Product Innovation … 7 Lessons 3M Teaches about Their Success
Ken Sawyer once was quoted: Collaboration drives creativity because innovation always emerges from a series of sparks – never a single flash of insight. 3M is still at it, at age 104. The manufacturing conglomerate — an abrasives maker that broke out by inventing masking tape in 1925 — is introducing new products as if it were a startup. Their product innovation rates at the top of the heap.
3M takes a long-term approach to the new product development process by creating a culture of innovation that encourages risk-taking, tolerates mistakes made along the way, and rewards achievement.
A culture of innovation means that senior management encourages employees to spend a significant portion of their time on products and research that go beyond their usual scope of responsibilities.
Related post: The Secrets to Building an Innovative Culture
Another way 3M capitalizes on its innovation success is by combining diverse technologies in new and unexpected ways.
3M draws upon innovative technologies from its portfolio of 55,000 products to create new solutions, such as using dental technology applied to car parts. By making these uncommon connections, the company pioneers new ways of innovating.
Long before Google its engineers one day a week to pursue their own ideas, 3M let its researchers do the same with up to 15% of their time.
In another unusual practice, 3M awards annual Genesis Grants, worth as much as $100,000, to company scientists for research.
The money is allocated by their peers and is spent on projects for which “no sensible, conventional person in the company would give money.
The company, as a result, had in place a goal to generate 30% of revenue from new products introduced in the past five years.
It’s about inventing hundreds and hundreds of Next Small Things, year after year.
So how does 3M get these great results from its product innovation? They believe their success can be described in the following seven points:
They are committed to innovation
One sure way to show that is with money. In 2005, 3M spent $1.24 billion on research and development, or 6% of its $21.2 billion in revenue.
That’s an unusually high amount for an industrial manufacturer. And of that R&D outlay, a fifth went to basic research or pursuits that have no immediate practicality.
My takeaway: investment is certainly a measure of innovation commitment, necessary, but unfortunately not sufficient. Other measures of commitment are needed, such as celebrating even small successes by upper management.
The corporate culture must be actively maintained
Newcomers also quickly learn the stories of how 3M developed the first audio tapes, for instance, or Scotchgard. Tribes and peoples keep their cultures alive through oral histories; so does 3M.
My takeaway: a company’s culture is important for its employees to understand priorities and how things can get done. Stories of the past successes are the best way to enhance a corporate culture.
Innovation is impossible without a broad base of technology
For instance, 3M claims to have leading know-how in 42 diverse technologies. That allows researchers to take an idea from one realm and apply it to another.
My takeaway: the more “dots you have to connect” the more new ideas you will find.
3M has long encouraged networking — formal and informal — among its researchers
The scientists formed an organization called the Technical Forum in 1951. It invites all of the company’s 9,700 R&D personnel to an annual symposium, where everyone can see what everyone else is working on.
Labs also host their own conferences and Webcasts and elect representatives to a governing body to set policy.
My takeaway: collaboration is one of the key enablers of innovation as innovation rarely starts from a single spark, but rather a collaboration of many smart contributors.
The company rewards employees for outstanding work, based on pre-established goals
The folks who call themselves 3Mers take pride in discoveries that lead to real-world products. Management reinforces this by fostering a dual-career ladder so veteran researchers can continue to move up without becoming managers.
It also honors hundreds of employees — nominated and selected by their peers — for scientific achievements every year. And it gives the top 20 overachievers and their spouses a four-day holiday at 3M’s corporate retreat.
My takeaway: recognizing the results is a great way of demonstrating the value of a company’s human capital. It also builds the innovative culture the company is committed to.
Do you quantify efforts?
Product innovation … quantify efforts
3M tallies how much of its revenue comes from products introduced in the past four years to judge whether its R&D money is being spent wisely.
That way management can assess which lab is hitting its mark and which may be falling short. After reviewing its data, the company centralized basic research from 14 centers around the world to its headquarters campus in 2003.
My takeaway: if something is critically important to a business, as product innovation is to 3M, then it is important to be measured. It would be very interesting to review 3M’s detailed measurement plan and its results.
Research must be tied to the customer
Employees spend a lot of time with customers to understand what their needs are so they can go back to the labs to come up with valuable products. Of course, results will vary.
My takeaway: nothing earth shaking here as all successful companies must be good here. Again, not much detail available on their specific ways to identify and prioritize customer wants and needs. Another area we will be attempting to get further data on process and results.
If you are looking for additional resources in creativity and innovation, one of my favorite experts is Gregg Fraley. You’ll find lots of good stories and examples to learn from in his blog.
The bottom line
So if you want to find a truly great innovator, don’t look for the ones that make the biggest headlines are that are most inspiring on stage. Look for those who spend their time a bit off to the side, sharing ideas, supporting others, and quietly pursuing a path that few others are even aware of.
What’s important to consider is that when a task is automated, it is also democratized and value shifts to another place. So, for example, e-commerce devalues the processing of transactions but increases the value of things like customer service, expertise, and resolving problems with orders, which is why we see all those smiling faces when we walk into an Apple Store.
That’s what we often forget about innovation. It’s essentially a very human endeavor and, to measure true progress, humans always need to be at the center.
In conclusion, our biggest takeaway is simply that everything you are exposed to makes a connection. It’s how one puts them together that will optimize your success.
What are some of your experiences with change in your company? Please share a story or two …
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More reading on creativity and innovation from Digital Spark Marketing’s Library:
Learn How to Think What No One Else Thinks
Generating Ideas by Convergent Thinking
Amazon and Managing Innovation … the Jeff Bezos Vision
The Secrets to Building an Innovative Culture
Mike Schoultz is a digital marketing and customer service expert. With 48 years of business experience, he consults on and writes about topics to help improve the performance of small business. Find him on G+, Facebook, Twitter, Digital Spark Marketing, and LinkedIn.
