SVKM’ S NMIMS U NIVERSITY

M UKESH P ATEL S CHOOL OF T ECHNOLOGY M ANAGEMENT & E NGINEERING

MANAGEMENT OF INNOVATION CASE STUDY

MINNESOTA MINING AND MANUFACTURING (3M)
MBA Tech. 4th Year

(I.T), Shirpur

By

Rewat Singh Fageria

Arpit Grover

Uday Mittal

Anubhav Saksena

Sameer Tayal

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Table of Contents

Serial No. Topic Page No.

1 The radical innovations 2

2 The incremental innovations 3

3 Was it a disruptive/radical innovation? 4

4 Dimensions of innovations 6

5 Categorization in the 4p’s model 7

6 Process of innovation 8

7 Phase gate model 9

8 Drivers for the innovations 10

9 Discontinuity Triggers

10 Strategy Adopted

11 References

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What are radical innovations?
Radical innovation is building a product or service that would have a revolutionary effect on the
market and is often disruptive for the players in that market. A radically innovative product would have
an entirely set on new features (e.g. Post-it) or major improvements on features of an existing product
(e.g. Scotch Brite) or has a significant (30%) reduction in cost (e.g. Scotch Permanent Glue Stick, 3M
Surgical masks). They may have competency destroying effects on an established organization.

Minnesota Mining & Manufacturing or 3M, as they are known to the world, has been introducing
radically innovative products for more than 100 years now. Their strategy to deal with radical
innovation is based in following:

 Setting stretch targets - such as ‘x% of sales from products introduced during the past y
years’
 Allocating resources as slack - space and time in which staff can explore and play with ideas,
build on chance events or combinations, etc.
 Encouragement of ‘bootlegging’ of employees working on innovation projects in their own
time and often accessing resources in a non-formal way
 Provision of staged resource support for innovators who want to take an idea forward

Over the years, 3M has developed immunity towards external radical innovators by developing an
internal support system for their own innovators. Every employee at 3M is considered to be a
‘skunkworker’ – allowed to work in their own way- thus giving them no chance to look outside the
window to implement their product.

Take for example the story behind Scotch Tape. The inventor, Richard Drew, came up with the idea of
masking tape from the glued newspaper strips while he was working on creating a new and crinkly
backing material for sandpaper. Though his instructions, at that time, were to give his entire focus on
the sandpaper project but he simultaneously kept working on the masking tape. Due to him the
management adapted “get-out-of-the-way” attitude for the innovators of the organization. Later he
went on to launch the Scotch brand as a subsidiary of 3M.

Art Fry, the Post it inventor, got the idea of Post it while he was singing in a church choir where his
bookmark kept falling. He the used the 3M’s ‘bootlegging’ policy to solve his problem and now the
world is singing praises of Post it Notes. Now, the Post it brand has been extended to digital world in
form of Post it Digital Notes.

3M has also been innovating over its innovation process. Recently, in their Medical-Surgical-Division,
they launched the ‘Lead User Research’ program as a way to innovate and develop a new
breakthrough surgical drape product. A team of lead users which included a veterinarian surgeon, a
makeup artist, doctors and military medics was assembled. The lead users were interviewed so as to
gain insight into how they solve the problem for themselves. The lead users were then queried to
determine whether they have knowledge of individuals or organizations that were considered to be
“outside the market”. From the result of both the lead users and the outside-the-market users, 3M
identified new methods or approaches towards creating innovative surgical drape products that are
true breakthroughs that may not have surfaced by simply examining existing users with traditional
market research techniques.

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What are the incremental innovations?
Incremental Innovation refers to the process of continuous improvement on a product. It is an
evolutionary process of innovation wherein a product is taken through the stages of innovation again
and again to get a product with improved features or reduced cost or both.

