When George Buckley became CEO of the notable 3M Company in 2005, he was faced with a dilemma. His predecessor, James McNerney, one of Jack Welch’s gang of three at GE had been the first outsider to lead the company in its 100-year history. McNerney had barely stepped off the corporate jet before he declared he would change the DNA of the place. His game plan was vintage GE. McNerney cut 11 %
of the workforce (8000 people), intensified the talent/ performance-review process, and tightened the purse strings at a company that had become a profligate spender. He also imported GE’s hallowed Six Sigma quality program. Thousands of staffers became trained as Six Sigma “black belts.”
The plan seemed to deliver: McNerney jolted 3M’s moribund stock back up based on cost savings and fat profits. He won praise for bringing discipline to an organization that, despite its reputation of being an innovator, had become unwieldy, erratic, and sluggish. Then, four and a half years after arriving, McNerney abruptly left for a bigger opportunity, the top job at Boeing.
Successors, CEO George Buckley and his team, faced a challenging question in their first 100 days: whether the relentless emphasis on efficiency had made 3M a less creative company. That’s a pivotal issue for a company whose very identity is built on innovation. After all, 3M is the birthplace of Scotch Tape, Thinsulate, and the Post-it Notes. There were lots of signs that creativity was being squelched by process efficiency. There have been few notable innovations in the past five years.
You Can’t Schedule Creativity
In one of his first speeches, CEO Buckley said he was going to manage the yin and yang of imagination and discipline. “Invention is by its very nature a disorderly process,” he said. Then almost immediately he started to roll back many of McNerney’s initiatives. “You can’t put a Six Sigma process into that area and say, ‘Well, I’m getting behind on invention, so I’m going to schedule myself for three good ideas on Wednesday and two on Friday.’ That’s not how creativity works.”
Buckley is just the kind of guy who has traditionally flourished at 3M. It was one of the banners of the “3M Way” that workers could seek out funding from a number of company sources to get their pet projects off the ground. Official company policy encouraged employees to use 15% of their time to pursue independent ideas. The goal is to get back to the place where one third of the products 3M sells didn’t exist five years ago. (Today the number is about a one quarter.)
The dilemma that Buckley is trying to manage between innovation and efficiency is one that’s bedeviling CEOs everywhere. There is no doubt that 6 Sigma quality has been one of the most important business trends of past decade. But as once-bloated U.S. manufacturers have shaped up and become profitable, global competitors, the onus shifts to growth and innovation, especially in today’s idea-based, design-obsessed economy.
Comments
Post has no comments.