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“Leading Through Innovation”
Roberto Castillo
Jenilee Kilbury
April 2, 2013
MGMT-762 1
Company Numbers
• $29.9B annual sales
• R&D Expenditures
• 2012 - $1.6B
• Last 5 years - $7.3B
• Aim to invest 6% of
annua...
Company Business Units
• More than 35 business units under the following groups:
• Consumer – homes cleaner, offices organ...
Competition
• Many smaller specialized companies in singular
fields of expertise
• Few larger cross-sector competitors:
• ...
Innovation at 3M
• Innovation = Idea + Exploitation
• Trends:
• Market Research
• Products = consumer demand
• Mobile devi...
Innovation Culture
• Cross functional teams
• Sales, technical , manufacturing, product
development, business experience
•...
3M Corporate Innovation Culture
• The 15% option
• Seed capital
• Own or Other business units
• Corporate grants
• Genesis...
Product Cycle Development
• Prioritize ideas
• Make a prototype
• Numerous prototypes, trial and modification
• Manufactur...
NPD Process Basics
• Match customer needs
• Increase barriers to entry
• Product should not be easily imitated
• Be simple...
Lead User Approach
• Customer driven, but NOT
• Focus groups
• Sales data
• Customer complaints
• Collect information abou...
Lead User Approach
• Lead Users – “companies,
organizations, or individuals that
are well ahead of market trends
and have ...
How does it work?
Cross-Functional
Project Team
- 4-6 people
-Marketing and
technical depts.
-One project leader
Laying th...
Enterprise Growth Teams
• Goal: Finding new customers-driven applications
for existing 3M technologies
• Cross functional ...
Applying Current Trends to New
Applications
• Clear Credit Cards
• Credit Card company wanted a unique
transparent card de...
Applying Current Trends to
New Applications Cont’d
• Micro-needles
• Micro-replication pattern used in reflective street s...
Applying Current Trends to
New Applications Cont’d
• Auto Body Filler
• Mixing process is done by hand – wasteful, ineffic...
How does 3M win?
• Agile
• Flexible
• Tolerate risk
• Allow mistakes
• Quick to market with new products
• Protect their p...
Conclusions
• 3M’s Strengths
• Work closely customers to find trends in new markets
• Creative Corporate Culture to motiva...
Our Recommendation
• What would we do?
• Increase R&D spending by implementing efficiency
initiatives to reduce costs in m...
Do you have any question?
20
Thank You
21
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3M Leading Through Innovation

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3M Leading Through Innovation

