Category: The Future of Work & Next Generation Enterprise Growth Themes

3M’s Open Innovation – Collaborative culture and innovation leadership

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By Posted on March 6, 2015 in Culture and the Integrated Workplace, HR Administration & Transactional Outsourcing - Shared Services, Strategic HR, The Future of Work & Next Generation Enterprise Growth Themes

Fred J. Palensky, chief technology officer at one of the world’s most innovative companies, explains how to foster the ongoing cross-pollination of ideas.

As part of Booz & Company’s annual study of the innovation strategies of the world’s highest-spending companies on R&D, the firm conducted a survey that asked senior innovation executives to vote for the world’s most innovative company. (See “The Global Innovation 1000: How the Top Innovators Keep Winning,” by Barry Jaruzelski and Kevin Dehoff, s+b.) The third most frequently cited innovation leader was 3M, right behind Apple and Google. That came as no surprise, given 3M’s track record of developing smart, successful new products.

3M’s ability to keep churning out new innovations is very much dependent on the company’s long-standing commitment to open innovation, both internal and external. We recently spoke with Fred J. Palensky, 3M’s chief technology officer, who discussed the many ways his company creates and develops ideas through open innovation, and explained why its highly collaborative culture and innovation leadership are essential to the process.

S+B: Can you describe how 3M’s open innovation processes are organized?
PALENSKY: The reason 3M is what it is today — a company that has developed organically across consumer, electronic, transportation, industrial, safety, security and display, and electronic markets — is our shared, leveraged technology and innovation model. We assume that technologies and technological capabilities have no boundaries or barriers. Any product or manufacturing technology is available to any business in any industry in any geography around the world.

As the company’s senior technology executive, I’m responsible for the corporate research laboratories. I represent the entire technical community at 3M, which includes about 10,000 R&D people in 73 labs around the world. About 15 to 20 percent of those people work in corporate research, which is responsible for developing, transmitting, and supporting technologies throughout the company. I also head up the corporate technical operations committee, or CTOC, which ensures the development, health, sustainability, and transmission of 3M’s tech capabilities across all the businesses, geographies, and industries in which we operate.

We have 63 full-scale operating businesses in dozens of industries in more than 70 countries around the world. Each one of those businesses conducts its own research, while maintaining connections with all the other R&D operations throughout the company.

S+B: What enables the cross-pollination of ideas?
PALENSKY: We believe that no one business has everything it needs to conduct business in its marketplace without leveraging the rest of the company. So every single technical employee in the company has dual citizenship — they’re part of a particular business, lab, or country, and part of the 3M global technical community. We don’t restrict people from moving from one business to another, from one industry to another, or across country boundaries. Most of the people who run the businesses, the country offices, and the labs have been in five or six or 10 different parts of the company before. They’ve grown up inside the 3M culture. I myself have been at 3M for 34 years, and I’ve had 14 different jobs in five different industries and three different countries. I like to think of it as a movement of people and ideas that’s not mandated but officially endorsed.

S+B: 3M also has an active external open innovation program. Can you describe it?
PALENSKY: Our corporate labs are continually bringing in new employees and technologies from universities and other sources. And we collaborate closely with customers. We have 30 customer technology centers around the world, where our technical and marketing employees meet with customers and expose them to the full range of 3M technology platforms. We ask them what their technical issues, problems, and opportunities are, and whether any of 3M’s many different technologies can help them. The constant technical interaction is critical in creating new innovations.

S+B: Can you discuss a specific product that arose out of 3M’s open innovation process?
PALENSKY: Really, all of them. To take one example, we just introduced an entirely new kind of sandpaper — shaped, fine-grained, self-sharpening, structured abrasives. The mineral technology came from the abrasives division, some of the shape technology came from optical systems, coating technologies came from the tape division, and mathematical modeling and fracture analysis came from the corporate research center. Altogether, the abrasives division used seven different technologies to create the product, only two of which came from the division itself.

S+B: What role does culture play in sustaining open innovation at 3M?
PALENSKY: I think our success is driven much more by culture than it is by structure or organization. We’ve been practicing open innovation at 3M throughout our history. The company started out making sandpaper, and our salesmen sold our products to all kinds of people. When they visited auto-body shops, they watched workers struggle to paint fine lines and borders. So the salesmen went back to the office and talked about the problem. That was the beginning of our masking tape business. That’s the culture that has sustained us ever since.

