Freedom to Innovate: 3M Case Study

3M: An innovative company

Most people who know about 3M know it for its Post-It notes or for Scotch tape or Scotchguard. 3M is renowned for its innovation, so much so it received a National Medal from President Clinton in 1995. The story of the inventor of the Post-It Note, Art Fry, is often touted as an example of both serendipitous innovation and allowing employees freedom to follow their interests and passions for the benefit of the company. Most innovation specialists are familiar with Google engineers having time to do their own thing, with Google launching Gmail, Google Earth and Google Labs based on the work of those dedicating 20% of their time to exploring their own ideas. But it was 3M who, in 1948, launched their 15% programme, where all employees, not just engineers or technical people, spend 15% of their time supported by the company in chasing their passions and their ideas, to see if there is any value there.

Time to innovate

That 15% investment of employees’ time has led to innovations such as Cubitron II, a sandpaper that acts like a cutting tool and generates millions of dollars in revenue. But more importantly, this programme to indulge in pet projects does two things that symbiotically drive up profits – they reduce labour costs by increasing talent retention – through more satisfied and autonomous workers – and also reduce recruitment of talent costs, as highly talented individuals want to work for 3M versus their competitors. 3M balances off this 15% time by setting bonuses based on innovation – 30% of sales turnover has to come from products launched in the last four years for bonuses to be paid in specific divisions. Therefore, a virtuous cycle is created in the culture of 3M, harnessing a spirit of innovation. 3M have also created organisational structures that feed and grow innovation to ultimately drive revenue, but at the same time to support and satisfy colleagues. For example, funding for pet projects comes from multiple potential sources, with avenues left open to the individual. Recruitment is done simply by colleagues putting together posters to recruit other specialists onto their project. 3M has innovation at its heart and soul, which is an incredibly compelling environment in which to work.

‘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.