A Century of Innovation: The 3M Story

248 Pages·2003·6.788 MB·English

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3
Innovation
This book is dedicated to the thousands of 3M employees
who have made 3M a strong, vibrant, growing,
diversified technology company with innovative products
and services in markets throughout the world.
About the cover:
Shortly after the Century ofInnovation began, 3M introduced Wetordry sandpaper, shown in the
background, giving the company its first entry into the important automotive market. Inventor
Francis Okie often scribbled notes on scraps ofthe sandpaper as he worked. Today, 3M optical
films, shown in the foreground, are among the company’s newest products. These innovative films
enhance the performance ofelectronic displays from the smallest hand held devices, such as cell
phones, to large liquid crystal display monitors and televisions.
© 2002, 3M Company. All rights reserved.
First Edition: 2002
International Standard Book Number
ISBN 0-9722302-0-3 (cloth)
ISBN 0-9722302-1-1 (paper)
from the CEO . . .
It is exciting to celebrate 3M’s first Century of Innovation with
the extended 3M family.
There are many reasons for 3M’s hundred years of progress:
the unique ability to create new-to-the-world product categories,
market leadership achieved by serving customers better than anyone
else and a global network of unequalled international resources.
The primary reason for 3M’s success, however, is the people
of 3M. This company has been blessed with generations of imagina-
tive, industrious employees in all parts of the enterprise, all around
the world. I hope you’ll join us in celebrating not only a Century of
Innovation but also a century of talented and innovative individuals.
W. James McNerney, Jr.
Chairman of the Board and Chief Executive Officer
Contents
1 Early Struggles Plant the Seeds of Innovation
1
3M opened for business as Minnesota Mining and Manufacturing in in the little town
ofTwo Harbors, hoping to capitalize on a mineral used for grinding wheels. Nothingis easy for
the optimistic founders, but their persistence pays offand they begin manufacturing sandpaper.
2 3M Innovation—A ‘Tolerance for Tinkerers’
13
3M welcomes innovative people who are creative, committed and often eccentric. The
“architects” ofinnovation, Richard Carlton, Dick Drew and Francis Okie, create a climate
that turns 3M into a new product powerhouse. Researchers explain valuable lab lessons
and provide a glimpse into the fabled, highly productive Pro-Fab Lab.
3 3M Innovation—How It Flourished
29
Sustaining innovation in a growing company is a massive challenge. 3M walks the innovation
“high wire” and invests mightily in Research and Development. 3M people share ideas and
solve customer problems across oceans and continents. The highest potential product ideas
attract company champions and are rewarded with additional capital.
4 Ingenuity Leads to Breakthroughs
49
The most important innovations respond to unarticulated needs. 3M calls work in this arena
“the fuzzy front-end,” and it can lead to significant breakthroughs. That’s what happens in
nonwovens, fluorochemicals, optical lighting film and microreplication—technologies that
spawn a wide array ofproducts and new “technology platforms” for 3M.
5 No One Succeeds Alone
67
While 3M people must take personal initiative to build rewarding careers, they are rarely
“lone rangers.” 3M people naturally gravitate toward being champions, sponsors and
mentors even before these were popular business buzzwords.
6 No Risk, No Reward—‘Patient Money’
77
For most ofthe century, 3M demonstrates its bias toward growth through diversification.
Follow three business ventures where long-term investments, known as “patient money,” pay
offin multiples. These include: reflective technology; 3M Health Care, which today has more
than ,products; and 3M Pharmaceuticals, developer ofinnovative drugs.
7 The Power of Patents
95
Intellectual property is imbedded in 3M’s “DNA.” Protecting the company’s unique tech-
nology, products and processes has been a priority for years. Because innovation is the
growth engine at 3M, intellectual property has more currency than cold cash. 3M defends
its patents—at home and abroad.
8 Look ‘Behind the Smokestacks’
109
When -year-old William McKnight becomes the company’s sales manager, he develops
an enduring philosophy—the best way to find business is to “look behind the smokestacks.”
Move beyond the purchasing office and find out what your real customers need.
3M Timeline: A Century of Innovation
126
9 Going Global—The Formative Years
137
Wetordry sandpaper is 3M’s ticket to Europe in the s. William McKnight recognizes the
potential ofglobal business and joins the game early. The pioneers of3M International chron-
icle their first years—an era demanding resourcefulness and gumption from its leaders.
