, 26
Affiliations: Serves on the board of directors of Newell-Rubbermaid, Georgetown University, and the Economic Club of Southwestern Michigan. He is also a member of the Loyola University Council of Regents.
Advice to Professionals: “Take risk. Without taking risk, you may get along but you’re [not] going to excel. You can’t be afraid to move. I have no interest in being comfortable. Don’t shy away from challenges. Go after challenges. The payoff can be incredible.”

On Jan. 1, 2009, Whirlpool corp. Chairman and CEO Jeff Fettig told its 70,000 employees that economic forces had placed the home appliances manufacturer in the weakest position he could remember. The financial crisis that began in 2008 devastated businesses, both large and small. But Whirlpool, located in Benton Harbor, Michigan, and which manages 13 worldwide brands such as KitchenAid, Admiral, Amana, and Maytag, had been facing performance challenges since 2006. The housing market had collapsed. Soaring metal and oil prices had driven up production costs. The company lost ground to competitors in regional markets as well as on the international front.

By the time the financial crisis hit, the brutal economy forced its executive leadership team to stay focused on a recently drafted strategic plan to turn the business around. Michael A. Todman, president of Whirlpool International, recalled the overarching goal: “Let’s control the things we can. We had already changed our business model, and we had to make some really tough decisions.”

Senior management concentrated on three key priorities: aligning costs to meet the demands of the turbulent business climate; managing cash for greater liquidity; and maximizing market share by targeting consumers in a more effective, efficient manner. As a result, the company abandoned brand advertising, shifting to promotional and point-of-sales methods. “It was important for consumers to understand the value of the products we were bringing to market,” Todman says. “We spent our time talking directly to them so we used more digital media.”

To underscore the urgency, management also ramped up internal communications. It was critical to make and implement decisions at a faster pace and, at the same time, secure employee buy-in. So board members met once a month instead of six times a year while managers spent more time meeting with the rank and file. “Philosophically, our approach is to be straight, be honest, tell people exactly what’s going on,” says Todman. “When you do, they will get on board, understanding all the facts and what the alternatives are.”

The strategy worked. By the end of 2009, the $17 billion giant, the leader in its space against brands that include Electrolux and GE, produced a 9% sales growth and now projects another 6.9% increase in 2010. According to Wall Street Strategies Analyst Brian S. Sozzi, by second quarter of this year sales for North America saw a 6% increase compared with second quarter of 2009; there was a 24% increase in Latin America and 43% in Asia. Although Europe declined in sales by 6%, the company managed a 266% increase in operating income in the region. Moreover, it has also unveiled an unprecedented slate of washers, dryers, refrigerators, and other appliances this year.

During that challenging period, Todman focused on the North American market. As president, he drove his region’s rebound, contributing to 56% of the company’s revenues. He also completed the integration of Maytag into the Whirlpool product line. Acquired in 2006 for $1.9 billion, Maytag had been dropped by Best Buy, one of the industry’s biggest retailers, and cited as a poor investment. But Todman focused on revamping the line by closing costly plants and educating the entire staff on both companies before introducing new models for 2008. By 2007, his tactics saved Whirlpool $460 million, beating cost projections by $60 million.

One of Black Enterprise’s 100 Most Powerful Executives, Todman received the promotion to his current position in January of this year. His portfolio is expansive: Todman oversees brands in Europe, Latin America, and Asia with duties that include management of global information systems and global strategic initiatives including energy efficiency and innovation.

“Mike has a number of strengths,” says Fettig. “First he’s got great experience in being a global leader. He knows how to operate effectively with different cultures and different people. He also knows our operation very well—our strengths and weaknesses, what we can do and what we can’t do—so he’s instrumental in helping us set the right priorities and then running disciplined operations to help us deliver our expected results.”

For his leadership role in helping bolster Whirlpool’s financial performance through his strategic vision in accessing global markets and ability to effectively drive innovation, Todman has been selected as the 2010 black enterprise Corporate Executive of the Year.

THE GLOBAL STRATEGIST
“When I started in the international markets, frankly, there were no global businesses. They were international businesses. They really operated independently and every market was very separate,” says Todman.  “Today it is a global marketplace and we’re also seeing that consumer trends and habits are starting to merge a little bit.”

Todman seeks opportunities in foreign markets driven by growing economies and younger consumers moving into higher income brackets. A July 2010 Standard & Poor’s report estimates industry unit shipments will rise 10% in Brazil, compared to a 3% to 5% increase in the U.S. In fact, Latin America represents Whirlpool’s fastest-growing market, producing 22% of total sales in 2009. Michael Rehaut, an analyst with J.P. Morgan, expects Latin America and Asia to grow as much as 10% and 8%, respectively.

Developments such as the expansion of young consumers in the Middle East to infrastructure projects in India will enable Whirlpool to clean up in the future. “When I think of India and how it’s investing in infrastructure—the fact that now people can get electricity, the fact that it can stay on [for] more and more people—that really is a great opportunity for us,” Todman says. “We also have to develop markets where there continues to be opportunity if we innovate—bringing new products and services to our consumers in those marketplaces.”

