Leadership development report (Leading for Change)Sherie Ng
3M's Leadership Competency Model: An Internally Developed Solution • 133
3M'S LEADERSHIP COMPETENCY MODEL: AN INTERNALLY DEVELOPED SOLUTION
Human Resource Management, Summer/Fall 2000, Vol. 39, Nos. 2 & 3, Pp. 133–145 © 2000 John Wiley & Sons, Inc.
Margaret E. Alldredge and Kevin J. Nilan
This article describes the development of an executive-level global competency model at 3M. The work on this model was completed in partnership with the company’s top executives and a global team of in-house professionals. The competency model itself consists of 12 competen- cies and generalizable behavioral anchors for each competency. The applications for the work include the assessment of the level of readiness of candidates for the company’s top 500 global positions, development of incumbent executives, and improved objectivity in the placement of future leaders. The article concludes by outlining some key lessons learned from this ongo- ing work. © 2000 John Wiley & Sons, Inc.
During the last 20 years, the tumultuous, global business climate has challenged hu- man resource professionals to help organi- zations survive and even flourish in the face of constant pressure to change. Markets emerge, enlarge, or disappear with ever in- creasing speed. Competition in areas of new product development, information manage- ment, manufacturing capacity, and sourc- ing is genuinely global. Technological changes have radically altered how organi- zations deal with their business, creating increased pressure for speed and the capa- bility of the information technology infra- structure. For many companies, traditional competitive advantages for numerous prod- ucts have virtually evaporated. What re- mains constant is the differentiation achiev- able through the skills and contributions of the employees of an organization. This dif-
ferentiation can be unleashed or inhibited by the behavior of the organization’s leaders.
The structural changes taking place in business have impacted very directly the in- dividual differences or capabilities needed by executives and managers. As stewards of suc- cession planning, selection/placement activi- ties, and development processes, human resource professionals are definitely in the middle of the fray. With state-of-the-art sys- tems and processes, human resource profes- sionals are able to help their organizations navigate through these turbulent times and maintain their competitive positions. The good news is that they have the potential to use knowledge, learning, and tools to impact dra- matically their organizations.
In this article, we outline 3M’s response to the environmental challenges that necessitate
Technological changes have radically altered how organizations deal with their business, creating increased pressure for speed and the capability of the information technology infrastructure.
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strengthened leadership. This article details the creation of a 3M template of global lead- ership competencies for use in assessment, development, and succession.
The principal driver at 3M for the creation of this leadership model is the need of the or- ganization to survive and grow. As product dif- ferentiation narrows, margins shrink, and pressures on pricing mount, the effectiveness of leadership becomes more critical for sur- vival. As Bass (1990) notes, leaders have a di- rect influence on the performance of the organization as well as on the satisfaction and performance of those whom they lead. Both enhancing the efficacy of the appointed lead- ers and developing future leaders with more intentionality were expected at 3M as direct consequences of the successful implementa- tion of this work.
A secondary motive was the ever-pressing demands of succession planning. At 3M, plac- ing the right people in the right jobs at the right time is complicated by the diversity of businesses and by the company practice of pro- moting from within. The fact that it takes years to develop the understanding necessary to function effectively within 3M’s breadth of businesses and technologies encourages pro- motion from within. Key openings that pro- vide development and the opportunity for growth of leaders, therefore, must be managed as the rare jewels they are. Thus, the intended applications of the leadership model were:
• accurate assessment of leadership capability
• more effective development of talent within the organization
• selection and placement of leaders into key positions
Understanding 3M As a Company
3M is roughly a 100-year-old company, with approximately 40 business divisions as well as many departments and subsidiaries, involved in the manufacture and sales of an unusually wide array of products. In addition to the core businesses, which manufacture tapes and abrasives, the company also produces and sells products in markets as diverse as printing, health care, automotive, construction and
home improvement, office supplies, transpor- tation, and specialty materials. 3M has enjoyed a reputation as an organization that fosters in- novation and new product development. It ac- complishes these while maintaining a culture where there is:
• a high level of loyalty to the company among employees
• encouragement to take risks on new ventures, often outside the scope of their approved projects
• leadership and management talent within the enterprise
• high job stability
Almost since its inception, 3M has en- joyed success. The company often invents a product and then dominates that market. New products seem to have flowed continu- ously while the company has used patent protection to its full advantage. 3M’s tech- nical community operates much like an aca- demic environment where both applied and basic research are shared openly and tech- nologies are available freely across business units. New technologies are created or adapted as a direct result of informal net- works that can be traced back to internal technical conferences. Learning through personal experiences with customers or from experimentation has lent strong cred- ibility to discoveries. The result of this learn- ing is the development of a culture in which direct 3M experiences are often perceived as necessary for validation of insights and findings. This aspect of the culture has helped create an intensely independent at- titude throughout the company.
