McNerney Drives Organic Growth at 3M
Emily Kearney
February 18, 2005
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3M Chairman and CEO W. James McNerney |
"Organic growth…the ability to reinvent itself from within," rather than by mergers and acquisitions, differentiates the 3M Corporation from other hundred-year-old companies, Chairman and CEO W. James McNerney, Jr., told an MIT audience Feb. 18.
When McNerney joined the company in 2001, 3M's culture of growth
had gotten stale, he said. In response, McNerney's leadership team
regrouped the company's engineers into results-focused, energized
teams while maintaining 3M's creative and entrepreneurial spirit.
McNerney described this process in a lecture entitled Innovation
and Practical Solutions from a Diversified Technology Company.
The Industry Leaders in Technology and Management was held at MIT
and sponsored by the Industrial Liaison Program and the Center for
Technology, Policy, and Industrial Development.
3M adopted a new product development strategy, 3M Acceleration, which separated the concept development backend from the production frontend and applied separate metrics for each. This approach retained the creative freedom of the research and design teams, while challenging the production teams to focus on yield.
"How do you get organic growth? You expect it," said McNerney. 3M's leadership introduced new and higher goals, he said, challenging the culture of Minnesota Nice and focusing on actual market results, not internal metrics. Meanwhile, they reorganized the company's divisions around markets, such as health care and transportation, rather than product areas.
McNerney praised 3M's traditional culture of innovative thinking, which had inspired loyalty among employees. He had inherited "a legacy where everybody wakes up in the morning trying to figure out how to grow the company. Some of the ideas are pretty wacky, but better to try to herd the cats than have no cats at all."
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