ideas factory Charles Chuck Kummeth was appointed the The INTERVIEW CHUCK KUMMETH

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2 The ideas Many iconic brands are included among the 55,000 products manufactured by 3M. The new UK MD, Chuck Kummeth speaks to Libbie Hammond about maintaining a culture of innovation factory Charles Chuck Kummeth was appointed the new managing director at 3M United Kingdom in June 2005, taking on responsibility for the global technology company s activities in the UK and Ireland. The UK and Ireland is home to one of the largest 3M subsidiaries outside the USA, employing 3400 people across 12 locations, including seven manufacturing sites. Products manufactured in the UK include coated abrasives, respirators, adhesive tapes and pharmaceuticals. Chuck s focus will be on developing new markets in UK rooted industries for an organisation that operates in numerous markets, including: consumer and office, display and graphics, electro and communications, health care, safety, security and protection services, industrial and transportation. Born in Jamestown, North Dakota, Chuck s early career saw him in a number of technical and management positions, where his work on early data cartridges was incorporated into the first Macintosh computers. With a 3M career spanning 22 years, Chuck has held several business development roles at the company including: director, mergers and acquisitions Industrial Markets; business development director International; general manager Electronics Markets Materials Division and business executive director, Industrial Business, Europe and Middle East. Speaking of his background, Chuck gave details of his early days at 3M: I started off in engineering, which makes me a bit of an anomaly for 3M in that I am not a chemist, I am actually an electrical engineer. I spent roughly ten years in the laboratories and then 12 years in business, and I was also involved in a spin off called Imation that we performed in I had to find a back door to get back here seven years ago. I have held a lot of positions, almost too many to count! With six months as MD under his belt, Chuck has already made some significant changes at 3M UK, but describes this assignment as one he has been looking forward to. It has been great fun, and it is the first position that I have actually asked for. I moved around a lot in the company like everyone does in 3M, but this is one of the jobs I have always had on my list, I have always wanted it. I love British humour and the way of working in Britain - I love the irreverence and the questioning. 3M also now has a new British CEO, who will be visiting here a lot, so I am looking forward to working with him. The UK subsidiary is 3M s oldest, and is also the largest manufacturing base outside the US, with a very large employee count, so there is a broad range of functions and disciplines to be managed. We have all these economic challenges in front of us, explained Chuck. We are a manufacturing company and the UK economy has very quickly become knowledgebased, so that is why I am here - to try and utilise my knowledge background. 8 venture

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4 going on in the Health Care arena. To enable us to be more focused we have taken out hundreds of projects, both new product development and what we call penetration projects, simplified our business and looked more closely at rooted industries, areas that are growing and remaining in the UK versus the industries that are leaving. This is a big change for us, it has never been done before. This type of project needs a long-term view to assess its success, but early indicators show that it has been very well received. Chuck explained further on the thinking behind this re-structure. The UK used to be home to lots of manufacturers and tier one suppliers, but they have mostly all moved on now, so we are now trying to focus on areas where we do still have high demand in the UK, with oil and gas being a great example. Wasting no time, Chuck has already introduced a major change to 3M, which involves re-working the entire portfolio of products offered by the company, as he explained: First you have to understand the way that 3M was organised, he said. We manufacture 50,000 60,000 product lines that were organised into seven large businesses. Historically because of this complexity, we have always left these businesses in silos, and thought of them as seven separate portfolios. But my team and I have worked very hard over the past six months on re-working our entire range, trying to combine the seven different areas into one portfolio. This means re-thinking some of our products, and reallocating resources to areas that we think will have the best growth in the future. So for example, do we keep doing what we are doing in Tapes and Abrasives, or should we put some of these resources into Health Care? Aging population is one of the mega trends in the UK, and our market here is very health care related, so we need to look at the current issues in healthcare to see if that has more potential than trying to get more tapes and abrasives manufactured here. Much of our very innovative work is World leaders The UK is one of the world leaders in oil and gas and yet 3M has never formed a market focused segment or business unit here to represent the breadth of products that we have for that sector. We actually stock everything from glass bubbles to different high performance tapes, but we need to put them together so that the customer can appreciate the power of the portfolio. As a salesman, if you are selling 50 products from big 3M, you wake up the purchasing agents for these companies. Another great example would be the 2012 Olympics - it is not too early to start thinking about this as it will be the biggest construction project since Terminal Five, and we have an awful lot of products that could be useful, but instead of having 15 sales people from 15 divisions all attacking in parallel and confusing the customer we are trying to roll all this together into one market segment and approach the customer as one storefront. That generates far more power. Chuck pointed out that as certain industries move away from the UK, 3M needs to rethink how it approaches its customer. If I use high visibility vests as an example, we used to lead this business area, but that is a textile and that has all moved to China, so we may spec it here, but it is not made here any more. It doesn t make sense to have people here trying to grow that business when it has all moved abroad. The trick is to keep the specification here, which we send over to China so that people still ask for 3M stock by name. 3M has been finding ways to make new ideas happen for more than 100 years, but the company name is still perhaps not as well known as it could be. Chuck 10 venture

