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Organizational Change
How Kohler Has 'Tapped' an Internal Flow of Entrepreneurial Ideas

To help address the need to provide access to clean water and sanitation around the world, Kohler launched an internal “Shark Tank”-style social innovation competition — and many of its 38,000 employees are loving the chance to share their big ideas.

For a company whose business is to hold and deliver water, access to clean water is paramount. The fact that 780 million people around the world lack access to safe water and 2.5 billion lack improved sanitation is nothing short of a crime. But it’s also a huge opportunity.

Kohler Co. is a 145-year-old company known best for its kitchen and bath fixtures. It’s the top plumbing brand in the US and China, with products including sinks, faucets, toilets, tubs, showers and water purifiers. The scarcity of clean water in many parts of the world has made it a natural fit to launch corporate stewardship efforts to promote access to safe water. Its staff have keenly stepped forward to participate in efforts to distribute water filters in places such as Puerto Rico, and improve access to sanitation in places such as India.

But the need for solutions to address access to water and sanitation is also a business opportunity. Realizing this, Kohler launched an internal “pitch” style social innovation competition — the I-Prize; and many of its 38,000 associates around the globe are loving the chance to share their big ideas.

We spoke with Rob Zimmerman, Director of Sustainability; and Ratish Namboothiry, Associate Director of Innovation for Good, to learn about what Kohler is doing that stands out.

What is Innovation for Good? How did this program come about?

Ratish Namboothiry: Innovation for Good (IfG) is an innovation incubator designed to find new business opportunities that have a social purpose aligned with the United Nations Sustainable Development Goals (SDGs). We picked the three that most closely align with our competencies of plumbing and power: Goal 6 — Clean water and sanitation; Goal 7 — Affordable and clean energy, and Goal 12 — Responsible consumption and production, and stay focused on those.

Last year, we introduced the “I-Prize” innovation competition, similar to an internal “Shark Tank.” Kohler’s entire global associate base was invited to respond to the challenge. We had regional competitions and identified the top 11 teams that will pitch ideas to a panel of judges. The goal is to pick the top ideas to provide seed funding and support over the next year. We apply the principles of design thinking, and aim to fail fast and continue to innovate. The goal is to develop ideas to the point where business units can take them on. What we are really doing is de-risking work for business units by incubating new business ideas that help address the SDGs.

How are outcomes evaluated, and what have you learned so far?

RN: We look for the right intersection between profitability as a means to sustain the business and impact. That’s how we assess potential and select the ideas that get pitched.

The challenge for us is that we are a new group and there aren’t a lot of other companies doing things like this. We’ve realized that these ideas can take a long time, up to several years to go to market. There’s a lot that goes into making a new venture profitable, especially when it's a new set of customers, so we try to diversify our portfolio.

We’ve also discovered the power of our associates and their entrepreneurial mindset. When you give people an opportunity to participate in a challenge like this, you’ll be amazed at what you can get. We definitely underestimated that when we started, but we’re seeing that some of the ideas that are being brought forth go beyond product development and address problems related to IT, HR, the supply chain. Many of the ideas drive efficiencies in business processes that make our business better, improve people’s lives and are make our processes leaner.

What are some examples of products that have come out of the IfG incubator?

RN: Kohler WasteLAB came out of IfG. Earlier this year, we launched our first product — the ANN SACKS Crackle Collection by Kohler WasteLAB. It’s made out of recycled dry cull that was otherwise being thrown away. It’s been an incredible success because it couples consumer value with a positive environmental impact, which becomes a very compelling proposition. Another example of a product that was launched is a gravity tabletop water filter.

How do these initiatives fit into the business model? Has there been any assessment of the business benefits?

RN: The process is being designed such that the ideas we pick and incubate are solutions the business units can take on. That puts onus on the teams to be business-minded and stay focused on the consumer problems that they would want to solve and that will provide consumer value.

What’s different about sustainability at Kohler?

Rob Zimmerman: Integrating environmental considerations into product design at the scale we are doing is what is unique about us. Environmental considerations are integrated into most of the plumbing products and we are in the process of integrating across the power business. This has the most potential impact because, as our consumers use these products over the next 10 years, it will drive efficiency across their lifecycle.

When an I-Prize team comes up with a solution, we run it through a sustainability screen just like we would any other product. We had several teams come up with environmentally sustainable ideas.

We’re building sustainability into our processes, and not adding it on to our business at the end. It’s important for everyone to understand how sustainability can amp up the work we are doing in across our different business functions.