10 Capitalizing on a Global Presence
155
With characteristic fervor and entrepreneurial ambition, 3M launches new international
companies during the s, s and s. Managing directors explain the joys and
frustrations oftheir first overseas assignments as 3M International becomes a new source
ofinnovation and soon accounts for more than percent ofthe company’s revenues.
11 Divide and Grow—Follow the Technology
169
In , William McKnight has a revolutionary idea uncommon to American business. He
creates divisions that divide as they grow so new businesses get a running start. By following
a proven technology into uncharted waters, some ofthese businesses achieve astounding results.
12 Defining Moments Strengthen 3M’s Culture
185
When times are tough, “doing the right thing” defines the company’s character. This philoso-
phy is present in when 3M people are killed in an explosion. It echoes through the s
and s when the company handles environmental issues and apartheid in South Africa.
And, it guides decisions in the s when the Asia Pacific region faces a drastic economic
downturn.
13 A Culture of Change
199
Long before “reinvention” was common in American business, change already was a central
part of3M’s corporate culture. Follow the rise and fall of3M’s copying business, the trans-
formation ofmagnetic media from being a pioneer to selling a commodity. Understand 3M’s
spin-offofsome ofits businesses, creating a new, independent company called Imation.
14 3M Leaders—The Right Choice at the Right Time
215
The top leaders of3M have been largely Midwestern hard workers. Most came to 3M with
technical training, and all, except the most recent, built their careers at the company. Review
their individual contributions and styles.
Acknowledgments 236
3M Trademarks 236
Beginnings in Two Harbors
Perseverance and the survival spirit
1
r
o
l
e
m
o
d
Early Struggles Plant
e
the Seeds of Innovation l
o
In today’s business world, innovation is the mantra of f
success. For companies large and small, the big winners i
n
are those that match new, marketable ideas with customers
n
before anyone else can. It takes flexibility and creativity
and a willingness to risk. ● One hundred years ago, o
when 3M was founded as Minnesota Mining and
v
Manufacturing, the formula for business success was
a
the same. But for 3M, perseverance mattered even
t
more. The multiple crises that rocked 3M a century
i
o
ago could have easily destroyed a young company
in the st century. Imagine, for example, that n
2 Chapter 1
your “big idea” for a new product has properties that discovered in the region and prospectors hoped to get
will leave your competition in the dust. You attract ven- rich with new mineral claims, including the possibility
ture capital, invest in production facilities, and set your offinding gold.
sales force loose to beat the market leaders. Then—as
now—everything is riding on a marketable innovation > Incorporate First, Investigate Later
with immense promise. Leaps of faith were common in those days, as one
But instead ofsoaring revenues and customer observer noted: “Like so many others who organized
orders, your big idea fails. Your mining ventures in the early s . . . 3M apparently
product is flawed. Your major incorporated first and investigated later.” The company
investors have given you all the sold shares and made plans to start mining before they
funding they can. This is pre- were even certain they had customers. Finally, Hermon
cisely what happened when five Cable, a 3M co-founder and successful Two Harbors
northern Minnesota entrepre- meat market owner, traveled to Chicago and Detroit
neurs extracted a mineral to test samples of3M’s corundum with potential cus-
from the shores ofLake tomers. Though Cable came home describing only
Superior. The optimistic part- “fairly satisfactory” results, he encouraged his four
ners believed their “Crystal Bay” partners—who all seemed infected with Cable’s enthu-
mineral was corundum, almost as tough siasm—to move ahead.
as diamonds and an ideal substitute for It was almost two years after 3M’s founding that
garnet, the mineral abrasive found in the company sold its first batch ofminerals, one ton
grinding wheels used by furniture makers. ofCrystal Bay corundum, in March . Fortunately,
The founders of3M were banking on success when based on the founders’own solid reputations, the local
1
the company was born in . Each man contributed bank had no qualms about loaning the company oper-
,in start-up funds in exchange for ,shares. ating capital until more sales revenues materialized.
They started their venture in Two Harbors, a booming
frontier village on the North Shore ofLake Superior,
where the winds ofentrepreneurship
were as strong as Alberta
Clippers blowing across
the lake. Iron ore had been
2
Chapter opening photos
Prospective stockholders were offered
a free boat trip from Two Harbors to
the 3M Crystal Bay plant to inspect
3M’s corundum;3M company letter-
head;Original 3M plant on North
Shore of Lake Superior at Crystal Bay,
Minnesota, 1903;Label on back
of Crystal Bay corundum paper.