Innovation Leader 3M: Finding Balance between Freedom and Discipline

Abstract posted from the rage of Post-it (Post-It) to the high Andean tape (Scotchtape), from scouring pad to water purification equipment, 3M products are almost ubiquitous in everyday life, video tapes, cellophane, Thinsulate insulation materials (Thinsula...
From the popular Post-It to Scotch tape, from scouring pad to water purification equipment, 3M products are almost everywhere in daily life, videotape, cellophane, and Thinsulate insulation. (Thinsulate), mops, masks, drapes, and highway reflective signs. Not only that, but because it mainly serves business users, a considerable number of technologies and products are hidden in other companies' products, such as brightness enhancement films used on smartphones and tablet screens.
It's hard to imagine that 3M, which was founded in Shuangwan, Minnesota, in 1902, was originally a mining company that mined the sandpaper used to make sandpaper and grinding wheels. Unfortunately, the business was deserted, and later the imported minerals were produced to produce sandpaper, but the quality has not been ideal. . After several efforts, 3M finally launched the high-quality exclusive Three-M-ite sandpaper in 12 years, and soon launched a series of disruptive innovations, such as waterproof sandpaper (1921), masking tape (1925) and the famous Scotch Scotch Tape (1930). These innovations have laid the foundation for 3M's empire, and it has since begun a glorious century.

Today, 3M employs 90,000 people and has an annual revenue of $32 billion. It is a large and diverse material technology company. It has 47 core technologies and more than 70,000 products covering industrial, transportation, medical, telecommunications, construction, energy, office supplies and personal consumption. Relying on its strong innovation capability, 3M has developed 60,000 innovative products over the past 100 years, with an average of three per two days. Not only is it far superior to similar enterprises, but also far ahead of most glamorous high-tech enterprises. As a traditional processing and manufacturing enterprise, it ranks third in the world in terms of innovation ability, second only to Apple and Google. Therefore, 3M has been almost synonymous with innovation for a long time, and it has become an example for many companies to imitate. As a century-old store, what is the secret of 3M's ability to continue to maintain strong innovation capabilities?

Strong innovation culture creates brilliant
The most unique thing about 3M is that since its inception, innovation has become its soul, and it has been deeply rooted in the enterprise genes, although it has not faded after a hundred years. For other companies, innovation is just a corporate strategy, and for 3M, innovation is its business model. In other words, for other companies, innovation is only acquired, and for 3M, innovation is a kind of innate quality.

The core figure in building the soul of 3M's innovation is the company's 40-year-old legendary leader, William McKnight. Since he became general manager in 1914, he has continued to promote product development and established the first laboratory for R&D when 3M just survived in 1916, which was a very avant-garde concept at the time. Due to the significant improvement in product quality in this laboratory, McKnight set up a larger laboratory a year later and established a full-time R&D team. Since then, 3M's innovation culture with technology as its core has begun to take shape. Since then, the waterproof sandpaper developed by 3M has been extremely successful, which proves the value of innovation. In 1937, McKnight led the establishment of a large-scale central research laboratory, completely transforming 3M into an innovative machine running at full speed.

The 3M innovation culture created by McKnight is fully reflected in the following six aspects.
First, give R & D personnel full freedom and free space for display. In 1925, 3D's young laboratory technician, Richard Drew, found that the tape separating the car paint was not working well when he visited the company. He returned to the company to start research and development. Although he did not get McKnight's support at the beginning, he was stubborn and finally introduced a subversive masking tape, which not only made 3M huge profits, but also helped him realize the strategic transformation from a single product of sandpaper. In 1930, Drew invented the well-known Scotch Scotch tape by observing the user. This product was very profitable during the Great Depression, and it made a great contribution to the smooth progress of 3M. Because of these successes, McKnight and his management team are convinced of the importance of internal entrepreneurship, and believe that innovation can only be achieved by giving developers full freedom. Therefore, McNair officially implemented the 15% free time rule in 1948, which is one of the most famous corporate decisions in history. It has also become a model for Google imitation in the future, that is, technical employees can use up to 15% of working time to develop. Personal interest projects. Not only that, they can also spontaneously form an inter-departmental team and receive financial support from the company.

The 15% free time policy has spawned some of the best-selling products from 3M. One of the most well-known stories is the birth of the post. Its developer Arthur Fry, a member of the church choir, has been troubled by the effective method of identifying the singer until he discovers that a failed glue developed by 3M can make small pieces of paper sticky and easy to pick. Then, I started to develop this product, and finally created the 3M's most widely known and best-selling product. In addition, 3M's current fist product screen brightening film is also developed. In 1992, three R&D personnel advocated the development of a new type of optical film material. Today, this ultra-thin optical film is widely used in mobile phones, computers and televisions, occupying 75% of the global market share, bringing 3M to the world. .

