3M Case

By 2006, 3M was one of the largest technology-driven enterprises in the United States with annual sales of $ 23 billion. An estimated 61 percent of these sales were outside the United States. McKnight is the first president of 3M Company to hire scientists such as Richard Carlton who made significant contributions to the 3M’s innovation and research department. McKnight also set up the 3M’s culture of 15% rule, which encouraged researchers to work without fear of financial risks.

Benefits of 3M’s unique innovative culture

The culture of innovation has been beneficial to 3M since McKnight became the first outsider CEO of the company. The decision by McKnight to hire Okie led to the invention of a new kind of sandpaper that he patented. The sandpaper was waterproof and proved useful with either water or oil to reduce dust and friction in auto finishes. The invention of the wet and dry sandpaper revolutionized the sandpaper industry and consequently led to significant innovation and research growth at 3M. The introduction of the masking tape, invented by Richard Drew, presented the first significant product diversification at 3M. This product also marked genesis of the 15% rule that allowed the workers to use 15% of their workweeks on innovative projects that might benefit customers without having to justify the validity of the projects to their manager.

Over the years, several other scientists at 3M followed Drew’s example and created a wide range of innovative products by improving existing technologies and applying them in new areas. One such example is the invention of the Scotch Guard and the development of the ubiquitous Post-it notes. Different scientists gradually developed this product over years. The first one after Scotch Guard was Penser, followed by Art Fry who perfected the product to the test of 3M’s customers. In 1980, Post-it notes became the bestseller product that generated considerable profits to 3M.

Systems that 3M established to institutionalize the unique culture

One of the systems that 3M established to institutionalize the unique culture of innovation, research and development, was the 15% rule. This rule allowed the workers to use 15% of their workweeks in doing research on the projects that could be potentially beneficial to the customers without having to justify their actions to managers. This rule allowed the technical workers to engage in the research and innovation without fear of opposition from the management. 3M diversified into different fields of innovations and development. As a result, the company established a central function to control researches and development. McKnight and Carlton established the Central Research Laboratory. The main function of the laboratory was to supplement the work of product division and undertake the long-run researches. Another system established to institutionalize 3M’s culture was the 3M Technical Forum. The objective for this undertaking in 1951 was to create synergy between the increasing diverse business operations of the company. 3M also established the principle of patient-money. According to this principle, the company spent a considerable amount of money on potential research projects that could take many years, but would generate huge profits once concluded. An example of such projects is the 12 years research on sandpaper before it started to profit 3M.

Changes by successive CEOs to 3M’s culture

McKnight founded the innovative culture at 3M. Successive CEOs further were developing this culture until 1990. In 1991, Desi Desimone became the CEO of 3M. His management principles enabled 3M to survive through the recession of early 1990s. However, he faced criticism when the company missed its earning target in 1998 and 1999. During his leadership, 3M did not introduce any new products in the market. McNerney took over as the CEO of 3M in 2000. McNerney’s focus was to get to know 3M’s staff, culture and its diverse lines of business. His plan was to bring the GE playbook to 3M and use it to boost 3M’s results, but not to destroy their innovative culture.