Innovation at 3M Corporation Essay
Innovation at 3M Corporation
3M was and still is a worldwide leader in innovation. After a rough start in 1902, over decades, 3M enjoyed national and global growth as well as a reputation for remaining a hothouse of innovation.
In the 1990’s, 3M was trying to move away from the incrementalism and it sought to change the mix of new products to truly create something new to the world, instead of line extensions, which typically had provided two out of three new-product sales dollars.
By 1996, the 3M Medical-Surgical Markets Division, a world leader in surgical drapes market, had gone almost a decade with only one successful product. At this point, Senior Product Specialist Rita Shor has been charged with the mandate of developing a breakthrough product within existing business strategy. She was selected not only because her seniority but also because she was thought of as being creative and consensus builder.
Rita and the Medical-Surgical Market Division experiences with the traditional market research were disappointing. Traditional tools presented an abundance of data but contained little useful information for conceptualizing a breakthrough product as the current strategy of the company was desperate to find. In an in house lecture, Rita had heard about a new methodology for product development called “Lead User Research.” In an in house lecture, Rita had heard about a new methodology for product development called “Lead User Research.” The premise of this novel methodology was that certain consumers experienced needs ahead of other consumers and some of the former would seek to innovate on their own. Shor decided to try since this might provide the key to the breakthrough product.
The Medical-Surgical Division focused largely on reducing infections from skin through surgical drapes and surgical prepping. The team decided to center their interest in a new product that should reduce infections, conform to the body, prove more effective than current products and be easy to apply and remove.
Shor and her consultants follow the “Lead User Research” methodology stage by stage. The first two stages run as planned. However, the diversity in lead users and fields of expertise was adding complexity to the third and fourth phase. Along the way, after a change of the division manager, Shor experienced a big barrier of skepticism from her superiors. They had reduction on the team and clear opposition. The third stage took six months instead of six weeks. Shor and her team had to sell the program starting from scratch, reminding the new managers the expected benefits and the old problems.
Finally, after one year and with the help of a dozen of lead users gather from backgrounds as diverse as cosmetics to surgery, the team ended up with three innovative product recommendations. Two of them represented a straightforward linear extension of 3M product lines. One more, the team though, might open the door to new business opportunities. However, the team had a fourth recommendation but it divided the team.
The fourth idea would change the business unit strategy, in fact could mean to associate and combine technology from more than one core area of the company.
Shor should decide if take the four recommendations to the senior management and revolutionize the company or just play safe and keep doing business as always.
There is no doubt of the excellence of 3M’s products. It is also known per decades that the company is a leader in innovation. However, this case represents the need for change in a moment where innovation was just predictable and the “new products” were the result of the same old ideas.
It is understandable, up to a certain point, the level of comfort in employees and management had within the company. When the company has a steady income and year after year and the results show growth, small but growth, it is hard to sell a change in the organization. Rita Shor’s dilemma about presenting or not the fourth recommendation was not just about numbers. It was about business strategy, changes in the organization and cultural change management. After all, depending on how that kind of changes are implemented, the numbers could go either direction, faster and bigger by itself. Eventually, 3M should realize that the times where the innovation called for “it’s better to seek forgiveness than ask for permission” were behind. That there was no more “get-out-of-the-way” attitude. To put it in perspective, the employees’ comfort zone made the company transform itself in a short-term thinking, incapable of being radical anymore.
In addition to the cultural aspect of the organization, another reason for the actual situation was the product developing process and the product teams that perform it. Those teams were composed primarily of technical individuals with zero room for an empirical behavior, making the company a secluded environment. The proportions of logic and predictability in contrast with creativity and “free” innovation were overwhelming.
In summary, Rita Shor’s decision was not an easy one. She never imagined how far her assignment was going to go. The truth was that it went beyond the point of just finding a breakthrough product. The results of applying the “Lead User Research” methodolog y, opened bigger doors to radical change inside the company. That is what the case is all about.
Rita Shor had two clear alternatives. On the one hand, she could deliver to senior management only the three products they clearly defined. On the contrary, she could face the opposition of some of her own team members and introduce to 3M the “Lead User Research” methodology. Explaining the findings and telling the company that the legendary innovation process needed a refresh.
The first option would help the team to present a safe and conservative idea, aligned with the 3M traditional methods. In fact, two of the three products were a linear progression of other products, which would please the “old” school of the management. Likewise, the third product accomplished the goal of the new company strategy. It was the breakthrough product that the Senior Management charged Rita to find. This option was the best in terms of having everybody happy within the team and everybody in th e organization.
The second option was a bigger risk. It was a personal risk for Rita and her results to the company. It was also a business risk for the Health Care Unit and the Medical -Surgical Division. The recommendation of evolution or revolution was a big challenge for all the levels of the organization. It would start with the Health Care Unit’s business strategy statement but it would not stop there. The new recommendation would imply to collaborate with other units. It would means probably to create and destroy business units along the company. Not to mention that the recommendation would touch the core of the innovation principles in 3M.
However, all those risks could be the answer that 3M was eager to find. The 30% goal of sales from products that did not exist four years earlier was not an easy target. The answer could be the change in the innovation process as a whole and not just one product at a time.
Definitely, the recommendation is to deliver the fourth idea to the Senior Management team. However, in order to assure the success of the new “Lead Users Research” methodology, it must be clear that 3M needs to commit all levels of the organization to the changes that “reinventing” themselves will bring.
Change Management is a painful process. Even though it could involve complex activities, changes in organizational structure, downsizing and cultural mentality change, all will benefit the company, in the long run. The new initiative will bring back the bright ideas 3M was known for and it will restore the respect that other businesses in the industry always have had for them.
It is important though, be aware of the long process, the challenges that implement new methodologies and new ways of thinking implies. In 1995, John Kotter published research that revealed only 30 percent of change programs are successful1. There are not too many changes since then. In fact, fig.1 shows how 9% completely failed, 49% failed and just 21% had a complete and successful implementation of changes in the organizations 2.