Innovation at 3M

Afsal Sha 14007Ashok Mohan 14026Devaiah A G 14045Irishi R 14064Tony Sebastian 14171

Group 3, Section C

Case Facts

• A group of talented individuals embarked to introduce leading edge market research for understanding customer needs called “Lead User Research”.

• Initiative to introduce this method had now grown into a revolutionary series of recommendations that threatened to rip apart the Medical – Surgical Markets Division.

• The research team now wants to rewrite the entire business unit’s strategy statement to also include more pro-active products or services.

• This recommendation goes against the incremental growth approach of 3M.

About 3M• The 3M Company, formerly known as the Minnesota Mining and Manufacturing

Company, is an American multinational conglomerate corporation based in St. Paul, Minnesota.

• To achieve high rates of innovation, 3M placed a heavy emphasis on R&D.

• 3M followed the incremental approach of innovation and product development.

• Company allows all staffs to spend 15% of their time to explore new ideas.

• Major innovations are Post-it note, Waterproof Sandpaper and Mask Tape.

Problem Identification• The Medical – Surgical Division focused largely on surgical drapes and surgical

prepping.

• 3M was highly penetrated on a niche for surgical drapes and prepping in US market.

• But sales in US had limited growth and overseas markets were limited by high cost of 3M products.

• Because of these reasons the business unit had gone almost a decade with only one successful product.

• In order to revive the business unit, senior management charged Rita Shor with the mandate of developing a breakthrough product.

Traditional Approach• Marketing input traditionally came from current customers and sales representatives.

• 3M usually hires small research firms for market research reports.

• Few market researchers also worked at 3M.

• Tools used by 3M to identify market needs:• Data from sales representatives• Focus groups• Customer evaluations of current products• Site visits by 3m Scientists and technologists

• These methods had disadvantages like too many interfaces between development

teams and customers and information obtained were not proprietary.

Lead User Research

• The Lead User method provides a means to unearth product development

opportunities that are not immediately obvious by traditional methods.

• It allows for accurately forecasting market opportunities by tapping the expertise and

experience base of “lead users”.

• Some lead users may be involved with just one or more of the important attributes of

the problems faced by users in the target market.

• Lead user methodology involves 4 stages and typically take five or six months.

Lead Users• Lead users are users of a product or service that currently experience needs still

unknown to the public and who also benefit greatly if they obtain a solution to these

needs.

• Lead Users' real life experience is needed for marketing research in fast-moving fields.

• Lead users of a novel or enhanced product, process or service as those displaying two

characteristics:

• Lead users face needs that will be general in a marketplace—but face them months or years before

the bulk of that marketplace encounters them, and

• Lead users are positioned to benefit significantly by obtaining a solution to those needs.

• There is a four step process thorough which lead user can be incorporated into

marketing research. They are:

• Identify an important market or technical trend;

• Identify lead users who lead that trend in terms of (a) experience and (b) intensity of need;

• Analyse lead user need data;

• Project lead user data onto the general market of interest.

Lead User Research ProcessStage I:  Project Planning (up to 4-6 weeks)

• Establish new relationships, gather support from peers.

• The team also identifies the types of markets and new products of interest, the desired level of innovation, and key business constraints.

• Stage I typically starts by informally interviewing industry experts to get a feel of the current trends and market needs.

Stage II:  Trends/Needs Identification (up to 5-6 weeks)

• Starts with a four-day workshop at the beginning to come to terms with the information generated in Stage one.

• Focused interviews with relevant lead user experts.

• Ultimately, leads to framing a specific need related trend for which a new product can be developed.

Stage III: Preliminary Concept Generation (up to 5-6 weeks)• Preliminary concepts involving ideal attributes and features that will best meet customer

needs in chosen area of focus.• The team informally assess business potential for the product or service being conceptualized.• Concepts come from lead users in target markets.• Business fit of concepts being conceptualized.

Stage IV:  Final Concept Generation (up to 5-6 weeks)• Mainly centres around a 1 to 2 day lead user workshop.• Generating alternative product concepts using the research knowledge.• Evaluate the concepts in terms of technical feasibility, market appeal, and management

priorities.• Refines the concepts emerging from the workshop and presents recommendations backed by

solid evidence.

Disadvantages of Lead User Research

• The final outcome is unpredictable

• A lot of dedication and patience is required from the research team as

well as from the management.

• Requires a lot of human resource commitment.

• This methodology is very lengthy and time consuming.

Lead User Research at 3MStage 1: Project Planning (6 weeks)• The team leaders probed the team for answers to questions about the market, polices, technical details etc.• In the process, the team built a invaluable database of information.

Stage 2: Trends/Needs Identification (6 weeks)• Started with 5 day workshop to make sense of information gathered in Stage 1.•Contacted experts who were lead users in various fields.• Developed parameters for the breakthrough product like it should be easy to apply and remove, prove more effective than current products etc.

Stage 3: Preliminary Concept Generation (6 months)• International fact finding visit to developing countries which had high growth potential.• A Variety of lead users were found with expertise about different relevant attributes.

Stage 4: Final Concept Generation ( weeks)• A two and a half day workshop to answer the question “Is there a revolutionary approach to infection control?”•The invitees successfully rose to the challenges and generated numerous product concepts. •Came with the 3 product ideas and a revolutionary strategy despite facing multiple challenges.

Product Innovation Charter Background :

Stagnating drapes sales in the surgical-medical division. Sales in US market had limited growth and overseas markets were limited by high cost.

Focus:The focus of the company is on reducing infections from the skin through surgical drapes and surgical prepping. Creating a Competency in surgical drape technology in a cost containing environment.

Goals – Objectives:The goal is come up with a breakthrough product within the current business strategy that can revive the business unit.

Guidelines:The new product should be within the existing business strategy of the unit.

Solutions/ Recommendations by the Research Team

• “Economy” Line : One-size-fits-all strategy and time-saving dispensing systems will boost product acceptance

• “Skin Doctor” Line : hand held devices for antimicrobial substances.

• Antimicrobial “Armor” Line : An armor product line to “armor” catheters and tubes from unwelcome microscopic visitors.

• Upstream Containment of Infections: Enter into the area of early intervention in the disease process.

Observations• Lead user research methodology is very unpredictable. It can lead to discovery of

products that are never though before.

• In 3M, management gives more stress on traditional approaches. The focus on incremental growth is so much that there are thousands of 3M product concepts and inventions awaited markets and languished on drawing boards and R&D labs.

• The company should move from its incremental approach and restructure its business strategy to focus on new product innovation.

Value Creation

• Developing cost effective products can help to capture markets in developing

countries.

• Introducing products for Upstream containment of infection can help 3M to be the

leader in that sector.

• 3M’s heavy emphasis on R&D will help them to discover revolutionary products.

Thank You