Cycle of Innovation

The incremental innovation runs in the background of every 3M product be it sandpapers, surgical
masks or Scotch brands. Though these products are radically innovated but radical innovation alone
is not enough to support an organization as big as 3M. Incremental Innovation comes at the bottom of
the pyramid and thus not appears “sexy” (as quoted by 3M CEO George Buckley) to the innovators of
3M. They seem to be turned on by what is on top of the pyramid “the new innovative products” that
brings out the creativity. However, the CEO sees this in a little different way. His approach towards
motivating his employees to follow incremental innovation is to make them understand how “bringing
innovation where it is next to impossible” is more challenging to the mind. Once he’s able to get this
into their brain, the employees said “bring us volume we’ll give you expansion”. The main hurdle here
for Buckley was to make something interesting where people saw none at all.

The earliest incrementally innovative product from 3M is the Aluminium Oxide Sandpaper for use on
wood, metals etc. 3M Sandpaper dates back to the birth of the company itself and its been in market
ever since. 3M made continuous improvements to the quality of the sandpaper and reducing the cost
at the same time.

Another famous product from 3M is Post it Notes. Post it Notes was invented by Art Fry in 1970.
Though it was a radically innovated product but it has been under continuous development. The
recent in this line of product is the Post is Digital Notes. Post it Digital Notes is a software created by
3M Technologies to simulate its paper counterpart for use on computers.

The major field where 3M has used the concept of Incremental Innovation is Health Care. 3M
DuraPrep, 3M Steri-Drape, 3M Steri-Drape 2, Surgical Tapes etc. are the well-known products from
this category. Though the launch of these products was year back but 3M still is the market leader
here because these products have passed the cycle of innovation many times in the R&D labs of 3M.
The latest product to go through this cycle is Surgical Mask. 3M, in about a month, will be launching
the low cost surgical masks with better quality. Thus 3M applies incremental innovation not only to its
products but also to the processes which go into making of those products.

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Was it a Disruptive/Radical Innovation?
Innovations that are radical in nature reinforce the incumbent’s position in a certain industry. This is
very well understood by 3M Company. 3M Company is a company whose very identity is built on
Innovations. 3M Company is the birth place of masking tape, Thinsulate and the Post-it-note. Radical
Innovation requires completely new knowledge and/or resources and thus, is competence destroying.
Whereas, Disruptive Innovation is an improvement or advancement that enhances a service or a
product in a manner that has never been expected by the market. 3M Company developed a Non-
drying Tape which made the two-tone paint application very easy. It was a radical innovation as no
one earlier, had thought about a tape that would stick tightly and yet could be pulled off cleanly
without leaving residue or taking away the paint with it in case of car paints.

In few years, 3M Company came up in 1930 with a Scotch Cellophane tape which were useful for
railroad refrigerator cars. The Scotch Cellophane tape almost stole the whole market from Du Pont
who had come up with a moisture proof material in early 1900s as a packaging wrap. Scotch
cellophane tape became one of the most famous and widely used products of 3M Company. There
were many just Radical Innovations done by 3M and they keep on getting new products from the
existing products as a result of constant Incremental Innovation. Their Radical Innovations lead them
to conquer more and more market share. 3M Company invests heavily in the Research &
Development department in order to encourage the employees to come up with something new and
extra-ordinary which has not been thought off yet.

In 1980s, 3M made another radical innovation by introducing Post-it Notes which were designed for
temporarily attaching notes to documents and other surfaces. Post-it Notes gave people’s
communication and organization behavior a new dimension. Post-it Notes was a strong enough
adhesive to stick to most of the surfaces and yet weak enough to come off without causing any kind of
damage to those surfaces. This adhesive product affected the adhesive industry and made it more
convenient for the people to communicate between themselves. Post-It notes are also very
convenient to carry and leave notes for others. Dr. Spencer Silver was responsible for more than 20
radical innovations at 3M including the Post-It Notes. Most of the innovations of 3M Company were
Radical Innovations.

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Dimensions of Innovation
Innovation is a very human activity, which can occur along many dimensions. These correspond to
the dimensions of human activity itself. The Physical Dimension includes the environment created
along with the support for and response to individual needs. 3M does this by encouraging the broad
perspective and supporting an individual by giving them a sense of empowerment and by providing
rigid bureaucratic procedures to the creative ideas that the staff members come up with.

