How has 3M built structural and contextual ambidexterity into the organization?

3M is considered as one of the most innovative companies in the world. It is diversified technology company serving customers and communities with many innovative products and services that half of the world’s population today enjoys at least one of 3M’s products out of 50,000 products which are sold in the market. Their philosophy is ‘decentralization’ which prevents company being hierarchical and bureaucratic. One noticeable feature of 3M company is its high tolerance of failure. Sometimes it seems like they’re promoting failure since their main power of innovation is in trial and error.

3M company encourages employees to try creative thoughts as much as possible and guarantee them not to blame anything because of failure. We can summarize their characteristic managerial philosophy as followings: structure, process, reward and people. In the beginning, organization structure of 3M company is toward supporting innovation. First of all, they try to keep small size of business and administrative unit. They compose of organizational structure based on function.

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It makes decentralized power and authority possible.

Secondly, 3M company installed research and development laboratories everywhere. Each business division could have its own research laboratory. Finally, organizational role of every employees are essential for innovation. The executive champion or a mentor promotes trying innovative ideas. Executive champion is usually former product champion who was in the same situation with other employees that they understand difficulty in executing new ideas. The second element of supporting innovation is process. 3M is famous for its 15% rule, which employees spend 15% of their time on developing products.

It works off since this system encourages many employees pursue ideas they have in mind. This is proven to be effective empirically given that many famous products nowadays were born in this process. 3M also has another process that facilitates innovative ideas. For helping middle manager not to abandon ideas which worth to develop, they set 25% of the revenues in each division to be concerned latest products which introduced market less than 5 years ago. This figure differs depending on the time but basic idea is the same. The fact that many of 3M’s products came from slight modification of existing products.

So they set the rule of revenues and promotes breakthrough items which are pretty new in the market. Knowledge sharing processes were an obviously part of innovation. 3M let technical council meet senior people regularly. Also interaction between 3M employees and clients were high. The third part of innovative company is its reward system. 3M doesn’t use monetary system as the main part of rewarding system but spiritual method. The product champion and the best teamwork were celebrated. Person who were awarded as champion could potentially become the CEO of the division where he/she belongs to.

The procedure is when one have an idea, he/she can take the idea to an executive champion. If accepted, it immediately started to implement that idea. If denied, it can still encourage that idea to other division or request until accepted. Finally, last element of innovation supporting system is people. It has philosophical hiring system. People who differently and loyal to company are preferred. 3M offered dual ladder career so that they can develop their expertise in every fields. Why did 3M not provide a thrust for innovation in 3M India until 2011? What has promoted the change in strategy?

The 3M India was founded as a joint venture between Ashok Birla Group and 3M corporation. In that age, 3M’s portion (40%) was not as much as nowadays it has which is 76% of stake. Despite about 20 years of healthy growth, it only contributed 1% of 3M global revenues and even less in terms of profit. That’s when it realized they need change in strtegy when approaching to Indian market. In 2011, 3M started to notice the importance of localized, open environment, and decentralized culture at 3M India. This shift was aimed to stimulate more growth and innovation within the company.

Basically the sift is about implementing 3M’s corporate architecture and culture into 3M India. As soon as it knew this fact, it renewed thrust to expand the Indian market with an strategy. This strategy accelerated development of products in India, for India, through R&D. In short, 3M India should focus on developing technologies which are unique in India market and avoid possible reverse development for other international markets. 3M India targeted to obtain 40% of revenues from new products and invested 2. 5% of revenues on R&D and expect to earn %1billion gross sales by 2015.

Their primary focus is explained as product development for the local market in India while sharing technical information from worldwide data. 3M India knew that price is the most important part in Indian market. The Indian market is price sensitive that overly designed products could be accepted paradoxically only if they match the price level of common needs in India. For instance, ‘Pochha’ was recreated not for technical purpose but ‘value for money’ initiative that Indian people put importance on. Also as part of implementing their strategy in local market, It localized products they have.

A famous example of localized product was respirator depicted in Exhibit5. It matched all the needs Indian people had. Seeking potential new application for existing technology is another path to innovative path. What are the challenges that 3M India has faced or is likely to face in entrenching the 3M innovation culture in India? How should it address them? 3M India has adopted many of the 3M practices which were proven to be central role in supporting for innovation. First adoption was 15% rule which allocates 15% of the time in developing new ideas.

Also dual-ladder career progression system was also chosen as a way of promoting innovation in 3M India. However, there are so many concerns about the effectiveness and practical ways of using the system. According to the article, first concern is ‘Would the scientists in India become inventive if they had the 15% time to themselves? In order to maximize the effective outcome of 15% rule, good use of international knowledge sharing network should be implemented first so that those two systems can have synergy effects. Second concern is ‘Would they be able to exploit the intrapreneurial opportunities that 3M India offered?

Considering local organizational culture and adjusting strategy play an important role here. Last concern is ‘How many of them would prefer a technical ladder to a managerial ladder? ’ I personally questioned this when I first read the dual ladder part. Now I had read the article over and over, I can come up with solution that sometimes technicians just want to stay in their jobs rather than moving towards completely new position. Aside from every concerns ahead, there is a difficulty that 3Ms open culture conflicts with Indian culture. India has hierarchical culture, bureaucratic organization.

It is very sensitive to failure and has a tendency of collectivism which has low acceptance level of individual behavior. To deal with these difficulties I believe we should focus on 3M company’s core values where the company was founded. This core values can be delivered across the whole international corporations irrespective of country culture. But 3M company makes sure that incremental strategy is more helpful rather than adopting fully new corporate culture which could increase employees’ awareness problem. Mentoring system and support from senior employees could be one way of helping.

Small and various culture-learning sessions can make a difference in localized brance of 3M company. Changing 6-gate process to peer evaluated process could also be one good way. All the strategies they’re taking such as 15% rule, overcoming fear of failure are enough ways of becoming innovative company. The only challenge is how every local companies internalizes the systems they are offered to do and use it effectively given market environment in its specific country. Actually after implementing the new strategy in India market, revenues have grown tremendously.