A Roundtable Featuring: Larry Wendling of 3M, Tom Kelley of Ideo, Lisa Rose of Ciba Vision and Robert Rivenburgh of Mars Advertising.

Can innovation be managed or is it magic?

Larry Wendling: At 3M, we practice a bottom-up, grass-roots model of innovation and so usually it’s very difficult to predict the specific outcome. But we can manage innovation to the extent that we can create an environment that supports the freedom of the individual to pursue new ideas.

Creating that environment is very much about having a clear understanding of how innovation relates to the company’s business model. Developing rewards and recognition is also very important. And you need to tie innovation metrics to business metrics, although we certainly don’t go metrics crazy at 3M.

Tom Kelley: Many, many years ago I was talking to a guy at 3M who joked that he hated the Post-It Notes story because it’s not replicable: Art Fry is sitting in the choir loft at church and the idea just descends upon him.

That’s fine if you can sit around waiting for the idea to happen, but you need a process for innovation. Any organization can systematically raise their game for innovation if they manage towards it.

On the other hand, you can’t manufacture innovation. It’s more the farming model than the manufacturing model. You create a greenhouse for innovation — the light, the heat, the moisture and air — and the innovation will grow.

Lisa Rose: Innovation absolutely can be managed, and in big companies it has to be managed. Every company has great people, inventors and tinkerers, but unless you have an intentional process to drive it out into the marketplace, innovation typically gets a bit stifled.

The process needs to stay close to the front line. You want your innovators to be talking to your sales people and seeing what’s going on with your end users. At the same time, they have to be somewhat sheltered from the day-to-day business so that they have the time and resources to do things a bit differently.

There’s a tendency to think only of the creative side of innovation without enabling an innovation group actually to execute. You have to set things up with clear expectations around prototyping and testing to make the idea real so you can go from paper to execution as quickly as possible.

Robert Rivenburgh: It’s really neither managed nor magic. There are certainly sparks of magic, but I break innovation down into two areas: the way and the system.

It’s the way in which you need to work to generate new thinking and new ideas. It’s the culture, the collaboration and the environment. The system then drives those ideas to market.

What inspires innovation?

Wendling: Scientists and engineers just have an innate desire to solve problems and advance science and engineering. So, most of the people 3M hires are doing what they are doing because this is what they like to do.

But usually I like to say we don’t hire innovators, we hire creative, scientific people. That’s because when you come out of graduate school you probably haven’t had the opportunity to take your innate creative and scientific ability and apply it to something useful.

Kelley: The two-word answer for me is: new stimuli. In my latest book, I talk about three learning modes. There’s stimulus through anthropology, which we call the “human factor.” That’s where you go out and observe human behavior and notice stuff that you haven’t noticed before, and see things with fresh eyes.

Then there’s experimentation, where you try stuff that may or may not work but you learn from the failure. And then third is cross-pollination, which is looking outside your company, outside your industry and perhaps outside your culture or country for ideas. The idea is not to copy them, but to find ideas you can adapt, shape or translate for your unique situation.

If you just read the trade pubs from your own industry — every single one of your competitors reads those same pubs. Sure, it’s important to keep up on stuff that’s happening in the industry, but the innovations are going to come from outside. Innovations come from metaphorically applying something from elsewhere. Those are the stimuli that can be inspiration for the duration.

Rose: What inspires innovation is a certain understanding of a problem and being emotionally connected enough to figure out the solution. Real inventors are tinkerers; they’re constantly thinking about trying new things to get to something that might solve the problem.

In big companies, what really inspires innovation are big goals. People need a vision of what could be and that tends to drive organizations. When you put a challenge out there that seems almost impossible, that’s when you get the best thinking. Everyone starts with a bit of a “that’s impossible” and then they become inspired by the idea of trying to figure it out.

Innovation really is at the heart of leadership. Leaders need to have a vision. They need to put big goals out there that seem somewhat scary, and then allow the resources to flow to it to crack the code.

Rivenburgh: Innovation starts with the culture of the organization and having senior leadership that provides the right environment. It really stems from the company’s DNA, the roots of the company and what it’s all about. It’s a fearless, creative environment that looks for ideas from anywhere and everywhere, whether it’s finance, planning or creative.

We have a monthly “town hall” meeting where we have a contest of creative ideas so that everyone can see what’s new and innovative throughout the organization. We do something called “I wish I’d done that” where we share ideas we’ve seen in the marketplace.

And we do a monthly best-in-class marketplace audit, which we publish. It’s all about creating an open environment, and providing the facility to be creative.

What is the role of failure in innovation?

Wendling: In general, we feel that we should have a significant percentage of failure at the front end of a new product development process. If you don’t fail, you are probably not taking enough risk. The failure can come from the technology really not delivering on what we thought it could; it’s better to find this out on the front end, before the product is out in the marketplace.

It’s best to let the team working on the program come to a conclusion by guiding them through a systematic process for product development. Sometimes management must force the issue because obviously people are passionate about what they are doing and can lose perspective. But letting the team decide when it’s time to quit the program is very important.

Kelley: Failure is very important to innovation. Imagine if you were going to try to learn to walk and the rule was that you are never allowed to fall down. If you weren’t allowed to fail, there would be a lot of people still crawling around in mid-life. In many cases, failure is intrinsic to the process.

You want to fail small and you want to fail early. This is the thing that Thomas Edison did; he was running experiments all the time. You need a culture of prototyping, in which people are always carrying around half-finished and slightly fragile ideas.

