Aligning the IT Human Resource with Business Vision:
The Leadership Initiative at 3M
IT Human Resource Challenges and Their Significance
In the face of increasingly turbulent business and technology environments, the keys to success for the 21st century information technology (IT) organization lie in its ability to be adaptive, responsive, and aligned to business needs (Ross et al., 1996). These characteristics demand an IT workforcethat is motivated, willing to change, and empowered to act without overt, persistent guidance. While technical architectures and infrastructure are undeniably essential for an IT organization to fulfill its mission, of equal if not greater importance is the willingness of IT professionals to offer their best and to be proactive in an ever-changing fluid environment. Indeed, insightful IT leaders recognize that the greatest impediments to success are related to people rather than information, technology, and systems.
IT human resource challenges have assumed increasing significance for at least two reasons. First, many IT leaders are faced with the enormous challenge of transforming the IT organization from a back-office support role to a key business partner or core competence of the organization (Hamel and Heene, 1994; “Linking…,” 1994). This transformation requires newrolesandcompetencies for IT leaders and professionals (Dempsey and Koff, 1995). Key challenges for IT leaders are to envision these roles and competencies and to develop and implement programs to translate this vision to reality. We describe the IT human resource vision that is guiding such a transformation at 3M – a large multi-product, diversified manufacturing firm (1997 sales: $15B) -- and focus on the implementation of its leadership initiative. Second, IT leaders face the challenge of competing in a labor market plagued by severe supply-demand asymmetry. For the IT leader who is successful in making the transformation described above, the demands for IT services are likely to mushroom, making this challenge even more critical. We describe 3M’s success in meeting this challenge while implementing its IT human resource vision.
IT constitutes a core competence for many business organizations today -- it has been compellingly argued that IT can provide a source of sustainable competitive advantage in the next decade (Rockart et al., 1996). However, although IT leaders might recognize and value the competitive potential of information technology, such a sentiment is not necessarily widely shared by business leaders. That was the case at 3M -- six years ago, prior to Dave Drew, the current CIO. Managers across the company did not recognize nor necessarily value the potential of IT for providing competitive advantage. IT constituted an essential support function at best, certainly not a strategic enabler nor a core competence. Although the marketplace overwhelmingly recognized 3M as an innovator, 3M needed a fundamental transformation to make innovative use of IT. To understand this prevailing situation more fully, we provide an explanation of 3M and its culture as well as a brief history of IT at 3M.
With its headquarters in St. Paul, Minnesota, 3M has operations in more than 60 countries. It has more than 70,000 employees who create, manufacture and sell 50,000 products in 200 countries around the world. Some products, like Scotch(TM) Magic(TM) Tape, are brands found in households and offices all over the world. The company's research and development portfolio features 100 technologies, which include abrasives, adhesives, non-woven fibers, films, precision coatings, fluorochemicals, ceramics, optics and microstructured surfaces.
Innovation is required and inextricably linked to success at 3M. Thirty percent of each year's sales must come from products less than 4 years old. Scientists are encouraged to spend 15 percent of their time pursuing their own ideas. The ever-popular Post-it® Notes sprang from the 15 percent rule. Over the past five years, 3M has invested about $4.5 billion on research and development projects, nearly 7 percent of sales each year. In 1997 sales topped $15 billion.
The company's culture fosters a spirit of entrepreneurship. William L. McKnight, who became president in 1929 and chairman of the board in 1949, created a corporate culture that encourages employee initiative and innovation and provides secure employment. His basic rule of management was laid out in 1948:
“As our business grows, it becomes increasingly necessary to delegate responsibility and to encourage men and women to exercise their initiative. This requires considerable tolerance. Those men and women to whom we delegate authority and responsibility, if they are good people, are going to want to do their jobs in their own way.”
“Mistakes will be made. But if a person is essentially right, the mistakes he or she makes are not as serious in the long run as the mistakes management will make if it undertakes to tell those in authority exactly how they must do their jobs.” “Management that is destructively critical when mistakes are made kills initiative. And it's essential that we have many people with initiative if we are to continue to grow.” Today, 3M is approaching the 21st century by focusing on technologies that possess clear competitive advantages and large growth potential. It is building on five key strengths of market leadership, technical innovation, customer focus, global reach and employee initiative to advance the lives and businesses of its customers and provide an attractive return for shareholders. As noted in the Chairman’s Letter in the 1997 Annual Report:
“Wide application of 3M expertise provides the foundation for our multiproduct, multimarket, multinational approach…. Although our businesses are highly diverse, they also are highly integrated in research and development, manufacturing, logistics, information technology and marketing. This integration stems from a deep-rooted culture in which 3M people identify customer needs, act on their initiative, and widely share technologies and other expertise.”