3M New Ulm

November 1, 1997April 30, 2008 Roger Matz

This story is a condensed version from Connect Business Magazine.

If it ain’t broke, don’t fix it. Ron Peterson, manager of the Minnesota Mining and Manufacturing plant in New Ulm, ignores that ancient axiom. He’s on a determined mission to revitalize what’s always been one of 3M’s most successful plants.

“What 3M New Ulm has had is 35 years of uninterrupted financial success plus good records for quality, safety and customer service,” Peterson said. “The employees are ‘famous’ within 3M for being hard workers with a strong work ethic. They’ve led the company in ‘presenteeism,’ safety and productivity for a long time.”

These accomplishments are notable in themselves, but even more impressive within the context of 3M as a worldwide company with $15 billion in sales, 50,000 products and nearly 79,000 employees working in plants and operations spread around 34 states in the U.S. and in 63 foreign countries.

What 3M is trying to avoid, according to Peterson, is having its New Ulm operation “stagnate and become a victim of its own success. The fear is that this might not last forever and that we need a whole new approach to make sure we’re ready for change. I’m not predicting doom, but I’m absolutely certain that a business that doesn’t change will eventually fail.” He’s convinced that the time to change is now, while the plant is still strong, still a leader.

But change isn’t necessarily a welcome word among the 950 3M’ers in New Ulm. “Many people here are used to working at the same job, for the same supervisor, doing the same thing – for years,” he said.

When Peterson arrived as manager 2-1/2 years ago from a 3M plant in Chico, CA, he wanted to communicate with employees more frequently and on a more informal, topical basis than the pattern of quarterly meetings established by a predecessor. So he switched to monthly meetings. “I thought that was relatively simple, but I received letters opposing it,” he said.

When he instituted a program for “enhancing personal effectiveness” and began instilling a concept that “we’ll be more successful working together than separately,” resistance became apparent. “That was a difficult message for many people.”

Even though the plant’s employees lead the company by many measures, “what they don’t lead in is in things like teamwork and creativity. They want to work hard, run their own machine and then go home. This is a farming community and they’re rugged individualists,” Peterson said.

Peterson wants to change their mind-set, open new vistas and provide growth opportunities, break down imaginary walls and create an environment where employees evolve from being factory workers or engineers into “essentially business people” with a broader outlook about their day-to-day roles. That means forsaking both dependence and independence to work together in “interdependent” relationships, according to Peterson.

“For example, if a dependent second-shift comes in and blames the first shift for problems with data collection or housekeeping, that’s unproductive. It serves no purpose and hasn’t solved a thing,” Peterson said. “Two dependent groups will knock heads and fuss and fume at each other, accomplishing little.”

Independent workers can be nearly as ineffective when it comes to creativity and permanent problem resolution. “They’ll come in, find the problems, and take care of the situation themselves,” Peterson said. “Unfortunately, the problems are likely to recur unless the root causes are fixed.”

In Peterson’s model plant, an interdependent second shift will discover problems, raise questions about them with members of the first shift, and begin opening relationships toward mutual problem-solving. “They’ll create alternatives with a ‘win, win synergism,’ and take the approach that the solution isn’t theirs, isn’t the first shift’s, but one that hasn’t been thought of yet, one that’s different from both.”

The shift to interdependent working relationships is already underway, facilitated by a five-day course that’s been taken by supervisors, managers and some of the hourly employees. A popular book, “The Seven Habits of Highly Effective People,” is used as a text. Peterson said the book “isn’t a ‘good read,’ but the content is exactly what we’re looking for.” 3M contracted with the Covey Institute of Utah to teach two courses per month involving 12 to 15 people in each. Peterson hopes to put all 950 employees through it – a process that will take years. He’s not dismayed. “Here’s the good news – it doesn’t take 100 percent. It doesn’t take 950 interdependent people to succeed, but it does take a core of influential people. If we have 15 to 20 percent who are interdependent, they can lead the rest to success,” he said.

Peterson has a sense of urgency about creating a climate of interdependence because, despite all the outward appearances of success, he sees problems with the New Ulm plant. “The fact is that our products are aging and our techniques and processes aren’t keeping up with a rapidly changing world.” The plant generates $500 million in sales, almost enough to rank it as a Fortune 500 company by itself. A fifth of those sales come from electrical connectors, little plastic devices used by electricians to link hot wires, a product manufactured here since the plant opened in 1962. Another $30 million comes from computer cables, the flat or “ribbon” variety used to connect computers or interface with peripherals. The plant manufactures 12,000 different products, although that number needs some perspective. Each different kind of cable, of varying length, size or configuration, counts as a separate product. So do the many varieties of connectors, which range from household size to the kind linemen use for splicing wires or hooking up to power supplies. The plant makes connectors for telephone cables and cords in addition to those used in the electrical industry.

“As some of these 12,000 products get older, and patents run out, perhaps we shouldn’t be the one making them anymore,” Peterson said. Rather than manufacturing maturing products, Peterson would like to see New Ulm “focus on new products. I want to compete inside the company for new technologies and new products.” That avenue represents opportunity because 30 percent of 3M’s $15 billion in sales come from new products.

Right now, 3M New Ulm isn’t in a good position to compete for much in the way of new products because its facilities are squeezed for space. And he admits that in a plant laden with “fairly stable products, there’s a risk in vying for new products. It’s another reason to become interdependent before we do that. If things go bad, everybody wants to change. The problem is that’s the worst time to change. It’s critical to change while you’re still good, to reinvent yourself while you still have the funds, credibility, momentum and market presence to take risks. Our approach is to make those changes while we’re still making money, still growing.”

3M plant managers tend to stay in one location for only five years or so, according to Peterson, because the company “doesn’t want them to get stagnant or to block the experience for others.” But after 2 1/2 years in the job, Peterson said he isn’t “hung up on that time line. This particular assignment is a big job and I’m not bucking for the next spot. I’m trying to leave a legacy for these people.”

He’s determined to create an interdependent atmosphere in the plant whether “it takes two years or 10 years. The end point is inevitable. We want to maintain the journey, and we need to review things occasionally to make sure that the end we’re seeking is still the right place.”

Peterson said he’s “personally gratified” by the progress of his mission so far. “But it’s too soon to call the revolution complete.”