3M's Seven Innovation Components
The seven factors or components of successful innovation, according to 3M, are:
• The relationship of innovation to corporate vision and business model
• 3M’s culture, which I’ve addressed previously
• Access to multiple platforms or technologies
• Individual expectation
• Measured Accountability
• Connection to customer need
Let's investigate each of these components and discern their value for innovation.
Relationship to corporate vision and business model
3M is the first company I’ve seen with a documented definition for innovation. That definition is:
The use or application of creativity to generate a new or novel output having value for customers
Often when we at OVO work with clients one of the first things we try to do is create a definition, so that everyone is working from the same perspective. Demonstrating a standard definition means that everyone within 3M understands what innovation is. Further, Larry Wendling, one of our hosts, said that “Innovation is 3M’s business model”. I think by this he meant that innovation is viewed as a core strength and a competitive advantage for 3M. At 3M innovation is tightly aligned to corporate strategy.
3M's culture, which I've written about previously, encourages innovation and establishes expectations that everyone should be creating new ideas. The atmosphere is collaborative and collegial, and individual initiative is expected.
Access to multiple technologies
3M has six major business lines that span the gamut from consumer to industrial, healthcare to imaging. The fact that 3M has basic research and products in so many different businesses and technologies mean that innovators have a tremendous number of potential interactions and “mash-ups” within 3M. In a sense they’ve created their own proprietary, trusted networks. While we were in the innovation center we were introduced to 40 core technology platforms. This means that any innovator can explore opportunities in his or her area of focus, and also call on scientists and researchers across a tremendous array of technologies and capabilities. But beyond merely managing a portfolio of technologies, 3M sponsors and encourages cross-pollination.
3M encourages a range of informal networking, as we’ve detailed in our discussion on the culture. But perhaps more importantly 3M encourages “birds of a feather” to organize themselves into special interest groups. This informal, horizontal structure around specific topics or technologies is called the Tech Forum. On any given day you can expect that at least one interest group is meeting on a specific technology or capability in every 3M facility. The networking and exchange of information is truly astounding. These interest groups have formal leadership and small budgets to encourage communication, but are driven from the “grass roots”. These teams reinforce the 3M culture and are called “3M’s competitive advantage”.
Every 3M employee is expected to innovate. One of the most important early leaders of 3M, William McKnight, developed a set of expectations for employees and their managers. These included ideas like individual initiative, allowing the individual to decide how the job got done, and tolerance for mistakes. This encouraged individual effort and initiative. Further, the rewards and recognition structure reinforces networking and the innovation culture. There are few individual financial incentives to innovate, but several important recognition programs, including the “Circle of Technical Excellence and Innovation” and most prestigious, the Carlton Society. Only 170 individuals have been named to the Carlton society.
3M spends a significant amount of its revenue on R&D and other innovation activities. As such, innovation must produce value for 3M and the activities and outcomes are closely managed. 3M uses a balanced scorecard model to track its success with innovation, including such measures as:
• Incremental Revenue from recent innovations
• R&D spend
• Speed to market from idea to product
• Patents issued
Measuring the results indicates that 3M expects to innovate, and expects ideas to flow through a pipeline and become new products. That which gets measured gets managed. Innovation needs to be measured and managed like any other process.
Link to customer need
Innovation and basic research is not valuable unless the discoveries can be converted into value for the organization or its customers. 3M carefully connects its innovation work to customer needs (particularly B2B customers) through meetings and exchanges with customers in Customer Innovation Centers located throughout the world. Typically each facility has several meetings every day with corporate customers. These meetings identify significant challenges the customers face and help 3M identify the right technologies or opportunities for new innovation.
These are the seven key facets or components of innovation from 3M's perspective. Tomorrow I'll complete my posts about the 3M visit with the identification of some key challenges and areas of growth for 3M to explore.