Old kids on the innovation block
How organizations learn to build long-term innovation capability
Confession: I play the banjo. Which is often the cue for a series of bad jokes all at said frying pan picker’s expense. Example — what’s the difference between an onion and a banjo? No one cries when you chop up a banjo. Or the difference between a Harley-Davidson motorcycle and a banjo — you can tune a Harley. And so on….
But even banjo players can make good sometimes. Especially if (like one Richard Drew) they use the money they earn playing in the evenings to fund their part-time studies in machine design and mechanical engineering. That’s the kind of determination which helped convince the 3M Corporation to take him on as a lab technician in 1921.
Their investment soon paid off.
When you think about the early days of the global car industry your mind probably jumps to Henry Ford and his amazing team of engineers who enabled mass production. Back in 1909 Ford outlined a new strategy for the company, one which concentrated on a single model (the Model T) which could be built in high volume at low price. Something which involved a number of trade-offs, not least in terms of massively editing down the choices available to customers. It was at this strategy meeting that he memorably said ‘Any customer can have a car painted any colour that he wants so long as it is black.’
The decision helped establish the Model T as ‘a car for Everyman at a price every man can afford’, bringing the price down by 75% and putting it within the reach of many people. But it didn’t satisfy the market for long. People wanted more choice in models, styles — and colour schemes. All of which made life more difficult for the skilled craftsmen in the paint shops, trying to deliver ever more exotic paint jobs without slowing down production.
Part of the problem is that when you want to paint with more than one colour then you need to cover up the area you don’t want painted. Which is a clumsy fussy business; early attempts involved using rags, newspapers and scraps of cardboard but then they had to be held in place, making a one-man job into a two-man job. Attempts to solve this by using sticky tape to hold the mask in place also failed; the solvents in the paint dissolved the adhesive on the tape making the whole mask slip and slide all over the surface.
Enter Richard Drew. He was visiting a paint shop trying to sell a new kind of sandpaper which 3M had launched. Hearing some choice language coming from one corner of the shop he walked over to ask what the problem was — to be given an expletive filled tutorial in how not to mask up a paint job. What was needed — he was told in no uncertain terms — was a better adhesive tape which would actually stick and stay stuck!
He went back to his office and began to tinker around with various formulations to try and make something suitable. His boss wasn’t too pleased, ordering him to get back to his main job of selling sandpaper — but he kept on with the quest.
It took him two years and involved a variety of vegetable oils, chicle, linseed, various resins, glue, glycerine and treated crepe paper. What he eventually came up with was a tape strong enough to stick to the surfaces but easy enough to peel off without leaving any scars on the paintwork. Despite its promise his boss wouldn’t allow him to buy the machinery he needed to produce it in quantity — so Drew turned his innovative skills to the problem of financing capital equipment. He bought his machinery in small pieces, each of which cost less than the $99 he was permitted to spend on an item of equipment, and then assembled the machine himself.
This last act finally convinced his boss to let him go ahead — and also provided a lesson which became a company mantra. The boss in question was William McKnight and he made a key policy out of the experience. “If you have the right person on the right project, and they are absolutely dedicated to finding a solution — leave them alone. Tolerate their initiative and trust them.”
And so in 1925 3M’s Scotch® Brand Masking Tape was born. It was warmly welcomed in those paint shops and quickly in many other places; over the next thirty years the company sold over a billion rolls of the stuff. And it’s still around today having created a market which is still growing. Not bad for a product rapidly coming up on its hundredth birthday.
Grandfather rights…
But it’s not their oldest successful product; that distinction goes to the sandpaper which Richard Drew was trying to sell. Sandpaper is used in many industries to prepare surfaces for painting, varnishing and other treatment. And people working in furniture factories, or rubbing down walls to make a smooth surface for painting in the construction industry or our old friends in the automotive paint shops all shared the same problem — dust. It got everywhere, made for unpleasant working conditions and didn’t do much for the surfaces themselves. And if you tried to wet the paper so that it damped down the dust you ended up with all the dust particles sticking in between the grit on the sandpaper and losing its abrasive power.
That was a problem which a solo entrepreneur, a self-confessed tinkerer called Francis Okie, had been working on. In order to test his ideas he needed samples of sandpaper from the many different companies on the market — including 3M. Intrigued by what he wanted the samples for they paid him a visit — and discovered someone sitting on a great idea but rapidly running out of money and options. His great idea was a sandpaper with silicon carbide grit and a waterproof adhesive and backing, which he’d christened ‘Wet and Dry’. The big advantage to paint shops was that the sandpaper could be used wet; the water running off the sanded surface would carry the dust particles away without clogging up the grit and losing its abrasive power.
These days we’re used to hearing about examples of ‘open innovation’ and stories of happy marriages made between entrepreneurs with bright ideas and established companies with the experience to help bring those ideas to market and scale them. But in 1921 3M was very much a pioneer of this approach — to their mutual benefit. They offered Okie a job (with enough freedom to continue his tinkering), took on his patent and brought ‘Wetordry’ sandpaper to the market.
Where you can still find it today, having just celebrated its 100th birthday.