The result of giving employees full freedom and support to encourage innovation is that many employees have become enthusiastic pursuers and defenders of developing new products. They are brave in the face of resistance and difficulties, thus contributing to the birth of disruptive products. Therefore, 3M promotes and maintains this principle as the core of its innovation culture. Of course, in most cases, these efforts are not rewarding, but once successful, they can bring huge benefits to the company.

Second, there is maximum tolerance for the failure of R&D projects. Another core component of 3M's strong innovation culture is to fully embrace the failure of employee innovation, not only without punishment, but collectively. Because 3M believes that successful innovation is the result of countless failures, the so-called failure still has value. In fact, many failed projects will be reborn in different fields. For example, the legendary post-it is a glue that was previously failed to develop. At 3M, the failed team is not responsible for any responsibility. After the dissolution, the members are free to join other teams and everything starts over.

3M not only fails to contain, but also encourages employees to take risks and set up seed funds to support R&D projects that are unorthodox or have no obvious return. Because many of the so-called techniques that have no obvious rewards are later applied in areas that the original creators never thought of. For example, the nonwovens originally used to make decorative ribbons have limited market potential. But then this technology turned out to be the core technology for many products across 19 departments, including protective masks, surgical strips and Scotch clean boards.

Third, continuous and large-scale research and development investment. Innovation has no secrets, and large-scale continuous investment is the last word. 3M's annual R&D investment accounts for 6%-7% of total revenue, far above the industry average of 4%, sometimes as high as $1.8 billion to support its more than 8,500 researchers worldwide. For an industrial manufacturing company that is primarily for business users, this R&D investment is very high. Moreover, 3M invests one-fifth of its research and development funds in basic research and pioneering research with no obvious returns, encouraging radical innovation. Currently, 3M is driving seven such disruptive innovations, such as transparent adhesive films for parcel buildings. The most important thing is that, over the years, no matter how many CEOs have been replaced, 3M's R&D investment has never been reduced, and strong capital investment has become a strong guarantee for 3M's continuous innovation.

In addition, in order to ensure that new products are brought to market as soon as possible, 3M also established the famous New Product Vitality Index, which measures the proportion of sales of products listed in the last five years in the total camp. In 2015, this figure has reached 35% and is planned to reach 37% in 2017. At present, 3M launches three new products every two days on average, constantly injecting fresh blood into its product line.

Fourth, promote the most extensive internal knowledge and technology exchange. McNaught was deeply troubled by the quality of sandpaper, and realized that the sales manufacturing and R&D departments needed to communicate constantly to avoid this problem. Therefore, he has been pushing R&D personnel to engage in formal and informal exchanges and interactions for many years. As early as 1951, R&D personnel spontaneously set up a technical forum, organized a meeting every year, invited 3M nearly 10,000 R&D personnel to participate, introduced each other's current research projects and shared their experiences and experiences, trying to break the boundaries and barriers of the organization and achieve cross-border Horizontal and vertical communication between departments and cross-business areas. At the same time, another important purpose of the technical forum is to pass on the ideas of the R&D team to the leadership.

In addition to extensive technical exchanges, laboratories in various business departments also hold regular technical conferences and broadcast live on the web. 3M also set up a technical committee to let the heads of each laboratory meet regularly every month, and hold a three-day group meeting every year. One of the core issues is how to promote technology sharing and transfer between departments. In addition, there are professional technical chapters established by researchers across the department but with the same research fields, and regular scientific and technical reports and exchanges. In addition to these formal communication platforms, 3M has also established various informal occasions and channels to promote the company's R&D personnel to establish personal relationships and further promote the sharing of knowledge and technology. This full internal knowledge and technology sharing mechanism is also one of the secret weapons of 3M innovation.

Fifth, establish a reasonable employee innovation incentive and recognition mechanism. First of all, 3M has set up a two-track system for career advancement. Senior scientists can get promotion without becoming a manager. On the one hand, they avoid brain drain, and they also solve the problem that management does not understand technology. Secondly, commend outstanding R&D personnel, such as selecting the most outstanding top 20 R&D personnel each year, and entertaining them and their families with high-end vacation vacations. In addition, the highest honor of 3M researchers is to become a member of the Carlton Association - as a celebrity hall within the company, only the most scientifically successful people can be selected. Of course, 3M also rewards the team's innovative achievements, such as the Golden Step Award.

Of course, informal incentives are sometimes more motivating than these formal accreditations, that is, the story of a research and development hero that is passed down between colleagues, such as Philips Paguis who secretly worked in the lab at night or successfully developed light reflection technology. Philip Palmquist) and so on. Their stories have been passed on from word to mouth and become a model for 3M developers.