5 commented: Pretty much everyone in the world, in the home or in the office, is within ten feet of a 3M product. We are the owners of iconic brands such as the Post-it note (which celebrated its 25th anniversary last year) but in the UK 3M might not be an instantly recognised company name. I think it comes down to brand equity, brand identity and brand investments and building a brand is like planting trees, it is for the next generation. Creating an instantly recognisable brand takes a long time and the investments in the UK have not been comparable to what they were in the US. Inventing new products Chuck mentioned the Post-it note which is just one of many revolutionary products invented by 3M, so I asked him to explain how the company goes about developing so many product lines, and so often those that change the market. We have invented a lot of ground-breaking products such as the fax machine, the copier, digital magnetic tape and masking tape, and our culture does encourage this radical thinking, he said. I came from the laboratory where we were expected to understand the areas we were in but also spend some of our time working on ideas that weren t really in the plan, and a large percentage of our breakthroughs come from those areas. When I coach people I always try to treat the lab a little bit differently from the business side. The management side is the place where we can fail, but the laboratory people never fail, they just run out of time and move onto other projects. I don t think anything that is worked on in the lab is wasted, even if it doesn t turn into a big product. By taking this laboratory experience into the boardroom, Chuck has an advantage over some managers who may not have this insight into the innovation process. It also offers a business advantage. I think that 3M is still an innovation and imagination company, and we work at the top of the pyramid in most industries, so to have higher margins and maintain that growth continually, we have to have innovation. Managing both business and constant innovation is a very special recipe and also very fragile, so must be constantly addressed. As a company made up of so many diverse product areas, tying together a culture of quality has traditionally been a tough challenge; however in M introduced a Six Sigma programme, and this has managed to bring the company together. Six Sigma is in our fabric right across the company, Chuck confirmed. In the company today we have over 30,000 Six Sigma programmes, and this has done a lot to improve our operation. Historically we have had trouble finding a common language, but Six Sigma is one of the rare processes that did it and we We have invented a lot of ground-breaking products such as the fax machine, the copier, digital magnetic tape and masking tape followed the same exact process in all subsidiaries in all countries, and it has had amazing results for us we have saved billions of dollars. This Six Sigma approach encourages a partnership method, but this has in fact been part of 3M s culture for many years. This is fundamental to us, said Chuck. We will try and work with the production people to find solutions - that is how we invented masking tape when we saw people struggling to paint two-tone cars. It is natural for us to work with customers and try and find problems to solve their pains. That being said we have had a very strong gift in the past of finding customers unarticulated needs, and coming up with the exact product that they can t live without. How would a customer tell you that they need a fax machine? It is this leap of imagination that our staff have to take. Chuck mentions his staff often, and believes that it is the low staff turnover and vast years of experience at 3M that helps it stay at the forefront of the market. We have an average tenure of 20 plus years here, he said. I have worked with a lot of companies and a lot of customers and whenever you see companies with high staff turnover, that are continually working with new people, they really can t get it done, they can t get as far. There is something to be said about continuity and a trusting internal relationship, so you can rely on your people and when they stick around you get that extra leverage, he concluded. For our kind of model success is all about the people, and they have to be treated differently, according to role. venture 11