Overview of the case study
The business environment is very competitive. Consequently, companies need to offer customers proficient and reliable service. If they do not, customers will switch to more consumer efficient companies. Furthermore, as companies grow in size, it becomes harder to keep track of the growing amount of sales and customer information. If a company does a poor job by not focusing and maintaining customer satisfaction, it can result in problems for both the company and the consumer. This study will focus on the Minnesota Mining and Manufacturing Company, more commonly known as 3M, and how it empowered its employees, improved its growth rate, customer service and sales by introducing a new approach to growth.
This study also provides critical interrogation on the approaches and strategies applied by Minnesota Mining and Manufacturing Company in its efforts to turn around the company after the loss of profit despite the reputable strong tradition of innovation culture. Firstly, the study provides critical elements of innovative methods applied in order to exploit the profitable gains from the excellent research practise. This is done by explicating innovation process that has been applied at the 3M Company leading to innovative strategic thinking coupled with the work done on the ground. It then identifies the curative recommendations in addressing the major problems that have been identified throughout the case.
The fundamental problem of the 3M Company was the inability to exploit profitable improvements by exploiting its excellent and reliable research practice to the advantage of the company. Consequently, the company could not diversify its products in relation to the demands of the fast changing and sophisticated markets at a worldwide level. The company needed to embark on a major example change without compromising its excellent research tradition but to seek turn around strategies in order to maximise its profits.
Recommendations and conclusions are clearly defined and they reveal what the author thinks about being an innovative leader who is able to support employees’ in their new ideas by implementing the company culture which is supportive to all of them to produce successful projects.
What are the main elements of the innovative process at 3M? Is it possible and desirable for other companies to emulate them?
“Richard Lynch defines Innovation as the generation and exploitation of new ideas. Furthermore it also provides organisations with the ammunition to move ahead of the competition. He states that innovation can deliver three priceless asserts to strategic management:
1. Substantial future growth
2. Competitive advantage
3. Ability to leapfrog major competition, even dominant competitors The innovative process at 3M has usually been a focus area for the top management. The company adopted a get out of the away approach towards the product developers in return worked accordingly towards innovation, together with technicians each team had a process engineer to ensure that the product
was efficiently made.
The whole team did not face any risk if the product has failed.
The product developers should pay visits in the factories and workplaces to talk to the workers to get ideas for products.
The developers were not given the share of product royalties as the company believed that innovation was driven by sheer love of it. But the developers were encouraged by various means like rewards for innovation and grants for innovative projects.
There was also a dual ladder approach that provided the senior technical persons with great career opportunities to advance without switching over to management. Some of the elements of an innovative process at 3M is a free frame, people are able, capable and freed from any restrictions. Nevertheless someone should judge, review the Innovation Process. Stage stones should be set up otherwise it is no real process. Furthermore the consistency and the success factor should beat a specific period extremely revised and reconsidered regarding implement capability. In today’s competitive industry, cost plays a big role.
Innovation is perhaps one of the most words that are over used in the business world today, and some of the organisations blow the innovation trumpet preach but don’t necessarily practice. But there are organisations like 3M that do practice innovation which gives hope to the organisation as they are using innovation in their daily lives through ground breaking products & services which made the company to be in the top ten of Fortune magazine’s most admired US Company.
3M Company sticks to its innovation, If we take a step back from the Innovation process, for the process to be successful it needs an environment to encourage Innovation, below are the points of what the environment characteristics needs to be:
Organizations eager to take measured risks.
Business leaders being able to understand technology and the application of it.
An organization that is exposed to change.
An organization that is brave enough to see beyond the financial benefits is not made visible that quickly.
Processes and structures to encourage brave thinking business leaders that are able to see what tomorrow will look like
The Innovation Process:
(Tidd et al., 2005). States that “the ability to manage the innovation process is an essential competence of any organization, but members must first understand the workings of the process to be successful”
Figure 1.1 Adapted from: O’Sullivan (Innovation Process) – 5/29/2008
“O, Sullivan further explains that”
The first stage in this perspective of the innovation process relates to the creative activity of generating an opportunistic idea. This stage involves the continuous scanning of the internal and external environment for threats and opportunities that might be developed into an innovation by the organization. This stage involves mining the sources of innovation for new ideas and evaluating solutions to identified problems. An organizational culture that encourages creativity and empowerment can significantly support this phase of the process; this is exactly the similar culture that functional at 3M Company. The input typically stems from a technical insight into a product or process.