In fact, Todman directs his team to assess such dynamics to encourage a more holistic thinking about global business. “He’s pushing the company to think from an international perspective,” explains Warwick Stirling, global director of energy and sustainability. “How can we take best practices from our work in Brazil and apply that to the rest of South America?”

It’s a management practice developed, in part, by discovering Americans don’t always hold the best ideas for driving the company’s business. “When I first went overseas, I had the view that Americans had it all figured out,” Todman recalls, “that we had the answers and the approach. I very quickly came to the realization that other people have ways of solving problems that may be different but are no less effective.” The experience, he says, taught him to learn, listen to, and appreciate different perspectives.

OPERATING BY THE NUMBERS
Born and raised in St. Thomas, U.S. Virgin Islands, Todman is a robust man with a gentle demeanor that’s not easily ruffled. His colleagues all describe him using similar adjectives: consistent, engaging, and extremely personable. His office, which he shares with Fettig in the executive wing, offers an expansive view of green lawns and is appointed with photos of his wife, Lynn, and his two children, Sean and Melanie; and memorabilia from his travels around the world. When he first joined Whirlpool nearly 20 years ago, he left then-tech giant Wang Laboratories after serving in numerous leadership positions to step into what he believed would be a “sleepy industry.” The Georgetown University graduate with a bachelor’s in business administration found his best preparation for future management positions was his first job: financial accountant at PricewaterhouseCoopers. His training at the large accounting firm provided a solid foundation for executing financial strategies. Says Todman: “The ability to very quickly assess the health of the business through its profit and loss statements has been very beneficial. It has helped me understand the things to focus on when I’m looking at businesses.”

Stirling has observed how Todman’s business acumen has significantly contributed to corporate growth. “It’s really interesting to spend time with a senior leader who runs a multibillion-dollar organization that is very complex,” he says. “He’s able to analyze really complex business problems and make the right decisions so that the company can make money. For example, right now we are looking at standards negotiation within the U.S. across multiple product categories. It’s tied to our product plans, our engineering plans, but it’s also tied to a legislative process. Mike’s able to look at that and help us make those tradeoffs very quickly between refrigeration standards versus washing machine standards and then how all that works so that the financials all play out.”

Todman joined Whirlpool in 1993 in London as director of finance, eventually running the customer service business in Europe. Over the next decade, he quickly gained the reputation as a corporate troubleshooter, crisscrossing the Atlantic several times managing troubled businesses in North America and Europe. By 2006, he was named president of Whirlpool International and a member of the board of directors, playing a pivotal role in orchestrating a successful turnaround in China, where the company struggled for nearly a decade with cultural nuances and brand positioning. By 2008, he was deployed back to the States as president of North America before being reappointed to his current role.

THE GREAT COMMUNICATOR
With Todman’s background, it makes perfect sense that he would oversee innovation, one of Whirlpool’s four core competencies, with a funding budget of $3.5 billion. He’s currently overhauling the process that was developed to encourage employees to submit ideas and transform them into products for market. “We think that there are more opportunities out there to think differently and get close to the consumer,” he says. “Innovation forces you to get closer and understand them—their patterns, or if there is something not articulated.”

In fact, Todman learned the value of such an approach when he returned to Europe in 2001 to address management concerns. He thought his assignment would be a quick turnaround. After six months, however, Todman wanted to readjust his projections. “I was missing all of the goals, targets, and objectives that had been set.” It was the first time his bosses asked if he was up to the task. “It truly forced me to step back and think about how I was going to improve my performance and turn the European business around,” says Todman. “It forced me to understand, one, that I had to better articulate what the goals and objectives of the business were. I needed to get a great team of people around me. I needed to rely on people.” The challenge resulted in the creation of Whirlpool’s Enterprise Leadership Agenda, a clear set of priorities disseminated throughout the organization so that all employees are clear about the business agenda and their role in meeting company goals.

Communicating is an integral part of Todman’s management style: dissecting trend information, disseminating company goals and objectives, and pushing employees to think broader, more creatively but as an interconnected unit that functions across the globe. It’s a 24-hour job, he says of managing the various time zones through phone calls and video conferencing. Todman spends two weeks out of every month in the marketplace visiting the team as well as customers. “I understand how consumers are living and that keeps you on the pulse.”

Todman, in his very little free time, enjoys reading action adventure books and golf. His ringtone chimes Otis Redding’s “Sitting on the Dock of the Bay,” which Todman sometimes imagines as a fleeting possibility. His office phone quickly reminds him of his ever-evolving, fully demanding to-do list that keeps him focused on current goals and future innovations.

On Jan.1, 2010, Fettig made an announcement very different in tone and sentiment from the previous year. “I made the comment that the company was in the strongest position that it has ever been. And I feel that same way today,” he says. “Mike played a critical role not only in communications, but helping us keep our pulse on the rapidly changing marketplace. It was very different in Europe than it was in Brazil, than it was in India, than it is in China. Mike, with the executive committee, has to assess these things in real-time business. He is the leadership face every day that a large number of people in our organization look to for direction and clarity.”

Todman will continue to demonstrate his brand of leadership until Whirlpool appliances can be found in every part of the globe.


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