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This book is dedicated to the thousands of3M employees who have made 3M a strong, vibrant, growing, diversiÞed technology company with innovative products and services in markets throughout the world. © 2002, 3M Company. All rights reserved. First Edition: 2002International Standard Book Number ISBN 0-9722302-0-3 (cloth) ISBN 0-9722302-1-1 (paper)About the cover: Shortly after the Century ofInnovation began, 3M introduced Wetordry sandpaper, shown in the background, giving the company its Þrst entry into the important automotive market. Inventor Francis Okie often scribbled notes on scraps ofthe sandpaper as he worked. Today, 3M optical Þlms, shown in the foreground, are among the companyÕs newest products. These innovative Þlms enhance the performance ofelectronic displays from the smallest hand held devices, such as cell phones, to large liquid crystal display monitors and televisions.
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It is exciting to celebrate 3MÕs Þrst Century ofInnovation with the extended 3M family. There are many reasons for 3MÕs hundred years ofprogress: the unique ability to create new-to-the-world product categories, market leadership achieved by serving customers better than anyone else and a global network ofunequalled international resources. The primary reason for 3MÕs success, however, is the people of3M. This company has been blessed with generations ofimagina- tive, industrious employees in all parts ofthe enterprise, all around the world. I hope youÕll join us in celebrating not only a Century of Innovation but also a century oftalented and innovative individuals. W. James McNerney, Jr. Chairman ofthe Board and ChiefExecutive OfÞcer from the CEO. . .
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Contents1Early Struggles Plant the Seeds ofInnovation 13M opened for business as Minnesota Mining and Manufacturing in in the little town ofTwo Harbors, hoping to capitalize on a mineral used for grinding wheels. Nothingis easy for the optimistic founders, but their persistence pays offand they begin manufacturing sandpaper. 23M Innovation ÑA ÔTolerance for TinkerersÕ 133M welcomes innovative people who are creative, committed and often eccentric. The ÒarchitectsÓ ofinnovation, Richard Carlton, Dick Drew and Francis Okie, create a climate that turns 3M into a new product powerhouse. Researchers explain valuable lab lessons and provide a glimpse into the fabled, highly productive Pro-Fab Lab. 33M Innovation ÑHow It Flourished 29Sustaining innovation in a growing company is a massive challenge. 3M walks the innovation Òhigh wireÓ and invests mightily in Research and Development. 3M people share ideas and solve customer problems across oceans and continents. The highest potential product ideas attract company champions and are rewarded with additional capital. 4Ingenuity Leads to Breakthroughs 49The most important innovations respond to unarticulated needs. 3M calls work in this arena Òthe fuzzy front-end,Ó and it can lead to signiÞcant breakthroughs. ThatÕs what happens in nonwovens, ßuorochemicals, optical lighting Þlm and microreplication Ñtechnologies that spawn a wide array ofproducts and new Òtechnology platformsÓ for 3M. 5No One Succeeds Alone 67While 3M people must take personal initiative to build rewarding careers, they are rarely Òlone rangers.Ó 3M people naturally gravitate toward being champions, sponsors and mentors even before these were popular business buzzwords. 6No Risk, No Reward ÑÔPatient MoneyÕ 77For most ofthe century, 3M demonstrates its bias toward growth through diversiÞcation. Follow three business ventures where long-term investments, known as Òpatient money,Ó pay offin multiples. These include: reßective technology; 3M Health Care, which today has more than ,products; and 3M Pharmaceuticals, developer ofinnovative drugs. 7The Power ofPatents 95Intellectual property is imbedded in 3MÕs ÒDNA.Ó Protecting the companyÕs unique tech- nology, products and processes has been a priority for years. Because innovation is the gro wth engine at 3M, intellectual property has more currency than cold cash. 3M defends its patentsÑat home and abroad.8Look ÔBehind the SmokestacksÕ 109When -year-old William McKnight becomes the companyÕs sales manager, he develops an enduring philosophy Ñthe best way to Þnd business is to Òlook behind the smokestacks.Ó Move beyond the purchasing ofÞce and Þnd out what your real customers need.
