...3M has been known for decades as an entrepreneurial company that peruses growth through innovation. It generates a quarter of its annual revenues from products less than 5 years old. Long before “reinvention” became a buzzword of American business, 3M already had made change a central part of its corporate culture [1]. Many say the company’s success over the years is linked to its ability to change as 3M, its products and the world marketplace evolves. Once 3M top management has long felt that the 3M innovation process was being focus on incremental improvements to existing product lines. They urgently wanted to improve matters, and wanted especially to improve 3M's ability to respond to the "unarticulated needs" of customers by providing breakthroughs and services. Among many methods of innovation that the 3M used to improve their capability of making breakthroughs, The Lead User process offered a promising solution to that problem. Von Hipple (1999) marks that the Lead User market research method is built around the idea that the richest understanding of new product and service needs is held by just a few "Lead Users." They can be identified and drawn into a process of joint development of new product or service concepts with manufacturer personnel. In this research after a general description of innovation definition, the 3M Company is introduced as the research case study. In the fourth part the culture and methods of innovation that made or used by the 3M is discussed. And...
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...Question 1: How has 3M’s innovation process evolved since the foundation of the company? Why, if at all, does 3M, known as a ‘hothouse’ of innovation, need to regain its historic closeness to the customer? - The big winners are those who match new, marketable ideas with customers before anyone else can. It takes flexibility and creativity and willingness to risk. - In 1902, 3M was founded as Minnesota Mining and Manufacturing by five northern Minnesota entrepreneurs. - Their idea was to extract a mineral from shores of Lake Superior. The partners believed the mineral was corundum, an ideal substitute for garnet, the mineral abrasive found in grinding wheels used by furniture makers. - Each partner put in $1000 and started their venture in Two Harbours hoping to find the mineral and possibly gold. - The initial idea of incorporated first, investigated later. The company sold shares and made plans to start mining before they were even certain they had customers. - When Hermon Cable travelled to Chicago and Deitroit to get the mineral tested with potential customers to find a “fairy satisfactory” results. However, he encouraged the other four partners to go on with the project. - Two years after the founding of the company, 3M sold the first batch of minerals. The product was not corundum but anorthosite, a soft mineral that is inferior to garnet. - Everything was tumbling down from here: the suppliers wanted their money back, the company could not sell shares to...
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...by Eric von Hippel, Stefan Thomke and Mary Sonnack Eric von Hippel is a professor at the Massachusetts Institute of Technology’s Sloan School of Management in Cambridge. Stefan Thomke is an assistant professor at Harvard Business School in Boston. Mary Sonnack is a Division Scientist at 3M Corporation. Sonnack and von Hippel and Joan Churchill are coauthors of a handbook on the lead user process to be published in 2000 by Oxford University Press. When senior managers think of product development, they all dream of the same thing: a steady stream of breakthrough products—the kind that will allow their companies to grow rapidly and maintain high margins. And they set ambitious goals to that end, demanding, for example, that a high percentage of sales come from products that did not exist a few years ago. Unfortunately, the development groups of many companies don’t deliver the goods. Instead of breakthroughs, they produce mainly line extensions and incremental improvements to existing products and services. And given the pace of change in today’s markets, that’s a recipe for decline, not growth. Given the imperative to grow, why can’t product developers come up with breakthroughs more regularly? They fail primarily for two reasons. First, companies face strong incentives to focus on the short term. To put it simply: although very new products and services may be essential to future growth and profit, companies must first survive to get to the future. That necessity tends...
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...This case describes how 3M Corp. introduces and learns a new and innovative methodology titled Lead User research to understand future customer and market needs. A team from 3M's Medical-Surgical Markets Division applies the Lead User Methodology to the field of surgical infection control and discovers that there exist new product concepts together with a new business strategy. The problem here is 3M should decide whether this new strategy will be a tool for 3M 's strategy towards corporate expansion and innovation. In the mid 90s, 3M realized the symptoms in its innovation approach that only incremental development is involved in its current product range instead of breakthrough ones. This approach limited the company’s competitiveness and financial performance and growing the business required to prepare the environment capable of delivering “breakthrough innovations“. Therefore, 3M’s management set a new goal: 30% of sales should be driven by new products. The new strategy focuses on understanding the real market needs to create possible developments and enhancements for a particular product which can eventually lead to a breakthrough in product offering that ultimately results in a competitive advantage. In this case, the suggested approach, Lead User Method, enables 3M to satisfy an important need (not spreading infections during surgery) by developing a specific new product or service. If there is not a new approach, the innovations that 3M makes will only be a "solution...