The Emotional Dimension includes the emotional experience while working in the organization and
also the support for and response to individual emotional needs. 3M does this by encouraging
informal meetings and workshops in a series of groups, committees to encourage free and active
interchange of information and cross-fertilization of ideas. This also creates a special bond between
the different staff members and develops a comfort level so that no member hesitates to come up with
a new idea. 3M also readily accepts mistakes and encourages risk-taking.

The Story & Meaning-Making Dimension includes mythologies, values. 3M does this by respecting
Innovation by maintaining a ‘Hall of fame’ for members with Innovative achievements.

The Community Dimension includes all aspects of community and society. 3M does this by
recognizing and acknowledging innovative activity by recognizing the effort rather than achievement.

The Creative Expression Dimension includes creativity expressed and also individual and group
creativity allowed, invited, facilitated and embraced. 3M does this by attempting not to separate out
different functions but by bringing them together in teams and other groupings. 3M recruits people
with innovator tendencies and characteristics.

The Intellectual Dimension includes mental understanding, decision-making and also support for
and response to individual intellectual materials. 3M does this by providing all the necessary
resources like time, money and support. Breakthroughs like ‘Scotchgard’ and ‘Post-its’ were not
overnight successes but took 2-3years and 3M provided the necessary support throughout the time.

The Economic and Social Dimension includes improving the technological base and economic
activities. 3M understands the importance of Time, efforts and cost. Thus, 3M appreciates the efforts
and initiatives taken by the staff members, gives them proper support in terms of time and intellectual
property.

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Process of Innovation
Minnesota Mining and Manufacturing (3M) was founded in 1902 by five businessmen in Two
Harbours, US. The company which started of with the mining corundrum, now has about 50,000
products to its name. Following ‘Innovation’ as a business strategy, the company sells its products in
about 200 countries across the globe. With an employee strength of about 75,000 and operations in
more than 65 countries, 3M has earned itself the reputation of one of the most innovative company in
the world.

Right from the initial days, Mc Knight, the then vice-president encouraged a culture of innovation in
3M, motivating the employees in various ways to take initiative and come up with fresh ideas.

Recruitment and Retaining Talent

The company recruited people with wide range of interests who were interested in learning and
exploring new things. 3M looked for people who were creative, self motivated, hard-working and
problem-solvers.

‘Divide & Grow’ policy

Noticing the fast increase in size of the company, McKnight adopted the policy of ‘divide and grow’.
New management teams were devoted to new business ventures so that new products and new
markets could be focuses upon individually and explored thereafter.

Knowledge & Idea Sharing

Realising the importance of idea sharing and communication among employees, 3M incorporated a
social networking platform where people could exchange ideas. This new step stimulated faster idea
generation and exploration into many new markets. Also, a flexible organisational structure of the
organisation allows employees from various interests to come together and work toward their new
interest.

Research & Development

3M spends around $ 1 billion annually on R&D projects. The company allows its employees to use
15% of their time for independent projects and also provide funds, if viable, from the company sources
to take the project forward. The employees are provided an environment where they can think big and
take risks without the fear of punishments.

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Rewarding the Innovation

To motivate the employees towards the spirit of innovation, 3M realised that it was mandatory to
reward the employees. The ‘dual ladder career path’ policy created two career options i.e.
management and technical. This meant that even a technical person could get promoted to vice-
president without taking managerial responsibility.

‘Golden Step’ award is given to the those who come up with a successful business venture from
within 3M.

Customer Feedbacks

The company takes the feedbacks given by the customers very seriously. This helps in improving
upon the current products and making new products suitable to the customers.

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4P Model of Management

Product, Price, Position and Promotion form the 4 P’s of marketing.

3M has a wide variety of products which are categorized into six businesses i.e.