There’s a skill that we sometimes call “squinting.” When somebody comes into your office with a half-baked idea, you ignore the surface detail. If you just squint and look at the shape of the idea, you see that the idea is not perfect but you can see the shape of something and give it a chance to develop.

Rose: I think it is wrong for us to think of experiments as successes or failures. As innovators, we are not trying to define something as a success or a failure; we’re trying to achieve learning that will enable us to advance ideas that can solve problems. The minute that you frame something as failure, people don’t want to talk about it. They don’t want to be measured, judged or critiqued.

There are so many areas where you don’t know what you don’t know that it’s really important not to pre-judge and just try.

Rivenburgh: If you’re going to come up with business-building ideas and ultimately commercialize them, you’re going to have to push. Failure is part of that. Failure highlights areas of opportunity, and again, it goes back to the culture; you’ve got to have an environment where people don’t avoid the idea of failure.

When you have a culture where you’re constantly brainstorming there are no bad ideas. So, you need to be constantly exploring and testing and have the stomach to try different things, fail, and keep going at it. This encourages people to do and push more.

Is crowdsourcing a viable path to innovation for most brands?

Wendling: 3M obviously has a lot of capabilities inside. We really encourage internal networking to provide solutions and then we stress working very closely with customers to innovate around their needs and problems.

Anything you can do to facilitate networking should facilitate innovation. Crowdsourcing does indeed have a place in this regard; it can be a very valuable tool for consumer-based businesses and can be used even in a more industrial environment. The thing to keep in mind is that it probably isn’t the total solution: The odds are against finding a “diamond in the rough” through the crowdsourcing approach.

3M doesn’t hype itself as an open-innovation company and I was really worried about this a few years ago. I said, oh, my gosh, we’re missing the open innovation thing. What I didn’t realize was we’d been doing open innovation for 108 years! But the new thing is the e-enablement of it, which really does provide access to a broader network than ever before.

Kelley: I would call it open innovation, which is a close relative of crowdsourcing. To me, the connotation of the word “crowdsourcing” speaks more to pop culture, or the everyman, as opposed to open innovation, where it can be more targeted to include specific kinds of expertise.

Either way, the opportunity to tap into the wisdom of many as opposed to the very close circle of our decision makers inside the company is huge. Finding a mechanism to tap into large numbers of people without divulging your deepest, inner secrets is a tremendous opportunity. It bodes well for the future and really deep and complex problem-solving.

Rose: I think crowdsourcing lives under open innovation as a means to an end. If you look at crowdsourcing as all walks of life contributing, then I think it’s an interesting place to get inspiration. Depending on the innovation question, you could get some really good ideas from crowdsourcing.

To make crowdsourcing or any kind of open innovation process work, you need to have a certain foundation with that group. You have to define the group’s areas of competency. If you think of that as the starting place, crowdsourcing is really great. But I caution: it’s one tool in the toolbox for getting ideas and inspiration. I wouldn’t look at it as being the only place to go for that.

Rivenburgh: Crowdsourcing is absolutely a viable path to innovation. You need to be open, transparent, and you need to get into the conversation with consumers. If you don’t apply the wisdom of the crowds, you are going to become obsolete.

Consumers are demanding more and more and more of brands and want to be involved with them. Everybody wants to be a creator and there is an opportunity to let them in. You will get some great thinking from an outside-in perspective versus the classic inside-out.

Which people or companies do you most admire as innovators?

Wendling: Siemens is a company that I greatly admire because of their extraordinarily strong technical organization. What they do very well is futuristic roadmaps and planning. They also have a culture that makes heroes out of the inventors, scientists and engineers. They are very similar to 3M in that regard.

IBM comes to mind. They are leading the development of next- generation computing technology — things like quantum computing. They have the ability to plan way into the future, and nobody else is going to do it if they don’t.

I’ve also admired Honda in my interactions with them. They always seem very open and willing to try new ideas, either from an engineering or oftentimes a design perspective. They have a very open culture, which sometimes you might not expect from an automotive company.

Kelley: I think you have to give extra points for companies that have turned a corner like Samsung and Procter & Gamble. Samsung, starting in the year 2000, was an autocratic, challenger brand, but now they are an innovation engine. By some measures, they’ve beaten Sony.

At P&G, when AG Lafly came in, he talked about going from being problem solvers to solution finders. The big idea was that, while P&G might have some of the smartest chemists in the world, you get no points from solving the problem yourself from scratch.

In fact, you got a few points deducted if you discovered later that a PhD student in Indonesia had already been working on the same problem for three years. The idea was to get a head start through open innovation.

Rose: I was always inspired by the fact that 3M allows its people to have time to innovate. They have a willingness to take their technologies and think through how they might be commercialized in new ways. They are a very agile and interesting company from that standpoint.

Method is an interesting company from an innovation standpoint because they were initially discounted as not knowing anything about chemistry or R&D. But they realized that people didn’t need just high-powered cleaning, that they also wanted to be inspired as they are using their products. Nike stands out because they have an ideal to help athletes perform better and they’ve stayed true to that in their innovation.

And I admire Procter & Gamble because they are very intentional about how they share technology across groups. They have thousands of scientists and yet they are all very well connected and linked to each other. They have a great sharing culture on the R&D side.

Rivenburgh: Patagonia and its founder, Yvon Chouinard, resonate with me. It’s a great story that goes back to crowdsourcing and the open architecture of innovation. Chouinard’s organization has stayed true to its cultural values.

He started out with a lifetime guarantee and stood behind his product. This generated more customer loyalty and attracted strong brand activists and loyalists — including me.

Chouinard was on the forefront of supporting the environment and being sustainable. Patagonia started out with innovation and integrity, and has stayed true to that.