Case Study: How 3M Gave Everyone Days Off and Created an Innovation Dynamo Befor
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Case Study: How 3M Gave Everyone Days Off and Created an Innovation Dynamo
Before Google and Hewlett-Packard, 3M was offering employees time off to explore their own projects — netting 3M's most famous products to date.
In 1974, 3M scientist Art Fry came up with a clever invention. He thought if he could apply an adhesive (dreamed up by colleague Spencer Silver several years earlier) to the back of a piece of paper, he could create the perfect bookmark, one that kept place in his church hymnal. He called it the Post-It Note.
What you might not know is that Fry came up with the now iconic product (he talks to the Smithsonian about it here) during his "15 percent time," a program at 3M that allows employees to use a portion of their paid time to chase rainbows and hatch their own ideas. It might seem like a squishy employee benefit. But the time has actually produced many of the company's best-selling products and has set a precedent for some of the top technology companies of the day, like Google and Hewlett-Packard.
The 15 percent program seems squishy, is now key to 3M's business strategy.
Today, 3M is a multinational powerhouse, with more than $20 billion in annual sales across a product line 50,000 deep, from adhesives to optical film. It boasts 22,800 patents, many derived from its 15 percent program. The program has been key to 3M's business strategy and could be a model for other companies eager to innovate. Says Kurt Beinlich, a technical director for 3M: "It's really shaped what and who 3M is."
Founded in 1902 in a little town on the shores of Lake Superior, 3M started out in the mining business as the Minnesota Mining and Manufacturing Company. With mining hopes dashed, the founders bought a sandpaper factory and struggled for years over how to run it. New investors had to pour in cash to keep it afloat. Eventually, one of them, Lucius Ordway, moved the company to St. Paul, where 3M hit upon some key inventions, among them: masking tape and cellophane tape.
3M launched the 15 percent program in 1948. If it seems radical now, think of how it played as post-war America was suiting up and going to the office, with rigid hierarchies and increasingly defined work and home roles. But it was also a logical next step. All those early years in the red taught 3M a key lesson: Innovate or die, an ethos the company has carried dutifully into the 21st century.
15 percent time is extended to everyone. Who knows who'll create the next Post-It Note?
"It's one of the things that sets 3M apart as an innovative company, by sticking to that culture of giving every one of our employees the ability to follow their instincts to take advantage of opportunities for the company," says Beinlich, who tries to get most of his 70-person technical lab team to participate.
How is the program implemented? In Beinlich's telling, workers often use 15 percent time to pursue something they discovered through the usual course of work but didn't have time to follow up on. And even that depends on other factors — how closely managers keep tabs on projects, for one. What's more, 15 percent time is extended to everyone, not just the scientists (you can hear the cheers in marketing), the idea being: Who knows where the next Post-It Note will come from?
There is failure. As a company culture, it's accepted, if not entirely embraced. In Beinlich's department, engineers designed a heat-repelling cover to protect car finishes from welding sparks. But there just wasn't a market for it: Automotive workers didn't want to shell out for another product when they could keep layering blankets to protect finishes like they always had. "When we found that out, we celebrated that we had found something that was innovative and had its place. But we said OK; let's move on," Beinlich says.
The 15 percent program has clearly inspired other organizations. Google's 20 percent time famously gave birth to G mail, Google Earth, and G mail Labs. (Google would neither confirm nor deny that the idea for its program came from 3M, but it's hard to imagine otherwise; after all, 3M's program had been around 50 years before Google even filed incorporation papers.) Likewise, Hewlett-Packard Labs offers personal creative time.
Still, it's a rare perk at most companies, technical or not. For starters, it's expensive. 3M invests more than $1 billion in R&D alone; 15 percent of that starts to be a sizable outlay. Author Scott Berkun writes about business innovation. He says these policies only work when the outcomes are backed. "Many companies have tried to emulate the 20 percent time idea" but failed because they remained conservative about supporting the new ideas, he says. And experts agree that this kind of nudging probably works best at companies where there's a high level of creative competitiveness; that is, where impressing peers is just as important as the innovation itself.
Some have tried to emulate 3M's program but failed because they wouldn't support the new ideas.
