3M's Innovation Challenges

Over the last few posts I've documented a number of capabilities that enable 3M to innovate successfully. These factors include the culture, the intentional scenario planning or "forward mapping" within the research teams and the identification of seven core enablers or components of innovation. Through these attributes and a dedication to innovation throughout the organization, 3M has clearly established itself as an innovation leader.

Now, we want to turn in this last post to the remaining issues or challenges. While 3M is an excellent innovator, there is always room to grow and improve. In this spirit, there are a couple of areas where I believe 3M could do more to improve its innovation capabilities. The areas of possible improvement are:

Complacency: Paul Williams pointed out that any firm that has success in any endeavor risks becoming complacent. As Andy Grove of Intel pointed out "Only the paranoid survive". 3M needs to build on a successful foundation and remain hungry for new innovations. Also, 3M should speed up its product development and delivery time frames.

Insular: While 3M is very good at internal discovery and does invite key customers into its innovation efforts, it risks becoming too insular. 3M has yet to fully embrace “open” innovation in all of its incarnations. Clearly other R&D driven organizations like P&G have embraced a combined internal and external model successfully. 3M could start by partnering with Innocentive and grow its trusted networks, then move more gradually to an "Ideastorm" model for consumer products.

Product/Technology focused: The majority of the innovations we discussed were technical discoveries based on research that led to new products. This is very commendable, but leaves out a number of other kinds of innovations, from service innovations to business model innovations. I'd like to see more and hear more about 3M's innovations outside the product sphere, and encourage them to do more innovation outside the technology/product sphere.

Engaging the whole organization: In fairness we only met with the research teams, so we didn't have a chance to meet individuals outside of the research teams who are innovating. I didn't get the sense that the expectation, or the sets of tools and techniques, are nearly as evolved outside the technology organization. It would be interesting to see 3M place as much emphasis on innovation beyond the product as it does on the technology and product.

Customer Driven: 3M is clearly a technology driven innovator, using new discoveries to create new products and services and align those with customer needs. While this approach requires some interaction with customers and consumers, there was less discussion of the discovery of unarticulated needs using ethnography or voice of the customer. Given the capabilities of the research teams, adding more customer insight tools to the mix would make 3M an innovation machine.

3M is clearly a leading innovator and has done a significant amount of work to innovate consistently. While some of the points I raise above may seem a bit narrow, I believe that innovation needs to be extended beyond the product and beyond the bounds of the organization. Business model innovation and customer experience are two of the most sustainable innovations and differentiators, and there's really very little attention paid to these concepts in any organization. With the headstart that 3M has in terms of its existing capabilities, building these other strengths shouldn't be difficult and will erect a differentiation that will be exceptionally challenging to overcome for any of its competitors.

3M's Seven Innovation Components

This post is the third about my trip to 3M. In the first post I examined 3M's culture, informed by its midwestern roots. In the second post I reviewed the concept of forward mapping and some of the opportunities and challenges of 3M's innovation exchanges. Today I'll recap and review the components that 3M believes make up its innovation success.

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
• Networking
• 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.

Culture
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.

Networking
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”.

Individual Expectation
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.

Measured Accountability
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.

More on the 3M visit

This is the second of a series of posts about a visit to 3M's customer innovation center in St. Paul Minnesota. There we were treated to a day of interaction with some of the leading innovators at 3M. Additionally, we learned about 3M's methodologies and culture which sustains innovation. My previous post about 3M's unique collegial, no "rock star" culture is here. In this post we'll explore the use of "Forward Mapping" that the technology researchers and scientists use to project the development of new insights.

In our meetings with 3M we were fortunate to have Andy Ouderkirk present to us the “forward mapping” process 3M uses to project technologies and their future uses. This concept is similar to “roadmapping” except the perspective is from a technology point of view rather than from a product point of view. The concept also incorporates some scenario planning aspects and these "forward maps" look at the development and refinement of technologies well into the future, and the possible products to be created or problems that can be solved. Using this forward mapping process and some other 3M methodologies, Ouderkirk believes that breakthrough ideas and innovations can become much more predictable and frequent. He believes that breakthrough innovations are different from evolutionary or incremental innovation in two specific regards. Evolutionary ideas are execution driven and mitigate risk through diversification (many different ideas). Breakthrough ideas are architecture driven and mitigate risk through leverage. In other words, breakthrough ideas create “platforms” that launch many new products and iterations of products. The platform concept is important to 3M, since each new technology may integrate with other technologies or platforms to create a wide range of solutions in many different businesses. This forward mapping capability led to the development of the first “pico” projector, an LCD projector about the same size as a mobile phone. The capability to develop that product was “forward mapped” from highly reflective thin films that Ouderkirk and his team developed several years previously.

