Term Paper Of

Mgt 952: Managing Innovation

And Creativity

Topic: “3M Way to Innovation”

Submitted to:
Mr. Nitin Dhir

Submitted By:
Naman Kumar
RE1802A08
Sec: O2021
Reg.No:10800991
 ACKNOWLEDGEMENT

I take this opportunity to present my votes of thanks to all those

guidepost who really acted as lightening pillars to enlighten our way
throughout this project that has led to successful and satisfactory completion
of this study.

I really grateful to my sir Mr. Nitin Dhir for providing us with an

opportunity to undertake this Term Paper and providing us useful
information related to this Term Paper with all the facilities.

Lastly, I thankful to all those, particularly the various friends , who have
been instrumental in creating proper, healthy and conductive environment
and including new and fresh innovative ideas for us during the project, their
help, it would have been extremely difficult for us to prepare the project in a
time bound framework.

Name: Naman Kumar

Reg.No: 10800991
Section: O2021
RollNo: RE1802A08
Contents:
 Introduction: 3M corporation
 Innovation in 3M.
 Fostering innovation in 3M by
researchers.
 Different type of innovation use by 3M
and its organization Culture.
 How 3M manage the innovation?
 3M leadership and strategy
 3M way to building an innovative
organization.
 3M linkage and networking.
 Ability of 3M continuing the Innovation
Process.
 3M leading through the innovation...
 The opportunity by 3M.
 Innovators benefits to 3M.
 Points of view (Review).
 References.

Introduction: 3M Corporation:

3M Corp: 3M is one of the most successful global companies in the world. It is

famous at being innovative in its cultures and company growth. It is a global
multi-holding diversified industrial materials supplier that currently operates
under seven business segments. As heard that 3M is an $18 billion diversified
Technology Company with operations in more than 60 countries and currently
manufactures more than 50 thousand different products. It has become
synonymous with innovation. At 3M, laboratory employees operate under a
15% rule. Company allows employees to spend 15% of their time on their idea
that could benefit 3M. But this time they embedded the rule in the culture; it is
shown as a symbol of the freedom and encouragement which help to generate
generate and develop new ideas, rather than an entitlement of time. Their
supervisors are instructed to respect the concept. So let’s now focus on how the
innovation in 3M, which including working culture and people management,
etc. that can be replicated and benefits different areas in daily applications.

Innovation in 3M:
3M Company is primarily driven by innovation. By 1980, several new markets
were entered and 3M was manufacturing products in areas of pharmaceuticals,
medical, dental and energy control. In 2002, 3M celebrated its first “Century
of Innovation”, recognizing the company’s remarkable success, which strength
in its ability to create new to-the world products.” This company has been
around for just over 100 years and during that period has established a clear
reputation as a major innovator. They have launched a number of breakthrough
products which have established completely new markets and they have set
themselves a consistent stretch target of getting 30% of sales turnover from
products launched during the past four years. In 2003, 3M decided to focus its
efforts on the front end of idea generation. They recognized that their NPI, or
New Product Introduction Process, was not adequately capturing the front end.
3M began to explore new ventures in areas of graphic arts and electro-
mechanical products. After that the sales were rising and 3M continued to
provide innovative solutions to its customers. They started producing flexible
circuits used in printers, cell phones and display enhancement films which,
along with other innovative new products, pushed their sales to a record of $20
billion in 2004. 3M has managed to expand their presence globally in several
locations such as India, China, Mexico, Brazil, Russia, Turkey and many others,
which constitute 61% of their annual sales.
Now, 3M is ranked as one of the top ten most innovative companies in the
world. 3M also fosters innovation by allowing the formation of both formal and
informal new venture teams. 3M also supports innovation with small grants.
Both of these programs represent a second chance to fund a project if an idea is
not originally approved for development. The two programs represent
approximately $1 million out of the total $1.1 billion budget for research and
development. One good example of innovation product in 3M- decorative
ribbon was innovated incidentally, which valued to customers for decorating
presents or gifts; later time, it was modified and the materials of nonwovens
used in decorative ribbon finally became respirators that serves its medical and
occupational health and safety businesses.

Fostering Innovation in 3M by Researchers:

An essential part of 3M which remained in its culture was Entrepreneurship and
Intrapreneurship. Evolutionary have developed a key role in 3M's growth. 3M's
innovation culture begins when the five entrepreneurs created a company to
explore. Then from the other researchers:

McKnight was the 3M chairman from year 1949 to 1966 and who joined the
company as a bookkeeper in 1907 and helped 3M to really develop a culture
towards systematic innovation. McKnight encouraged 3M management and
encourage men and women also to continue work on their innovative idea and
his management theories are guide lines for 3M. He has been characterized 3M
by his principles which is supportive for the management which encourages the
employee to be innovative towards the innovation. His greatest contribution
was a business philosopher, and he created a corporate culture which
encourages the employee innovative idea and his/her innovation. His basic rule
of management was laid out in 1948.