Models of Leadership Competencies
This intensely independent attitude has re- sulted in the desire of 3M management to cre- ate a customized model of leadership compe- tency rather than accepting an existing model. After all, innovation is a core competence at 3M; employees “tinker” constantly with prod- ucts, systems, and ideas from whatever source. It is because of this dynamic innovation that 3M management decided to develop a 3M- specific leadership competency model.
Learning through personal experiences with customers or from experimentation has lent strong credibility to discoveries.
3M's Leadership Competency Model: An Internally Developed Solution • 135
The Beginning of a Customized Model of Leadership Competence
The original work on the development of this customized model of leadership competency started in 1986. At that time, the goal was to identify competencies necessary for success in general manager positions. A group of vice presidents (executive, group, division, staff, and international) met periodically to identify and articulate competencies required for suc- cessful general management at 3M. Through ongoing dialogue and enhancements, a basic competency model evolved.
During the next nine years, that early work was implemented and used initially in succes- sion planning. Later on, the application of the model broadened to include assessment of incumbent capabilities and succession candi- date readiness and development. Concur- rently, human resource professionals and executives continued to work on refinements of the leadership competencies and support- ing materials.
Leadership Development—A Global HR Priority
In 1995, as a result of continuing concerns about the depth of leadership bench-strength for the top executive positions, the Vice Presi- dent of Human Resources involved the talent of participants in a global conference of the top HR professionals to identify leadership selection, assessment, and development as the number-one priority in HR. At the conclusion of this global HR conference, Alldredge and Nilan were identified as the co-leaders of the project to create a portfolio of products and processes for use with 3M’s leaders. Clear positional responsibility was given to the them to develop comprehensive systems for the above mentioned applications targeted at in- cumbents and candidates in the top 500 posi- tions.
Top Executive Involvement and Consensus Building
To take advantage of the external changes to the field of leadership development, an initial step in the process included a review of litera-
ture that was oriented toward leadership com- petency and development. Nilan and Alldredge also compared 3M’s earlier work on general manager competencies to existing corporate models of leadership competency. When 3M professionals juxtaposed work from the mid- 1980s with the current state-of-the-art think- ing in leadership, they realized that those ear- lier competencies needed to be updated. Spe- cifically, 3M’s competency model needed to incorporate changes in leadership philosophy and to address the hypersensitive global busi- ness environment.
As Alldredge and Nilan began to respond to the needed changes, they focused on three critical success factors. First, it was critical to involve key executives and senior manag- ers actively in the process. Second, they de- cided that this competency model would have three elements: competency labels, compe- tency definitions, and behavioral anchors for each competency. Third, in order to achieve the desired global implementation of the com- petency work, they convened a group of in- ternal HR practitioners in the area of leadership development and assessment from around the globe. This global HR team in- cluded representatives from Europe, Asia, Latin America, Canada, and the United States. Through this global team approach, the quality of the work and the likelihood of worldwide acceptance were enhanced.
As mentioned, for success on this project, we strongly believed that it was necessary to es- tablish a group of executive clients as working partners. These partners would input, review, and edit the work and determine when to move to the next stage of this initiative. With the sponsorship of the Vice President of Human Resources, three groups of executives were established as our clients (see Table I).
To explain the table, the first group refers to 3M’s Executive Resources Committee (ERC) or top nine executives. The key respon- sibilities of this committee are the selection and development of individuals through their placement in the top 500 positions at 3M. The second group is the Human Resources Policy Committee (HRPC), which approves all policy
Specifically, 3M’s competency model needed to incorporate changes in leadership philosophy and to address the hypersensitive global business environment.
