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3Innovation
This book is dedicated to the thousands of 3M employees
who have made 3M a strong, vibrant, growing,
diversified technology company with innovative products
and services in markets throughout the world.
3 3M Innovation—How It Flourished 29
Sustaining innovation in a growing company is a massive challenge. 3M walks the innovation
“high wire” 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.
Acknowledgments 236
3M Trademarks 236
Beginnings in Two Harbors
your “big idea” for a new product has properties that discovered in the region and prospectors hoped to get
will leave your competition in the dust. You attract ven- rich with new mineral claims, including the possibility
ture capital, invest in production facilities, and set your of finding gold.
sales force loose to beat the market leaders. Then—as
now—everything is riding on a marketable innovation > Incorporate First, Investigate Later
with immense promise. Leaps of faith were common in those days, as one
But instead of soaring revenues and customer observer noted: “Like so many others who organized
orders, your big idea fails. Your mining ventures in the early s . . . 3M apparently
product is flawed. Your major incorporated first and investigated later.” The company
investors have given you all the sold shares and made plans to start mining before they
funding they can. This is pre- were even certain they had customers. Finally, Hermon
cisely what happened when five Cable, a 3M co-founder and successful Two Harbors
northern Minnesota entrepre- meat market owner, traveled to Chicago and Detroit
neurs extracted a mineral to test samples of 3M’s corundum with potential cus-
from the shores of Lake tomers. Though Cable came home describing only
Superior. The optimistic part- “fairly satisfactory” results, he encouraged his four
ners believed their “Crystal Bay” partners—who all seemed infected with Cable’s enthu-
mineral was corundum, almost as tough siasm—to move ahead.
as diamonds and an ideal substitute for It was almost two years after 3M’s founding that
garnet, the mineral abrasive found in the company sold its first batch of minerals, one ton
grinding wheels used by furniture makers. of Crystal Bay corundum, in March . Fortunately,
1
The founders of 3M were banking on success when based on the founders’ own solid reputations, the local
the company was born in . Each man contributed bank had no qualms about loaning the company oper-
, in start-up funds in exchange for , shares. ating capital until more sales revenues materialized.
They started their venture in Two Harbors, a booming
frontier village on the North Shore of Lake Superior,
where the winds of entrepreneurship
were as strong as Alberta
Clippers blowing across
the lake. Iron ore had been
But a long dry spell followed because 3M’s product president and never drew a paycheck. To scrape along
was actually anorthosite, a soft mineral that is inferior in those years, Cable also worked without pay and
to garnet. 3M’s partners voted to cut their salaries and so did Dwan. Decades later, William McKnight, con-
then abolished them altogether. Meanwhile, impatient sidered the “architect” of 3M growth, credited Dwan,
suppliers wanted their money, and 3M owed its own Ober and Cable with “remarkable faith and tenacity.”
employees back pay. (Each of the partners contributed They also shared a strong work ethic and Midwestern
roots, a background that worked in their favor during
The first key issue the company faced was difficult times.
With no revenues in sight and the treasury bare,
failing to make quality sandpaper. They could 3M’s founders tried another approach in . If grind-
have given up and gone under. It’s incredible ing wheel manufacturers aren’t buying our corundum
that they persisted and looked beyond a short- to make their wheels, let’s make the wheels ourselves,
they reasoned. Deciding to become a manufacturer of
term vision of success. > Dick Lidstad retired vice
money to cover the payroll.) 3M had little success sell- pull all the things that need to come together
ing its stock to raise operating capital, and the company and it’s called ‘believing.’ Innovation boils down
was racing head-long for disaster. Only two investors to conceive it, believe it, achieve it. > Leon Royer
stepped forward—Edgar Ober, a St. Paul railroad man,
retired executive director, 3M Leadership Development Center,
and John Dwan, a Two Harbors lawyer and co-founder
of 3M, who had a reputation for smart investments. Human Resources, formerly a technical director
Acheson’s “carborundum”
was taking off on the East
Coast, especially with grind-
ing wheel manufacturers.
Searching for other options
to keep the company afloat, the
founders jettisoned the grinding
wheel idea a year later and chose
to focus on manufacturing sandpa-
per, another business they knew noth-
ing about. To get started, the company
needed about , to pay its debts
and finance a sandpaper plant. Who would
be the financial supporter this time? Ober
called his younger friend, Lucius Ordway,
co-owner of Crane and Ordway, a plumbing supply Ordway migrated to St. Paul, at age , after gradu-
firm in St. Paul and a man of means who liked to take ating from Brown University. He married into St. Paul
risks. Ordway invested , on the assurance that society, promoted new business development in the
he wouldn’t need to be involved in the day-to-day city, sailed the waters of White Bear Lake as his yacht
affairs of 3M. club’s first commodore, and pursued his own company’s
growth. By the time Ober appealed to his friend for of New York and both mines were dominated by larger
an investment in 3M, Ordway was already worth nearly sandpaper manufacturers.
million. 3M had no domestic source of raw materials, no
After Ordway had invested ,, the founders ready cash and no product. This might have been a logi-
came back for more money. Within two years, Ordway cal time to admit defeat. Instead, the company moved
had invested , in the fledgling enterprise. Even to Duluth in and found a source of Spanish garnet.
though sales had begun to pick up, 3M still needed It received its first shipment in .
more cash. Breaking his own rules about daily involve- At just about the same time, 3M’s first and only
ment, Ordway became 3M’s president and personally “angel,” Ordway, introduced the concept of patient
approved every purchase and every check issued. In money—a term that is still used today at 3M to repre-
the back of his mind, Ordway considered getting out, sent long-term investment in an idea, technology or
but he couldn’t think of anyone else who was a likely
prospect to buy his majority share of 3M.
