Case study background. 3M 3M Global Headquarters Global Headquarter 3M: Minnesota Mining and Manufacturing Company 60,000 products, 61 countries, 75,000 people, and 10% growth in sales The key success of innovation at 3M is "good management e.g. good communications, the setting of clear objectives with a company culture of nurturing ideas and fostering creativity. It uses a combination of structured research and individual freedom- allowing researchers to spend 15 per cent of their time doing projects of their own selections 1. Company heritage and culture Apply formal and informal processes Develop a culture supporting creating new products and building new businesses Hiring good people and trusting them "The promotion of entrepreneurship and the insistence upon freedom in the workplace to pursue innovative ideas" 2. The demand for innovation 30% of the sales are from products that are less than four years old. This is the objective that management must achieve. Pressure: not only develop new products, but also those new products represent 30% of sales New ideas is part of daily activities. Continual reinforcement of the objective Another goal: 10% of the sales within only one year 3. Freedom for creativity Dedicate 15 % of work week time on creativity, allowing employees to work on ideas without having to seek out approval from the organization. But it turns out that some people spend more than 15% on projects, some use less than that; some none at all. The figure is not so important as the message. The use of grants genesis grants", up to $75,000 to develop ideas into potential product opportunities 4. Tolerating failure Embrace on initiative Management at 3M are known to have made at least one mistake in their career. 5. Autonomy and small businesses 3M realizes that structure and system might inhibit the creative mechanism. Adopt approach that enables individuals and within organization to groups establish small internal venture groups with managers free to make their own decisions, develop their own product lines and take responsibility for the results--- offer an entrepreneurial environment under a corporate umbrella 3M - A 'House of Brands' Post-it Scotch Durex Brite Vikuiti Brittex Ponjita 3M ESPE Fitr RASURE PGA Sark Sterilizing Grade Filters Scotch Nexcare Endotoxin Removal Viscoplast 3M Sees LASSURE PFS Series F HAC Produce Vent/Air Fiters Commercial HVAC Fitters Diverse Portfolio of Solutions Particulate Control Bioprocess Monitoring Tools Atest Bogical Indicators Zeta Plus Cariegos & Capsuke Clarification Buffer Media Single-Use Storage LASSURE Filtration A Series 6. High profile for science and technology The company invests 6.5 % of its annual sales turnover in R&D. Employ over 7,500 scientists and technologists Marketplace and users plays an important role in product development. 7. Communication and technology transfer Microreplication technology, that was first used to develop overhead projectors, has been transferred and applied to produce a wide range of products e.g. traffic signs, floptical disks, laptop computer screens, and films. Innovation dilemma: efficiency vs. creativity The practice of strict, process-focused Six Sigma programme leads to the pressure in creativity and innovation development. After 2010, 3M commits increased investments in R&D- up more than 11%. 3M: inventing hundreds and hundreds of Next Small Things Discussion 3M is regarded as the corporate with an effective company culture that nurtures innovation, a range of management techniques and strategies that deliver long-term success. Guidelines Question 1: an effective culture, intensive investment in R&D, supports in time and budget, clear and challenging objectives Question 2: the challenging objectives provoke creativity and innovativeness among employees. Question 3: 15 % rule sounds encouraging but it comes with pressure from high sales target. Question 4: Some radical product innovation might require longer period of diffusion. Sales target should be more flexible depending on the level of newness. Question 5: Science and technology is not always the key success of innovation performance. Innovation leadership, supportive culture and good management approach also play significant roles. Question 6: Operational efficiency (cost, cash flows etc.) is opposed to innovation development which requires high R&D cost and some degrees of failure tolerance.