 Consumer and Office Business

 Display and Graphics Business
 Electro and Communications Business
 Health Care Business
 Industrial and Transportation Business
 Safety, Security and Protection Services Business

Some of the famous 3M brand products are Command, Nexcare, Scotch, Post-it, Scotch-Brite,
Scotch-Gard, Scotchprint.

3M has positioned its product in about 200 countries across the globe, adapting itself to suite the
markets in different places. A country like India where price of the product is very important in the
market, the company came out with Scotch-Brite at a suitable price, lesser than that in the US.

For Scotch-Brite, 3M came up with 2 different products and very nice commercials in the market,
stating the product as ‘scrub sponge-ideal for liquid dishwash ’ and ‘scrubpad-3X three times better’.
Thus positioning different variants of the product for different purpose in the utensils wash segment.
Similarly the same products were promoted in various countries using attractive advertisements,
which could gain the attention of the local people.

Thus 3M, using the 4P’s of marketing, made Scotch-Brite a house-hold brand in Indian kitchens.

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Phase Gate Model
A phase-gate model is a system in which a development method is divided into stages separated by
gates. At each gate, the continuance of the development practice is decided by a manager or a
navigation committee. The verdict is based on the information available at that point of time, including
e.g. business case, risk analysis, availability of necessary resources (money, people with correct
competencies) etc.

3M’s chairman and CEO, W. James McNerney Jr. adopted the 2x/3x process as the stage gate
model. The methodology is designed to double the number of new ideas entering the front end of the
commercialization process and triple the commercial impact of products going to full scale launch.
With the enthusiasm of new product launches, the firm can get caught up in new product
development. But it takes the focus away from scientifically significant programs, which is the
undertaking of corporate research. The 2x/3x redeployment gave the firm a chance take the people
really engaged on the business side and focus them on technology commercialization and clearly
focus the people who remained in the new corporate lab on research and technology development.
2x/3x spreads the responsibility for innovation and new product development across all functionalities,
not just research and development.

3M has widely adopted processes like QFD (Quality Function Deployment) and FMEA (Failure mode
affect analysis) and it’s design for Six Sigma (DFSS). Some of the best practices and modifications
formalizing under the model stated as the stages are cited below :

- Phase 1: Project Planning Phase : In this investigation phase of the study, the team identifies
the types of markets and new products of interest, and the desired level of innovation. At the
same time, the team identifies key business constraints.

- Phase 2: Trends/Needs Identification : The ultimate goal of this stage is to select a specific
need-related trend to focus upon for the remainder of the study. The information collected
during Phase 1 helps to get the sense of the ‘conventional wisdom’ relating to trends and
market needs. Then the focus shifts to finding the top experts, through querying experts,
telephone networking, scanning literature, and consulting in-house colleagues. These initial
ideas are amended and refined throughout this stage.

- Phase 3: Preliminary Concept Generation : In this phase, the group acquires a more precise
understanding of the needs it has selected as the area of focus. It involves generation of the
preliminary concepts involving ideal attributes and features that will best meet the customer
demands. The team also seeks to informally assess business potential for the product or
service being conceptualized.

- Phase 4: Final Concept Generation : The team takes the preliminary concept developed in
Phase 3 toward completion. It is ensured that all possible solutions have been explored. The
evaluation of the concepts in terms of technical feasibility, market appeal and management
priorities are done. Finally, a consensus is arrived at on the most commercially promising
concepts and recommendations are developed for further refinement.

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Drivers for Innovation
3M has always presented a consistent depiction – innovation is a consequence of creating the culture
in which it can take place. The key to their success has been to create the conditions in which
innovation can crop up from any one of a number of directions, including accidents, and there is a
deliberate endeavour to avoid putting too much structure in place as this would constrain innovation.
3M has created its own Innovation Diving Machine to stimulate growth over the last hundred plus
years.

