I recently had the opportunity to mix with dozens of 3Mers at The Conference Board’s 4th Annual Master Class on Innovation, held at the 3M Innovation Center in Maplewood, MN. 3M has a long, glorious history of innovation and is famed for its culture of allowing employees to spend 15% of their time on innovation. Legendary 3M CEO, William McKnight, promoted the “15% rule,” and his reason is on display at 3M’s Innovation Center: “Encourage experimental doodling. If you put fences around people, you get sheep. Give people the room they need.”
3M is known for innovative products, such as sandpaper (100 years ago), scotch tape, post-it notes, and the first electronic stethoscope with Bluetooth technology. Many of these innovations started out as failed experiments for another purpose and then, through 3M’s collaborative culture of innovation, resurfaced in adjacent verticals as game changing innovations.
The 3Mers I met repeatedly emphasized the “15% rule” and 3M’s dedication to spending 6% of its sales on research and development. Each 3M business is held to a “30% rule” – 30% of each division’s sales must come from products introduced in the last four years. Each business also needs to meet its current sales goal, bring innovation to current products by working closely with customers, and explore opportunities for innovation three-to-ten years in the future. 3M engineers frequently collaborate with customers, and customers are invited to 3M’s innovation centers and Technology Forums. 3Mers also emphasized the company’s seed capital and technology grant programs for “intrepreneurs,” New Venture Formation, and dual career ladders for its scientists and engineers. 3Mers told me, “Bosses can’t say no to technology program grants! The magic is in the mix!”
3M’s innovation culture has led to impressive business results.
Over a 20-year period, 3M’s gross margin has averaged 51%, and the company’s return on assets, 29%. 3M has consistently been highly ranked in Fortune Magazine’s annual survey of “America’s Most Admired Companies,” usually in the top 20.[i]
During my time at 3M, I marveled at the numerous stories told about how an innovation in one industry was transferred to a totally different industry, and with great commercial success. I asked the 3Mers, “How do you get this organizational collaboration?” I was repeatedly told the following, “We pick up the phone and call someone!” Or, “We walk across the hall and ask an expert!”
“Ok, Ok, I get it,” I replied. “But I live in the middle of Silicon Valley where they believe there is a new business model, algorithm, and technology platform for everything from hailing a ride and getting a mortgage to dating and running a marketing campaign. Don’t you use program management software to manage innovation programs, or technology platforms for analytics, or crowdsourcing? Is it all using the phone and walking across the hallway?”
Cristin Moran, Ph.D. and Head of Front End Innovation for Health Care at 3M, answered my question by saying, “We use those technology tools as well.” In fact, she was co-presenting at the Master Class with Kobi Gershoni, Co-founder and Chief Research Officer of Signals Group, on how to use external big data analytics to detect the early “signals of noise” to identify winning opportunities in health care. Cristin continued, “This culture of picking up the phone and calling someone is at the heart of our innovation and how we collaborate. It is our foundation.”
We are all here to help one another
Former 3M employee, Rita Shor, now a Program Director at The Conference Board, said, “When I joined 3M, Bill McKnight emphasized that it should never take you more than three phone calls to get an answer. He said that we are all here to help one another. Our innovation comes from our employees being able to ask questions, pursue ideas, and get help from our experts. We are all assessed on how well we collaborate with each other. If you don’t collaborate, eventually, the culture will catch up with you, and you will gently be asked to leave.”
For me, it was gratifying to hear the importance of old fashioned collaboration. While today’s social media and collaborative technology can assist and accelerate collaboration and the management of new innovation, it really begins with a phone call, or a stroll across the hall.
How does innovation work in your company? Join the conversation.
Victor Assad is the CEO of Victor Assad Strategic Human Resources Consulting and is a Managing Partner of InnovationOne. He consults on talent management, leadership development and coaching, innovation, and other strategic initiatives. Please e-mail Victor at [email protected] or visitwww.victorhrconsultant.com. For innovation visit www.InnovationOne.
[i] Vijay Govindarajan and Srikanth Srinivas (August 6, 2013)