This is evident in the case of 3M, when Fry had an idea of taking a peelable adhesive that had been developed some year’s earlier at the 3M research laboratories and spreading it to marketers, it is further mentioned in the case study that it worked well.
The second stage of the process is opportunity recognition, in which the opportunity of developing the idea into a new product, process, or service is assessed and evaluated relative to other opportunities. This phase of the process involves deciding which innovative ideas will be pursued by the organization and which are deemed outside its interest. The undertaking of innovative actions is both expensive and resource intensive for any organization, and even large organizations such as 3M.
If an opportunity is recognized as appropriate for the organization, then the idea moves to a new stage where it can be developed further. This phase involves the development of the idea or solution into a potential innovation that is ready for launch to its internal or external market. The development of an innovation can be highly resource intensive for any organization. It also applies to Fry when his ideas worked well and requested permission to develop the product commercially and he was given an opportunity to develop a manufacturing process.
This phase of the innovation process relates to the launch to the market, which is where the customer makes the final evaluation of the innovation. Understanding customer needs is essential to ensure that the eventual offering to the market meets these needs.
A superiority gained by an organisation when it can provide the same value as its competitors but at a lower price, or can charge higher prices by providing greater value through differentiation which results from matching core competencies to the opportunities. They had strong innovation and research foundation at 3M Company that has ability of adaptability, although they experienced loss before but they managed to turn around the situation. It appears that they do not have a competitor in the world with the same level as they are. Instead, there appears to be several competitors in each sector or industry in which 3M offers its products and services.
Frequently, as companies grow, they tend to become more
bureaucratic and less able to adapt to changes in the market or industry. To conclude I would say that 3M Company’s existing controls are very good and support their strategy. However, they should also incorporate the other missing controls to ensure greater innovation power and profitability.
Looking at today’s Industries and competitions amongst them, in my opinion ,I would suggest other company’s follow the steps of 3M, the have made some mistakes but were able to turn around the situation due to their elements of innovation process.
What do you think of Six Sigma? Can other companies do the same? Firstly Six Sigma is defined as a “program that is used to improve processes within the organization be it in manufacturing or production processes. Six Sigma is usually prepared at defining goals and problems, measuring existing data and processes, analysing problems and goals, improving processes or tasks and controlling how the problems will be resolved in the future. According to the research I have identified three traits from Six Sigma”
I. The advantages
The benefits of Six Sigma contain the improvement and development of operating processes to ensure quicker response time, quality products and
services and better monitoring of performance and work outputs, which I think it is the best approach to growth for 3M since they have dropped their sales.
This type of an approach or model surely and possibly saved 3M Company to come up with the said results and benefits because it provides a formula in which an existing processes is checked for consistency, efficiency and effectiveness, if it fails to measure to the existing industry standards it is revised and redesigned to match the best practices . I would advise other companies to do the same because it is the model that guides the company.
II. The costs
The Six Sigma model also ensures that costs will be dropped because there will be limited time spent in the process and more time to work on the actual tasks which is already handy at 3M.
It appears time its cost is huge and that an organization has to appoint or hire a person that would guide and train top management and middle management in the principles of Six Sigma which is wise for all the companies like 3M than running their businesses at a lot, dropping sale, losing profit.
Furthermore Six Sigma will also empower the employees to gain knowledge as it is the model that will require trainings, yes it will be costly but with productive results at the end.
III. The risks
Six Sigma might also have its own risks, some organisations might not be patient but looking at its approach, it had a positive impact on the 3M Company; it also developed leadership skills and focused on customer satisfaction.
Furthermore, even though the approach does wonders in the company, not all companies of the 3M embraces Six Sigma some of these reasons are very costly training of human force, only applies to the manufacturing industry, and it is just a trend. Other companies might think that, main issue that have to challenge with is if the Six Sigma really benefits the company or it cost the company to sacrifice the innovative and creative culture for the sake of continuous improvement of products to satisfy the customers and accelerate the financial performance. Nevertheless it proven worth it by 3M because of the rescue it has done to the company while it was falling behind.