Repeating the trick…
Both of these products were not only very successful, they also created new categories, opened up whole new markets. What’s impressive about 3M is the way in which they have managed to repeat this trick over decades — think for example of Scotch tape, still selling millions of rolls per year since its launch in 1930. And the handy tape dispenser for it, born in 1939. (The old tape-meister Richard Drew was behind this one as well, using many of the skills he’d learned in building the machinery to manufacture masking tape his team managed to create a transparent cellulose-based tape which is still at the heart of the company’s business ninety years later).
Or Scotchlite reflective traffic signs (1939), Scotchgard upholstery protection (1956), Scotchbrite washing up pads (1958), Micropore surgical tapes (1960), Thinsulate fabric (1979) and the (relatively) recent PostIt notes in 1980. All well-established products, all still on sale today with others joining them all the time. 3M has around 50,000 products in its range and commits to the widely published strategic challenge of getting a third of its revenue from products launched within the preceding three years!
Success isn’t accidental…
It’s sometimes easy to forget that even the world’s largest companies (and 3M with $32bn of sales and close to a hundred thousand employees certainly qualifies in this category) were once start-ups. And a key feature of start-ups (the successful ones) is that they are fast learners.
3M’s long history of success isn’t down to luck; instead it comes from a very particular approach to innovation which the company have honed over the years. They’ve taken time out to think about how they innovate and carefully teased out the patterns which seem to help — their ‘routines’ for managing innovation. They’re very clear about ‘the way we do things round here’ — their innovation culture — and take care to make sure the message is taken on board by new employees.
Amongst the key lessons which they absorbed and built into their routines have been:
- Build on people — give them space and opportunity. William McKnight was a book-keeper in the early years but when the company faced one of its many early crises around quality management he was promoted to look after the company’s operations. By 1929 he was running the entire company — and he took on board the lessons which people like Richard Drew had taught him about supporting initiative. He set up an approach which he summarised in his ‘Basic rule of management’: “delegate responsibility and encourage men and women to exercise their initiative.”
- Encourage intelligent failure — the down-side of allowing people to take initiative is that they will make mistakes. Importantly one of McKnight’s famous comments was that ‘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.’
- Listen to customers — go to the source, understand the user context. An approach exemplified by Richard Drew’s early paint shop visits; picking up market signals comes from getting close to the market.
- Engage in open innovation — long before Bill Joy observed that for even large organizations the blunt truth is that ‘not all the smart people work for you’ 3M was finding this out the hard way. Their fledgling business in 1921 had its first major success through finding and then assimilating the technology behind Francis Okie’s wet-or-dry sandpaper — and this was a lesson they took careful note of. Whether in technical communities or in strategic alliances knowledge flows freely in and out of the company, its success due in no small measure to the networks it creates
- Give people space and permission to explore. 3M is famous for its 15% policy, effectively signalling to people that it’s OK to explore and play around with ideas for up to 15% of their time. (the origin of this number was the calculation that if people spent the equivalent of a couple of coffee breaks plus their lunch hour they would have around 15% of their time free to think about their own projects). But not too much — the 3M culture of ‘intrapreneurship’ is built on the expectation that people will also use their own time and initiative. Drew’s two-year quest to find the recipe for masking tape was an ‘off the books’ piece of internal entrepreneurship, as was Art Fry and Spencer Silver’s development of PostIt notes.
- Manage your knowledge base. From their earliest days 3M sought to understand the science of coating surfaces — and then were able to put this knowledge to use across many different categories and markets. But this was more than simply managing a database; their successful combination and recombination of knowledge owes much to the idea of internal communities of practice, managing knowledge flows across the company. And to a consistent commitment to doing their own R&D as well as making use of what others know.
- Manage your innovation portfolio. McKnight famously carried out an audit of the company’s products trying to find the patterns behind their breakthrough successes. This led to setting up a cross-company New Products Department, with the responsibility to pick up both technological possibilities and market opportunities, balancing the risks and rewards and using this to drive innovation strategy
- Create internal entrepreneurship capacity. McKnight had noticed that Richard Drew, despite his early success had become bogged down in the systematic process of product development. His free-wheeling slightly maverick approach no longer fitted the company’s formalised approach. So McKnight offered him the chance to hand pick a small team and start an open ended invention facility — the Products Fabrication Laboratory; — as a place where ‘misfits’ like himself could find a home. It was an astute move; over the next 20 years the ProFabLab developed a string of breakthroughs like Micropore surgical tape, face masks, respirators, and artificial turf. Its value wasn’t just in the products and technologies that they created but also in the underlying message that there are many different ways in which to approach innovation. That same culture of intrapreneurship was what underlined the emergence of Post-it notes a generation later.
3M’s story is a reminder of the importance of learning and building capability to manage innovation. It’s not about doing one thing well but about finding different ways of handling the challenges of creating value from ideas
And having extracted key lessons, even from situations in which they failed, putting those recipes into practice and reinforcing them. To borrow a quote attributed to the famous golfer, Gary Player — ‘it’s a funny thing — the more I practice the luckier I seem to get’
For more on ‘Mastering the craft of innovation’ see my website here and take a look at my online course here — or listen to my audio course here.
