Making Corporate Entrepreneurship Work: “The Innovation Rule” at 3M

Thanks to all of those who have replied to the previous blog on the benefits of corporate entrepreneurship. Some of you asked me to explain that how corporate entrepreneurship works in large organizations. Apple, Motorola, Mitsubishi, 3M, and Johnson and Johnson are all well known examples of large organizations that practice corporate entrepreneurship today and have been successful with it. By implementing it in their organizations, they can now design new products that customers want, rather than products entrepreneurs think customers want.

To better understand the concept of corporate entrepreneurship it is important to look the practical example of 3M that how corporate entrepreneurship was implemented at 3M. 3M has benefited from this culture as it has brought it closer to the actual customers resulting in 3M being able to meet its customers’ requirements. 3M has developed a culture that encourages its employees (corporate entrepreneurs) to be creative and come up with new ideas which may or may not work. They have set aside 15 percent of the company’s time each day to allow their employees (corporate entrepreneurs) the freedom to work on their own projects. They call this their ‘innovation rule’.

They have created a management control system that provides the (corporate) entrepreneurs with various resources that they might require for developing and experimenting new products and services. They have allowed their employees the freedom to fail as it encourages them to be creative and come up with new ideas. The employees are not afraid to be creative as they know they would not be punished for any mistakes they make. They also have a system in place that rewards employees (corporate entrepreneurs) for being creative and generating new innovative ideas.

By creating a flat decentralized structure, communication has been made more effective and open between all. The company acknowledges that open communication has helped them get where they are today as communication leads to innovation flow throughout the organization. Thereby, making decisions quicker and easier as communication is direct throughout the company. 3M encourages change as it is seen as a buzz word for entrepreneurs within, who are encouraged to challenge the status quo of the company at all times, as they are always discontent with it.

3M’s Vice President Larry Wendling (2007) has contributed to the literature of 3M’s entrepreneurial culture. It has been successfully implemented over the years and is still today being successful due to their buzz word innovation, being believed by everyone throughout the company starting with the CEO. They understand many benefits this system brings because of their shared vision and by doing so, they have created an example that other companies can follow. Undoubtedly, 3M has proved to be a torch-bearer and an illuminating example reaping the benefits of corporate entrepreneurship for others all around the world.

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2 comments

  1. Erum Inam siemaaz_aqua@hotmail.com 03433996800 says:

    “Thereby, making decisions quicker and easier as communication is direct throughout the company.” Sir this benefit of proper use of entrepreneurship you mentioned is actually a major point the organizations should get focused upon. What they do mostly is that they don’t welcome the creative ideas the employees do have and even if they somehow the higher authorities to present what they have got it is not entertained at its finest level by the organization tops. I am really glad to hear that we have organizations like 3M who not only greet their employees to come up with Innovative ideas but tell them not to fear doing mistakes just continue to reach out.
    Bravo to the 3M.

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