In terms of its organization culture, 3M’s Company culture is promoted to be freedom and full of excitement and anticipation. Employees enjoy being heroes. 3M Company is being innovative in its cultures and company growth, so the focus needs to be on how innovation in 3M, including working cultures and people management etc. can be replicated and benefits different areas in our daily applications
Goldman, Maritz, Nienaber, Pretorius, Priilaid and Willliams (2010:94) referring to Roger Harrison’s model of organisational culture mentions that “it has various attributes with four types of culture that could be easily observed at 3M Company although one called power culture seemed to be more dominant than others. Goldman et al., (2010:95) continue their notion by saying that a person whose personality is suitable for the culture of the organisation will be more likely to succeed than the person who does not naturally fit within the organisation’s culture. The table below reveals all these cultures and their attributes.
Competence, growth, success and distinction
Strength, direction, decisiveness, determination
Structure, order, stability, control
Relationships, mutuality, service, integration
Figure 2.1: Adapted from: Goldman et al., (2010:95). Organisational cultures and their attributes.
This case study has stressed some of the key activities and principles that contribute to 3M Company’s performance. Most of these are not new and are certainly used by other companies. In 3M Company’s case they may be summarized as an effective company culture that nurtures innovation and a range of management techniques and strategies that together have delivered long-term success.
Most of companies pay lip service to the organisation values and practice set out in this case study. There is evidence that 3M Company supports these words with actions. 3M Company hire good people and trust them; this will bring about innovation and excellent performance. 3M Company ensured that introducing Six Sigma is a good move than at other companies. Moreover, the success of the approach is due to the continual reinforcement of its objectives. Indeed, also the performance of individuals is partly judged on whether they are able to achieve the objective.
Marketing pull and Marketing push technology
According to Lynch (2009:283) market pull is one of the principal sources of innovation which is customer needs analysis. Baker in Lynch (2009:293) emphasize by suggesting that innovation takes place when companies identify new market opportunities and this is how 3M Company attempted to employ market pull by introducing Six Sigma and this exposes that they had ability for creating innovation. The 3M Company business area was completely different from what Six Sigma specialised on so they were necessary forced to encourage creativity, develop leadership skills, customer satisfaction, and exploration and focus where new ideas can come from a wide variety of sources.
According to Lynch (2009:283) Technology Push is technology development analysis whereby other industries are being surveyed for their technology developments and assessment of their relevance to its own. 3M Company joined forces with external companies as mentioned above in trying to introduce new approach to growth and link the internally controlled culture of technology push even though they assumed that it was market pull. Their main challenge at 3M Company is that they need to know what technologies to push so that they do not dissolve their establishments.
The diagram below illustrates how the two sources of innovation should be exploited by organisation without distinction.
Figure 2.2 Adapted from Lynch (2009:283) Two major drives of innovation.
To what extent, if at all, does innovation matter in setting the purpose of an organisation?
Yes innovation does matter in this case because; many organizations invest in innovation in order to change. Organizations put aside a percentage of turnovers to change products, processes, and services. In particular, the objectives should be achieved because of this investment. Yet, a very large amount of innovation activities does not meet these objectives. The motives behind failure provides clue regarding how to avoid such failure in the future.
In this case study the process by which the companies should apply innovation has been examined. It has been examined by making sure that employee understands the process by which innovation takes place in the work place and then improving. In this case study 3M organizations has tried to lower their innovation failure rates and move faster with the process of growth as mentioned previously above about Six Sigma, the approach to growth.
Looking at the process of innovation from idea generation, through evaluation, and on to realization, you will also find customers who become evaluators of the success of an innovation in the company and by concluding there is also key ways to improve the ability of the company or organisation by monitoring the following innovation processes:
Goals, Actions, Teams, Results.
Goals of Innovation
The principal goals required by an organization in return for this investment vary between organizations. The following have been found across a large number of manufacturing and service organizations and ranked in order of popularity, with the first goal being common to most organizations (European Commission, 1996):
Creation of new markets
Extension of the product range
Reduced labour costs
Improved production processes
Reduced environmental damage
Replacement of products or services
Reduced energy consumption
Conformance to regulations
Following are the critical factors that managing technical innovation in 3M Company:
a) Organization culture
b) Communication and
The causes of failure can vary widely depending on the individual innovation. Some causes will be external to the organization and outside its influence of control. Others will be internal and ultimately within the control of the organization. Some of the more common causes of failure in organizations can be distilled into the following five types (O’Sullivan, 2002):
Poor goal definition
It means that organizations find it difficult to define their goals. Poor goal definition requires that organizations decide on appropriate goals for their environment and define these goals in terms that are understandable to everyone involved in the innovation process.
