Page 198 - Grow from Within Mastering Corporate Entrepreneurship and Innovation

Leadership from All Le vels 183

preneurship begin with the CEO’s team and remain under its
ongoing stewardship.
Even in companies in which entrepreneurial activities have
become natural and are ingrained in the structures and
processes of the firm, a shift in focus at the top can lead, over
time, to entrepreneurial atrophy. For example, 3M has been
famous since the 1960s for consistently introducing new busi-
nesses built around innovative technology platforms. After
2000, however, under the leadership of former GE executive
James McNerney, 3M appeared to lose some of its creative lus-
ter, Brian Hindo suggested in a 2007 BusinessWeek article.
McNerney emphasized performance reviews based on Six
Sigma quality control principles, which focus on efficiency. But
in 2005, when McNerney left 3M for Boeing, the new CEO,
George Buckley, needed to face the fact that the engines of new
business creation at 3M had slowed. Revenues from new busi-
nesses had slipped from more than one-third to less than one-
quarter. The company’s reputation as an innovator dropped
from number one in the Boston Consulting Group’s Most Inno-
vative Companies List to number seven in 2007. Why? The
incentives of Six Sigma management gave preference to more
predictable incremental innovation projects over longer-term,
disruptive bets. Art Fry, a 3M veteran, noted that breakthrough
businesses like Post-it Notes would have never come out of the
new system. “You have to go through 5,000 to 6,000 raw ideas
to find one successful business,” he notes. “Six Sigma would
ask, why not eliminate all that waste and just come up with the
right idea the first time?”
Smart companies have found ways to fight this trend toward
benign neglect and the resulting entrepreneurial atrophy. As
discussed in Chapter 3, for example, Google’s two founders,
Larry Page and Sergey Brin, and their CEO, Eric Schmidt, meet
on a weekly basis to discuss new business initiatives, thereby