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with human resource impact. The third group is called the Operations Committee, charged with overseeing 3M’s operations and made up of the Chief Executive Officer (CEO) and his 13 direct reports. In the end, the impact of these partnerships on this work was immense.
The first task was to clarify and simplify the existing set of competency labels and defi- nitions. With those in hand, we met individu- ally with each member of the ERC to review the material and discuss leadership philoso- phy, business complexity, and verbiage. The objectives were to use the language of the business and represent the philosophy of ex- isting 3M leadership. At several points, the entire set of competencies was presented to the HRPC. Debate about the importance of wording, phrasing, and interpretation helped these executives clarify their beliefs about lead- ership. It also served as a catalyst for these executives to coalesce around current expec- tations and future needs of leaders at 3M (see Table II).
As can be seen in Table II, the result of individual meetings and group discussions with executives was a series of modifications to the competency labels and descriptions. This active review process helped ensure that the executive group could speak with knowl- edge and genuine commitment about the com- petencies and subtleties contained within their competencies’ definitions. Without provoca- tion, these executives took every opportunity to expound on personal beliefs and expecta- tions of leadership at 3M. In one particular instance, this growing passion led the head of engineering and manufacturing not only to draft a “white paper” detailing his personal philosophy and views of leadership, but also to discuss its contents with members of his management team.
Clustering the Competencies
The global HR team immediately contributed by clustering the 12 competencies into a frame- work that illustrated how these competencies develop during an executive’s career. Table III reveals competencies and their definitions in the framework as agreed to by 3M executives.
While readers familiar with the litera- ture may not see anything particularly
unique in Table III’s list of competencies and their definitions, it is important to rec- ognize that each word was intentionally chosen by the three groups of clients. The consequence of this process is that the cli- ents “owned” the labels and definitions that capture issues unique to the priorities held by these executives.
These updated competencies were used almost immediately for succession deci- sions. A tool was created by merging the competencies with an existing list of job ex- periences critical for successful general management at 3M. The result of using this tool is more objectivity and greater disci- pline in developing candidate slates for ex- ecutive positions at 3M. By working with this Position Profile and Candidate Analy- sis form, the hiring executive creates a pro- file of the priority competencies and work experiences needed for a specific, open po- sition. The hiring executive can easily com- pare the competencies and work experiences of all potential candidates against that de- sired profile (see Table IV).
3M’s Competency Framework
The global HR team identified a framework for organizing the competencies in Table III. In this section, a description is provided of some of the thinking behind each of the 12 competencies and the organizing frame- work. This should help clarify the complex- ity inherent in each of these competencies. It should also help explain the logic of ap- plying these competencies to some mana- gerial positions. For example, there exist a few managerial jobs in larger, mature busi- nesses that demand capability in areas such as business health and results, customer ori- entation, and the inspiration of others.
Fundamental Leadership Competencies
Within that framework, the first three lead- ership competencies are considered “fun- damental”, particularly with respect to char- acter. While new employees possess these fundamental competencies at the time of hire, they refine them through job experi- ences at successive management levels. The
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• ETHICS AND INTEGRITY Exhibits uncompromising integrity and commitment to 3M’s corporate values, human resource prin- ciples, and business conduct policies. Builds trust and instills self-confidence through mutually respectful, ongoing communication.
• INTELLECTUAL CAPACITY Assimilates and synthesizes information rapidly, recognizes the complexity in issues, challenges as- sumptions, and faces up to reality. Capable of handling multiple, complex, and paradoxical situations. Communicates clearly, concisely, and with appropriate simplicity.
• MATURITY AND JUDGMENT Demonstrates resiliency and sound judgment in dealing with business and corporate challenges. Rec- ognizes when a decision must be made and acts in a considered and timely manner. Deals effectively with ambiguity and learns from success and failure.
• CUSTOMER ORIENTATION Works constantly to provide superior value to the 3M customer, making each interaction a positive one.
• DEVELOPING PEOPLE Selects and retains an excellent workforce within an environment that values diversity and respects individuality. Promotes continuous learning and the development of self and others to achieve maxi- mum potential. Gives and seeks open and authentic feedback.
• INSPIRING OTHERS Positively affects the behavior of others, motivating them to achieve personal satisfaction and high performance through a sense of purpose and spirit of cooperation. Leads by example.