Dick Drew, was the best innovative researchers in 3M history, had great impact
on 3M. Drew, invented the masking tape in a lab, which gave 3M an
opportunity to diversify its product line. The invention soon led to hundreds of
applications that developed into products such as Scotch Cellophane Tape for
box sealing, Scotchlite Reflective sheeting for highway markings and magnetic
sound recording tape.

Ernest Gundling is the other researchers who explore the reasons for the
company's innovative achievements. He identified the key factors which was
responsible for creating a work that inspires the innovation, illuminating many
of 3M's unique business practices.. The technical and global innovation
receives special attention, that can both support innovation and innovators
themselves. He has research to the depths of 3M's operations and identified the
different approaches to managing innovation to its continuing success.

On the other hand, Roger Appledorn, the corporate scientist in 3M, originated
the micro replication technology platform and has the thirty-one patents to his
name. He stated the different factors that managing technical innovation in 3M,
including
1. Organization culture.
2. Communication
3. Management style.

Different types of Innovation use By 3M &

its organization culture:
3M Corp. used the 3types of Innovation which are the matrix used by the
management for potential markets:
 Type A: It contains new business with new customers and markets.
 Type B: It contains the plans to making changes on the basis of competition
which aims at target existing customers in new application areas.
 Type C: It contains linear extension that focuses on existing customers and
applications.
3M taught to think out of the box and made contributions to different markets
with only one same material. Innovation really means no assumption in any
situations.

Organization culture: 3M’s culture had promoted to be freedom and full of

excitement and anticipation. Employees enjoy by feel as being heroes. In 3M, it
doesn’t matter that to which positions, they would be. The 3M Organization has
been madly successful in its business ventures. This can help to be attributed
their ability to fulfil each one of the metaphors that have encountered. It has
been able to employ a traditional organizational framework, but it still allows
its employees and lower management creative freedom, the organization to
adapt to the environment and pursue other markets. The one thing that to be
note about the organization is its massive product line up and large number of
divisions within the company.

How 3M manage the innovation?

3M presents a picture in the interviews and in its publications –that the
innovation success is a consequence of creating the culture in which it can take
place. This philosophy is born out in many case histories – that the key to their
success has been to create the conditions in which innovation can arise from
any one of a number of directions, including lucky accidents, and there is a
deliberate attempt to avoid putting too much structure in place since this would
constrain innovation.

3M innovation strategy and leadership:

The company has always valued to the innovation and this has been a
consistent. Their overall innovation strategy is really focused on two core
themes – (i) deep technological competence and (ii) strong product development
capabilities. The company combine these strategies to enable them to offer a
steady stream of breakthrough products and product line improvements. A great
strength is the integrated input from the technical and marketing side which
able to creative association.
Here some strategies and leadership by 3M:
 Setting stretch targets – It refer such as ‘x% of sales from products was
introduced during the past years which provides a clear message and ability
to focus for the whole organization.
 Allocating resources– Resources means space and time in which the staff
can explore and play with the ideas and build on chance events etc.
 Encouragement of bootlegging employees: Those who are working on the
innovation projects in their own time and accessing resources in a non-
formal manner – the “benevolent blind eye” effect.
 They include the provision of staged resource which support for innovators
who want to take an idea forward at different levels of internal venture. This
encourages ‘Intrapreneurship’ (internal entrepreneurial behavior) rather than
people feeling that they have to leave the firm to take their good ideas
forward.
 In recent years they have seen their momentum because of the sheer scale of
the operation and the range of competition.
 Their response has been to identify a series of ‘Pacing Plus’ programmes,
which helpful to focus around 30 key areas.
3M way to building an Innovative
Organization:
3M is trying to building the organization more innovative which helpful to their
roots of the organization and to their global presence. So, they use some ways
for it that are:
 Recognition and reward: In the company there are various schemes which
acknowledge the innovative activity like their Innovator’s Award which
recognizes effort.
 Reinforcement of their core values: The innovation is respected – for
example, there is a ‘hall of fame’ of the members who are elected on the basis
of their innovative achievements.
 Sustaining the circulation: Movement and combination of people from
different perspectives to allow for the creative combinations.
 Allocating slack and permission: Permission refers to allowing employees to
spend a portion of their time in other curiosities activities which may lead
them to the breakthrough products.
 Patience: Acceptance of the need in motion for innovative ideas and to take
Shape.
 Acceptance of mistakes and encouragement for risk-taking: Some time the
person makes mistakes, but if a person is right, the mistakes do not take as
serious, in the long run work. Management may be in problem when mistakes
are made and it kills initiative, and it is more important that people with
initiative ideas are continue to grow.
 Policy of hiring innovators: 3M is looking for the people with innovator
tendencies and characteristics which help to develop the organization more
efficiently.

