Innovation Value Chain at 3M

What better way to talk about innovation value chain than start with a company that has pioneered a century of innovation, 3M Company formerly known as Minnesota Mining Manufacturing Company. 

Before talking about their value chain I would like to see back in history as how this company started innovating and diversifying in various technologies.

They started out way back in 1902 when industrial revolution was hot in the America. They actually started out as a Mining industry to sell the mineral corundum to manufacturers to make Grinding wheels. That business did not go well for them so they decided to jump into manufacturing Sandpaper. Now here is where Richard Drew (inventor and employee in 3M) came into picture. He observed that two tone auto paint job were difficult to manage at the border of the two colours.  Drew took it up as a personal challenge and while working in 3M he started working on this pet project. His general manager William McKnight wasn’t that happy with Drew concentrating on other work which was not in 3M domain. McKnight did ask him to stop doing that and concentrate on his official work i.e. on sandpaper. But Drew carried own this work anyways. Later when he was done this product was introduced to his manager & the auto paint job firm and it turned out to be a hit. This product was none other than the Masking Tape. 

Suddenly then McKnight realized the importance of this pet project that Drew had carried out. This according to me led McKnight to promote the concept of individual innovation among employees. After this followed number of innovations including Cellophane tape. In 1948 when McKnight had became the chairman of 3M he said the following three paragraphs which would guidelines to any firm thinking about innovation. It is as follows

“As our business grows, it becomes increasingly necessary to delegate responsibility and to encourage men and women to exercise their initiative. This requires considerable tolerance. Those men and women, to whom we delegate authority and responsibility, if they are good people, are going to want to do their jobs in their own way.

Mistakes will be made. But if a person is essentially right, the mistakes he or she makes are not as serious in the long run as the mistakes management will make if it undertakes to tell those in authority exactly how they must do their jobs.

Management that is destructively critical when mistakes are made kills initiative. And it’s essential that we have many people with initiative if we are to continue to grow.”

- William L. McKnight, Chairman 3m 1948.

Here we see the bloodstream of 3M’s innovation value chain which is still followed. 

First we generate trust in employees by delegating tasks to them to perform. Secondly understand that mistakes will be done. Mistakes are part of life. An individual has to commit mistakes to learn more i.e. learn for these mistakes and try other alternatives. Thirdly is let the employees take the initiative. Don’t interrupt. Because of this we have the famous 15% time policy in 3M :)

Those who know the company best, point to four key ingredients that foster a culture of innovation at 3M: 

1. attracting and retaining imaginative and productive people; 

2. creating a challenging environment; 

3. designing an organization that doesn’t get in people’s way; 

4. offering rewards that nourish both self esteem and personal bank accounts

Idea generation in 3M

Innovation has thrived at 3M because people talk. They strike up lively conversations in hallways, cafeterias and labs. They talk across departments and divisions. They meet to share ideas in brainstorming sessions and forums. While more traditional organizations have kept researchers and engineers within their own area or divisions, where their loyalties were strongest, 3M has instead fostered a strong sense of attachment to the company as a whole.  The granddaddy of that concept was the Technical Forum which had its start in 1951. An organization in which participation was purely voluntary, its original goals were to foster idea sharing, discussion and inquiry among members of the 3M technical community, while educating technical employees.

Manley Johnston, vice president of international technical operations of 3M learned that if you have a good story to tell in this company and if you have the guts to tell it, people will listen and support you. 

Conversion in 3M

Conversion in 3M can be mentioned in following two steps.

"Take small steps." - Experiment, but on a small scale. When something looks promising, go all out and seize the opportunity. This way one can do plenty of inexpensive experiments that create a funnel of would-be innovations.

"Give people the room they need." - Without entrepreneurship, there is no experiment. Without experiment there is no success or failure. People need some time, incentives, job security and room to experiment.

Diffusion in 3M

To explain this I would like to quote Moe Nozari, executive vice president, consumer and office market who looks back at his 31 years. Early in his career, Nozari discovered a catalyst that could be used to create Utethane, a component in many 3M products, He says “I went to my boss, George Allen, who later retired as senior vice president, Research and Development and said, ‘I have finished this. What do I do now.’ His answer was, ‘No, you are not finished. Now you go to every division in this company and show them what you have done and work with them to incorporate your invention into their product lines’ That was the best professional growth opportunity for me, because I learned about the company and the wide range of skills and responsibilities that 3M people have.”

For 3M the technologies belonged to the company not the business units. So once they had innovative technology they will try to see if it incorporates in other departments and helps them make a product.

Above quotes are from "A Centruy of innovation - the 3M story", a good book giving us the story of 3M