Moreso than other R&D work I’ve seen in other innovative companies, the research scientists and corporate innovation teams at 3M are constantly aware of the need to deliver value – in fact they “sell” their research and development findings to the various business lines and meet in organized “tech forums” with product and innovation leaders in the business lines on a regular basis. The formal and informal exchange of information is truly amazing. On any given day in any 3M facility you can find at least one "tech forum" underway. This engages "horizontal" communication and attracts individuals who have a common need or challenge to solve and exposes the wealth of corporate research to everyone in the forum. The combination of "Forward Mapping" - extending a new technology far beyond the first technical iteration to consider integration with other capabilities to solve a wide range of problems over several iterations, demonstrates a desire to solve problems and address opportunities, not merely just discover new things. This forward thinking philosophy helps 3M identify new opportunities and consistently innovate.

We did discuss a few concerns with the methods we saw in use. The “influencer” panel asked questions about younger researchers and younger product managers and wondered if the informal, person to person transmission of information would work in an age when many new graduates are very comfortable networking, but use very different tools. Within the research labs there is little use of social media tools like blogs, Twitter and Facebook, but a growing realization that these tools are the modus operadi for the younger generation entering 3M’s product groups and labs. To further that point, while 3M has a very robust internal innovation program, and does interact fairly regularly with its B2B customers in the customer innovation centers, 3M retains a “bring the customers to us” mentality and has little experience with truly “open” innovation. In the few instances it gave as examples of "open innovation", all the examples were acquisitions of other firms. There needs to be a greater understanding of open innovation models, from an “IdeaStorm” application for consumer facing products to proprietary networks of engineers, scientists and companies for more technical B2B challenges. Finally, much of what 3M calls innovation seems more like technology discovery and technology push rather than customer pull. In fact one of the speakers called this "technology driven business development". That's fine, and important, but too much emphasis on internal knowledge and insights uncoupled from customer and consumer needs can result in interesting but ultimately disappointing innovation.

Midwestern Innovation at 3M

Yesterday, November 12th, I had a unique opportunity to visit with senior executives and scientists at 3M's Customer Innovation Center in St. Paul. 3M invited six innovation "influencers" to attend a briefing and to learn more about what makes innovation so viable at 3M. Over the next several blog posts, and in my upcoming November newsletter, I plan to recap what we learned during the briefings, and what I think that means for firms that seek to replicate the success that 3M has had in innovation.

One attribute that resonated with me was the collegial and "we're all in this to succeed" cultural model demonstrated time and time again during the presentations. After all, these weren't just any scientists. Several people in the room, including Andy Ouderkirk, Olester Brown and Sumita Mitra are well known innovators and have won numerous awards inside 3M and outside 3M as well. In many organizations these individuals would be "rock stars", yet the CMO of 3M said several times that one of the defining cultural aspects of 3M is that there are no "rock stars". It's hard to validate that statement after one day of meetings, but I came away with the sense that everyone (at least on the technical side of the house) is actively encouraged to innovate, and that aspects of the 3M culture sustain that by lowering barriers and increasing the opportunity to work together.

I titled this post "Midwestern Innovation" because we joked at lunch about whether or not 3M's culture would have developed in the same way if the firm had been located in Manhattan or San Jose. 3M's model is distinctively upper midwestern - built on the concept of working together for the common good of the firm and the employees. The original founders embedded much of this philosophy, which was extended by William McKnight who encouraged his managers to allow employees to experiment, to define the best way to do a job, and to tolerate mistakes. I'm curious how much those early decisions about how to structure work and the collegial atmosphere of the environment has sustained 3M and made it easier for innovation to occur.