  1. 1. “Leading Through Innovation” Roberto Castillo Jenilee Kilbury April 2, 2013 MGMT-762 1
  2. 2. Company Numbers • $29.9B annual sales • R&D Expenditures • 2012 - $1.6B • Last 5 years - $7.3B • Aim to invest 6% of annual sales by 2017 • 87,700 Employees • 34,750 in US • 8,200 researchers • 50% in US • In more than 70 countries • 40 mfg facilities • 35 laboratories • Products sold in nearly 200 countries • 3,102 awarded Patents http://solutions.3m.com/wps/portal/3M/en_US/3M-Company/Information/AboutUs/WhoWeAre/ 2
  3. 3. Company Business Units • More than 35 business units under the following groups: • Consumer – homes cleaner, offices organized and buildings well maintained • Electronics & Energy – telecommunications networks, high- performance electronics and reliable sources of power • Health Care – medical and oral care, drug delivery and health info systems • Industrial – abrasives, adhesives and filtration systems • Safety & Graphics – personal protective equipment, saftey and security products http://solutions.3m.com/wps/portal/3M/en_US/3M-Company/Information/AboutUs/Businesses/ 3
  4. 4. Competition • Many smaller specialized companies in singular fields of expertise • Few larger cross-sector competitors: • Tyco International • PPE and Industrial Products • SC Johnson • Cleaning Products and Auto Care • Johnson & Johnson • Health Care, Medical and Oral Care • Strategic Group?? 4
  5. 5. Innovation at 3M • Innovation = Idea + Exploitation • Trends: • Market Research • Products = consumer demand • Mobile devices, medical technology and energy • Developing nations • Generation of new ideas focus on customer needs • Medical products poised for growth to meet needs of aging population (baby boomers) • Race for hospitals to digitize medical records DePass, Dee. "3m Bets Big on Innovation." Star Tribune Nov 09 2012. ProQuest. Web. 2 Apr. 2013 . 5
  6. 6. Innovation Culture • Cross functional teams • Sales, technical , manufacturing, product development, business experience • Freedom to create ideas and share them • Tolerate mistake • Comfortable with Risks • Prioritization • Lack of formal processes • Reduce Time to Market • Value and business model • Do not kill good ideas 6
  7. 7. 3M Corporate Innovation Culture • The 15% option • Seed capital • Own or Other business units • Corporate grants • Genesis Grant - up to $100,000 • Dual career path • Technical or managerial • Rewards and recognition programs • 12 Global Programs • 4 US Programs Studt T. 3M--Where Innovation Rules. R&D Magazine [serial online]. April 2003;45(4):20 7
  8. 8. Product Cycle Development • Prioritize ideas • Make a prototype • Numerous prototypes, trial and modification • Manufacture the product • Six sigma • Generate Sales • Distribution Channel which must suit the customer 8
  9. 9. NPD Process Basics • Match customer needs • Increase barriers to entry • Product should not be easily imitated • Be simple and cost-effective • Have fast time to market • Have robust designs and good quality • At 3M: • Lead User Approach • Enterprise Growth Teams 9
  10. 10. Lead User Approach • Customer driven, but NOT • Focus groups • Sales data • Customer complaints • Collect information about needs and solutions from the leading edge of the target market • Similar problems in more extreme form • Adapt lead users ideas to their own business needs Von Hippel E, Thomke S, Sonnack M. Creating Breakthroughs at 3M. Harvard Business Review [serial online]. September 1999;77(5):47-57 10
  11. 11. Lead User Approach • Lead Users – “companies, organizations, or individuals that are well ahead of market trends and have needs that go far beyond those of the average user” • Advantages: • Lead users are not competitors • Willing to share knowledge • Lead users need the technology • No cost to 3M (usually) Von Hippel E, Thomke S, Sonnack M. Creating Breakthroughs at 3M. Harvard Business Review [serial online]. September 1999;77(5):47-57 11
  12. 12. How does it work? Cross-Functional Project Team - 4-6 people -Marketing and technical depts. -One project leader Laying the Foundation -Identify target markets -Type and level of innovation desired -Stakeholder approval Determining Trends -Talk to experts with a broad view of emerging technologies and leading edge applications Identify Lead Users -Gather info via networking -Identify especially promising ideas -Shape prelim ideas and assess business potential Develop the Breakthrough -Move prelim concepts toward completion -Workshop w/ lead users and team members Commercialization -Finalize concept design -Commercialize with management approval Von Hippel E, Thomke S, Sonnack M. Creating Breakthroughs at 3M. Harvard Business Review [serial online]. September 1999;77(5):47-57 12
  13. 13. Enterprise Growth Teams • Goal: Finding new customers-driven applications for existing 3M technologies • Cross functional Team • Time to develop a new product • 3 to 6 months • Incremental Innovation • Problem identified in one industry, able to find solutions from current technologies in another industry 13
  14. 14. Applying Current Trends to New Applications • Clear Credit Cards • Credit Card company wanted a unique transparent card design • Used technology of their optical films to block IR light without blocking visible light http://solutions.3m.com/innovation/en_US/stories 14
  15. 15. Applying Current Trends to New Applications Cont’d • Micro-needles • Micro-replication pattern used in reflective street sign • Small painless patch of hundreds of micro-needles 15
  16. 16. Applying Current Trends to New Applications Cont’d • Auto Body Filler • Mixing process is done by hand – wasteful, inefficient and messy • Scaled up the Pentamix system used to mix putty for dental impressions 16
  17. 17. How does 3M win? • Agile • Flexible • Tolerate risk • Allow mistakes • Quick to market with new products • Protect their products • 500 Patent Applications/year • Trademarks 17
  18. 18. Conclusions • 3M’s Strengths • Work closely customers to find trends in new markets • Creative Corporate Culture to motivate innovation • Fast development and time to market 18
  19. 19. Our Recommendation • What would we do? • Increase R&D spending by implementing efficiency initiatives to reduce costs in manufacturing and supply chain • Encourage more collaboration among R&D departments from different industries and markets • Encourage radical innovation 19
  20. 20. Do you have any question? 20
  21. 21. Thank You 21

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