Making Open Innovation work: the case of 3M


Open Innovation is a proven paradigm for generating higher levels of innovation in products, processes and capabilities.  As opposed to the “closed” nature of many company’s R&D efforts, OI looks to open up a firm’s innovation process to outside ideas, collaboration and partners.  Because technical knowledge is widely distributed and dynamic, organizations will not be as innovative when they rely entirely on their own research.  Instead, managers should actively search out and buy or license technology, patents or inventions from other companies, individuals or research institutes. At the same time, technology not being used in a firm’s business can be offered outside the company.  OI is not only about big science projects.  One of the most common applications is problem solving for challenging technical issues. 

Many market leaders like GE, Cisco, Adobe and P&G have successfully used OI to improve their products, reduce R&D costs, solve difficult technical problems and accelerate time to market.  One of the best exploiters of OI is the manufacturer, 3M.

In 2010, 3M was voted the World’s third most innovative company in a survey by consultant Booz & Co.  How does 3M use a paradigm like OI to regularly create successful new products and capabilities?  Fred Palensky, 3M’s Chief Technology Officer, shared some insights in a recent edition of strategy+business magazine:

  • 3M stresses internal sharing of new innovations.  New technologies and capabilities that are developed in one R&D centre must be shared – cross pollinated – across product lines, markets and technology platforms;
  • Cross pollination is enabled by a cultural trait known as “dual citizenship.” Employees are responsible both to their market and department as well as the global 3M technical community. Key people are often moved around to different sectors, roles and geographies enabling them to share ideas and skills while bringing them a holistic view of the business. 
  • 3M encourages regular collaboration with outsiders. For example, 3M’s R&D labs are presently collaborating with universities and business partners in over 300 projects.   To better address user needs, 3M has developed 30 customer technical centers that bring users directly into the product development process.

Palensky attributes 3M’s innovation success to culture, not structure or process.  OI has been practiced for years and is part of the firm’s DNA. According to Palensky, OI works because “everyone has skin in the game.” In particular, employees must spend 15% of their time outside of their area of responsibility, collaborating, visiting customers or brainstorming.

In our experience helping firm’s germinate innovation, strategizing on OI is a lot easier than making it work.  The following are some of our best practices:

Cultural considerations are paramount

Within closed R&D organizations, the “not invented here” phenomena is very strong.  Overcoming this requires managers to regularly reinforce a culture of external collaboration, information sharing and trust and back it up with reward schemes.

Management systems must align

Key elements like structure, information rights, roles & responsibilities and measurement systems must be congruent with an external-facing, sharing-based philosophy.

Seek and ye shall find

Serendipity is most likely to occur when a range of technical problems is exposed to a large number of diverse participants. Sufficient resources, time and mandate must be designed into the OI process: innovation discovery & synthesis, partner identification and relationship management.

Governance is critical

OI programs must be carefully designed to protect intellectual property, designate decision rights and reward distribution in advance.

For more information on our services and work, please visit the Quanta Consulting Inc. web site.

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9 comments so far

  1. […] Many industry leaders have successfully operationalized this model including Apple, Xerox, IBM, 3M and […]

  2. […] Many industry leaders have successfully operationalized this model including Apple, Xerox, IBM, 3M and […]

  3. […] Many industry leaders have successfully operationalized this model including Apple, Xerox, IBM, 3M and […]

  4. […] Very often, the accompanying management systems – processes, practices and structure – play a significant role in hindering commercialization efforts.   A 2010 McKinsey survey on Innovation identified a numbers of management challenges including: a lack of formal accountability for innovation, poor or conflicting measurement and reward systems and ill-defined priority setting.  In other cases,  an organization’s traditional approach to innovation creation – for example, centralized and siloed R&D centers – is often less productive in getting compelling innovations to market versus an Open Innovation approach. […]

  5. […] It depends on how you measure success and shareholder value.  The better question may be:  is there one best approach to innovation?  My experience advising firms with their innovation strategy suggests that combining the best and most practical aspects of each approach will yield the best results. According to Saffo, fostering innovation requires “an odd blend of certainty and intellectual rigour and openness to new information and new ways of thinking” In other words, it should be a blend of top-down guidance and bottom-up discovery mixed with a dash of open innovation tactics. […]

  6. […] including supply chain partners, academia and innovative start-ups.  A variety of firms such as 3M, Siemens, P&G and GE have used Open Innovation strategies to improve R&D productivity and […]

  7. […] up in the phone manufacturing plants to improve the odds of commercialization and to foster 3-way collaboration between the manufacturers, design engineers and researchers.  From an office perspective, the laboratories and common areas were physically laid out to ensure […]

  8. […] pharmaceuticals, content production, and packaged goods. Companies like P&G, Whirlpool, 3M, Philips, and Eli Lilly have successfully leveraged OI to improve R&D productivity, increase […]

  9. […] pharmaceuticals, content production, and packaged goods. Companies like P&G, Whirlpool, 3M, Philips, and Eli Lilly have successfully leveraged OI to improve R&D productivity, increase […]


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