The strategy that makes 3M an innovation powerhouse

Innovation is not a one-time story, but it is a process and a strategy, and no other organization reflects this process better than 3M (company that manufactures scotch brite). It is about an organization that went from a small and unprofitable Minnesota Mining and Manufacturing (where the three “M” come from) company in the early 1900s to becoming one of the most successful and revered product companies today.

3M bagged the US government’s highest award for innovation through its sheer and stellar innovative solutions, the National Medal of Technology. Its portfolio of nearly 60000 products includes Post-It notes, Scotch-Brite, ACE bandages, and many other innovative medical and industrial products.

Some stories of innovation strategy that show how 3M has time and again transformed failures into successes

Initially, 3M ventured to mine corundum, which they planned to use to make grinding wheels. Instead, what they found was a low-grade mineral called anorthosite. They did much experimentation, and the result was their first breakthrough product: Wetordry sandpaper. Discovering the poor-quality mineral could have caused an early end to any fledgling company, but it was 3M innovation strategy that transformed this failed venture into a success.

Another story is about Post-It Notes. Dr. Silver, an employee of 3M, had invented this new product, but he did not know what to do with it. He tried to promote his creation within 3M, but no one could think of using it. Art Fry, a Silver colleague at 3M, used to sing in his church choir. During one such program, he became frustrated when the bookmarks he used to mark his place in his hymnal kept falling out. He remembered Silver’s adhesive and tried some on his bookmarks. It worked wonderfully! The bookmarks stayed in place, and he could move and reattach them easily without harming any of the pages. The rest is history.

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Scotchgard development is another success story of innovation. Patsy Sherman, a 3M researcher, was conducting experiments on fluorochemical polymer when one of the lab assistants accidentally spilled some of the mixtures on her shoes. She tried water, alcohol, soap but was unable to remove the spillage from her tennis shoes. From here, she got the idea that this substance could perhaps act as a stain protection barrier for other textiles.

This unparalleled success of 3M provokes us to ask: When several organizations struggle to even maintain and deliver values through a single product, how 3M has been successfully providing values through its more than 60000 odd products? The answer lies in understanding the innovation strategy of 3M.

Over time big organizations of the size of 3M siege to innovate. Organizations that pursue growth based on innovations are subject to an innovation paradox: do we manage today or tomorrow? 3M has been able to find the answer to this paradox. So, what are they doing, and how are they doing this?

Over the years, 3M has developed a robust and rich organizational culture and structure that promotes, encourages, and facilitates innovation. Let us have a walk-through of some of their approach to business growth and success.

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Varied Platform to foster Innovation:

3M’s strategy is to provide a wide variety of Innovation centers and Technical forums to create a pool of practical, novel, and worthful ideas that are then nurtured into opportunities. Field visits by Scientists to observe customers to understand their pain points are very common at 3M.

Customers are also encouraged to visit Innovation Centers set up specifically to generate new ideas, explore possibilities, and solve problems. These platforms facilitate building a network among scientists, employees, and customers where they freely exchange their ideas and future projects.

Dedicated time for innovation:

In 1948, 3M launched its “15% rule” program, where 15 percent of employees’ time was dedicated to innovation. The Post-It note was invented during 15 percent time. Not only Post-It, many of the products from nearly 118,000 patented products of 3M result from this 15% rule program. Organizations such as Hewlett-Packard and Google have both replicated this approach. Gmail and Google Earth were originated during Google’s 20 percent time. 

Technology and innovation are at the heart of 3M – the company has been granted more than 118,000 patents, and each year, more than 4,000 new patents are issued to 3M worldwide.

3M

30/4 rule to increase innovation speed:

3M has set up this rule which states that 30 percent of the company’s profit should come from products introduced in the last four years. This rule has been developed to provide the speed at which innovation takes place in 3M.

These kinds of initiatives are not so simple as they sound. It requires actual work on the ground and a bird’s eye view of the inner and outer organization’s environment, and 3M has mastered it with time.

Virtuous cycle through Innovation:

Innovation powers the new product development at 3M, which increases market share through customer acquisition leading to improved profit, which again encourages new product development innovation.

3M invests more than USD 1 billion in R&D every year, which is around 6% of its revenue. This unprecedented expense on R&D is above the industry average and a cornerstone of 3M’s product development efforts.

Commitment to Science and Sustainability:

3M has been very serious about science, which is the foundation of its existence. But it is equally considerate towards climate change and sustainability. 3M has announced to make its entire operations carbon neutral by 2050.

Such early commitments to climate change allow organizations to prepare themselves for new technological adoption. It has planned to invest nearly 1 billion USD over the next 20 years on the ESG front. Following a path of resource efficiency would improve the bottom line of 3M and give it an edge over its competitors in the world, where resources are becoming scarce with the passing of days.

Conclusion

3M has consistently been regarded as an entrepreneurial organization both within scholarly and business communities. Undoubtedly, 3M’s core competency is its entrepreneurial corporate culture.

Over the years, 3M has transformed this philosophy into an organizational capital with tolerance for failure, regard for success, and encouragement for every idea, even if it looks like a foolish one. It has institutionalized knowledge from the learnings of past failures and collaborations of its employees and resources.

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