Case Analysis- 3M: Profile of an Innovating Company
The next invention was the wetordry waterproof sandpaper, which came about when an ink manufacturing named Francis Okie asked for samples of every mineral supply in the house. Mr. Okie was persuaded to join 3M as the company first product developer. The wetordry found immediate acceptance in automobile plants and repair shops. The next critical event occurred in 1925 when Dick Drew a young laboratory technician was sent to deliver sandpaper samples to an auto repair shop for testing seeing the problem that workers were having refinishing the new two-tone paint jobs, Drew began to work with sandpaper adhesives, developing a paper coating that held tightly but stripped off easily. This was the evaluation of masking tape which quickly found acceptance. While 3M sales force continued to relay on customer’s needs to the company expanding lab technicians adapted the abrasive and tape product line to a variety of applications. DuPont’s newly introduced cellophane with adhesive was the most important experiment, it was needed for a moisture- proof tape for an insulation job, although unsuccessful came the creationof Scotch Cellulose tape. Through the process of developing its new product line of coated abrasives and pressure sensitive tapes, 3M quickly amassed a strong knowledge of material technologies and an impressive capability in the precision coating process. To leverage and expand this expertise, in 1937 McKnight approved the creation of a Central Research Laboratory launching technological development. By the creation of the CRL new creations such as electrical tape, reflective tape which resulted in the development of traffic control and safety systems, and magnetic tape which aided in audio and video recording products. McKnight knew that if 3M didn’t expand abroad its competitors would use international markets to build their strengths to battle 3M at home. On the basis of its share of the old Durex companies, 3M created an International Division, after building this original group of six subsidiaries, the company started and principle- First in Defeats others. Subsidiaries were usually started small and built through self-generated and self-financed growth. From 1929-1966 McKnight transformed 3M from a $1million, U.S. based industrial abrasives and adhesives firm into a $1 billion international corporation with a highly diversified portfolio of business done. Root Problem
During the years when McKnight ran 3M he had a philosophy of make a little, sell a little. He gave everyone creative authority. If you had an idea he allowed it to be tested even if the test product did not make it. Free-ranging discussion also acknowledged that profitable growth in the future would not be as easy to achieve. First, economic slowdown and foreign competition were likely to slow domestic growth. Second, international expansion, a powerful growth engine for 25 years would become more difficult. And, finally, 3M’s leadership acknowledged that the company’s vital new product development capability had been operating less effectively in recent years. As the company moved towards the 1980s, it seemed that the combination of external challenges and internal changes were likely to demand management’s attention. The decade that followed proved to be one requiring substantial adjustment, restructuring, and even redefinition of some of 3M’s past policies and practices. The new CEO Lou Lehr was challenged by a renewed outbreak of inflation and global recession following the second oil shock. Problem Components
During 3M’s biggest reorganization in 30 years, the new CEO decided to collect the entire portfolio of 42 divisions and 10 groups into four business sectors based on their related technologies. The primary objective was to facilitate the development and diffusion of technologies across closely related...