• BUSINESS HEALTH AND RESULTS Identifies and successfully generates product, market, and geographic growth opportunities, while con- sistently delivering positive short-term business results. Continually searches for ways to add value and position the organization for future success.
• GLOBAL PERSPECTIVE Operates from an awareness of 3M’s global markets, capabilities, and resources. Exerts global leader- ship and works respectfully in multicultural environments to 3M’s advantage.
• VISION AND STRATEGY Creates and communicates a customer-focused vision, corporately aligned and engaging all employees in pursuit of a common goal.
• NURTURING INNOVATION Creates and sustains an environment that supports experimentation, rewards risk taking, reinforces curiosity, and challenges the status quo through freedom and openness without judgment. Influences the future to 3M’s advantage.
• BUILDING ALLIANCES Builds and leverages mutually beneficial relationships and networks, both internal and external, which generate multiple opportunities for 3M.
• ORGANIZATIONAL AGILITY Knows, respects, and leverages 3M culture and assets. Leads integrated change within a business unit to achieve sustainable competitive advantage. Utilizes teams intentionally and appropriately.
3M Leadership Competencies.
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The final competency within the visionary set is “organizational agility”, one of the most difficult skills to develop but one of the most significant for the future.
first competency encompasses “ethics and integrity” and relies on a commitment to 3M values as a way to build trust. The follow- ing are the 3M values:
• We satisfy customers with superior quality, value, and service.
• We provide our investors with a fair rate of return through sustained quality growth.
• We respect our social and physical environment.
• We work to make 3M a company em- ployees are proud to be part of.
The words and actions of a leader need to be consistent and clear. The message con- veyed by every leader’s actions and decisions should be one of honesty and integrity. It is expected that every transaction with cus- tomers, suppliers, and employees is an ethi- cal one.
“Intellectual capacity,” another of the 12 competencies, is also fundamental to leader- ship at 3M. The leader’s intellect must con- tinuously sharpen and expand. The complexity of the business, the new technological plat- forms, and challenging market issues require total system understanding. The leader must be able to articulate complex thoughts, ideas, and visions in ways that communicate effec- tively with colleagues at 3M as well as with customers and vendors.
To these competencies add “maturity and judgment”, the third competency within the “fundamental” category. The leader should respond to extreme stress and ambiguity with predictability and resiliency. The leader’s de- meanor must communicate calmness to oth- ers. After all, sound judgment is expected from a leader in whom the corporation places con- fidence and responsibility.
“Essential” Leadership Competencies
The “essential” four competencies develop as individuals become responsible for a func- tion or department. These set the stage for readiness for larger and more complex execu- tive positions.
Contained within this set of competen- cies is one 3M believes to be critical for busi-
ness success—“customer orientation.” Since we as a company expect to be “the preferred supplier”, then every contact with a customer must be a positive one. The leader must align every activity and decision with the customer’s actual strategy and needs. All that the leader accomplishes, however, is achieved through others. The ability to develop relationships, therefore, is an essential competence of lead- ers. Leaders must dedicate time, energy, thought, and action to the development of human capital.
The time the leader spends with employ- ees carefully listening and modeling dedica- tion puts the leader in a better position to “inspire others”, another critical leadership competency. In the end, the leader can never be solely responsible for successfully com- pleted work. No matter how productive the leader, it is the members of the business unit who are responsible for accomplishments. For those people to be successful, it is essential that the mission of the business unit be clearly communicated to all members. It is essential that the leader be able to articulate an end state sufficiently compelling for others to ex- ert whatever extra efforts are required to main- tain a healthy business in today’s globally competitive marketplace.
The last competence in the “essential” set is achieving “business health and results.” The leader understands that 3M is a busi- ness enterprise that must create profit; lead- ers are responsible for the profitability of the business units they support. A leader must also cultivate, throughout the organization, an orientation that leads to business genera- tion and improved results. In the final analy- sis, leaders remind all others that the objective is to create an attractive return on shareholders’ investment.
“Visionary” Leadership Competencies
For leaders to assume increased levels of re- sponsibility, they need to develop additional capabilities that can be characterized as the “visionary” set of competencies. Leaders need to look outward beyond their own locus of control—to other organizations and must ac- cept much broader responsibilities. These competencies and behaviors will be used ex-
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The words and actions of a leader need to be consistent and clear.
tensively as individuals advance and grow in leadership responsibility.