Sixth, implement a unique and effective research and development strategy. 3M defines itself as a research technology-oriented materials company. It has been developing different technology platforms for many years and is now a leader in 42 technologies. Because of its diverse and extensive technology base, its innovation strategy is very different from that of other companies. It uses extended and integrated R&D based on technology platforms, which will extend and cross-innovate various technology platforms, such as The technology for producing filling materials has been introduced into the automotive industry, and the technology for producing materials for filling the depressions of automobiles and producing thin strips has been used to produce audio and video tapes, conductive materials, reflective ribbons for traffic signs, etc. The old projector technology developed by 3M is now used as a drug release technology in the medical field. Although the application areas are quite different, they all come from the same technology platform. At 3M, the longest-running technology platform is micro-replication technology. This technology can change the physicochemical properties of plastics, rubber and other plastic materials. This technology, born in 1950, is still widely used in transportation, access and building lighting. This innovative approach based on technology platform extensions has formed 3M's unique tree-like technology development path. More than 100 branches of technology and product areas allow developers to conduct cross-border applications, resulting in significant innovations.

Of course, a century-old company can maintain a strong innovation culture and ability, and rely on the correct guidance of its past presidents. In the past 40 years, 3M has changed its president every five years, but these leaders are fully committed to maintaining the innovation culture created by 3M godfather McKnight. This innovative spirit is passed on from the hearts of every employee and becomes the soul of 3M.

Swing between free efficiency
Everything has two sides. Although 3M's free innovation culture has forged many legends, it also brings negative effects, such as loose organization, lack of coordination, decision-making and slow action. Because they have given developers too much freedom for a long time, they lacked discipline and urgency, new product development speed is quite slow, the average period is more than 8 years, and often become their intellectual game, and it is seriously out of line with user demand, resulting in a large number waste. Also, due to the lack of standardized performance evaluation and accountability system, many R&D teams are overstaffed and inefficient. In fact, 3M, which has been widely respected by the industry, has not launched significant innovations for many years. The familiar Scotch tape was launched in 1930, and the post was posted in 1980. The most recent innovative LCD film was also introduced in 1992.

As early as the early 1980s, the then president, Lou Lehr, realized this problem and drastically changed it to inject discipline and efficiency into 3M without sacrificing it for many years. The culture of innovation. But he did not succeed in the end. Later, President Jake Jacobson continued his predecessor's work, trying to make 3M more disciplined and improve the efficiency and speed of research and development. He achieved good results, but his late DeSimone brought 3M back to the era of personal freedom. Entering 3M in the 1990s, performance began to decline significantly.

In 2000, James McNerney, the star president of GE Airborne to 3M, faced a 3M with poor earnings, stagnant earnings, weak stocks, and no improvement in operations. He resolutely began to carry out in-depth changes, first cut 8,000 people, and introduced the Six Sigma management method that GE relied on to insist on efficiency, and finally injected discipline into 3M, standardized management, improved execution and efficiency. During his tenure, 3M performed well and stocks almost doubled. However, the increase in efficiency also comes at a significant price. 3M's innovation power has dropped significantly, the contribution rate of new products has dropped to 21%, and most of them are progressive innovations from a single field. 3M's core philosophy and values ​​have been severely impacted for nearly a hundred years.

After his successor, George Buckley took office, he postponed or terminated many of his predecessors' proposals and projects, such as abolishing the Six Sigma system set up by the R&D team, giving them more freedom and trying to restore a free innovation culture. However, during his five years in office, 3M's performance was not satisfactory.

In 2012, Inge Thulin began to take charge of 3M's handsome print. He has seen that over the past 30 years, 3M has been continually moving between freedom and discipline, innovation and efficiency. It has not found a suitable balance point, causing ups and downs and turbulence, and employee morale has been greatly affected. Therefore, since he took office, through institutional restructuring and business reform, he has tried to find a middle way in the conflict between these two concepts that have plagued 3M for many years. Under his leadership, 3M's performance began to pick up again.

What Turin and all his 3M predecessors faced was actually a significant management paradox and an important management proposition. Efficiency requires discipline, precision, stability, and repetition, while innovation requires freedom, ambiguity, variation, and randomness. The more emphasis the company places on efficiency and quality, the more it kills the passion for innovation, especially radical or subversive innovation. But a culture that is too free must bring sloppy, slow, and inefficient. In today's increasingly competitive world, such companies cannot survive. How to find a reasonable balance between the two is a challenge for any big company. It seems that 3M seems to have found the right rhythm under the leadership of this tall, strong and determined Swede.

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