CIO — IN 1982, DAVID P. DREW, THEN INTERNATIONAL DIRECTOR OF I.T. at 3M, began to work on a project to standardize the company’s IT operations around the globe. In 1988, when Drew was done, 3M had one global infrastructure instead of a separate operation in each of the 63 nations in which it maintained a presence.
3M’s globalization project was way ahead of its time. The company developed templates for global implementations that are still applicable more than a decade later.
Pretty impressive. But what makes 3M’s 1982 globalization project truly extraordinary is the fact that it was launched during an economic downturn.
By no stretch of the imagination was 1982 a good year. Unemployment averaged 9.7 percent, its highest level since the Great Depression. In November 1982, the unemployment rate hit a whopping 10.8 percent. The inflation rate that year hovered just above 6 percent. (Compare those figures with those from 2000, which saw 4 percent average unemployment and an inflation rate of 3.4 percent.)
For most companies, 1982 was a time to pull back, hunker down and mark time while studying the Machiavellian maneuvers of J.R. Ewing on Dallas. For 3M, it was a time to innovate.
And 3M is still reaping the benefits. The template-based approach and centralized management it developed then has helped it keep its IT headcount low?lower, indeed, than it was in the early ’80s. According to Drew, now 3M’s vice president of IT, this allowed the company to breeze through the IT worker shortage that hamstrung corporations throughout much of the dotcom boom. In fact, with an IT budget that’s 35 percent larger than it was in 1982, 3M today employs 25 percent fewer IT workers than it did then.
As 3M knew, innovation is most valuable when the economy is down-and-out. That’s when a company can separate itself from the pack. In good times everybody has lots of ideas and enough money to fund most of them. In bad times companies have to pick and choose. And that means they have to think analytically and creatively.
It’s risky innovating when the dollars budgeted for projects are precious. But when the markets rebound, those who have been innovating all along will be ahead of those who haven’t been.
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Companies with a history of innovation have built legends and large revenue bases by capitalizing on good ideas in good times and bad. Drew believes that difficult economic times are actually a spur to innovation. "You’re forced to be creative and innovative because you have less resources with which to work," he says.