The visionary leadership competencies begin with a “global perspective” or mindset. 3M’s customers and competitors come from six different continents. Thus 3M leaders must understand and appreciate what diver- sity of cultures means to 3M since those cul- tures impact customs, currencies, geographies, languages, available products, and changing economies. Increasing the current revenues from businesses outside the United States can only be accomplished by understanding and serving customers worldwide, especially in economically challenging times.
The success of 3M’s activities globally, of course, also requires a vision of the enterprise as a global entity accompanied by a strategy to achieve global results. The leader must know where the organization is heading and align all resources toward the goal of achiev- ing global results. The vision is the purpose of the organization and strategy is the roadmap for getting there. Effective 3M leaders are ca- pable of keeping their organizations aligned with the corporate vision while pursuing their own units’ immediate business objectives.
The corporate vision for 3M is to be “the most innovative enterprise” in each business or market. It naturally follows, therefore, that 3M expects its leaders to excel in “nurturing innovation”. The 3M leader first creates a cli- mate that supports new ideas and takes risks often. Then the leader must develop a per- sonal relationship with each inventor of ideas or products, recognizing that commercializa- tion cannot be accomplished in isolation and must be taught.
The interconnectedness of business and organization today offers a challenge that the leader meets by “building alliances” to reach business objectives. A leader develops net- works and fosters alliances inside and outside his/her organization to achieve results. These networks may range from joint ventures to informal professional groups. The point is that a successful leader actively initiates mutually beneficial partnerships.
The final competency within the vision- ary set is “organizational agility”, one of the most difficult skills to develop but one of the most significant for the future. The rate of
organizational change today is so rapid that both leaders and entire organizations are too often caught off balance. Fortunately, an out- standing leader can practically “see around corners” to anticipate changes in markets and economies before they are officially noted. An individual with such capability can lead inte- grated change efforts that achieve sustainable, competitive advantage.
In the project plan, establishing compe- tencies was the first step. With that step reached, attention turned to identifying the particular behavioral characteristics possessed by leaders who consistently excel in each com- petency. Through these behaviors, executives could demonstrate the competencies that lead to business success.
Behavioral Definitions of Leadership Competencies
Because the needed consensus both on the set of competency labels and on the general definitions had already been established, the next objective was the anchoring of the com- petencies within the 3M experience. This phase of the work was based on critical inci- dent methodology. This step was of major im- portance because for two constituencies it would drive the success of the project. For the executive clients, this work would personalize the competency model. If done well, it would bring to life the model’s potential to pinpoint what 3M executives have successfully done.
For employees, who are ultimately the re- cipients of this work, clarity of the behavioral manifestations of each competency would help demystify the path to executive roles at 3M. The objective was to describe, in behavioral terms, what a high degree of each competence looks like. In contrast with how some profes- sionals anchor competency scales with highly specific behaviors, the approach chosen was to seek informative and general, but not ex- clusionary, detail. This approach allowed broader application that better fit the diverse businesses of 3M.
Methodologically, a global team worked in pairs during the critical incident interview phase. In these pairs, human resource team members began intensive interviews with 70 executives across 3M’s global operations. All
3M's Leadership Competency Model: An Internally Developed Solution • 143
12 members of the team conducted inter- views, but in regularly changing pairings. Each executive was provided with two competency areas and, also for each area, descriptive examples of individuals or spe- cific incidents that demonstrated a high d e g r e e o f t h e c o m p e t e n c e b e i n g a d - d r e s s e d . A s a p p r o p r i a t e , n e g a t i v e i n - stances were discussed.
From these vignettes, behaviors as- sociated with each of the leadership com- petencies were extracted. The objective was to identify general items that could be observed on the job and used to assess and develop leadership competence. A second criterion was that the behavior be generalizable across markets and regions of the world.
Only three to five definitive behaviors for each competency area were identified. The assumption was that observation of these behaviors should enable an observer to judge the degree of competence. As an illustration, the set of behaviors for the area of “global perspective” is shown in Table V. Because the application of this model needed to be global in scope, behaviors that are global in nature are interwoven through- out the work; they are not restricted to this specific competence of “global perspective”.