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...Q1. How has 3M’s innovation process evolved since the foundation of the company? Why, if at all, does 3M known as a “hothouse” of innovation, need to regain its historic closeness to the customer? The hard start of 3M’s in 1902 with digging for corundum then discovering it is low-grade and worthless, moving to sandpaper business and discovering that the abrasives they import to use refuse to stick to the paper pushed the company early to the research road trying to fix the problems they are facing, one of the young technician figured out the problem and fixed the sandpaper and created the waterproof sandpaper for first time in the world that has a big meaning to 3M’s which leaded the company to be one of the biggest global innovation companies in the world. The company used the innovation since then by old research and development traditional method by identify the problem through visit or questionnaire to the clients and research the solution for the problem under vision of engineering to ensure the project efficiently made, not facing any risk if the product failed and also provide a feedback, The product developers used to visit the factories and workplaces to talk to the workers to get ideas for products it start as in 1920 when one of 3M’s lab visited a car body shop and discovered a problem while removing newspapers glued to the car body and start a research ended by creating a masking tab to the world. After all the success through R&D, 3M allowed the staff to spend...
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...For the exclusive use of Q. WEI2015. 9-699-012 REV: JULY 23, 2002 STEFAN THOMKE Innovation at 3M Corporation (A) On the evening of October 23, 1997, Rita Shor, senior product specialist at 3M, looked across the conference room at her team from the Medical-Surgical Markets Division. She wondered when to draw to close the intense ongoing debate on the nature of the team’s recommendations to the Health Care Unit’s senior management. A hand-picked group of talented individuals, the team had embarked on a new method for understanding customer needs called “Lead User Research.” But this initiative to introduce leading-edge market research methods into 3M’s legendary innovation process had now grown into a revolutionary series of recommendations that threatened to rip apart the division. While senior management wanted the “Lead User” team to execute a manageable project involving surgical draping material to protect surgery patients from infections, the team now wanted to rewrite the entire business unit’s strategy statement to also include more pro-active products or services that would permit the upstream containment of infectious agents such as germs. This went against the incrementalist approach that for so long had pervaded 3M. After all, as Mary Sonnack, division scientist and an internal 3M consultant on the new Lead User methodology, noted “3M gets so much revenue from incremental products . . . like a blue Post-it note instead of just a yellow one.” ...
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...Innovation at 3M Corporation INNOVATION AND KNOWLEDGE ECONOMY - GROUP C 1 Contents 1 1 2 3 4 Background Source of Innovation Innovative Culture Lead User Research 5 Impact of Lead User Method 6 2 Click to add title in here Companies in Indonesia Background of “ Lead User Innovation” “ Traditional strategic planning does not leave enough room for innovation “ understand leading _edge customer needs to change the basis of Competition working closely with customer & understanding market need LEAD USER INNOVATION Definition of lead users Lead users refers to users who are ahead of the majority of the market on a major market trend, and who also have a high incentive to innovate. Producers seeking user innovations to manufacture try to source innovations from lead users - because these will be most profitable to manufacture 3 Milestone of 3M in Innovation 1902 The Minnesota Mining and Manufacturing Company (3M) founded The company has a long and famous history of innovation. They are known for such products as the Post-it which revolutionized the way individuals communicate, masking tape, and waterproof sandpaper. 1961 Medical Products Division, the first 3M division dedicated solely to health care, founded. The Health Care Unit was an important component of 3M’s business model, contributing a large percentage to the company’s revenue streams The unit had failed to introduce a successful product in almost a decade 3M is third in...
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...Insights on Innovation – A primer from 3M 3M is widely recognized as a model of innovation. From an abrasives company, 3M has grown to generate $4 billion in net income on nearly $27billion in sales with 30% of sales consistently generated from products made in the last 5 years. 3M has nearly 60 business units grouped into six segments ranging from consumer and office to industrial and transportation. 3M does not make a secret of its success. Here are their steps to drive new products to market: 1. As a science based company they have a culture formed from a history of innovation and risk taking. Risk taking is encouraged and failure is seen as a natural part of creating new products. In fact, sandpaper without the abrasives led to adhesive tapes—consumer, medical, electrical and eventually audio and video tapes. 2. Management is focused on customers and their problems. They seek to truly understand what customers want. In some cases customers cannot explain their needs well so deep understanding on 3M’s part is what delivers a meaningful new product or improvement. Adhesives on the upper quarter of the back of small squares of paper? Yes, Post-It Notes. 3. Managers set stretch goals that require creation of new products at a rate that represents 30-40% of sales within a 4 year period. With a focus on new products in plans, the organization is driven to think and act in a new products direction. 4. Employees are given great freedom to pursue...
