The Challenge of Change: 3M, Six Sigma, and Corporate Culture
Using the example of 3M and its implementation of Sigma Six policies, researchers investigate how corporate culture can ultimately be reshaped.
How Six Sigma Changed Corporate Culture at 3M
When a new leader arrives at an organization, he or she seeks results and implements change. But the leader might be unfamiliar – or even clash – with the organization's current culture.
In the study, “Coerced Practice Implementation in Cases of Low Cultural Fit,” researchers Anna Canato, Davide Ravasi, and Nelson Phillips, respectively hailing from IÉSEG School of Management, City University, and Imperial College examine how corporate culture resists or accepts change.
For these researchers, corporate culture is more than workplace antics and water cooler chats; corporate culture is the interconnected, taken-for-granted beliefs at a company that create a common understanding about work ethic, values, and approach.
The researchers suggest that low cultural fit can delay the adoption of changes or cause an organization to implement changes only “ceremonially” – without real clout.
The researchers also identify how low fit changes can be adopted and adapted successfully within a company. Using the example of 3M and its implementation of Sigma Six policies, the researchers investigate how taken-for-granted beliefs and values can ultimately be reshaped, and how imposed change can create conditions for better organizational understanding.
New CEO Introduces Six Sigma to 3M
A multinational conglomerate, 3M’s cultural traits had traditionally revolved around collaboration, individual initiative, tolerance for mistakes and the absence of pressure for short-term results. These cultural traits fostered an environment of entrepreneurialism and original thought – factors crucial to 3M’s success.
In 2001, low profitability prompted a change in senior leadership. 3M brought in Jim McNerney, a former vice president of General Electric (GE), as its new CEO. With McNerney came Six Sigma, a workplace methodology popularized by Jack Welch, McNerney's former boss at GE.
Developed by Motorola in 1986, Six Sigma is a process management methodology designed to enhance efficiency. It enforces standardization and regulation by identifying and removing causes for error. It has often been praised for its ability to drive productivity. In McNerney’s first three years, he introduced Six Sigma to the entire organization.
Six Sigma temporarily improved 3M’s performance, but when its success waned, tensions about its implementation resurfaced.
Six Sigma Clashes with Entrepreneurial Culture
While it's not uncommon for new CEOs to introduce strategies from former environments, Six Sigma clashed with 3M’s existing culture of serendipitous discovery and tolerance for mistakes.
Employees were frustrated. They were vocal about their concerns over how metrics seemed to matter more than performance. Many believed Six Sigma was getting in the way of real invention – and that its principles were applied even in situations where they made no apparent business sense.
One executive notes:
In some cases in the lab it made sense, but in other cases people were going around dreaming up [programs] to fill their quota of [programs] for that time period…We were letting the process get in the way of doing the real invention.
Another business manager adds:
It has become a religion that has to be applied everywhere… I still have not understood why you should have Six Sigma on business plans.
3 Factors for Successfully Changing Corporate Culture
Leadership at 3M wanted to address employee dissatisfaction and fuse corporate culture and practice. After observing their approach, the researchers identified three factors that aid organizations attempting radical shifts in corporate culture.
1. Implement with executive enthusiasm.
New practices are most likely to face resistance when the new system reverses or forbids behaviour that used to be acceptable or encouraged. 3M had promoted mistakes as a method of discovery and learning. But under Six Sigma, mistakes had to be recorded and were viewed as threats to productivity.
The researchers suggest that having executive buy-in and excitement can ease a transitioning corporate culture. They suggest that McNerney’s own enthusiasm for Six Sigma was a key factor in smoothing 3M’s transition.
By being personally involved in training and showing familiarity and enthusiasm for the system, McNerney helped employees recognize how new practices were important to the larger vision and purpose.
2. Identify sweet spots in subcultures.
3M management realized that support for Six Sigma varied depending on team structure and team subculture. Engineers and manufacturers at the company demonstrated less dissonance for the process than their colleagues in sales, marketing and research. Researchers supposed this was due to a greater initial familiarity with scientific methods in daily work.
As such, the study points to subcultures of corporate culture. These subcultures might better align with – or even welcome – new changes.
Any adaptation and implementation plan should take into account possible subcultures, and consider how to:
leverage these subcultures for overall implementation success; and
use changes as an opportunity to bring the subcultures into greater harmony with the rest of the organizational culture.
3. Recognize that adaptation never ends.
When McNerney unexpectedly left his position at 3M in 2005, it was up to new hire George Buckley to handle the cultural tensions. Buckley kept Six Sigma practices, but dismantled some of the strict, formal obligations, including the emphasis on extreme precision.
His approach was to drop elements employees considered less useful or that interfered with 3M operations. This resulted in a kind of lean Six Sigma where specific or custom elements were still in place. For instance, 3M found that the Six Sigma’s office-wide standards for tools supported cross-unit collaboration, and so retained that particular element.
Employees supported this hybrid approach. “We need to identify where Six Sigma works best and then increase the intensity,” said a 3M executive. “But where Six Sigma might not be the best approach, we need to find a better one.”
Changing Corporate Culture Can Be Good
The fact that Six Sigma remained at 3M even after its champion left suggests the company experienced a shift in corporate culture. For managers contemplating change in their organization, the study provides useful lessons.
A certain amount of imposed change can be healthy and positive. While too much change can cause problems, too little can be equally destructive. Change exposes employees, including executives, to new values and approaches and encourages reinterpretation of corporate culture.
Change can be driven top-down. Involving employees early on in reviewing a new work process may seem valuable. But new processes lose benefit if they are amended too much before implementation.
A balance of traditional and new approaches helps employees integrate contradictory beliefs and better understand their organization.
Canato, A., Ravasi, D., and Phillips, N. 2013. "Coerced Practice Implementation in Cases of Low Cultural Fit: Cultural Change and Practice Adaptation During the Implementation of Six Sigma at 3M." Academy of Management Journal. 56.6: 1724-1753.