All marketers strive for innovation. But only a handful of their brands achieve the coveted status of proprietary eponym—that is, a brand name becomes the way consumers describe an entire category of product. 3M's Scotch Tape and Post-it Notes are perfect examples.
But it's not just about the product. According to Eric Galler, chief marketing strategy officer at 3M, innovation doesn't happen without the right organizational structure, processes, people, and culture.
In this exclusive interview with CMO.com, Galler discussed 3M's approach to fostering innovation, how it is reinventing itself for digital, and how his position differs from that of the CMO.
CMO.com: You’ll be speaking at the upcoming Brandworks University conference about how to make an organization an “innovation machine.” What can attendees expect to learn during your talk?
Galler: When I think about the term "innovation machine" and 3M, it's our culture of innovation that folks are very interested in hearing about. It's the story of 3M, a 100-year-old company with $30 billion in sales, that's widely considered as one of the most innovative companies in the markets that we compete in. And so it's that. It's a little bit of the history of 3M. I'll be talking about how the company struggled at its very beginning and ultimately succeeded by creating this culture of innovation.
One of our leaders for many years, William McKnight, codified a unique approach to business called the "McKnight Principles." It's about giving people freedom, expecting people to collaborate, and find opportunities in new markets. I'll be talking a lot about the repeatable practices and profitable processes that allow 3M to succeed, delivered by collaboration and the uncommon connections that 3Mers make.
3M is a pretty unique company. If you look at the Fortune 500, every company is classified by what industry they're in, except for 3M. 3M is listed under, I don't remember if it's "other" or "miscellaneous," but it's one of just a handful of companies that defy classification because we're in so many different businesses. The root of the company is the technologies, of course. We take a technology approach, "the 3M science" that we effectively apply to many different markets and ultimately improve our customers' and their end users' lives.
CMO.com: That's interesting. I'd like to dig more into this theme of innovation. Does internal structure play a role in a company's ability to innovate?
Galler: Oh, absolutely. I think whether you're a team, business unit, division, or overall company, organizations need structure. Structure and accountability and prioritization are very important.
At the same time, 3M is pretty well-known for having what's called a kind of "loose-tight" philosophy It’s featured in the book “Good To Great.” 3M focuses on balancing entrepreneurial action and corporate consistency, whichever is needed in the given situation. Loose-tight describes the balance that organizations need between corporate governance and entrepreneurial spirit that happens on a team.
Regarding 3M structure, as a company we've been strategically reducing the number of divisions that we have. We had about 40 divisions just a few years ago, and we have 27 today. Quite a few have been combined because they're in similar markets, and we have a philosophy that being a bigger division can focus us on bigger opportunities. That's been a pretty key change in 3M here just over the last couple of years.
This video explains how 3M makes innovation possible internally.
CMO.com: Can you talk a little bit about how 3M has used marketing innovation, specifically, to differentiate its brands and the products it offers?
Galler: Absolutely. At 3M, science is at the heart of everything we do. We have 46 technology platforms that are sold into almost 100 different markets, from health care, to safety, to building and construction, to industrial adhesives and abrasives. Our marketing innovation is brought to life by collaborating with our customers across all markets from the very early stages of the product development process. We continuously engage with them, iteratively, throughout the development process.
About 80 percent of our products leverage the strong reputation of the 3M logo. We have other brands, [such as] Post-It Notes, Scotch Tape, that we're very proud of, but we are working hard to ensure the 3M brand provides a consistent customer experience across all of our markets around the world.
CMO.com: You mentioned iterative engagement. What does that mean?
Galler: I talk to 3M businesses a lot about the importance of iterative customer engagement during new product development—really understanding the customer insights up front, then bringing it to life in an idea and a concept, and checking back again and again to make sure that we're delivering on those needs.
As a concept is developed into an early product or a prototype, we need to get back with customers, make sure it's delivering on what the concept promised or what the original insight was, and ensure we're articulating the benefits in the most effective way to allow us to then launch it in an effective way.
You can be right on with the insight and understanding the customers' need, but if the concept is a little off and the product is a little more off from that, and the launch communication is even farther, you can quickly find yourself with something that won't perform in the market. So it's that idea of iterative customer engagement, really understanding those insights up front, and validating your work along the way.
CMO.com: A big topic lately is this idea of digital transformation—reinventing not just marketing but the entire organization to better operate in digital. Do you have a digital transformation story?
Galler: We think we're quite far along on the digital journey, and we believe we're a leader in our markets. As a company, we are under way with a very significant business transformation initiative that's really going to impact the way we think about customers, the insights we gather, and how we engage with them. We introduced a new brand platform for 3M at South by Southwest called “3M Science. Applied to Life.” It talks about how we apply our science with the intent to make life easier, better, and more complete for people around the world.
To drive awareness of this new platform, we are running a completely digital and experiential campaign to really tell the story of 3M. We are communicating with our customers and prospective customers in ways they want to be engaged—online with an updated 3M.com that incorporates improved search, navigation, and display. In addition, we have a new 3M Newsroom that's focused on telling the 3M story and telling the stories of how our science is impacting lives around the world.
Part of our digital transformation also entails getting everybody to be on the same software platforms. We're updating our CRM capabilities and marketing automation capabilities as well.
CMO.com: What about marketing keeps you up at night?
Galler: I would say in any size organization, it's always about the people. We have 90,000 employees worldwide in almost 100 locations. Our employees are the ones that make the difference, whether they're in the labs, or they're the sales reps out on the street, or they're the marketers. It's the people that are the key. I work hard to make sure that our marketing teams follow the right processes and have the right tool sets to drive strategic marketing planning. I also work to ensure that they're bringing that customer voice to inform the business strategy. My role is developing marketing talent, the future leaders, across the world to help 3M drive growth.
CMO.com: I want to ask you a little bit more about your role as chief marketing strategy officer. How is your job different from that of a CMO? Who do you report to?
Galler: My boss is our CMO, Don Branch. He is responsible for the 3M brand, our digital presence, and for our Insights organization. My focus is on building marketing as a strategic function across 3M. I own the strategic marketing planning process, the tool sets that we use, developing marketing talent, training our future leaders, MBA recruiting, and teaching a common marketing language and approach across the organization.
I also have a center of excellence team that works with the businesses on more than 200 strategic marketing projects across the company each year. It’s kind of a marketing SWAT team that might work on a pricing project, or new product launch, or portfolio management using our best-in-class playbooks to get in and do work.
CMO.com: That is very cool. What would you say are some of your marketing priorities in the next year or so?
Galler: There are three key areas of focus. The first focus is on the launch of the new 3M brand platform. We are working hard to ensure all employees worldwide are telling a consistent brand story to our customers and prospective customers. We're a strong brand looking to be even stronger. We're currently number 66 on the Interbrand list of top 100 strongest global brands.
The second thing is working on our innovation process. It's something that we're known for, but we're continually trying to sharpen the saw. The third thing is focusing on the business transformation activity that we are doing with new systems platforms. It is really going to transform what marketers do throughout the company, particularly with customer relationship management software and marketing automation.
CMO.com is the Digital Marketing Insights sponsor for Brandworks University. For more information on the event and to register (use code CMO200 for a $200 CMO.com reader discount), click here.
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