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Elaine Cartas' Career Assessment Portfolio

Case Analysis: 3M

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1. What patterns did McNerney and his senior managers want to unfreeze within 3M? What patterns did they want to refreeze and why?

a. Unfreeze: As defined by the text, unfreezing is the ability to change old habits into something new. Yet, the process of unfreezing is difficult due to the reinforcement of old habits and the unpromising reward for creating a new one. This notion can be supported as all individuals prefer to have instant rewards and do not realize that creating new ways of organizing is a slow process. However, McNerney and his senior managers have successfully acquired this arduous task by unfreezing a multitude of areas within the company. For instance, McNerney and his senior managers realized that the industrial and consumer products were not productively increasing due to the mere variations of size and color discrepancies. As a result, McNerney and his senior managers reorganized all the products under six categories: health care; specialty materials; industrial products; consumer and office products; electro and communications products; and transportation, graphics and safety products. This reorganization resulted to easier organization for all employees to understand. Also, McNerney acknowledged that the traditional product process of approving the majority of new product ideas can be improved by determining the most promising new items early on. As a result, 3M has increased in profits. Additionally, McNerney believed that 3M’s traditional seniority-based compensation plan should be shifted into a merit-based structure that rewarded managers for implementing these rules. Thus, this merit-based process ensured high-performing managers within all levels of 3M. Another aspect that McNerney unfreezed was influencing managers to move 3M into services, an aspect that 3M managers were unfamiliar with. This change has allowed senior managers to successfully allocate the budgets within the varying departments. With these various changes, McNerney has proven to the global economy that 3M is a great example of success through improvement and change.

b. Refreeze: Although the ability to successfully unfreeze is the first step to change, it does not guarantee a successful change. Thus, the process of refreezing is needed in order to establish a positive outcome. Refreezing is the process of continuous reinforcement of a new pattern to establish success. For example, McNerney recognized 3M’s tradition of product development by supporting all new items. Yet, McNerney believed 3M needed to change this tradition to increase profits. In doing so, McNerney challenged R&D managers to determine which products were going to be successful in the future. In order to encourage this change, McNerney maintained the entrepreneurial spirit of the company by providing awards to employees whose ideas were turned down. Thus, the refreezing of awarding employees accelerated product development. In order to further promote these new changes, McNerney completely changed 3M’s performance management and development practices. In doing so, McNerney executed a merit-based structure that rewarded outstanding employees and managers bonuses and promotions rather than the traditional seniority-based compensation plan. As a result of these new performing changes, it has created a strong workforce that ensures high-performing managers.

2. If you were a manager at 3M, what kinds of outcomes [such as early wins] would you look for as evidence that the company is embracing change?

It is known that one of the key milestones in successful change is the ability to motivate early on, which is also known as an early win. As a manager at 3M, in order to see any evidence of the company embracing change, I would examine if all employees regardless of their status in the business are receiving continuous reinforcement. Thus, reinforcement can be displayed by noticing fewer mistakes and simple verbal commendations to subordinates. Besides personal progress, I believe that collective progress should be reinforced as well. Thus, all levels are being reinforced to complete the change process. Therefore, continuously reinforcement of all employees regardless of their status can lead to a high success rate of the new change.

3. How would you apply the 80/20 rule fostering change at 3M?

The 80/20 rule can be displayed throughout the fostering change at 3M. This rule suggests that 80% of the consequences are a result of 20% of the contributing factor. For instance, before McNerney entered 3M, the company was losing $1 million per year due to the cracks in dental ceramics. As a solution, McNerney employed a small group of managers to investigate this problem and found that the ceramics were not being correctly cured. The employment of these specially trained managers was a minimal cost, but it provided a great increase in 3M’s profits. Thus, 20% accounts for the small fraction of cost to employ the small group of managers, which resulted to a huge increase in profits that can be delineated by 80%. Another 80/20 rule can be applied to McNerney’s new product process of focusing on afew exceptional product ideas rather than all product ideas. Therefore, 20% represents the few products selected that has resulted to an increase in profits that can be displayed by 80%. As a result, McNerney’s successful ability to apply the 80/20 rule, which requires minimal effort and money, has resulted to 3M’s triumph.

4. Did McNerney and his senior managers try to change too much, too quickly? Should he have accepted the status quo for 3M for a longer time period before implementing his changes? Explain your answer.

I believe that McNerney and his senior managers did a great job in implementing these changes at a steady rate. It is known that the majority of change is highly unpredictable. Additionally, as mentioned in lecture, 87% of managers believe that change has been increasing at an exponential rate. By implementing these new changes right away, it can prevent future failure from happening. Furthermore, although McNerney had to cut a few employees, overall 3M has successfully flourished within the global economy. The reorganization of products, the improvement of quality through specialized managers, the new developmental process, the revamped performance management and development practices, and the shift of 3M into services has earned 3M record earnings.