Some of the other factors that sustain an innovation culture are also aspects of the midwestern, rural roots. There's a focus on individual initiative, which encourages people to identify opportunities and create solutions, and a "barn raising" mentality which encourages people to help each other with on projects. There's also very little financial gain on the part of the individual for new ideas, but the opportunity for advancement and the opportunity to repeat the success. Finally, the evaluation criteria for most people encourage working together and solving problems across geographies and product lines. These collegial attitudes, low personal aggrandizement and attitudes to sharing insights and information rather than bottling up information in rigid silos creates an internal innovation community spread across geographies and over 40 different core competencies. With a powerful informal network, the conditions are ripe for innovation.

Over the next few posts I'll return to the 3M visit and highlight some of the other learnings, takeaways and challenges for 3M. But to me one of the most important aspects of the innovative culture was the demonstration of the culture that allows innovation to flourish.

You can read other blog posts by other attendees here:

Mike Lippitz: link

Nick Shulz: link

Paul Williams: link

Other attendees included:

Joe Sinfield, Innosight
Lisa Bodell, FutureThink
Mary Tripsas, Harvard Business School

Island of misfit ideas

Do you remember the annual Christmas special about the island of misfit toys, where Rudolph ends up because he doesn't "fit in" with the other reindeer? The island is full of misfit toys that weren't acceptable for one reason or another.

A recent Accenture study on innovation found that there must be a mythical land of misfit ideas. Executives who were surveyed for the innovation study said that "opportunities to exploit underdeveloped areas/markets often die because they can never find a home to nurture them." Less than 15% of the executives surveyed disagreed with this statement. In other words, organizations can generate good ideas that are relevant to specific opportunities, but fail to find business lines or leaders who will adopt and nurture those ideas. So, those ideas must end up somewhere - our land of misfit ideas.

There are several reasons why good ideas aren't adopted and nurtured. In our experience I think I'd boil it down to three predominant reasons: prioritization, ownership and fear.

By prioritization I mean that a product or service development team within a line of business typically has more work than it can effectively complete. Even a very compelling idea that is generated and has merit must find its place in the priority stack. Often it is much easier to simply slip that "great new" idea at the bottom of the stack rather than reprioritize the work, so the opportunity slips by and little is done to advance the idea.

By ownership I mean that good ideas that are generated outside of a business line are often looked at with suspicion. Even if the idea is a good one and solves a significant problem, a business unit leader may think that since his or her team didn't generate the idea, they have little stake in the idea, or the idea may cannibalize the existing products and services. So a good idea is rejected or ignored.

By fear I mean that an idea may have great value but be so radical that implementing it will create significant change. In many organizations change is feared rather than embraced, and for some reason it is better to be forced to change through the actions of a competitor (reactive) than to create change and disrupt others (proactive). Since most firms reward consistency and reaction rather than change and proactive disruption, many new ideas will never see the light of day.

Perhaps what's needed is "local" innovation in a product or service line that is safe and relatively incremental, and "global" or corporate innovation that is relatively radical and disruptive. The challenge in this regard is moving the good idea from those who don't have the responsibility to develop the concept as a product or service to those that do, unless we simply spin off new product groups or businesses based on the radical ideas, rather than trying to force them into the existing businesses.

Otherwise many of the best ideas in your organization will end up on the island of misfit ideas, waiting for someone else to come along and discover them. Then, those ideas get released and implemented with a fury on those who ignored them initially.

Looking for the next disruption

Many of us are aware of disruptions in markets, but like recessions we can only identify them by looking at evidence from the past. It's difficult to identify what new emerging technology or capability will create a market disruption. We typically can say a new product or service was disruptive months or years after the fact. But that shouldn't stop us from trying to decide where a new disruption might arise. In fact, we should be scanning the horizon constantly for emerging trends and evidence of leading indicators. Or perhaps challenges to be solved.

I was thinking about this recently when it hit me - there's a clear need for a disruption in personal electronics. We've had, by my count, at least three big breakthroughs. First came a rapid decline in the cost of memory. Remember when Bill Gates said 640K was all the memory anyone would ever need? I have thumb drives that have gigabytes of memory. Second came processing power. Remember when Intel would tell you how great their next Pentium or Septium or whatever processor was going to be? They made you care about the processor. Who makes the processor in your iPod or SmartPhone? Who knows? Who cares? Most of us have far more processing speed than we'll ever need. Next came broadband and wireless access. We have access to fast data transmission, wired and increasingly wireless, just about everywhere. So, currently our personal electronics are fast, efficient processors of information and are constantly connected. What more could you want?

