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Innovation at 3M Corporation

03/11/11

Team Members:

Cian BarrettGillian BarrettLynn CurtinAmanda O’ Sullivan

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Contents

• About 3M• Products & brands • Innovation Culture • Innovation Processes• SWOT Analysis• What does the future look like?• Q & A

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1. About 3M

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Let us introduce you to 3M

http://www.youtube.com/user/3M?blend=7&ob=5#p/u/0/n26omgodGoM

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Innovation to be proud of

Connecting ideas around

the world

Reject boundaries

Embracing curiosity

Be the next spark

Be the next idea

Make a difference

Inspiring creativity to

solve problemsWe take ideas,

we take dreams, we make them

REAL ITY

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Does anyone know where the name 3M came from?

• Minnesota• Mining • Manufacturing

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Key Milestones

1900s1902 - 3M founded in Two Harbors, MN.1905 - 3M moved to nearby Duluth to focus on sandpaper products.

1910s1910 - Lucius Ordway joins 3M and moves company to St. Paul.1916 - 3M paid first dividend of 6 cents a share.

1920sThe world's first waterproof sandpaper developed (reducing airborne dusts during automotive manufacturing).1925 - Richard G. Drew invents masking tape.

1930sThe Adhesives Division was established.

1940sPost-war innovation - Scotchlite™ Reflective Sheeting for highway markings, magnetic sound recording tape, filament adhesive tape, the start of 3M's involvement in the graphic arts with offset printing plates.

1950s3M introduces Thermo-Fax™ copying process, Scotchgard™ Fabric Protector, videotape, Scotch-Brite® Cleaning Pads new electro-mechanical products.

1960sDry-silver microfilm introduced along with photographic products, carbonless papers, overhead projection systems. Rapid growth in medical and dental products.

1970sPharmaceuticals, radiology and energy control expand.

1990sSales reach $15 billion mark. 3M continues to develop immune response modifier pharmaceuticals, brightness enhancement films for electronic displays, and flexible circuits used in inkjet printers, and cell phones.

2000s2004 - Sales top $20 billion. Post-it® Super Sticky Notes, Scotch® Transparent Duct Tape, optical films for LCD televisions, and a new family of Scotch-Brite® cleaning products enter the market.

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Mission, vision, values

• Act with uncompromising honesty and integrity in everything we do.

• Satisfy our customers with innovative technology and superior quality, value and service.

• Provide our investors an attractive return through sustainable, global growth.

• Respect our social and physical environment around the world.

• Value and develop our employees' diverse talents, initiative and leadership.

• Earn the admiration of all those associated with 3M worldwide.

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3M at a Glance (yr end 2010)

• Global sales: $27 billion.• International (non-US) sales: $17.5 billion (65

percent of company's total).• Operations in more than 65 countries.• 3M products sold in nearly 200 countries.• 80,000 employees globally.

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Organisation StructureConsumer and Office Business

15%

Display and Graphics

Business 13.5%

Electronics and Communications Business 9.8%

Health Care Business 18.6%

Industrial and Transportation

Business 30.8%

Safety, Security and Protection

Services Business 13.8%

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Organisation Structure

Consumer and Office Business

15%

Display and Graphics

Business 13.5%

Electronics and Communications Business 9.8%

Health Care Business 18.6%

Industrial and Transportation

Business 30.8%

Safety, Security and Protection

Services Business 13.8%2. Products and Brands

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3M Brands

Post-It

Vikuiti

Nexcare

Littmann

Filtrete

Command Adhesive

Scotchprint Graphics

Scotchgard

Scotch-Brite

Scotch

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3. Innovation Culture

4. Innovation Processes

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Innovation Culture

• In 1948, William McKnight, Chairman (1949-1966) – "As our business grows, it becomes increasingly

necessary to delegate responsibility and to encourage men and women to exercise their initiative.

– "Mistakes will be made. But if a person is essentially right, the mistakes he or she makes are not as serious in the long run as the mistakes management will make if it undertakes to tell those in authority exactly how they must do their jobs.

– "Management that is destructively critical when mistakes are made kills initiative. And it's essential that we have many people with initiative if we are to continue to grow."

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Innovation Culture cont.

• In 2011, Fred Palensky, VP of R&D and CTO:– “Our goal is to include the voice of the customer at the

basic research level and throughout the product development cycle, to enable our technical people to actually see how their technologies work in various market conditions.”

– “We call it ‘customer-inspired innovation.’ Connect with the customer, find out their articulated and unarticulated needs, and then determine the capability at 3M that can be developed across the company that could solve that customer’s problem in a unique, proprietary, and sustainable way.”

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Innovation

Pronunciation:/ɪnəˈveɪʃ(ə)n/

noun[mass noun] the action or process of innovating: innovation is crucial to

the continuing success of any organization

[count noun] a new method, idea, product, etc.:technological innovations designed to save energy

DerivativesinnovationalPronunciation:/-ˈveɪʃ(ə)n(ə)l/adjective

Origin:Late Middle English: from Latin innovatio(n-), from the verb innovare

Source: Oxford English Dictionary

Innovation Definitions cont.

• Innovation comes in two forms– Sustaining innovations – These innovations improve

existing products and offer better performance against established, mainstream metrics.

