3M Corporation Case Study Free Essay Example

The 3M is a global innovation company that never stops inventing which is according to their vision statement. The 3M Company, formerly known as the Minnesota Mining and Manufacturing Company, is an American multinational conglomerate corporation based in St. Paul, Minnesota.

The Company believes in innovation and gives it a prime importance.

In this case they have picked up an innovative way to understand the customer needs by using “Lead User Research” Methodology.

In 1990s, 3M operated with four objectives:

• Producing 30% sales from products that did not exist four years earlier
• Greater than 10% annual growth in earnings per share
• Greater than 27% return on capital employed
• 20 – 25% return on equity

Over the decades, 3M enjoyed national and global growth as well as a reputation for remaining a “Hothouse” of innovation.

3M encouraged innovation through a variety of means including awards for innovation as well as in-house grants for innovating projects. The company also allowed all staff to spend 15% of their time to explore new ideas outside of assigned responsibilities.

To achieve high rates of innovation 3M placed heavy emphasis on R&D. In 1997, it employed 4500 scientists, engineers and technicians in the United States and another 2000 overseas.

• From its beginnings in 1902 as Minnesota Mining and Manufacturing, 3M has grown to achieve sales revenue of $US25.3 billion and an operating income of $US3.5 billion in 2008.
• The company has over 79,000 employees with approximately 13 percent employed directly as technical staff.
• As a truly global presence, 3M services almost 200 national markets, and operates subsidiary companies, such as 3M Australia, in more than 60 countries.
• Almost 64 percent of 3M’s entire sales revenue originates from international operations with a vision “to be the most innovative enterprise and preferred supplier in the markets we serve”, 3M prides itself on its history of innovation – reinforced through its brand promise, and “practical and ingenious solutions that help customers succeed”.

Innovation for 3M

3M prides itself on being a customer-focused organisation. “We understand our customers’ expectations and make sure that we exceed their expectations…Loyal customers stay with you, are more receptive to new products and recommend you to others.”

The customer-focused organisation is an important part of continuous improvement and Total Quality Management (TQM). A TQM organisation consists of a number of interdependent internal stakeholders or customers. These individuals, groups, departments and units supply to, and rely on, another individual, group, department or unit within that same organisation. These internal customers combine to improve quality throughout all processes and create better quality output for the end-users; the external customers. This philosophy of 3M applies equally to internal customers, demonstrated through the interdependence of its 45 technology platforms and diverse global operations; as well as to external customers.

What is Lead User Methodology?

Below is the illustration of how 3M moved from ideation to product development process.

Need

3M wanted to identify the need of the market by conversing with the lead users i.e. the experts in the field of veterinary sciences to medics in US medical army surgical hospital in Bosnia. This was majorly carried out in stage 1 and 2 of the project.

Technology

The merger of technology and need led to the creation of an infection barrier as surgeons wanted to focus on the operated area and not anywhere else. With the highly skilled technical team and high calibre lead users 3M identified the technological requirements.

Form

The concept was given a form by the discussion in the team and the team went upon creating 3 products by the help of Lead User Research Methodology, pioneered by Prof Eric Von Hippel.

New Product

With the combination of concepts 3M went about identifying 3 products the economic line, the skin doctor and the antimicrobial armor line.

In this methodology the lead users are interviewed and surveyed to gain insights from them and the outside-the-market users are also interviewed. Once these “lead users” have been identified, networking is employed and the lead users are interviewed so as to gain their insight into how they solve the problem for themselves. The lead users are also queried to determine whether they have knowledge of individuals or organizations who are considered to be “outside the market”  By this the companies may identify new methods or approaches towards creating innovative products that are true breakthroughs via ideas that may not have surfaced by simply examining existing users with traditional market research techniques.

The area in which 3M wanted to innovate by doing a New Product Development was in Medical-Surgical Market Division.

Opportunity identification

The need to generate a new product in the Medical-Surgical division of 3M was because of the management dicta that charged Rita with a mandate to develop a breakthrough product with the existing business strategy.