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...“3M: A Culture Made For Innovation” Introduction 3M stands for Minnesota Mining and Manufacturing Co. It was founded by five businessmen in 1902 at the town of Two Harbors, Minn (3M, 2012). They originally financed the company to mine the mineral cornundum for grinding wheel abrasives but the investment became a failure because it turned out that the mineral was actually low-grade anorthosite (Goetz, 2011). After being done with mining, the founders bought a sand paper company but struggled on how to run it. Eventually, Lucius Ordway moved the company to St. Paul where 3M created some successful new inventions such as masking tape and cellophane tape (Goetz, 2011). 3M is known to have one of the most innovative work cultures. Over the years it has developed values and norms that are geared toward innovation. 3M believes its innovative work culture is a huge factor in its success. 3M Values To promote creativity and innovation, 3M has developed cultural values and norms that allow for employees to feel empowered, to experiment, and to take risks in order to come up with new products. Values are standards or guidelines that people use to figure out which types of behaviors, events, situations and outcomes are desirable or undesirable (George & Jones, 2012). Values can be divided into two categories: terminal and instrumental (George & Jones, 2012). A terminal value is defined as a desired end state or outcome that people seek to achieve (George & Jones...
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...opportunities and threats to assist 3M in making business strategic plans and decisions (Renault 2015). Whereas, opportunity-based theory is used to support the behavior of 3M’s leaders in discovering and taking advantages of possibilities in the business without regarding to resources currently controlled (Pramanik 2015). SWOT Analysis stands for strengths, weaknesses, opportunities and threats existing in the business of 3M. In term of strengths, 3M has a diversified business because of their broad range of products and 6 different types of business segments provided. For example, the various products include Post-It Notes, Scotch Tape, high-tech LCD films and so on while the business segments include Healthcare, Industrial & Transportation, Consumer & Office, Display & Graphics (D&G) and so on to figure 1 in appendix list. Besides, 3M has also a strong Research and Development (R&D) where they spend more than a billion dollars on R&D in a year, around 20% of this budget supports its 32 technology centers. At the same time, 3M also employed approximately 1000 researchers that work in each of the technology centers to improve new product development (Gerybadze n.d.). In addition, there are various R&D centers established such as central research function in 1937, Technical Forum in 1951 and so on based on the 3M case study. Furthermore, another strength of 3M Company is that it has strong innovation and made 3M included in the list of 50 most innovative...
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...Innovation, ideas and solutions for a modern world 1 Introduction – A Century of Innovation 3M is a global diversified materials science company and a powerful, diverse and integrated enterprise. Although 3M identifies its core competency simply as “applying coatings to backings”, the company’s operations extend far beyond this. 3M, famous for its consumer brands such as Scotch® Tape and Post-it ® Notes, also creates thousands of industrial products used by manufacturers and service providers to create their own products. From its beginnings in 1902 as Minnesota Mining and Manufacturing, 3M has grown to achieve sales revenue of $US25.3 billion and an operating income of $US3.5 billion in 2008. The company has over 79,000 employees with approximately 13 percent employed directly as technical staff. As a truly global presence, 3M services almost 200 national markets, and operates subsidiary companies, such as 3M Australia, in more than 60 countries. Almost 64 percent of 3M’s entire sales revenue originates from international operations. With a vision “to be the most innovative enterprise and preferred supplier in the markets we serve”, 3M prides itself on its history of innovation – reinforced through its brand promise, “practical and ingenious solutions that help customers succeed”. Key values underpinning 3M’s continual success include its commitment to: • Satisfy our customers with superior quality and value • Provide investors with an attractive...