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rolemodelofinnovationIn todayÕs business world, innovation is the mantra of success. For companies large and small, the big winners are those that match new, marketable ideas with customers before anyone else can. It takes ßexibility and creativity and a willingness to risk.One hundred years ago, when 3M was founded as Minnesota Mining and Manufacturing, the formula for business success was the same. But for 3M, perseverance mattered even more. The multiple crises that rocked 3M a century ago could have easily destroy ed a young company in the st century. Imagine, for example, that 1Early Struggles Plant the Seeds ofInnovation
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discovered in the region and prospectors hoped to get rich with new mineral claims, including the possibility ofÞnding gold. >Incorporate First, Investigate LaterLeaps offaith were common in those days, as one observer noted: ÒLike so many others who organized mining ventures in the early s . . . 3M apparently incorporated Þrst and investigated later.Ó The company sold shares and made plans to start mining before they were even certain they had customers. Finally, Hermon Cable, a 3M co-founder and successful Two Harbors meat market owner, traveled to Chicago and Detroit to test samples of3MÕs corundum with potential cus- tomers. Though Cable came home describing only Òfairly satisfactoryÓ results, he encouraged his four partners Ñwho all seemed infected with CableÕs enthu- siasmÑto move ahead. It was almost two years after 3MÕs founding that the company sold its Þrst batch ofminerals, one ton ofCrystal Bay corundum, in March . Fortunately, based on the foundersÕown solid reputations, the local bank had no qualms about loaning the company oper- ating capital until more sales revenues materialized. your Òbig ideaÓ for a new product has properties that will leave your competition in the dust. You attract ven- ture capital, invest in production facilities, and set your sales force loose to beat the market leaders. Then Ñas now Ñeverything is riding on a marketable innovation with immense promise.But instead ofsoaring revenues and customer orders, your big idea fails. Your product is ßawed. Your major investors have given you all the funding they can. This is pre- cisely what happened when Þve northern Minnesota entrepre- neurs extracted a mineral from the shores ofLake Superior. The optimistic part- ners believed their ÒCrystal BayÓ mineral was corundum, almost as tough as diamonds and an ideal substitute forgarnet, the mineral abrasive found in grinding wheels used by furniture makers. The founders of3M were banking on success when the company was born in . Each man contributed,in start-up funds in exchange for ,shares.They started their venture in Two Harbors, a booming frontier village on the North Shore ofLake Superior, where the winds ofentrepreneurship were as strong as Alberta Clippers blowing across the lake. Iron ore had been Chapter 1221Chapter opening photosProspective stockholders were offered a free boat trip from Two Harbors to the 3M Crystal Bay plant to inspect 3MÕs corundum;3M company letter- head;Original 3M plant on North Shore of Lake Superior at Crystal Bay, Minnesota, 1903;Label on back of Crystal Bay corundum paper.
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president and never drew a paycheck. To scrape along in those years, Cable also worked without pay and so did Dwan. Decades later, William McKnight, con- sidered the ÒarchitectÓ of3M growth, credited Dwan, Ober and Cable with Òremarkable faith and tenacity.Ó They also shared a strong work ethic and Midwestern roots, a background that worked in their favor during difÞcult times. With no revenues in sight and the treasury bare, 3MÕs founders tried another approach in . Ifgrind- ing wheel manufacturers arenÕt buying our corundum to make their wheels, letÕs make the wheels ourselves, they reasoned. Deciding to become a manufacturer of finished goods, rather than merely a supplier ofraw materials, set 3M on a new, stronger course, but it didnÕt seem so at the time. The partners had no knowledge ofthe grinding wheel business. They also didnÕt know that an ambitious New York inventor named Edward Acheson had discovered how to make an artiÞcial abra- sive combining carbon and silicon at high temperatures. But a long dry spell followed because 3MÕs product was actually anorthosite, a soft mineral that is inferior to garnet. 3MÕs partners voted to cut their salaries and then abolished them altogether. Meanwhile, impatient suppliers wanted their mone y, and 3M owed its own employees back pay. (Each ofthe partners contributed money to cover the payroll.) 3M had little success sell- ing its stock to raise operating capital, and the company was racing head-long for disaster. Only two investors stepped forward ÑEdgar Ober, a St. Paul railroad man, and John Dwan, a Two Harbors lawyer and co-founder of3M, who had a reputation for smart investments. Ober came from modest means. After graduating from high school in St. Paul, he became a clerk at the Chicago, St. Paul, Minneapolis and Omaha Railroad. The hardworking Ober was promoted often, but his ambitions soared beyond his job. ThatÕs when Ober took a chance and bought ,shares in 3M. He hadhigh aspirations and faith in the venture. In ofthe early, touch-and-go years of3M, Ober served as Early Struggles Plant the Seeds of Innovation331 Anorthosite, mistaken for corundum, was mined at 3MÕs Crystal Bay property. 2 Articles of Incorporation, signed on June 13, 1902, by the Þve founders (Henry Bryan, Hermon Cable, Dr.J.Danley Budd, John Dwan and William McGonagle.) 3 John Dwan in his law ofÞce, where the company had its headquarters until 1916, when 3M moved to St.Paul. The Þrst key issue the company faced was failing to make quality sandpaper.They could have given up and gone under.ItÕs incredible that they persisted and looked beyond a short- term vision of success. > Dick Lidstad retired vice president, Human Resources You have an idea, you take this idea and you pull all the things that need to come together and itÕs called Ôbelieving.ÕInnovation boils down to conceive it, believe it, achieve it. > Leon Royerretired executive director, 3M Leadership Development Center, Human Resources, formerly a technical director
689 KB – 248 Pages