But we also actively support that culture. All of our technical people at the corporate labs dedicate about 15 percent of their efforts toward programs, interactions, learning, and teaching in areas outside their particular responsibilities. In addition to the various programs we’re developing at the corporate labs, we are working on more than 300 joint programs with various divisions and businesses. So, in addition to their corporate responsibilities, everyone is also a member of a team that is working alongside division members in either technology transfer or new product development projects.

All of this creates a community of collaboration, and it ensures that everybody has some skin in the innovation game. And because our senior leaders have grown up in this culture, they continue to nurture and protect this highly collaborative, enterprising environment. Cultures are unique and extraordinarily difficult to duplicate. And it takes a real effort to sustain them.

strategy and business

Author Profiles:

  • Barry Jaruzelski is a partner with Booz & Company in Florham Park, N.J., and is the global leader of the firm’s innovation practice. He has spent more than 20 years working with high-tech and industrial clients on corporate and product strategy, product development efficiency and effectiveness, and the transformation of core innovation processes.
  • Richard Holman is a principal with Booz & Company based in Florham Park, N.J. He is a leader of the firm’s global innovation practice, specializing in fields with highly engineered products, such as aerospace, industrial, and high tech.
  • Edward Baker, former editor of CIO Insight magazine, is a contributing editor to strategy+business.
  • This interview was originally published as part of “Casting a Wide Net: Building the Capabilities for Open Innovation,” by Jaruzelski and Holman, Ivey Business Journal, March/April 2011.

The Case for Performance Reviews

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By Posted on March 6, 2015 in Culture and the Integrated Workplace, Employer Branding & Talent Management, Finance (Payroll & Compliance) Function, High Performance Leadership, HR Administration & Transactional Outsourcing - Shared Services, Industries Reports & Case Studies, IT Function, Strategic HR, The Future of Work & Next Generation Enterprise Growth Themes

How Performance Reviews Pay Off

Sometimes, the least productive workers will bounce back the most.

Title: Driven by Social Comparisons: How Feedback about Coworkers’ Effort Influences Individual Productivity (PDF)

Authors: Francesca Gino (Harvard Business School) and Bradley R. Staats (University of North Carolina at Chapel Hill)

This paper examines the impact of performance reviews on productivity, and finds that feedback delivered on a regular basis, whether positive or negative, tends to result in improved performance. On a short-term basis, though, the impact varies, sometimes in ways that are counter-intuitive: Positive reviews, for example, do little to boost productivity, and negative reviews that are somewhat vague and indirect cause performance to fall off, but reviews that are directly negative cause productivity to leap. The research offers guidance to managers concerning the pitfalls and potential benefits in framing their messages in reviews, and suggests there is a need to provide feedback on a frequent basis.

In an ideal scenario, employees would be evaluated through the use of objective standards, but as the researchers point out, in organizational settings this is rarely possible. Instead, the very nature of performance feedback promotes what they call social comparison processes, as employees are informed about their performance relative to that of their co-workers. In this study, employees were not told their exact ranking, or that of their co-workers, but were informed where they stood in relation to either the “bottom 10” or “top 10” in terms of productivity.

The researchers conducted their experiment at APLUS, the consumer finance subsidiary of Shinsei Bank, a medium-sized Japanese bank. The 70 employees in the study performed largely repetitive tasks: They entered information from customer applications into a central data system. Their salary was not linked to their performance, and they had no specific goals to meet, which enabled the researchers to weigh the effects of performance feedback in an incentive-free context.

At the beginning of the monthlong study, the workers were split into three groups. One received negative feedback on a daily basis, a second received positive feedback on a daily basis, and the third, acting as the control group, received no feedback. The groups were randomly chosen without regard to past performance — in fact, none of the workers had ever before received a performance review from the company. Over the course of the month, the researchers analyzed more than 480,000 data-entering transactions performed by the three groups. By tracking the completion times and accuracy of the employees’ efforts, the researchers were able to measure daily changes in productivity for each of the workers.

Employees in the “negative” group were told they fell into the bottom 10 if, in fact, that was the case that day (what the researchers called direct feedback) or that they were not in the bottom 10 (an indirect approach that implied poor performance). In other words, even the best-performing employees in the negative group would get indirect negative feedback and know only that they were not ranked near the bottom. Similarly, employees in the “positive” group were told that they ranked in the top 10 or that they were not in the top 10.

On a day-to-day basis, the researchers found that neither form of positive feedback had much effect on productivity. Bad reviews, however, carried far more significance. When workers first received direct negative feedback, their performance jumped 13.6 percent, on average, the next day. But when employees first received an indirect negative review, they faltered, dropping an average of 17 percent in productivity the following day. ip info . The difference, say the researchers, is that those in the bottom 10 were motivated to improve by the shame they felt, whereas those who were not in the bottom 10 simply felt relief.

