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3M: Profile of an Innovating

Company 

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Background

Minnesota Mining and Manufacturing (3M) foundedin 1902

Established product differentiation as the key to

commercial successEmphasis on technological innovation, market

responsiveness and intrapreneurship

Focus on developing organization wide culture to

encourage innovation, sharing of knowledge anddeveloping good communication channels acrossorganization

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Bootlegging 15% of time on projects of interest

Formal awards & Informal recognition

Change in organization structure to give continuous focuson innovation and increase resource sharing

Planning process & Funding policy 

Knowledge Management

Database containing 25 years of information on hundreds of projectsPacing programs to identify key projects

Background

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Innovation

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Spheres of Innovation

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Role of Top Management

Striking the right balance between innovation andefficiency 

1. Within the innovation process itself.2. Between the primary functions within the organization.3. In their overall approach to corporate management.

Generating the right organization climate1. Placing of people and ideas at the heart of the management

philosophy.2. Giving people room to grow, to try things and learn from their

mistakes.3. Building a strong sense of openness, trust and community across the

organization.4. Facilitating the internal mobility of talent.

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 Attracting and retaining more creative talent1. Hire individuals with a range of abilities and interests

2. Hire people with a variety of backgrounds and personalities.

3. Involve peers heavily in the selection process.

Role of Top Management

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Problems

Unable to achieve organizational objectives such asROE, ROCE etc.

Increasing COGS

Due to emphasis on “Pacing Programs” the centrality of the innovative genius was diminished

Difficult for people to find 15% of their time to work on their own ideas

Freedom and flexibility of the employees decreased

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Challenges

To maintain its unique ability to drive growththrough innovation

Meeting the financial targets

Maintaining good communication with expansion of the company across borders

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7S Model

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Solutions

Quantum/Radical Innovation vs Incremental InnovationProduct Life Cycle:- Use Stage Gate Development Funnel Approach for products in

embryonic stage (as proposed by Robert G Cooper)

Focus on products in growth stage Incremental Innovation for products in maturity stage Do away with products in decline stage Reduce length of product life cycle for products in which rate of 

technological change is high

More emphasis on intrapreneurship focus on building customer loyalty by providing

superior quality, value and service

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Managing The Innovation Process

Project Management CPM/PERT/GANTT Chart

Stage-Gate Development Funnel

Cross Functional Teams and product team structure Skunk Works- temporary teams to expedite new product design

and to promote innovation

 An island of innovation located away from the organization

Dissolved when the product is brought to market

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Relationship of Environment and Strategy toCorporate Culture

Needs of the Environment

Strate

gic

F o

cus 3MM

AdaptabilityAdaptability

Culture

Clan

Culture

Bureaucratic

Culture

Mission

Culture

Flexibility

External

Internal

Stability

Sources: Based on Daniel R. Denison and Aneil K. Mishra, “Toward a Theory of Organizational Culture and

Effectiveness,”

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Creating a Culture for Innovation

Organizational Structure Organic structures like matrix and product team structures based on

norms and values Use of informal organization

People Recruit people who are committed to innovation but who travel alongdifferent pathways to achieve it

Maintain diversity in R&D employees and to allow them to follow divergent paths

Continue to empower employees and respect their contributionsProperty Rights Tie individual and group performance to monetary premiums Create career path for R&D employees

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