3m Linkages and Networking:

 Recognition of the power of association – It deliberate the attempts not to
separate out of the different functions but trying to bring them together in
teams and other groups.
 Encouraging broad perspectives: In their developing overhead business,
there was links with users made by getting technical development staff which
help to make sales calls that made the product successful.
 Strong culture: They have culture which is dating back to 1951 of
encouraging informal meetings and workshops in a series of groups,
committees. The Technology forum was established to encourage free
interchange of information and cross-fertilization of ideas. This activity helps
the company commit to support the resources and enables the company to
interchange of perspectives and ideas.
 Recruiting volunteers: In trying to open new fields, for the involvement of
Customers and other outsiders as part of a development team and it is
encouraged since it mix perspectives.

Ability of 3M continuing the Innovation

Process:

3M have been working on innovation for so long time, they have developed a
many set of structures to guide innovative activity and signals through to
implementation. They always allow following the parallel routes through their
system so that the innovations can come from close market interactions, deep
technology research, from various forms of collaboration. As they put their skill
to enabling the association for particularly relevant.

Their many breakthrough products have come because their staffs with
technical knowledge have worked alongside and that with awareness of real
market needs, the result has been a creative combination. There is a formal
stage-gate system for innovations which based on established products but in
addition there is a clear progress route for more radical ideas. Their approach
is well-known but they carry with it a strong element of encouraging innovation
champions to take non-linear ideas through the system. They run parallel
systems in which all funnels and gateways are include through which ideas pass
into narrower parts of the funnel and which also commit more extensive
resources.
3M leading through the innovation:

3M members in every function and every region of the world have rallied
around this goal and have worked very hard to re-invigorate innovation, while
continuing to deliver excellent financial results returns to our shareholders. In
2007 it achieved $24.5 billion in sales and it was all-time record for the
company. Sales were more above 7 % from the previous year and above 11 %
when adjusted for recently divested Businesses, that was great progress for a
company of its size.

3M invested more than $1.4 billion in the capital expenditures during 2007 for
plant the seeds for future growth, and absorbing more than $20 million of start-
up expenses in the process. The other investments enabled the enormous
progress toward the supply chain and the top line. In past days 3m opened new
plants in Korea, three in China, one each in Russia, India, Canada and they
had several plant extensions in the United States. Last year, it strengthened its
supply chain by closing inefficient plants in Italy, Japan, Canada and the
United States. It had closed over 50 inefficient plants around the world in the
last five years. But this was the truly remarkable achievement by the 3M. It
strengthens the supply chain and improves profitability, also by the growth
through improved customer service. For most companies, growth is may be like
the story about new products and new markets, but that is especially true for
3M. The people of 3M are driving innovation through their energy and
imagination for their company. In 2007, 3M increased R&D investment by 11.4
percent, the percentage of new products developed in the last five years.

In 2007, 63 % of 3M sales were outside the United States and 3M expect this to
increase about 65% in 2008 to more than 70 percent by 2010. 3M investing
today to realize the benefit of growth in the emerging markets as it mature. In
addition to executing its growth and supply chain initiatives, there are three
new challenges for 2008. These are (1) the less U.S. economy, (2) growth rates
of U.S. and (3) the changing nature of the market. Due to weakness in the U.S.
economy the 3M requires even more creativity and hard work than normal. So
fostering better and more innovation good service are more important. This will
become a focus for U.S. in 2008, with a number of changes being made to boost
U.S. growth. 3M great and enduring strengths are that there is no one, single
source of growth that it depends on. 3M diverse, in both markets and
geography, and therefore, growth patterns are often repeatable and extendable.
3M made the right kind of investment in challenging economic times, and also
for the longer-term future. After this having been and recognizing good results
3M are focusing on their investments and energy primarily on the future,
working with eyes wide open and looking straight ahead to revitalize the
creativity and imagination for develop products for emerging mega trends
across the globe.

