WHITE PAPER

BETTER TOGETHER An Examination of the Power of Collaboration in the Home Building Industry

I. INTRODUCTION and other areas where an allied firm can offer business to team-up to bolster areas of need No company today has the time, talent, and exceptional insight and surprising vision. or weakness, in much the same way a sports resources to tackle every business opportunity team depends on a collaborative effort to claim We’ll look at the opportunities through the and issue. Because of those practical championships. experiences of Benton Harbor, Mich.-based constraints, companies across nearly all Whirlpool Corporation (NYSE: WHR), a The need for change in the housing industry business sectors now augment their capabilities respected force for collaborative change in the has never been greater. George Casey, CEO of through a time-tested approach: Collaboration. residential housing industry. Their long and Stockbridge Associates, a consultancy serving How does your firm collaborate with others active experience as an active collaborative residential builders and developers, recently to advance your business aims? How do partner may serve to inspire other organizations said the construction industry’s critical labor other companies in the homebuilding plotting a cooperative way forward. shortage comes at a time when production is industry—builders, developers, lenders, realtors, just two-thirds of the average production level II. COLLABORATION: NEED manufacturers, contractors, among others— achieved from 1950 to 2010. Casey adds “… Sports legend Michael Jordan once observed, rally together to serve common business goals? that most other industries had achieved a 1500 “Talent wins games, but teamwork and percent productivity improvement from the This paper explores how the art of intelligence win championships.” A sports years 1945 to 2017. The construction industry collaboration can yield significant business metaphor is an apt way to understand showed a zero percent improvement in the benefits, including a leg up in technology, the business imperative for collaboration. same period.” manufacturing innovation, design excellence, Collaboration is an ages-old way for a Technological change has also revealed industry important tangible benefits of collaboration for partnerships and business development, says gaps. For example, more than 39 million all respondents, with resources solutions rating the major appliance aggressively supports all Americans now own a smart speaker1, such highly among builders and developers.” players in the home building industry. “Our as Amazon Alexa. Three years ago smart integration with technology companies like III. COLLABORATION: INDUSTRY RESPONSE speakers didn’t exist outside research centers. Amazon, Google, and our recently announced Homebuilders, especially volume home That presents a considerable challenge for partnership with Apple Watch, as well as builders, are moving rapidly to recognize the homebuilders looking to remain relevant to the acquisition of Yummly, showcase our new normal in smart home development. The tech-savvy home buyers. dedication to digital,” he says. homebuilder Lennar announced a collaboration To better understand the external forces driving with Amazon, for example. The two firms have The Yummly acquisition is especially instructive a need for greater industry collaboration, joined forces to create a network of Amazon in understanding the emerging cast of Whirlpool recently commissioned Hanley Experience Centers. Each Center demonstrates characters now flooding into the home building Wood, a data and media company serving smart, voice-recognition speakers and other space. Yummly is a leading meal discovery the residential design and construction digital convenience devices. platform for more than 28 million users. Not industries, to research the issue. The outcome, strictly a social media company, Yummly curates KB Home, another prominent national home the “Collaborate to Accelerate Research recipes based on the user’s diet, allergies, builder, is stepping out with a high-profile Study,” polled responses from architects/design preferences, taste profiles and more. For demonstration project of their own, the KB professionals, home builders, developers, and Whirlpool, the striking recognition is that it’s Home ProjeKt. KB Home, in association with building product dealers/distributors. no longer sufficient to deliver an exceptional KTGY Architects, Whirlpool Corporation and a product. You must also deliver an exceptional The survey investigated several issues, including: wide array of building product manufacturers, experience, especially in the kitchen. • Strategic collaboration needs and benefits are creating a flexible, connected and responsive concept home. It’s described as the “… ultimate Roberto refers to it as “everyday acts of care.” • Importance of external vs. internal exploration of health, wellness, and sustainability “Our goal is to make everyday acts of care like collaborations in a volume homebuilding framework.” cooking, cleaning, washing easier and better.” • Awareness of collaborations happening Through collaboration, Whirlpool is able to put The KB Home ProjeKt is set to unveil in the Las within the industry the warmth of person to person sentiment on Vegas master-planned community of Inspirada continuing innovation. • Potential future technology partners in early 2019. It will unveil entirely new-to-the- US-market features and functionality in smart A natural extension to that spirit of care • Importance of key characteristics in technology, health measuring and monitoring, is the connection between Whirlpool and external partners optimized energy and water use performance, smart thermostat maker Nest Labs. The idea: • How collaboration success is measured as well as efficient factory-based building Allow consumers to connect Whirlpool smart and managed technology that will enable the project to scale. appliances to the connected thermostats.