Poor alignment of actions to goals
Means that organizations find it difficult to continuously link the ideas and projects they are pursuing with their goals. This is perhaps even more acute if goals are difficult to define in the first place. It also influences effective management of the portfolios of projects that the organization is undertaking to ensure they are balanced appropriately.
Poor participation in teams
It refers to the behaviour of individuals and teams, latent knowledge of the organization, and the particular skills of individuals to contribute to the achievement of innovation. It also refers to the payment and reward systems that link individuals to goals.
The poor monitoring of results
It refers to sharing of the status of goals, actions, and teams involved in the innovation process within the innovation team and its main stakeholders.
Poor communication and sense of community
It relate to ineffective channels of communication and collaboration that constrain knowledge sharing and the ability of employees to participate as a broader community in the innovation process and make informed decisions when needed.
Steyn, Schmikl and van Dyk (2010:66) state that knowledge delivers sustainable competitive advantage as illustrated below
Figure 3.1: Adapted from Lynch 2009:261- An emergent approach to purpose
According to Palmer and Kaplan (2007:2) Strategic Innovation is the creation of growth strategies, new product categories, services or business models that change the game and generate significant new value for consumers, customers and the corporation. According to Lynch (2009:282) innovation is the generation and exploitation of new ideas. This has helped the 3M Company to gain strength in applying lessons learnt from previous experiences like the one of losing the sales and profit. This has made them to be able to deliver what refers to as the priceless assets to strategic management such as the following: Substantial future growth: The process of improving some measure of the organisation’s success which can be achieved either by boosting the top line or revenue of the business with greater product sales or service income. 3M Company able to restructure by introducing the approach to growth.
Ability to leapfrog major competition, even dominant competitors: Ability to conquer competition focusing on extensive promotions to highlight the distinctive benefits or features of products. 3M Company had employees who are strong in making sales and come up with high successful product “Post-it notes”. In terms of the competition, it started internally.
“Every company seeks the keys to innovation, but few find them. Over the decades, 3M learned how to be innovative and today the company uses that skill to great competitive advantage.” — Jerry I. Porras, Co-author, Built to Last
“Innovation is more than just a bright idea; it is an idea that gets implemented and has a real impact. In other words, somebody has to make it happen.” — Ernest Gundling, Author, The 3M Way to Innovation: Balancing People and Profit
It is advisable that, organisation should have its own database in order to fix or limit the problems in the company rather than running at a loss. 3M Company created their database and spent about $20 million, it in an integrated database, which stores information on customers, products, sales, inventory, and finance from all divisions and geographies. If all the organisations of the same nature can follow what 3M Company did, access can be gained to the database through a user-friendly website. Strong search which bring together related products and services from across the entire 3M Company can be easily accessed. Personnel and partners can also access latest information on product prices, availability, specifications and reviews of customer accounts. “The profitability of customers and products and the performance of partners can also be analysed across the entire company allowing better allocation of company resources. This allows 3M Company to take advantage of market opportunities and cross-selling opportunities and at the same time meet and customize the needs of customer segments. “(Some of the information is adapted from Harvard Business Review)
Ernest Gundling, Author, The 3M Way to Innovation: Balancing People and Profit (European Commission, 1996): Goal Innovation
Goldman, G., Maritz, R., Nienaber, H., Pretorius, M., Priilaid,D. & Williams, D.2010.Strategic Management: Supplement for Southern Africa. (1st Edition) South Africa: Pearson Education.
Havard Business Review. Vol 75 (6): 102-103
Jerry I. Porras, Co-author, Built to Last
Lynch, R. 2009. Strategic Management. (5th Edition). England; Pearson Education Limited.
McQuarrie, E.F. 1993. Customer visits. Building a better market focus. California: SAGE Publication.
O’Sullivan (Innovation Process) – 5/29/2008