CASE ANALYSIS OF INNOVATION AT 3M CORP Submitted to Dr.M.R.

Suresh GROUP NO: 2 [Sanjeev S, Bhimaji, Atiullah Ansari, Sreekanth, Sandeep Haneefa, Vijay Kumar] SECTION C- PRODUCT MANAGEMENT 10TH JULY 2013 ---------------------------------------------------------------------------------------------------------------Case Facts: The Minnesota Mining and Manufacturing Company (3M) prides itself on being an innovative, technology-based company, and they have had an excellent track over the years with respect to innovation. They are known for innovative products such as the Post-it R, which revolutionized the way individuals communicate, masking tape, and waterproof sandpaper.3M top management has long felt that the 3M innovation process was being increasingly afflicted by "creeping incrementalism" - a excessive focus on incremental improvements to existing product lines. They urgently wanted to improve matters, and wanted especially to improve 3M's ability to respond to the "unarticulated needs" of customers by providing breakthrough products and services. The Health Care Unit is a core component of 3Ms business model. Although, the unit was recording significant and increasing sales, it had failed to introduce a successful product in almost a decade. This did not jibe well with one of the companys key objectives, which aimed to see at least thirty percent of sales originate from products that did not exist four years earlier. Traditional market research methods were marred with shortcomings, and have proved to be ineffective in helping the Health Care Unit understand customer and market needs. Rita Shor, a senior product specialist, and a hand-picked group of subject matter experts were tackling this challenge using a new and innovative market research method called Lead User Research. This method addressed some of the shortcomings of the more traditional market research methods implemented by the company. After many months implementing the new market research technique, Rita and her team landed on four recommendations. Three of the recommendations would see the introduction of new product lines, whereas the fourth recommendation hinged on a complete rewrite of the Health Care Units business strategy. Given a recent change at the division manager level and a waning appreciation for the lead user research" method, Shor and her team were now faced with having to balance between the current incremental approach that 3M was familiar with, and a

more radical and potentially breakthrough change to its core business strategy. Shors ultimate goal is to deliver successful product ideas and help position the company and unit for a healthy and competitive future. The Lead user research Team: Shor assembled the lead user research team. The team consisted of individuals with a wide breadth of expertise and backgrounds, including antimicrobial pharmacology, chemistry, dermatology, biology, veterinary science, and even Broadway make-up artistry. The general approach to lead user research" involved four stages: 1. Project planning 2. Trends/needs identification 3. Preliminary concept generation 4. Final concept generation

Four recommendations from the Lead User ResearchTeam: 1. The Economy" Line 2. The Skin Doctor" Line 3. Antimicrobial Armor" Line 4. Evolution or Revolution The first three recommendations included a mix of incremental and breakthrough innovations. They included new product lines for low cost surgical drapes; hand-held devices for layering antimicrobial substances; and armor" that protected against blood borne, urinary tract, and respiratory infections. The product development team had also developed a fourth recommendation(Upstream containment of infections), which was quite unlike the first three. As the lead user research team progressed through the stages, it started to become evident that there existed a large gap in the current health care system. The team noticed that companies had not started to provide early intervention in the disease process, in what is known as the upstream containment of infections. Therefore, the fourth recommendation hinged on the decision to be evolutionary or revolutionary.

Analysis: The recommendations that involved radical or breakthrough products carry characteristics of high risk, cost, and usually take many years before tangible results can be seen. On the other hand, incremental innovation, a type of innovation 3M is very familiar with, is less risky, usually requires less investments in R&D activities, and results become

visible within a reasonable period of time. But in order to be competitive in the market the company has to maximize the returns of these products while minimizing risk, the company will need to balance between incremental and breakthrough innovation. In order to ensure that Rita and her team are able to effectively demonstrate the value of the lead user research model and highlight the successes from the past months, the team should initially put forward their three recommendations for new product lines. The economic", skin doctor", and the antimicrobial armor" lines would allow 3M to promote a balanced risk-based portfolio containing both incremental and breakthrough innovations. These proposed product lines would provide 3M with the potential to increase sales for the Health Care Unit, and open up its door to emerging markets, such as hospitals in Korea, Indonesia, and India. The antimicrobial armor" line alone has the potential to introduce the company into a new $2 billion market. Due to the increased failure rates associated with introducing significant change into an organization, Rita and the rest of the product team should not rush to put forward the fourth recommendation on infection prevention. The team could make an initial presentation to senior management on infection prevention and then take time to carefully study, plan, and build a better business case for the new model. Instead, by placing the emphasis on the recommendations for new product lines the team would be promoting lead user research and ensuring that as a method it would be available for future teams to pursue.

Solution: Given the degree of change that would result from implementing the fourth recommendation and the declining desire for lead user research among the top management, it might be wise for Rita to initially suggest the new product lines to the senior management team. Rita should not disregard the fourth recommendation, but she and her team should invest more time into developing, planning, and further studying the potentially new approach to the units business model before introducing it to management. For the time being, 3M should not discard its experience with traditional market research methods. The lead user research concept still needs consideration and additional refinement before it could be implemented at a wide scale across the company. For instance, the various challenges the group faced during Stage IV of the process would need to be addressed in order to increase the efficiency of the overall process. In addition, a successful launch of the three recommended product lines might further dictate the value of lead user research and can act as a evaluation bench mark for company-wide implementation of new method.