3m Business Case
3m Business CaseHarvard Business School
January 3, 1995
3M: Profile of an Innovating Company
As a perennial winner in Fortune magazine’s annual poll of American CEOs to determine “The Ten Most Admired Corporations,” 3M was almost universally recognized as one of the world’s most consistently innovative companies. Indeed, Fortune described it as “a kind of corporate petri dish that fosters a culture of innovation.” In an era when large companies were struggling to reignite employees’ entrepreneurial spark, 3M was the benchmarking standard. Yet, in November 1991, as “Desi” DeSimone assumed the job of CEO in the midst of a worldwide recession, he was more focused on 3M’s uncertain future than on its glorious past. Beyond the stagnating sales and declining margins he knew would be reflected in his first annual report (see Exhibit 1), DeSimone was aware that the company faced some longer term challenges. With a portfolio of over 100 core technologies being leveraged into some 60,000 products which it sold in 200 countries, some observers were beginning to ask whether this $14 billion giant with over 88,000 employees could continue its extraordinary innovation-powered growth and expansion. It was a question that the new CEO knew he would have to confront honestly. A lot more than the continued admiration of his Fortune 500 peers depended on it.
The Beginning: Foundations of 3M’s Values
In 1902, on the basis of a report that deposits of corundum, an abrasive mineral, had been found nearby, five businessmen from Two Harbors, Minnesota invested $1,000 each to form Minnesota Mining and Manufacturing (3M). When it was learned that the mineral deposit was not commercially viable, management decided to manufacture its own sandpaper. But initial manufacturing efforts were not much more successful than its earlier mining performance, and losses continued. Things began to change only after a young bookkeeper named William L. McKnight took the place of 3M’s sales manager who...