One of the most frequent answers we receive when asking workshop participants about obstacles to innovation is: “Our company’s culture!”.
Indeed, innovation is at least as much a social phenomenon as a technological one. The process and efficiency focus of the past two decades has undoubtedly improved bottom lines in the short term, however often at the cost of an organisation’s critical ability to innovate.
The resulting pitfalls were identified as early as the 1940s. Understanding the risk involved, 3M’s then CEO William McKnight declared in 1948:
“…it becomes increasingly necessary to delegate responsibility and to encourage men and women to exercise their initiative. This requires considerable tolerance. Those men and women, to whom we delegate authority and responsibility, if they are good people, are going to want to do their jobs in their own way.
Mistakes will be made. But if a person is essentially right, the mistakes he or she makes are not as serious in the long run as the mistakes management will make if it undertakes to tell those in authority exactly how they must do their jobs.
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.” (Author’s emphasis)
The company DNA resulting from the implementation of these and related insights was boiled down by Larry Wendling, 3M’s VP of Research, in a 2006 article into „Seven Habits of Highly Innovative Corporations“, four of which again emphasize cultural aspects:
- From the chief executive on down, the company must be committed to innovation. …
- The corporate culture must be actively maintained. … In a nutshell: „Hire good people and let them do their job in their own ways. And tolerate mistakes.” …
- Talk, talk, talk. Management at 3M has long encouraged networking — formal and informal — among its researchers. …
- Research must be tied to the customer. Employees spend a lot of time with customers to understand what their needs are so they can go back to the labs to come up with valuable products. …
The impact: 3M is time and again being rated one of the world’s most innovative companies while at the same time posting solid business results. To put it in the words of the upcoming April 13 (2015) issue of Forbes: “Unsexy but extremely consistent, with revenue growth of 5% to 6%, double-digit profit growth and a dividend that’s up at least 20% each of the last two years…”.