The following approaches adopted by 3M may be considered as their drivers of innovation:

- Incentive and Recognition: There are various proposals which acknowledge innovative
activity – for instance, their Innovator’s Award which recognizes effort rather than
achievement.
- Reinforcement of core values: Innovation is revered – for instance, the ‘hall of fame’ where
members are chosen on the basis of their innovative achievements.
- Nourishing ‘circulation’: Association of people from dissimilar perspectives to allow for
creative amalgamation – a key issue in such a large and dispersed organization.
- Allocating ‘slack’ and authorization to play: The employees are allowed to spend a proportion
of their time in curiosity-driven activities which may lead nowhere but which has the possibility
of giving breakthrough products to them.
- Endurance: approval of the need for ‘stumbling in motion’ as innovative ideas evolve and
take shape. Their breakthroughs like ‘Post-it’s’ and ‘Scotchgard’ were not overnight
successes but took 2-3 years to evolve before they emerged as feasible prospects to be
implemented into the system.
- Encouragement of risk-taking and acceptance of mistakes: The company has a firm faith in
the following ‘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’s
dictatorial and undertakes to tell those under its authority exactly how they must do their job.
Management that is destructively critical when mistakes are made kills initiative, and it is
essential that we have many people with initiative if we are to continue to grow.’
- Encouraging ‘bootlegging’: The employees have been provided with a sense of empowerment
to creative ways that staff come up with to get around the system acts as a counter to rigid
bureaucratic procedures.
- Encouraging broad perspectives: For instance, in developing their overhead projector
business, it was close links with users made by getting technical development staff to make
sales calls that made the product so user-friendly and therefore successful.
- Recruiting volunteers: The involvement of customers and other outsiders as part of a
development team is encouraged since it blends perspectives.
- Strategy of hiring innovators: Recruitment approach is looking for people with innovator
tendencies and qualities. They have the recognition of the power of association where there
are deliberate attempts not to separate out different functions but to bring them together in
teams and other groupings.

Strong culture of encouraging informal meetings and workshops in a series of groups, committees,
etc., under the Technology Forum – established to encourage free and active interchange of
information and cross-fertilization of ideas.

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Discontinuity Triggers

Discontinuity triggers are those events which lead to some kind hindrance to an ongoing plan/project
by the industry. They may be due to product inefficiency, or any other faults that come across the
development phase.

Colour Roofs (1929)

William McKnight’s desire for diversification sometimes led to the surprising results and a mother lode
of innovative thinking. He picked up one roadster, three trucks, two plants and one mountain. He
called his entire management and lab force together and asked “What can you do to make a mountain
of silica quartz portable?”

According to the salesman H.Colby Rowell, a huge market existed if 3M could make coloured
minerals for the roofing industry. But the practical consideration limited the amount of coating used on
roofing materials to only a fraction of an ordinary coat of paint. George Swenson(Research Chemist)
and his team created a little rotary pot furnace to test the approach. During the test the paint burned
off and the glaze fused with the roofing material it worked! Even in its first year producing 18,000 tons-
3M managed to run in the black.Its product was decidedly better than the competition’s. But in 4 years
only the disaster occurred. Swenson said “Our quartz granules were losing their adhesion and were
falling off the roofs”. This product threatened to put 3M. This product threatened to put 3M out of
business where it could charge premium prices, even during the great depression.

Mistlon Ribbon (1938)

It started out with Mr.Al Boese’s voyage in 1938 when his boss in 3M tape lab, Dick Drew suggested
that Boese should take some time off to search for a new job. But he hung around the lab anyway.
One day Drew off handedly mentioned that the 3M specifications, called for inexpensive noncorrosive
backing that was fibrous, but not woven, for its popular electrical tape. The only noncorrosive backing
anyone knew of was synthetic acetate cloth, clearly not covered by a 3M patent. All alone, Boese
spent studying fibers, writing reports for Drew, conducting modest experiments and, in his words,
“building half a dozen little machines with utter ineptness”—hoping to discover how to bind a mass of
fibers together without weaving them. “One day I was walking by the rubber colander in the tape lab,”
Boese said. “I stuck a little tuft of acetate fiber in the colander. It heated the surface of the fibers and
bonded them together. That was the opening to make nonwovens. Heat and pressure.”