The opportunity by 3M:

.3M encourages employees to pursue their ideas, even if it is out of the

segment’s line of business. This spirit of innovation has led to several products
that have either provided solutions better than existing ones or created a need
that customers were unaware of. The superior quality brand recognition of their
products in all personal and commercial office supplies has made it easier to
launch new products into this market. Innovation has always played an
important role in the corporate culture at 3M. The company’s famous 15% rule
calls for 15% of an employee’s time to be devoted to a new product or idea.

The management team believes in new ideas and practices, and is constantly
looking for ways to foster creativity and improve speed to market. Most new
ideas historically came from internal sources, mainly the technical employees of
3M. Moving forward, 3M wanted to increase the voice of the customer. So by
recognizing this all they prompted to consider with the Mind-Matter solutions,
Innovator.

 Mind- Matter solution: Mind-Matters helps organizations stimulate, capture,

validate, protect and profit from innovative product ideas created by
employees, customers, suppliers and business partners. It is built upon a
foundation of creativity and technological breakthroughs. In this innovator
became the perfect extension to 3M’s innovative culture. Peter Fritz, a Mind-
Matter innovator demonstrated the initial product and stated that the value
was immediate and it had productivity written all over it. Many successful 3M
products made it to market, some ideas describe as a black hole by him. Many
ideas, assessed by an executive committee, simply did not get sufficient
visibility and if the buy in was not immediate, they did not have a chance to
develop.
Innovator was used on a pilot basis with 3M’s Industrial Products Group in
February 2003. The pilot included over 100 users of the product. Fritz
describes its adoption that it was a user friendly tool and it made a significant
impact very rapidly. It forced our hand to develop a more robust review process
at the operation committee level. Ideas became qualified ideas and were sent to
product team leaders, who carried them to the product portfolio hopper.

Collaboration was a element that provided through the Innovator solution, it

thought was that ideas would come from both internal and external sources.
Fritz said that they try to bring together a raw idea with a customer need; ideas
from both channels are looked at by a review committee and by increasing
communication and collaboration between the sales team out in the fieldAnd
the technical specialists inside can more effectively address market needs.

As a result from all this effort Fritz describe that the innovator product is a tool
that provides visibility to a technical idea. And there was a large increase in
ideas during the initial implementation, 42 ideas coming in during the first 30
days. 18 of the first 54 submissions (33%) became qualified; almost 300% the
industry standard. 3M Director of Industrial Markets specified that the Mind-
Matters solution is making a meaningful impact on the commercialization
process at a most critical stage of innovation. 3M analyzed that their was a
improvement in the quality of ideas within the first 3 month time. In June 2004,
3M launched the first product whose concept was collected and analyzed within
Mind-Matter Innovators. Innovator was providing the 3M’s Industrial Products
Group with the collaborative tools to take innovation to the next level. 3M’s new
NTN Maintenance and Repair Kit was developed and delivered to the market an
estimated 6-12 months ahead of time. With increased communication between
their internal and external teams, ideas are tracked, validated and shoved to
development faster than ever before.

Innovator Benefits for 3M:

• Ability to manage and measure ideas accurately and securely.
• Large increase in submitted ideas with 33% considered for further action –
almost 300 times the industry standard.
• First product managed in Innovator, the NTN Maintenance and Repair
Kit released in spring 2004.
• Innovator is permitting us to collaborate around ideas and product concepts
unlike before, promising significant financial impact to our business.

Points of view (Review):

3M Way to Innovation provides valuable ways and practices that kept 3M on
the top edge and also presents a framework for adapting best practices to other
enterprises. The company faced many challenges for balancing the relation
with people, with the demands of the information... For managers,
entrepreneurs, and business people concerned with innovative excellence.

In the history of organizations the 3M rises above the masses as compare to

other company. As rarely capturing the very essence of the methods used by that
company to attain and preserve such greatness. This topic, show that
3M Company seeks the keys to innovation, and sustain its growth. 3M learned
how to be innovative and now these days they use that skill for great
competitive advantages. Ernest Gundling identifies significant examples of 3M
innovation and describes them in detail.

“3M continuing move towards with new innovation and it is impossible to live
an hour without hearing about the innovation at 3M.”

3M's basic definition of innovation is straightforward. Innovation is:

Creativity+Productivity which gives an improvement to this company.
. Innovation is not more than just a bright idea that comes from the mind of
creative person; that gets implemented and has a real impact on the company.

3M members gave the chance to share their company's innovation stories. And
by examining such stories which have relation to each element of the innovation
process will help to reveal how innovation actually takes place in the company.
This innovation process leads the company to move forwards.
References:

 www.Google.com
 www.proquest.com
 www.wikipedia.org
 www.searchengine.com

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