Leadership in Organizations
3M Optical Solutions: A Conflict in Evolving Cultures
In 1992 the Andy Wong, Manager of the 3M Optical Systems (OS) business unit, was caught between cultures. 3M had evolved from a mining company in 1902 to a diversified global company on the basis of a long tradition of supporting innovation. The company’s “reputation for innovativeness was reflected in a long-standing company
objective that 25% of its sales be generated by products introduced in the last five years.” That standard had recently been upgraded to 30% in the last 4 years by the new CEO, Desi DeSimone. DeSimone also espoused that 3M had to be “firm about cutting off projects that were not achieving their objects.” In contrast with these demanding sales objects 3M had evolved a long-standing tradition of supporting R&D efforts that had been the backbone of the company culture for almost 100 years. Caught between the new CEO’s demands and the old values of 3M was Andy’s decision to fund a project that thus far did not have a great track record but he believed had promise. Andy’s best solution was going to be a balancing act. Andy needed deny the expenditure to appease the CEO while simultaneously promoting innovation in line with the traditional 3M culture by launching the privacy screen without explicit funding.
Andy suggested, “a final possibility would be to try to restructure the project so that we can do it within the unit without seeking approval through either the formal or informal systems.” Andy understood the dominant culture of 3M was one of aggressive innovation over cost cutting. But the new CEO was asking 3M to switch cultures toward one of
financial austerity. Andy understood that innovation was a cornerstone 3M’s culture and critical to its success. Any attempt to quickly change would be meet with serious resistance. What Is Corporate Culture Anyway? would have described the CEO’s cost
cutting move as “tantamount to questioning the founder or owners of the organization” and innovation as a cultural element that had become a “sacred cow” and was “difficult
Andy’s final solution blended the two cultures and respected what What Is Corporate
Culture Anyway? called the “Espoused Values” and “Shared Tacit Assumptions” of 3M’s innovative culture. At the same time Andy had to accept the new leadership initiative to keep costs down. He was managing a group that “had been losing money since its formation in 1979.” And according to Andy his priorities where to “clean up Optical Systems” and to “demonstrate the economic viability” of the unit. He knew to save the credibility of the unit and his own personal credibility he was going to have to “starve
it…to show it can survive” as the CEO wanted.
Fortunately, 3M had a culture of shared intellect. Andy could leverage those culture values in the absence of explicit funding. Wong asked Jeff Melby to lead a cross-functional team to develop a newer, more competitive privacy screen. So according to Melby he “began to draw outsiders onto out team.” Melby leveraged his “personal network of contacts” and moreover in 3M “the culture is one where you just have to ask
for help and it’s available.” Melby describes, “It was amazing how well everyone worked
together, even the outsiders we pulled onto the team.” They all “had complete faith in each other.”
The faith that the OS team shared was a direct consequence of the “Espoused Values” and “Shared Tacit Assumptions” of 3M’s innovative culture. The CEO did not know who
to leverage that culture but Andy Wong and his team leadership did. Paul Guehle would never be put in a position of having to say no to Andy Wong utilizing this strategy particularly if 3M employees utilized their “15% time” to support a project in which they
all believed. It’s worth noting decades later Google adopted a 20% time project policy into its culture and gmail, Google Maps, and many other successful projects have come from that policy which mirror’s 3M’s.