In the long term, however, all forms of the performance feedback used in the study helped. The researchers found that both groups receiving feedback boosted their performance over the course of the month in comparison with the control group; the positive group’s productivity was up approximately 20 percent and the negative group’s about 30 percent. So although couching an employee’s performance review in positive terms may not make a difference the next day, it will over time. And whereas giving an employee indirect negative feedback can hurt performance in the short term, over the long term it’s still better than no criticism at all.

The researchers acknowledge that the study’s setting — a Japanese bank — may raise questions about whether the results are widely applicable. Because reputation and saving face are particularly important in Japan, employees there might react more strongly to criticism than workers in other societies. But the authors point out that the feedback was private and did not include specific rankings. In addition, because the company had no history of laying off employees for inadequate performance and offered no bonuses for working harder, the researchers could focus solely on the effects of the feedback itself. These two factors make the findings relevant beyond Japan, the researchers say. The researchers also believe the findings are applicable beyond job settings that are highly routine and quantifiable.

The results show that although regular feedback can improve worker performance over time, the pace of change can vary. Managers shouldn’t expect to see an immediate increase in productivity from their best workers. As for the rest, indirect praise isn’t likely to produce an immediate uptick, and indirect criticism may actually make things worse for a while. Telling underperforming employees that they are in the bottom segment — which, of course, could be defined more broadly than the “bottom 10” — offers the best chance of getting a quick and dramatic improvement.

Bottom Line:
Managers should consistently tell their employees where they stand: Whether presented in positive or negative terms, feedback tends to improve performance over time. In the short term, the biggest improvement may come from workers who are told they are in the bottom rankings.

Publisher: Harvard Business School Working Paper No. 11-078

Get Your Brain More Creative

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By Posted on March 6, 2015 in Culture and the Integrated Workplace, Employer Branding & Talent Management, Finance (Payroll & Compliance) Function, High Performance Leadership, HR Administration & Transactional Outsourcing - Shared Services, Industries Reports & Case Studies, IT Function, Strategic HR, The Future of Work & Next Generation Enterprise Growth Themes

Can you make yourself more creative?

According to Shelley Carson, author of the new book Your Creative Brain: Seven Steps to Maximize Imagination, Productivity, and Innovation in Your Life, you can.

In a recent conversation with the Boston Globe, Carson, who has a PhD in psychology from Harvard University and teaches at Harvard Extension School, noted these three things: “In the business world, creativity is now the number-one quality that head hunters are looking for in top-level chief executives. Most of the elite business schools in the country now have courses on creativity, and many Fortune 500 companies have hired creativity consultants.”
It’s possible, she says, for creativity-challenged people to use “biofeedback programs and other types of cognitive behavioral research” to change brain activation patterns to “mimic the brain activation of highly creative people.”
“What we have found in recent years in the neuroscience of creativity is that highly creative people tend to activate certain neural patterns in their brain when they are solving a creative problem or doing creative work,” she told the Globe.
Creativity and control are closely linked, she says. “I subscribe to the cognitive disinhibition theory of creativity,” Carson said. “A lot of people are really afraid to turn down the volume on the executive function part of their brain. They want control over their cognitive awareness and their mental workspace. It’s very difficult for them to relinquish that control and say to the guys back there in research and development, throw at me what you’ve got.”
An interview with Carson posted at her website gives a little more detail about this idea that you can make your brain more open to new material:

What do you think are the greatest challenges for people who want to get more creative?
Everyone has a built-in censoring system in their brains that filters thoughts, images, and memories, and stimuli from the outside world before they reach conscious awareness. Our censoring system keeps us focused on our current goals and on information that prior learning has taught us is “appropriate.” Learning to loosen up this mental filtering system to allow more novel ideas and stimuli into conscious awareness is one of the biggest challenges for people who don’t think of themselves as creative. In Your Creative Brain, I provide a lot of information on how to loosen the censoring system so that ideas can flow more fluently.

Does every brain really have the potential to be creative?
Yes! While it’s true that some brains are naturally more inclined toward creative ideation than others, all brains have a marvelous ability to continually change and develop. Research has shown that people who are naturally highly creative can switch between various brain activation patterns more easily than those who are less naturally creative. However, this is a skill that can be practiced and learned. Although it may not make an Einstein out of everyone, practice and exercise can definitely make any brain more creative.

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