3M Greater China President: reform drives innovation

Hailing from the US, Stephen Shafer began to serve as president of 3M Greater China two years ago. Before his interview with us, he said that he was not very good at Shanghai dialect and Mandarin. However, when he blurted out the Chinese word for "fast" to describe the speed of China’s development, he might not realize that his Mandarin was actually pretty good.

(Stephen Shafer, President of 3M Greater China)

Eight years ago, when he was based in the US, Stephen used to travel to Shanghai frequently. Speaking of his first impression of the city, he said with some regret, “Every time I came to China, I worked very hard and I didn't get to see much of Shanghai. Most of my impression of Shanghai at the time came from my interactions with our 3M team and our customers.” But his tone changed while recalling the people he met here, “They were full of energy, very smart, very ambitious, very hard working. I've now lived here for two years, which has only confirmed all of my initial impressions from 8 years ago.”

Exploring the Chinese market

Founded in 1902, 3M is headquartered in St. Paul, Minnesota, and operates businesses in many fields including transportation, construction materials, electronics, communications and health care.

3M’s history in China began in November 1984, when 3M China was registered in Shanghai as Shanghai’s first wholly foreign-owned company. It was also the first wholly foreign-owned enterprise in China established outside the Shenzhen Special Economic Zone.

(3M China’s business license registered in 1984)

With a history of more than eight decades, 3M was more like a mid-career sportsperson, bringing their experience and vitality to China, in order to seek a new challenge. Now China has become its largest market outside the United States.

As for the reasons for choosing the Chinese market, Stephen told the reporter, “One of the ways we think about our business, and running our business, is running it both with a microscope as well as a telescope. The microscope is: we have to operate our company for today, and we have to deliver results. As a result, 3M is a very well run company. We also recognize that we have to have a telescopic lens, which is, where is the world going? How are markets going to change?”

If we go back to the 1970s, the executives of 3M were thinking with a telescopic lens while looking for the opportunities in China. “I think they saw the potential of what the Chinese marketplace could be,” Stephen says. Compared with other companies, 3M is indeed a pioneer in investing in the Chinese market. As China adopted the policy of reform and opening up, 3M China started from Shanghai and has actively supported the development of China's economy with diverse technologies and solutions, thus becoming one of the most successful enterprises in China.

In China and for China

(3M has launched many pneumoconiosis caring programs, aiming to build consumers’ awareness on health risks.)

There is no doubt that 3M is a global leader in air quality improvement and respiratory wellness. According to Stephen, the company has been developing the technology of respiratory protection for over 50 years.“Speed is a great part of the innovation model. But there're other areas, where there's a risk to speed.”

The company has to move fast to grow and to stay relevant to the very quickly evolving market and consumers in China, but when it comes to the health care space, 3M knows that success does not come overnight. For instance, before each respirator is introduced into the market, the R&D department will do a lot of tests, to ensure quality and performance. It also works closely with government regulators to meet the relevant standards. In addition, as Stephen said, “3M actually helps to develop those standards, because it's very important for us that we think the industry needs to live up to an expectation for what the consumers need, so if you go down to our R&D lab in Shanghai, we spend a lot of time working on testing and requirements.”

In 2016, China put forward the Healthy China 2030 Planning Outline. While recognizing the past achievements in China’s health care field since 1978, the outline put forward a requirement of creating a healthier China over the next 15 years: China must promote a healthy and civilized lifestyle while regarding precaution as the primary measure.

　　(With much pride, Stephen showcases 3M’s respirator masks for children aged 7-12 and for teens aged 12-17.)

China's plan on how to bring a healthier and safer life inspires 3M. Stephen is very proud that 3M launched a new product in 2017, which is respirator masks for ages 7-12 and for 12-17, and which is also the first GB2626 fully certified respirator mask for children in the marketplace. Technically, the GB2626 standard requires the company to test the masks’ inward leakage rates on individuals with different facial features. That means innovation has to be done, so as to make customized products.

Benefiting from China’s innovative policies

In an era where other industry giants are compared to tigers and elephants in terms of their capacity, 3M, as a diversified technology innovation company, is likened to corals which can be seen everywhere on the seabed. Regarding this, Stephen admitted that he had heard of the description before. “We do impact people's lives in many different ways, and some of those are considered maybe small ways but they are impactful. I think that's where the coral analogy comes from, but behind that is a very significant innovation capability.”

According to a research study from Industrial Securities, 3M sells more than 50,000 products in nearly 200 countries around the world. Boasting nearly 100,000 patents, it has developed nearly 70,000 kinds of products, with an average of 1.7 new products every single day. That means each employee develops one product on average.

(3M Customer Innovation Center)

During the interview, innovation was repeatedly mentioned by Stephen. He thinks that policy and innovation work hand in hand. One of the things that is positive about China’s reform and opening up is that it started to provide some boundaries for people around markets and market access and generally how the markets will work and some fair trade practices within those markets, which has really helped to open up the China marketplace to the rest of the world. Similarly, within 3M, there are policies as well to try to foster innovation and help innovation grow. One is the 15% rule, which is trying to allow the employees to have 15% of their time to work on creative new projects. Innovation doesn't always occur by sitting at your desk. You have to be in touch with the external world. For a company, the more its people are externally engaged, the more it can attract and retain the smartest, most innovative people, hence better innovation will come.Policies are set to create innovation. That’s the same way that the Chinese government and other institutions try to create policies.

Shanghai, a city that embraces new things and has shown a rapid pace of change, is a very good match to the culture of 3M, a company that is imbued with vibrancy in terms of innovation and speed. As Stephen put it, Shanghai has proven to be a home for 3M, partly because it has provided a lot of stability around a place where the company can make investments. He pointed out, “We've worked very well with the Shanghai government and authorities around how to grow our business here. Most importantly it's been a terrific source of talent and people.” So far, there are 5,000 employees working in 3M’s R&D lab and four production sites in Shanghai.

3M China has benefited a lot from China’s reform and opening up. After pondering for a while, Stephen decided to use “pioneering” to describe China’s development. He said, “The last 40 years have been something that the global economy has never really experienced before. The people here in China have experienced changes at a pace that I'm not sure any generation has experienced before, and all of that means there's been this willingness to try something new and different and that takes a lot of courage. That's what I associate with pioneers: trying something new, moving forward, and doing it in a way that is new and bold and different for the world. I think it’s taken a lot of courage from the people here in China to drive that forward, and 3M has been very fortunate to be a part of it.”