Solve Case Study

Evaluate the policies and philosophies of 3M from the standpoint of helping the company implement its strategy, rooted in innovation Soln.: Policies implemented by 3M are:

1. 15 % option: Employees can spend 15% of their work week in pursuing individual projects of their choice which they need not disclose to any1, not even their managers. This promotes intrapreneurship which in turn enables the company to come up with a range of new products every year. 2. 30% rule: Business unit bonuses are based on how successful a business unit manager is in achieving revenues, with atleast 30% of business unit revenues required to be from products introduced in the last 4 years.

3. Dual ladder career path: There are 2 career ladders – technical career ladder and management career ladder, both of which allow equal advancement opportunities, thus enabling employees to stay focussed on their research and professional interests. 4. Seed capital: Product inventors can obtain seed capital within the company by 1st approaching the specific business unit manager. On refusal of funding from the BU manager the inventor can take his idea to other business units for funding. On further refusal of the idea employees can approach the corporate team. After securing the funding the product “champion” will set up the venture team on his own.

5. Tolerance for failure: The company culture encourages innovation by not imposing any punishment on failure of a product, instead the employee is guaranteed his previous job. 6. Rewards for success: When the newly introduced product reaches certain revenue goals, the employee receives raises, promotions and recognition in the form of awards.

Also once the revenue from the product exceeds certain target, a separate department for the product is created. Thereafter on crossing of subsequent cutoff revenue targets a business unit is created for the product, with the product champion given the responsibility of heading the business unit. BU managers must know the names of employees under them, thus each employee is entitled to the profit- sharing plan. 7. R&D spending: R&D spending of 3M is 6-7% of sales which is twice that of any manufacturing company. 8. 3 tiered research:

BU laboratories: Focus on specific markets, with near term products Sector laboratories: Focus on applications, with 3-10 year time horizon Corporate laboratories: focus on basic research with 20 year time horizon. 9. Technology forums: 3M supports various forums for sharing knowledge. Scientists from different laboratories are part of the technical council which meets to discuss progress on different technology projects. Other ways of technology sharing include email directories, technology sharing in annual in-house trade show, etc. 10. Customer contact: Scientists frequently obtain product feedback from customers. Customers can also participate in sessions aimed at generating product ideas.