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Some companies have proven that a corporate culture can promote and encourages innovation and, in the process, increase profitability. One such company is 3M, which has been in business for over one-hundred years and had sales of $163 billion in 2002. 3M works to create a culture of innovation throughout the entire company and at all levels. They do this in a number of ways. First, although making incremental improvements to existing products and processes is encouraged, there are greater rewards for making breakthrough improvements. The company has found that maintaining a corporate culture of innovation is difficult and requires work on the part of leaders. Professor Eric von Hipple, a specialist in innovation at MIT’s Sloan School of Business, noted that 3M executives in the 1990’s feared that too many improvements at the company were incremental in nature rather than revolutionary. The company had always prided itself for its cutting edge pace in product and process evolution. Leaders such as Vice President of Research and Development Jay Ihlenfeld began a program of developing their personnel by exposing them to other departments and divisions as well as providing them with training. People were allowed to select their own career and development tracks without risking losing compensation. This was a very popular move because people who were not interested in management careers could still achieve positions that would allow them to receive substantial compensation. Second, the company instituted the 15% rule. According to Ihlenfeld, this tool became a tremendous generator of creativity an innovation. The rule allows employees to use 15% of their time to work on any project that they want without getting management approval. After his idea has been developed, an employee can request funding from his department.
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