3M's got that in spades. Once a year, about 200 employees from dozens of divisions make cardboard posters describing their 15 percent time project as if they were presenting volcano models at a middle school science fair. They stand up their poster, then hang out next to it, awaiting feedback, suggestions, and potential co-collaborators. Wayne Maurer is an R&D manager in 3M's abrasives division and calls it a chance for people to unhinge their "inner geek." He elaborates: "For technical people, it's the most passionate and engaged event we have at 3M."
Past projects have included making clear bandages, optical films that reflect light, and designing a way to make painter's tape stick to wall edges (to protect against paint bleed). All these products are on the market now.
Sometimes ideas can languish for years. One worker had a hunch that if he reshaped particles on sandpaper, they wouldn't dull so quickly. But that was 15 years ago, and the technology and feedback weren't there to advance it beyond an interesting idea. Two years ago, the same worker started looking at the problem again during his 15 percent time. He made a poster. This time, he got different feedback with the help of new employees and new technology. They discovered they could retain a particle's sharp, pyramid-like shape just by changing the mixing order. Now 3M has a winner in the Cubitron II, a sandpaper that acts more like a cutting tool and one that still stumps copycats, despite that it's been on the market since 2009. If not for the 15 percent time, this worker's idea might've never taken off.
Another obvious benefit of this "think time" is in recruiting. Specialized workers are highly prized and fought for. Companies that offer roughly the same salary as another, can tip the scales with paid personal time. (The snow in Minnesota might be another issue.)
"What you're offering is essentially freedom, and that is very attractive for the right person," says Henry Chesbrough, a professor at the Haas School of Business at UC Berkeley, and the father of open innovation business practices.
Paid personal time is, of course, just one way to help a company innovate and, given the expense, it's not best for everyone. Chesbrough says advances in technology can be achieved if companies generally soften boundaries between where ideas come from and how they take root. A company can limit risk by letting internal ideas spin off into external companies, which might be bought back. On the flip side, internal groups can pursue external ideas. Perhaps the real lesson is that the best ideas can come from anywhere. And an innovative company will find a way to champion them.
You are expected to answer the following questions referring to the 3M case study above, other sources of research.
2. Explain different approaches to recruitment and selection practiced at 3M, and compare their strengths and weaknesses with the recruitment and selection practices at Google.
Explanation / Answer
The recruitment process and the concept of employment is changing fast and adopting new policies. 3M as can be seen from the case, pioneered the industry with “15 percent time” concept wherein employees were allowed to use 15% of their paid time to carry out their own research work and develop their own ideas. Through this unique practice, 3M has successfully developed some of their top-selling products and laid down a practice which would be emulated by many companies in the years to come. Surprisingly, some of the key research and differentiated product lines were developed in this 15% self- time.
3M being such a research driven organization developed Centers of Excellence to manage and drive different development activities in different fields. It strongly believes that if the required expertise is not available in the local area of operation, it would bring in talent from different countries to fill in the required void. The greatest strengths for 3M lies in the fact that they have populated HR with key specialists from other areas of the company. This brings in a new perspective on how the entire recruitment is looked at and the branding of the HR program has undergone a drastic improvement.
All in all, the culture and the recruitment process does appear pretty robust. However some evident weaknesses could be the act of social loafing when it comes to utilizing the paid time effectively. No proper metric has been developed as to evaluate how much of this paid free time actually resulted in growth in the company’s business and product portfolio expansion. 3M also extensively applies the contract worker concept, in order to check the culture fit of prospective employees, it often hires them as contract employees. This may not specifically go down well with a sizeable section of the workforce who look for job security.
Google on the other hand, looks for people who are of an all-rounder and are good in many things apart from the role they are looking to hire for. The basic approach is to hire for the long term and not just for the role at hand. This is contrast with 3M’s philosophy which focusses a lot on the right person for the right job and they would go to any length to get the right resource for the task at hand.
As a spin-off of the ‘15% time’ concept, Google did implement the ‘20% time’ concept. As a result of which, Google too benefitted with some key products like Google mail and Google Earth. However, Google was quick to realize that this culture should not be restricted to just 20% alone. It created a culture wherein the workforce was free to carry out research work on any field which the individual believed could be a game-changer in the days to come. This culture was developed without really targeting the ultimate output which would be differentiated offerings to their customers. This was incorporated into the DNA by default and not by forceful allocation of ‘paid free time.’