Innovation at its Core

Innovation is at the core of 3M, and it’s no different for 3M’s legal department. Ivan Fong, Senior Vice President, Legal Affairs and General Counsel, has led the department since October 2012. One of the things that most attracted him to 3M was “its culture of innovation combined with its commitment to collaboration.” He cites the company’s 15 percent culture—an informal program launched almost 60 years ago that allows employees to pursue their own projects and ideas during 15 percent of their time at work—as one example of innovation’s all-pervasive reach at 3M.

Fong says that there are three ways in which the legal department nurtures that culture of innovation:

1) They “lift up examples and model good behaviors.” Honoring 3M’s core “McKnight Principle,” named after longtime CEO and board chairman William McKnight, honest mistakes are seen as learning opportunities and not punished.

2) They encourage their people to take sensible risks and to set stretch goals. With stretch goals, “even if you don’t reach the goal, you end up doing more than you thought you could do,” Fong says.

3) They “recognize and celebrate” innovation. Financial Times recently named it as one of the most innovative in-house legal teams in North America.

The manifestation of innovation

About half of 3M’s legal team is outside of the U.S., so Fong has made a special effort to integrate the department as “one team working globally.” Fong says that they “focus on making a priority of having a single, consistent set of messaging and communication to help people feel like part of a larger team.” Fong and his team host a bi-monthly “all-hands” meeting that is webcast to the nearly 500 team members around the globe. With time zones spanning more than 14 hours, anyone who is unable to view the meeting live can watch the recorded webcast at his or her convenience. Another way the team stays connected is through periodic “ask Ivan” web chats, in which team members from around the world chat with Fong in real time. And they have an intranet site with a virtual suggestion box that Fong monitors. Anyone can submit questions or comments and, if they wish, choose to remain anonymous.

With innovation comes a need for prioritization, so Fong and his team have “an active hopper of technology and other initiatives.” Fong, with input from his team, selects one to three of those initiatives, referred to as “Vital Few Projects” each year. These are projects that are impactful for the organization and its mission, and that would not get done without dedicated focus and resources.

One Vital Few Project that the 3M team tackled last year was to survey Artificial Intelligence offerings and data analytics vendors. As one example cited by Fong, “we looked at whether we could use our data to make better and faster decisions around which patents to pursue and which will yield the biggest returns.” He adds, “The data exists and is just waiting to be analyzed.”

Like most legal departments, 3M’s legal team is “under pressure to drive efficiency and control [their] spend.” To help meet those demands, the 3M team is focused on operational excellence as one of their strategic priorities. 3M’s department has a dedicated Operations team, whose mission is to advance the team’s effectiveness, excellence, and value. Last year they added a Lean Six-Sigma Black Belt and a full-time data analytics specialist, as Fong says, to “help [them] get to the next level.” The Operations Team also handles document collection, review, coding, and production in-house for most large, document-intensive litigation and other matters—realizing seven-figure savings annually. And since 2011, the team has steadily built a team in India that handles many necessary legal functions such as patent docketing and NDA review.

In 2013, 3M formed a preferred counsel network (PCN), not just to reduce cost, but to deepen and fundamentally improve the company’s relationship with a select group of outside counsel. The 3M PCN, Fong explains, is “different from a consolidation effort.” “The goal of the PCN is to partner with excellent outside counsel who share our values and who are willing to invest in building a relationship with 3M.” One of the first principles of 3M’s PCN is to pay for value, not activity, and to partner with firms to craft custom fee agreements that align with underlying business objectives. The 3M team’s Litigation and Preventive Law group is also focusing its effort on reducing the number of matters, installing early warning systems and learning from mistakes, and resolving matters sooner.

Investing in leadership development

“We’re trying to achieve a legal department where high-performing and high-trust teams serve as business partners to support growth and innovation of 3M, as well as protecting the company and its reputation,” Fong says. Another Vital Few Project that helps them work to meet that goal is called Developing Legal Leaders.

“We worked with HR to create a legal competency model and career roadmap, which identifies the skills needed for every position at every level,” Fong says. “At the front end, we’re doing structured panel interviews to align our selection with those key competencies.” The 3M team has also worked to map the recruiting and onboarding process, and to identify areas for improvement.

3M is also committed to ongoing training and development for all professionals and at all career stages. For many years, they’ve had a “New Lawyer Academy,” which consists of an orientation, meeting people and instilling values and culture, and a structured curriculum. More recently, they’ve added an “advanced business course” for mid-level lawyers, which includes “intermediate finance and accounting, risk tolerance, communication, solution orientation, and executive presentation skills.” This year, the 3M team is expanding its formal training and development to include paralegals, patent agents and liaisons, and other administrative and operations professionals.

Fong’s leadership team also works to develop their leadership skills. In addition to periodic 360 surveys, they were the first law department leadership team to complete a “Return on Character” assessment, using KRW International’s program. Based on Dr. Fred Kiel’s book of the same title, the assessment is premised on the finding that high-character leadership teams lead organizations that are higher performing. “I’ve long believed that high-trust organizations are higher performing,” Fong explains, and “our work with KRW builds on that premise.”

Fong says that one important goal for the next year is keeping the department’s diversity program active. 3M participates in the Leadership Council on Legal Diversity, which includes active engagement by managing partners of large law firms as well as GCs of large companies. He describes his experience on the Council as a “terrific way to demonstrate our commitment to developing the next generation of diverse legal leaders.” The Council selects two fellows every year, who participate in a series of leadership development programs, which offers “a great opportunity to accelerate their development as leaders and network with their peers in the profession.”

Other goals for the next year include launching a company-wide effort “to select and deploy a contract life cycle management program,” continuing to expand their pro bono efforts world-wide, and completing a second round refresh of 3M’s PCN.

Continuous improvement

If it seems like Fong’s legal department has a lot going on, it’s because “we never want to take for granted what we’re doing. We’re always looking for better ways to do things.” That continuous improvement mindset affects everything they do.

3M’s legal department enthusiastically embraces its culture of innovation, but Fong says that the legal services industry at large is still experiencing “incremental change at best,” despite “predict[ions] of disruption for many years.” The two disruptors that he believes are likely to cause “some change over the next five to 10 years” are groups that provide “highly efficient, low cost, high volume transactional work”—such as the 3M team in India—and technology. “AI software combined with natural language processing may allow us to one day perform simple ‘TurboTax-like’ legal functions,” he says. “But robots won’t be replacing in-house lawyers anytime soon.”

Fong points out that “humans have to continuously climb up the value chain to stay relevant.” And that’s what he’s doing with the legal department at 3M: innovating, continuously improving, and embracing new challenges and opportunities.

 

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