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...Innovation Organisations: The 3M Way Damian Gordon Recommended Reading 3M formerly known as the Minnesota Mining and Manufacturing Company Founded on the North Shore of Lake Superior at Two Harbors, Minnesota in 1902 With over 76,000 employees they produce over 55,000 products, including: adhesives, abrasives, laminates, passive fire protection, dental products, electrical materials, electronic circuits and optical films Richard Drew June 22, 1899 – December 14, 1980 American inventor who worked for 3M in St. Paul, Minnesota, where he invented; – – – Masking tape, Cellophane tape, and Duct tape. Masking Tape In 1923 3M employee Richard Drew visited an autorepair shop in St. Paul, Minnesota. 3M produced and sold sandpaper and Drew was in the shop to test out a new batch. Masking Tape When he entered the shop employees were expressing disappointment at a failed attempt to paint a car in the two-tone style that was becoming popular at the time. Masking Tape Typically how the effect was achieved was by painting part of the car in one colour while covering the other parts with butcher paper The butcher paper was usually held in place with a heavy adhesive tape. Unfortunately, removing the adhesive tape peeled away part of the paint job. THE IMPORTANT BIT: Rather than just sympathise with his customers and move on, Drew decided to do something about it. Masking Tape His company 3M had a lot of know-how in creating adhesives...
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...Case study An analysis of 3M, the innovation company Introduction Any review of the literature on new product development and innovation management will uncover numerous references to 3M. The organisation is synonymous with innovation and has been described as ‘a smooth running innovation machine’ (Mitchell, 1989). Year after year 3M is celebrated in the Fortune 500 rankings as the ‘most respected company’ and the ‘most innovative company’. Management gurus from Peter Drucker to Tom Peters continually refer to the company as a shining example of an innovative company. This case study takes a look at the company behind some of the most famous brands in the marketplace, including Post-it® Notes. It examines the company’s heritage and shows how it has arrived at this enviable position. Furthermore, the case study attempts to clarify what it is that makes 3M stand out from other organisations. Background Originally known as the Minnesota Mining and Manufacturing Company, with its headquarters in St Paul, Minnesota, 3M was established in 1902 to mine abrasive minerals for the production of a single product, sandpaper. From these inauspicious beginnings, the company has grown organically, concentrating on the internal development of new products in a variety of different industries. The latest review of the company’s position reveals that it manufactures over 60,000 products, has operations in 61 countries, employs 75,000 people and has achieved an average year-on-year growth...
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...What actions, policies, strategy are used by the selected organization to motivate innovations among its employees? 3M Company, previously known as the Minnesota Mining and Manufacturing Company is an US MNC. They focus on two core themes – Deep technological competence and Strong product development capabilitie. * Setting stretch targets – such as demarcation of profit generated from X product in Y year sets benchmark for others. * Allocating resources as “Slack” – Ample of space, time and opportunity to grow. * Encouragement of “bootlegging” employees working on innovative projects. * Access to resources in a non-formal manner. * Different levels of Venture capitalist and provision to stag resource for innovators. * Intra-Entrepreneurship – Letting people take their idea forward within the organization and without having them leave. Are innovations are introduced by individuals or teams? 3M has department demarcation at various levels. For instance, they not only address the one who has done a great innovation but also the ones who have put in a lot of effort for the product; therefore having an award for effort rather than achievement. At 3M, the strategy is to reward the one who is actually involved in the process hence enabling everyone to come forward. If it is group effort, it will be introduced by the group leader having all the members recognized and if it’s in an individual effort; he/ she will also reckon the people who have...
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...1) 3M is an exploration firm because rather than doing better in a given domain, it always strives to change domains. It has enjoyed global growth and has a reputation for remaining a “hothouse of innovation”. 3M has a defiantly non-corporate nature and though the company is gigantic, yet it is very innovative and shows enormous growth potential as though it were a small endeavor. It has developed a wide category of innovative products such as waterproof sandpaper, masking tape, Post-it notes etc. Therefore, we can say that 3M depends highly on innovation and it prospers by finding completely novel ways of doing things rather than doing the same things a little better. 2) Product teams at 3M primarily consists of technical individuals and process engineers. The role of process engineers includes: Help ensure that the particular product under development is made efficiently. Provides teams with feedback about the company’s manufacturing capabilities. Implement systems that improve the different stages of the production process. Help in improving quality standards The drawback of having a process engineer is that, process engineers cannot help much if the team is research based. The process engineers are not able to contribute much when the structure of the team is such. On the other hand, the benefits include that the manufacturing process is optimized and the costs pertaining to operations are kept under check. 3) Architecture: The firm follows...
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