How WD-40 stayed disruptive despite selling the same product for 60 years

It keeps its people on their toes, says Whitney Johnson.

by Whitney Johnson
Last Updated: 11 May 2018

Change is the natural mode of human life. Change promotes growth; stasis results in decline. Whether they are the manager of a small team or the head honcho overseeing thousands of people across several business units, proactive managers get this.

They cultivate environments that keep the work experience fresh. They encourage and facilitate personal disruptions. They recognize that the best reward they can give their people—the thing that motivates and engages beyond money or praise—is learning. It’s what makes each of us more productive. It’s what turns our organizations into talent magnets.

As the case of WD-40 shows, managers who recognize this not only make a huge difference to their company, but have a direct influence on the lives of their employees.

An idea from the space age

In San Diego, California, in 1953, a new startup set its sights on the Space Age. The Rocket Chemical Company had a small lab and just three people, but they could see a major opportunity in front of them. The aerospace industry was producing incredible new technology—missiles and rockets that could fly farther than any had before—but that technology had a major weakness: it was all made of metal, and metal rusts.

Norm Larsen, the chief chemist, had an idea. He thought he could come up with a chemical compound that would keep the newly invented rockets and missiles from rusting. The secret would be to find a substance that would simply displace the water: stop water from clinging to the metal surfaces of the rockets so it would roll harmlessly away, like water off a duck’s back.

In his one-room lab, Norm and his two cofounders tried again and again to find a compound that would work. They tried ten times. They tried 20 times. They tried 30 times. Finally, on the 40th try, Larsen and his team found a successful formula. They were soon producing the product for Convair, a division of General Dynamics and maker of NASA’s Atlas missile.

Then something funny happened. The product worked so well that workers at General Dynamics started sneaking it home to use around the house as a protectant, solvent, and all-purpose lubricant. By 1955, Larsen realized he might have a market for his compound that was broader than the aerospace and defense industry. He went back to the lab and started a new set of experiments aimed at finding a way to put his special formula into an aerosol can. In 1959, the first spray cans of the product hit the market, and the world met WD-40.

The product’s name comes from ‘water displacement, fortieth attempt.’ Not a lot of fanfare or marketing spin behind that one; but 40 years later, WD-40 had over 80% market share in the multipurpose lubrication market. Today it’s practically synonymous with that market, and that yellow and blue can is found in 75% of American households. While companies like 3M and Valvoline have tried to unseat WD-40, none has been able to. By one estimate it has staved off competition from more than 200 rival products, including more than a dozen produced by billion-dollar firms.

The secret to staying ahead

How does a company stay at the top of its game for over 60 years, making and selling a single product whose formula has only been tweaked once? (In the early 1960s, they tried to improve the smell.) How can a company be successful when its product strategy flies in the face of everything the business establishment normally preaches, like ‘segment your market’ and ‘diversify’?

I’d argue they do it by taking a radical approach to managing their people. In the United States, only 33% of employees are engaged in their work, according to Gallup. Worldwide, those numbers are even worse: just 15% of employees say they’re engaged. But at WD-40, a whopping 93% of employees consider themselves to be engaged in their work, and 97% say they are excited about the future of the company. Why the difference?

Because WD-40 practices a human resources strategy that I call ‘personal disruption.’ A strategy that is centered around learning: you start as a beginner, embracing the confusion that comes with being a novice; you experience a state of deep engagement as you learn, grow, and gain traction; and you feel the joy of mastery once you get to the top of your learning curve. But then—crucially—you find a new challenge to tackle and the cycle starts over; human beings are wired to learn and change, not to stay in one place, doing the same thing over and over again.

At WD-40, this means that employees have an identifiable career path inside the company and that managers help their employees get from point A to points B, C, and D. WD-40 wants to keep people in house, not chained to their roles. They encourage employees to learn, leap to new roles, and learn and leap again.

Because management encourages leaps to new learning curves, many people have been there for ten to twenty-five years and longer. As CEO Garry Ridge told me, ‘I get so much joy out of seeing people who are coming through the company and stepping into new roles. They’re standing on the edge and I say "Jump! Don’t worry. There’s a net . . ."’

No wonder 60% of WD-40 employees believe they can satisfy their career objectives without ever leaving the company. Three senior leaders began their careers there in the role of receptionist. ‘Our brand manager for our key brand started in a part-time position [as receptionist],’ says Ridge. ‘We pushed her and pushed her and she jumped and she jumped, and now she’s brand manager of WD-40. That’s what we love.’

WD-40 exemplifies the practice of developing people through repeated disruptions. Because people are challenged by and engaged in their work, they stay. This impacts the bottom line. WD-40’s market capitalization has grown from $250m to $1.6bn over the past 18 years.

Not bad for a company that sells a can of oil.

Reprinted by permission of Harvard Business Review Press. Excerpted from Build an A-Team: Play to Their Strengths and Lead Them Up the Learning Curve. Copyright 2018 Whitney Johnson. All rights reserved.

Whitney Johnson co-founded the Disruptive Innovation Fund with  Clayton Christensen, and has been included in the Thinkers 50 – list of top management thinkers in the world.

Image credit: Mike Mozart/Flickr

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