– Disruptive innovations – These innovations typically offer less performance than established products, but are adequate, smaller, easier to use and cheaper.

Source: Clayton Christensen “The Innovator’s Dilemma”17

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Innovation Definitions cont.

• End-user innovation. This is where an agent (person or company) develops an innovation for their own (personal or in-house) use because existing products do not meet their needs.

• MIT economist Eric von Hippel has identified end-user innovation as, by far, the most important and critical in his classic book on the subject, Sources of Innovation.

Source: Wikipedia

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Lead Users – how did Eric Von Hippel define them?

• Eric Von Hippel defined Lead Users by 2 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

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Examples of Lead User Research Innovations

• World Wide Web - Tim Berners Lee – http://info.cern.ch/ – http://info.cern.ch/NextBrowser.html

• Salesforce.com – Marc Benioff • Facebook - Mark Zuckerburg • Apache • Apple – Apple engineers contacting users to assist in

resolving current battery life issues for the new iPhone 4S• Others innovations include:

– Tippex– Gatorade

• Adobe Reader

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Lead User Research Process

•Build an interdisciplinary team

•Define the target market

•Define team goals

Step 1 – start of the LUR process

• Interviews with experts•Scanning of knowledge/information

•Selection of the most attractive trends

Step 2 – id of needs & trends

•Networking based search for Lead Users

• Investigation of markets

•Screening of first ideas and solutions

Step 3 – concept generation

•Workshop with lead users to generate or to improve product concepts

•Evaluation and documentation of the concepts

Step 4 – final concept design

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Why and how is this research method different?

• Identify new trends before they happen. • Lead User Research (LUR) is different,

traditional market research collects information from the core target markets, where as Lead User Research seeks out the early, early adopters.

• Once the company finds these individuals, they will then work with the lead users to solve a problem within an industry.

• Lead users are no different than most people; in fact we are all lead users in some niche industry. These individuals are unique because they experience the same needs as your core target market but they experience them substantially before the general public.

• Lead User Research doesn’t assist incremental innovation; it is a facilitator for cutting edge, drastic innovation.

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“The Chasm”

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Seven Pillars of Innovation

1.  From the chief executive on down, the company must be committed to innovation.

2. “The corporate culture must be actively maintained” Though 3M has had a new CEO every five years on average over the past 40 years -- The philosophy of William L. McKnight, its inspirational leader from 1929 to 1966, has been passed down over the years – “Hire good people and let them do their job in their own ways. And tolerate mistakes”.

3. “Innovation is impossible without a broad base of technology.” Technology allows researchers to take ideas from one realm and apply it to another. Example – 3M scientists have used a technology behind layered plastic lenses to make more durable abrasives.

4. “Talk, talk, talk. Management at 3M has long encouraged networking -- formal and informal -- among its researchers. This is knows as this 3M's secret weapon. It allows researchers to get to know one another informally, so that they know who to call for advice or to team up with on a project.

5. “Reward employees for outstanding work.” 3M gives its top 20 achievers and their spouses a four day holiday at its corporate retreat park.

6. “Quantify efforts.” 3M tallies how much of its revenue comes from products introduced in the past four years to judge whether its R&D money is being spent wisely. It identifies which lab is hitting the mark and which lab is falling short.

7. “Research must be tied to the customer. Employees spend a lot of time with customers to understand what their needs are so they can go back to the labs to come up with valuable products. The Photo- IT photo paper came out of such research.

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Crowd Sourcing

• Sourcing tasks traditionally performed by specific individuals to an undefined large group of people or community through an open call.

• An efficient way to improve products, market them, or even conceive new ones.

• 3M willing to accept granted or issued patents for ideas• Evaluated to see if it fits with current business and marketing

strategy

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5. SWOT Analysis

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The 3M Brand

• No. 3 in Booz & Co.’s Top 100 Most Innovative Brands • No. 85 in Interbrand’s Top 100 Global brands (no. 90 in

2010)• No. 2 in Interbrand’s Top 50 Global Green brands • No. 4 in Byte Level Research’s Best Global Web Sites (no.

7 in 2010)• No. 83 in Brand Finance Top 500 (summary of financial

strength) • No. 72 in UK’s Superbrands B2B Top 100 (no. 83 in 2010)• No. 15 in Fortune’s World’s Most Admired Companies (no.

17 in 2010)• No. 4 in Global Reputation Pulse - U.S. Top 100 (no. 20 in

2010)

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Latest Update

• “Diversified manufacturer 3M Co (MMM.N) sounded a warning on Tuesday, telling Wall Street that Europe's brewing debt crisis and weakening consumer demand were taking a toll on profit” October 25, 2011– 2 reasons cited by George Buckley - No. 1 was worries

about European sovereign debt and the European economy. No. 2 was the rapid contraction of the electronics end markets."

Source: Reuters

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The future is....

• Green.• Continue to live and breathe “closeness to the customer”-

e.g. Annual Client Experience Summit. • Continue to develop and support an innovation culture. • Continue to align innovation strategy with the business

goals.• Revamp 3M.com!!

Source: Reuters

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To conclude... Thankyou...

http://www.youtube.com/watch?v=R2WPnlWFZqk

THANKYOU!!