MBA 580 3M

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Jan 9, 2024

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Benchmark Study 3M Michael Smith MBA- 580 Innovation Strategy High-Performance Organization Professor Paul Markham 12/31/2023

Analysis 3M’s process-based Approach toward Innovation The background for 3M is 70k employees and $15 billion in sales, global operations in over 200 countries, multi-products over 50K, and multi-market business ( Tidd, J., Bessant, J., & Pavitt, K. 2013). When it comes to the process-based approach toward innovation the statement it takes money to make money comes to mind. The company spends approximately $1 billion and R&D while having a high commitment to long term R&D which results in a top 10 in patients awarded in the United States according to the article by Tidd, J., and Bessant, J. This has led to the company launching breakthrough products while establishing new markets and consistently setting stretch targets of getting 30% of the sales turnover from the new products over the past four years. 3M manages innovation with their company culture. The key to success is to create conditions favorable for innovation to occur from different areas such as by accident and avoid putting structure in place. The strategy for innovation is setting stretch targets according to the article “ such as ‘x% of sales from products introduced during the past y years’ – provides a clear and consistent message and a focus for the whole organization” ( ( Tidd, J., Bessant, J., & Pavitt, K. 2013). Leadership allocates resources which includes time and space for the staff. The staff can explore and play with ideas, build on chance events or combinations. Encourage employees to work on innovation projects in their own time. Provision of staged resource support for innovators who

want to take their ideas forward. Think of this as shark tank. Due to the size of the company and range of competition the company has identified “Pacing Plus” programs which attempt to focus and prioritize around 30 key areas for development. To enable the process 3M has developed a set of structures and policies to guide innovative activity from picking up signals through to implementation. The company allows for parallel routes through their system so that innovations can come close to market interactions. There is no secret lab such as the famous aircraft skunk works that created legendary aircraft like the SR-71 blackbird, instead everyone is the skunk. The company has a formal stage-gate system for innovation. There is a clear process for radical ideas, moving to a thought stage, to more rigorous business plans. The idea is to take non-linear ideas through the system. The structure is not rigid. Significant features or process that promotes innovation The company does recognize and gives rewards to employees. These awards are built around innovative activity which recognizes the effort rather than the achievement. At the core innovation is a key the company has a hall of fame whose members are elected on a basis of the innovative achievements. Employees are allowed to move within the organization and the combination allow for creative thinking and new perspectives. Employees are allowed to slack or play with their own pet project. Patience, which is very important in some of the projects can take years to bring to market. Accept mistakes while encouraging risk taking. Allowing

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employees to get around the system and be creative when it comes to company procedures which could be seen as bureaucratic system. Lastly, the company starts the process early by hiring people with innovative mindset. When it comes to linkage and networking with 3M the company brings teams together and does not attempt to separate the teams. Encourage broad perspectives, an example is making an overhead projector and have the development staff to make sales calls which leads to sales. Strong culture and being apart of various groups and organizations such as tech forums. This allows for pollination with like-minded people. Bring outside volunteers to gain new perspectives. It is important to note permission to play with 3M is open and welcoming. When looking at the acceptance of mistakes it does enhance the company’s innovative culture it allows people to be daring, take changes, and not worry about losing their job or being reprimanded especially around performance. Compare 3M to RAM (my company) Looking at 3M and RAM company, RAM is more structured and rigid. Ram has project managers and VPs who work with specialist and pulled from functional teams. These specialists report to two managers. 3M is cross functional whereas RAM is more siloed and may practice older project management processes such as Waterfall. The innovation and ability to be free and flow is not available at RAM. In management RAM has more structured style where approvals go up the chain and gain approval before moving forward. 3M moves quicker and is more agile. The decision maker and processes are designed to not be roadblocks or get booged down in bureaucratic procedures or approvals. When it comes to communication RAM has a structure which goes through many hands and requires a ladder or tier structure. Instead, 3M has an open communication and cross pollination with an open-door policy in which leaders encourage

innovation and development. The approach for 3M is to empower and let employees be decision makers. This is important for innovation due to the speed and ability to adapt quickly. Having a rigid structure and processes to follow can slow innovation and take time to gain approvals or move forward on various projects. RAM could use best practices from 3M to help move innovation forward and lessen the structure Ram currently employees. It all starts with culture and empowering the employees of RAM. This can be achieved by trusting and allowing them to explore products and services which could help grow RAM and RAM could utilize to grow. Employees should be allowed to research tech forums, join different associations, and develop partnerships outside of RAM to gain a pulse of advances in technology and help RAM gain potential partnerships. RAM can learn to from 3Ms recognition programs and hall of fame which are not focused on results or profits. Instead, 3M rewards innovation and the attempts to move the needle while understanding mistakes can happen and not every swing will be a homerun. The Hall of Fame for RAM could be based on employees’ voices and not just on results, instead it could be based on the contributions from various stakeholders at RAM. Losing the titles freeing up the process and procedures is a good lesson for RAM, and still having guard rails and policies in place to ensure employees stay focused on task and not just being unproductive. Lastly, for RAM it all starts in the hiring process and training with a clear understanding how RAM supports its employees and encourages innovation while embracing outside of the box thinking. The timelines for RAM need to ensure longer-term projects to be more successful by continuing to use project managers and have processes in place to keep the timeline in line with expectations. The project manager needs to ensure the project stays on course and does not have a lot of bureaucratic tape to move forward with annual reviews. 3M has stretch goals and long-

term goals which are very structured and clear. If during the project timelines need to be adjusted, then the team should be meeting with leadership and executive stakeholders to address concerns and potential solutions to the roadblocks. Conclusion RAM could look at companies such as 3M and study best practices every day. For RAM to be successful as a company we need to embrace change and be willing to be effective in communicating the vision and changes. In establishing culture RAM needs to train current employees while removing obstacles and roadblocks. When it comes to the hiring process ensure the recruiters and hiring managers are looking for employees with innovative mindset and a willingness to explore while performing the task and duties the potential employee is applying to do with RAM.

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References Tidd, J., Bessant, J., & Pavitt, K. (2013). 3M: Rethinking Innovation 2 3M 1 : Rethinking Innovation Background . https://www.johnbessant.org/_files/ugd/6ba33a_0d844b920e654d70b93508 93dc4b7aa5.pdf

MBA 580 3M

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