Well, a couple of things. Since the early data input vehicles were typewriters, most of our electronics are dependent on manual data entry through a keyboard. Heck, even our smartphones are more keyboard dependent than voice dependent. But this is a limiting factor. Too many of us aren't great at thumb typing and want to have a more robust interaction with our Smartphones and portable machines. We are hampered by the input mechanism. What would these smart electronics look like if our main source of data input was voice? Could we eliminate the keyboard all together? I think this is one clear disruption waiting to happen. Voice driven electronics that can determine when I am speaking if I want to create a document and dictate the content of the document or record my voice for storage or make a call.

Also, another challenge of the form factor of most smart electronics is the size of the screen. Unlike teenagers, many of us are finding the size of the screen and the amount of information we seek to convey on those screens a challenge. What's clear is that as we become more reliant and dependent on mobile computing, we need more robust presentation capabilities, either as the 3-D holograms of Star Wars fame or perhaps something a bit more mundane, like a set of glasses that stand in for the screen. I could imagine a set of glasses that has a built in microphone that allowed the user a heads-up display of the information from his or her smart device.

Further, what's also happening is that all of the processing speed and memory are sublimated back into the cloud. We don't need tremendous processing power or memory on the device if we can stream a significant amount of information wirelessly and process it in the cloud. We need to improve the human interaction with the information and allow people to process and use information in a more natural context. We are still too tied to the concept of a computer terminal at a desk when our needs and interactions are increasingly less like that original concept.

The next major innovation or disruption in smart electronics should be in human form factors - allowing us to use ubiquitous information and process it in a much more effective way than we can today. If you are looking for a significant disruption that's likely to happen, I can't think of a more likely place to start looking.

Your innovation needs a story

Imagine if you will, somewhere in the distant recesses of our existence, a group of cavemen huddled around a fire. The wiseman of the group gathers the tribe around the fire and regales them with stories of their ancestors - how they fought the neighboring tribes, how they found the food necessary to survive. The shaman passes on the wisdom of the tribe, and teaches in the process.

Stories are the best way to learn, and the best way to communicate. For some reason, we've lost the sense of story in business. Rather than use stories we opt for hard and fast "facts" that often miss the root causes or issues. There's no story telling class in an MBA program, yet most of the best leaders understand the importance of storytelling, and they lead others by telling and retelling stories. Some of those stories are myths, meant to reinforce the culture. Some of those stories are true, meant to teach and instruct.

I've just had the opportunity to read Michael Margolis' new book Believe Me, which he calls a "storytelling manifesto for change makers and innovators". It is a small, slim book with a lot of good ideas about why story matters and how to reclaim it.

What strikes me about stories in regard to innovation is how little emphasis we place on a story or a narrative. Too often an innovation project is created, but there's no linkage to past work or existing issues. The project seems to exist outside of the framework of the business, and doesn't have a strong linkage or narrative to drive it. Margolis identifies 15 storytelling axioms and notes that storytelling is especially important to innovators. There are a few axioms I'd like to point out:

1. If you want to learn about a culture, listen to its stories. If you want to change a culture, change the stories. I've found that culture is always a barrier to innovation, so changing a culture is important when innovating. Identifying the stories and changing the stories will make innovation more acceptable.

2. The power of a story grows exponentially as more people accept your story as the truth. This axiom played out for us on an innovation project, when we introduced qualitative research to a firm that had not used ethnography successfully before. Our story about our findings and the value of our findings spread through word of mouth and created an entirely new perspective on the use of ethnography.

3. Storytelling is like fortune-telling. The act of choosing a certain story determines the probability of future outcomes. If we choose a story line that we are a simple, safe, slow moving company then that informs the culture and defines who and what we are. If we choose a story line that defines our organization as a risk taking, insightful innovator, that's what we can become. Your story drives your results.

As an innovator, I'd like to start with the story, which will drive the culture to adapt to a new view of itself, and anchor the work within a narrative that we can spread through word of mouth to others. There's a need for a formal communication network, but powerful stories, repeated throughout the organization, do far more to get people on board.

Check out Michael's new book and think about what your story says about your organization, and how you can use story to your advantage.