The survey affirmed what many industry Navigating the intersection of the home Another manifestation of the blurring lines leaders had long suspected. Notable among building and technology industries are major between hardware and software is Yummly’s the results: “Better design and developing appliance makers like Whirlpool. Giovanni collaboration with Instacart, the home delivery better products were seen as the most Roberto, Whirlpool manager of strategic service. Instacart is a key link in the food

1 https://techcrunch.com/2018/01/12/39-million-americans-now-own-a-smart-speaker-report-claims downtown Chicago. Tom Arent, Whirlpool General Manager for Field Sales and National Contract channels, helps his company assume a leadership position in industry collaboration.

“We got the feedback in the survey that less than 10 percent of all home builders would reach out to collaborate on strategic initiatives. The World of Whirlpool is a design showroom and collaborative planning area where we can meet with builders. We can talk with architects, designers, other vendors, and create an environment where we can look many years into the future.”

The collaborative initiatives have not gone unnoticed by the home building community. The appliance manufacturer’s willingness to go journey chain Whirlpool officials describe. Brett IV. COLLABORATION: STRATEGIES beyond the expected to engage with all parties Dibkey, Whirlpool vice president of brand and With so much in play, from technology in the home building process speaks well of strategy, describes the food journey this way: to design, how is a large major appliance the company says Stan Deringer. Deringer is “With Instacart integration, you can select a manufacturer expected to be nimble and agile vice president of operations for GFO Homes, recipe from Yummly, drop whatever ingredients enough to keep up. Whirlpool has some ideas. a volume home builder based in Austin, Texas. you may not have into a shopping cart that One you might call a variation on the unified “Major appliances are a high-risk part of the is fulfilled directly through Instacart. That’s field theory, a drawing together of disparate home building process. Typically they’re the another example of a third party collaboration forces into a grand homebuilding scheme. As last product to go into the house prior to that is designed to deliver a better experience a veteran of the software interface standard closing. The last thing you want is a delayed and remove friction within the food journey.” wars, Tippetts understands the challenge closing because of back-ordered or damaged “Food and cooking are now being treated like particularly well. “Our goal is to be able to let appliances,” Deringer says. Deringer credits a spectator sport,” Dibkey continues. “While the home be what it needs to be. Our role as Whirlpool for taking the time to understand food is very popular, consumers are spending an appliance manufacturer is to be part of that the business by collaborating with the trade. less time cooking than ever before. In fact, experience.” As a result, Deringer regards Whirlpool brands— 2017 was the first year on record where more Amana, Whirlpool, Maytag, KitchenAid, and To that end, Tippetts describes the meals were consumed in the home that were JennAir—as low-risk solutions for a high-risk emergence of cross-industry councils purchased outside the home versus prepared part of the home building process. that Whirlpool is pioneering. The concept in the home. Every consumer faces the same allows the appliance maker to learn “… V. SUMMARY question each evening, ‘What’s for dinner about the constraints we face whether it’s The Hopi’s have a proverb for collaboration, tonight?’ It’s our job to remove as much the standards within cabinet making to “One finger cannot lift a pebble.” In much friction in answering that question as possible.” things like changing energy standards.” the same way, many in the housing industry Whirlpool is attentive to other changing understand with a clarity of focus that may not For manufacturers, inviting representatives practices and customs as well. Take the front have existed quite this way before, just how from leading cabinet, bathroom fixture, of the house and the back of the house. There dependent they are on each other. Through furniture, flooring, and lighting companies was a time when entertaining and guests was collaboration and only through collaboration to informally discuss matters of common sequestered to the front rooms. No more. can sometimes competing interests seize interest such as trending colors, textures, the opportunities changing digital and “The back of the house is the center and heart and finishes can provide valuable manufacturing technologies now present. of the home,” explains Whirlpool’s manager insights that aid profitable design and for all design strategies, Jason Tippetts. “We’re manufacturing choices for all concerned. Call it the power of better together. seeing a lot of people sacrifice on square Whirlpool has also made a substantial footage in return for better experiences. They’ll investment in another way to rally differing trade-in four more feet of living space for a FOR MORE INFORMATION skill sets in the home design and building walk-in pantry, for example. Understanding www.whirlpoolcorp.com trade to together. It’s called the World of these changing dynamics greatly benefits our www.whirlpoolpro.com Whirlpool, a special insider’s showroom in design approach.”

Produced by Hanley Wood Strategic Marketing Services Group sms.hanleywood.com