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INNOVATIVE COMPANY
Group 6
The beginning
The founding philosophy – McKnight
Competitive Advantage:
-R&D and experimentation
-Product Differentiation
Focus on needs stimulated linear sequential
coupling
- Relaying customer needs to R&D
Search and attract idea generators( Francis
Okie –”Wetordry”)
Multiple Sponsoring System
3M Culture –Environment for Individual
Entrepreneurship
Leveraging and Expanding the
Technology Base
Gained strong knowledge of materials
technologies and process
Creation of Central Research Laboratory –
product-market explosion within 3M
Opportunities
External Demands
Expanding product applications leading to new
customer needs
Internal Capabilities
Culture encouraging employees to leverage
products, process and technologies
Basis of success of 3M’s
development program under
McKnight
Basis of success of 3M’s
development program under
McKnight
Technology base
Value of sharing knowledge
Formal networks for communication
Technical Council
Technical Forum
Informal contacts
Product Development
Objective 25% sales from products created in last 5 years
Encouraging individual entrepreneurship
Continuous exchange of ideas –sales, manufacturing ,
research
Bootlegging -15% time pursuing projects of interest
Supporting projects irrespective of market potential
Make a little, sell a little
Rewards for idea generators
Appreciation
Dualladder career track
Promotion
Recognition
§ Carlton Society
§ Golden Step Award program
§ Informal recognition –Repeating
stories
Individual persistence and commitment
Culture
Failures not penalized
Structure of 3M
Organizational Model -
McKnight
Supporting small entrepreneurial units – 7 divisions
with own research lab, production operation and
sales force
Division GM –full responsibility for operation
Organic ‘Grow and Divide’ policy
Project--->Department --->Division---> New Group
Decentralization along with Tight control over divisional
operations through strong corporate staff and
sophisticated control systems
International expansion
– International divisions with six subsidiaries
– FIDO principle
– Self-generated self-financed growth
Need for Change
External
Economic slowdown
Foreign competition
International expansion –more difficult
Internal
Less effective product development
capability
Organizational Model – Lou
Lehr
Major Priorities
– Cross-unit coordination
– New emphasis on formal strategic planning
– Expanding and leveraging 3M’s tech. base
Need for change – Entrepreneurship; Greatest strength
leading to fragmentation
4 business sectors – Industrial and Consumer,
Electronic and IT, Graphic Technologies, Life Sciences
Own lab : Drive medium term growth
Formalized planning
B o o stin g Te ch n o lo g ica l
structure in ve stm e n ts
“Jake” Jacobson
Organizational Model-
DeSimone
Reorganization of company into 3 sectors
Faster and efficient product development
Revised targets:-
10% reduction in manufacturing costs and
35% reduction in cycle time
Increased focus on Total Customer
Satisfaction
Obtaining 30%sales from products
introduced within last 4 years
Increased R&D funding to $ 1Bn
Tasks for DeSimone
Changing Theme
Individual Entrepreneurship v.
Team Oriented Approach
Individual
Team Oriented Approach
Entrepreneurship
Advantage: Advantage
Encourages innovation
Greaterspeed to
Brings out the best in
the individual market
Easy to blend ideas Resource sharing
Disadvantage: Disadvantage:
Reduced time to
transition ideas to Diminishes the
Operating centrality of
Organization for innovative
implementation
Less geared towards genius
business needs Less freedom
leads to less
morale and
motivation
Recommendations
Mix of individual and team -oriented
approach
For new product idea generation –
Individual
For incremental innovation –Team oriented