But Boese’s new process didn’t produce a better backing for electrical tape. Still he thought that
maybe, if the new nonwoven material was dyed and sparkled with colour flecks it could be used in
decorative displays.

The product was structurally weak for wrapping up packages and it wasn’t very attractive. It was
obvious to everybody that the product was a failure.

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Strategies Adopted:

3M’s strategy is Global, but is implemented to be Local.—Gulio Agostini.

William L. McKnight, who served as 3M chairman of the board from 1949 to 1966, encouraged 3M
management to "delegate responsibility and encourage men and women to exercise their initiative."

Many believe McKnight's greatest contribution was as a business philosopher, since he created a
corporate culture that encourages employee initiative and innovation.

His basic rule of management was laid out in 1948:

 "As our business grows, it becomes increasingly necessary to delegate responsibility and to
encourage men and women to exercise their initiative. This requires considerable tolerance.
Those men and women, to whom we delegate authority and responsibility, if they are good
people, are going to want to do their jobs in their own way.”

 "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."

These are some of the strategies that were practised by the company:

National Baldrige Quality Award

This idea called for meeting the customer expectations combined with a need for “time compression”
moving products faster from concept through development and to the market, 3M called it new quality
process Q90s.

Step-up Marketing, 1970

The keys to the step up marketing; introduce new products faster around the world and use those new
products to increase market share, while the strategy was simple- establish a presence and expand
when the time was right.

Corporate Intellectual Property, 1992

To map out and protect a key competitive product area, 3M invested in the research and development
of a new technology and the company needs to obtain a solid return on that investments.

According to Ron Mitsch (Retired Vice Chairman and executive vice president) “The power of our
patents is the reason for the success of every decision of our company. The patent protection gave
3M the time to develop markets that weren’t developed and change the basis of competition”. This
strategy aims to protect its substantial investments in research and development by obtaining,
maintaining and enforcing and by protecting the trade secret rights.

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Pacing Plus Program, 1994

It was implemented to channel limited research dollars into the most important product development
efforts. This program asked business to select a small number of programs for considerations, but the
company’s top executives made the final decision on which products were supported. The selected
products received additional cooperation, resources so that they could be brought to the market more
quickly.

As the number of products were smaller so it was also easier for international companies to address
the program effectively, so that this new procedure could be brought to market on a global basis.

Sustainability Strategies

3M’s strategies for sustainability encompass the pursuit of customer satisfaction and commercial
success within a framework of environmental, social and economic values.

Meeting society’s and 3M’s expectations for environmental improvement:

 Promoting sound environmental, health and safety management at our locations worldwide.
 Making pollution prevention pay through the development of new technologies and products.
 Developing products that help our customers address their environmental challenges.

A number of key strategic enablers are worth abating:

 Setting stretch targets – such as ‘x% of sales from products introduced during the past y
years’ – provides a clear and consistent message and a focus for the whole organization.
 Allocating resources as ‘slack’ – space and time in which staff can explore and play with
ideas, build on chance events or combinations, etc.
 Encouragement of ‘bootlegging’ employees working on innovation projects in their own time
and often accessing resources in a non-formal way – the ‘benevolent blind eye’ effect.
 Provision of staged resource support for innovators who want to take an idea forward –
effectively different levels of internal venture capital for which people can bid (against
increasingly high hurdles) – this encourages ‘intrapreneurship’ (internal entrepreneurial
behaviour) rather than people feeling they have to leave the firm to take their good ideas
forward.

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References
1.Joe Tidd, John Bessant, Keith Pavitt

www.wileyeurope.com/college/tidd

2. AllBusiness

http://www.allbusiness.com/technology/762843-1.html

3. Innovations at 3M corporations- Stefan Thomke

Harvard Business School

4. A Century Of Innovation 3M - W. James McNerney, Jr.

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