Capturing 3M Culture and Value
This product has vitality and relevance for the executives at 3M because 3M values and culture permeate the language of both com- petencies and behaviors. The handling of incidents and the behavioral examples pre- sented in the interviews continually repre- sent a corporate perspective. Interviewees delivered highly consistent messages, aligned with 3M’s corporate vision, objec- tives, and motivations. The excitement and enthusiasm generated by this work has carried over to countless presentations (internal and external) by top executives. 3M leaders are now sharing their insights with others and, in turn, all are becoming better leaders.
3M’s Chairman and CEO, L. D. DeSimone, insisted that an assessment tool be developed that would be succinct and simple. This tool would profile the degree of an executive’s over- all leadership competence in each of the 12 areas (see Table VI). This assessment process was to be conducted through personal dia- logue to evaluate the leadership competence of direct reports.
Leadership Assessment and Measurement.
Global Perspective: Behaviors
• Respects, values, and leverages other customs, cultures and values. Uses a global management team to better understand and grow the total business; able to leverage the benefits from working in multicultural environments.
• Optimizes and integrates resources on a global basis, including manufacturing, research, and busi- nesses across countries, and functions to increase 3M’s growth and profitability.
• Satisfies global customers and markets from anywhere in the world.
• Actively stays current on world economies, trade issues, international market trends and opportunities.
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We tested this approach with each mem- ber of 3M’s Operations Committee (the top 13 executives) individually. These executives discussed the leadership behaviors of each of their direct reports. The standard applied was for the interviewer to identify which behav- iors were driving the overall rating of each competence. Once these 70 profiles were summarized, Mr. DeSimone used those data to lead a consensus review of the 70 execu- tives at a monthly ERC meeting. This appli- cation worked so well that it has become an annual process.
A second application is focused on de- velopment. In this application, executives use the behaviors to set expectations for
leaders within their organizations. Indi- vidual executives talk through the behav- iors that they establish as criteria to be used later for judging performance. Execu- tives also use the behaviors to provide feed- back on each individual’s strengths and needs for refinement.
A third application is in the area of suc- cession planning. Here, the behaviors are used to identify long-range potential of other em- ployees. 3M believes that high-potential em- ployees who consistently exhibit effective leadership behaviors will progress in satisfy- ing career paths. This process will be validated and closely monitored against business results and objective performance assessments.
Ethics and Integrity
Maturity and Judgement
Business Health and Results
Vision and Strategy
Not a Strength Sufficient A Strength
Degree of Competence
TABLE VI Leadership Competence Profile.
3M's Leadership Competency Model: An Internally Developed Solution • 145
Out of this work comes the ability to pro- vide career paths and developmental experi- ences that will allow employees to enhance and refine leadership competencies. While much work remains to be done, 3M leader- ship believes we are well on the way to deep-
Bass, B.M. (1990). Handbook of Leadership. The Free Press.
ening bench strength and developing stron- ger incumbent leaders. With further develop- ment of leadership and talent assessment and succession applications, 3M leaders expect the extra time invested in customizing these solu- tions to result in measurable business success.
MARGARET E. ALLDREDGE is Executive Director of Selection, Assessment, and Leader- ship Development at 3M. She has spent 22 years at 3M in competency modeling, su- pervisory and management development, human resource operations (including an international assignment in Europe), expatriate administration, succession planning, and leadership development. She spent ten years in community college instruction and administration at colleges in Michigan and Virginia, teaching literature, composition, speech, drama and TOESL. She received a B.A. in English from the University of Rhode Island, an M.A. from Michigan State University, and has completed coursework for an MFA in Artistic Theater Direction from the University of Virginia.
KEVIN J. NILAN is currently Manager of 3M’s Development and Measurement Center. In this role, he has corporate responsibility for Supervisory Development, Management Development, employee testing, opinion survey and attitude measurement, Employee Contribution and Development process, 360 Degree Feedback Programs, HR benchmarking, and environmental scanning. He is is past chair of the Board of the Mayflower Group. Before joining 3M he was a principal at MDA Consulting Group. Nilan holds an M.A. and Ph.D. in Industrial and Organization Psychology from Ohio State University and completed his undergraduate studies at the University of Minne- sota, where he graduated Phi Beta Kappa in psychology.