If you look at 3M technologies and the strongest
A survival spirit dominated the little company and,
thankfully, a modicum of good sense. Even though programs we have today, they’ve been long-
there was talk of large copper deposits at Carlton Peak term. It’s not the money that’s patient, it’s the
in northern Minnesota, Ordway argued that 3M could
people supporting the new idea that are patient.
go broke using all its resources trying to find the pre-
> Leon Royer
cious metal. Ordway also refused to engage in price
fixing when two other abrasives companies suggested
to 3M in that life would be ever so much better product that shows promise, even when others argue
if all three just “cooperated on prices.” otherwise. The angel in Ordway resurfaced again in
when he acquired property to move 3M from
> Perseverance and a Spirit of Survival Duluth to St. Paul. The first step was construction of
About that time, 3M’s partners learned that their Crystal a new sandpaper plant. It was a big gamble, given 3M’s
Bay corundum wasn’t corundum at all, but a low-grade ragged history. In fact, McKnight said years later that
anorthosite that was useless for abrasive work. If the without Ordway’s investment of patient money, 3M
company was going to make sandpaper, it needed a would have disappeared before .
source of garnet and only two deposits existed in the The company seemed star-crossed. First, a worthless
United States. Both were in the Adirondack Mountains mineral, then virtually no sales, poor product quality
4 5 4 Workers taking a
break during construction
of 3M’s original St. Paul
building. 5 Harriet
(Hattie) Swailes, 3M’s
first female employee,
began as a “general
office girl” in 1903. Later
she transferred to
St. Paul as secretary
to McKnight and retired
in 1923.
6 Chapter 1
Background:
Imperial Wetordry sandpaper
and formidable competition. All the founders had to “Much to my surprise,” McKnight recalled
keep them going was perseverance, a spirit of survival years later, “Mr. Ober appointed me sales
and optimism. What would happen next? It was the manager to succeed Mr. Pearce and to fall heir
equivalent of the sky falling, only at ground level. 3M to his troubles.” McKnight knew nothing about
built its new plant, a two-story, -foot by -foot sales or quality assurance, but he experienced
a dimension of 3M’s young culture that has
become a key strength for years. It was to
The founders had unshakable faith in the future
provide promising people with new opportuni-
of 3M. Even though they almost went bankrupt, ties, support them and give them time to learn
they kept pouring money in. You succeed if you and thrive. That is precisely what happened. When
McKnight proved he could take initiative, be cre-
have faith. > Walter Meyers retired vice president, Marketing
ative and produce, Ober promoted him to general
manager in, ahead of two men who were older
structure with a basement. It wasn’t the best construction, and more experienced.
but it was all the budget allowed. When raw materials
arrived from Duluth and were stacked on the first floor,
one Saturday, the weight tested the timbers—and the 3M recognized the importance of quality
timbers lost. The floor of the new plant collapsed and assurance and technology excellence sooner
every carton, bag and container landed in a heap in the than most companies. The builders of 3M
basement.
With the plant finally restored, 3M faced quality knew that if their company was to be a leader,
problems. The company had sales of , in , they had to identify and solve problems.
but disgruntled customers were sending its inferior > Ken Schoen retired executive vice president,
sandpaper back. To make matters worse, 3M had no
Information and Imaging Technologies Sector
lab or technical expertise to figure out what was wrong
with its sandpaper or how to fix it. 3M’s naturally ambi-
tious sales manager, John Pearce, grew dispirited and
quit. For a solution, Ober turned to 3M’s young office
manager.
1 Letter to 3M
Secretary John Dwan
from an early stock-
holder, 1910.
Lou Weyand Walter Meyers erals to make abrasives for sand-
It was McKnight who went straight to customers’ Retracing the route of the Spanish garnet shipment,
factories to find out why 3M’s sandpaper was failing. 3M discovered that its sacks of garnet had crossed
And, it was McKnight who told Ober—with all due a stormy Atlantic Ocean with an olive oil shipment.
respect—3M would never succeed unless its general When the ship pitched and rolled, a couple of casks
manager supervised both sales and manufacturing. broke and oil soaked into the garnet bound for St. Paul.
The one-two punch in and that hit 3M 3M was left with tons of oily garnet and a
might have been the end of this start-up story, but once pack of angry customers. Fortunately, Orson Hull, 3M’s
again, perseverance prevailed. Once the plant was resourceful and determined factory superintendent,
restored, McKnight dealt with what he called “an finally found a solution after many experiments. He
epidemic of complaints” that spread like a nasty virus “cooked” the garnet and roasted the oil away. That
incident led to 3M’s first quality program. But, regaining
‘We want you to inspect everything,’ Mr. McKnight the trust of customers would take much longer and that
task fell to a young up-and-comer, Archibald Bush.
told me. He outlined what he wanted me to do
Like McKnight, Bush was raised on a Midwestern
and I said, ‘I don’t know how long it’s going to farm, paid his way through business school in Duluth,
take.’ He said, ‘All your life if you like; we’ve got then joined 3M as a bookkeeper. But, the extroverted,
ambitious and energetic Bush seemed far better suited
to get a good product.’ > Bill Vievering 3M’s first quality
to sales. It was Bush who is credited with building a
assurance employee and a Carlton Society member
strong sales culture at 3M in the company’s early years.
He later held leadership positions on 3M’s Executive
among customers and “what little reputation we had . . . Committee.
was badly impaired.” In the daily mail, every complaint The second punch in the one-two punch came on
was the same . . . pieces of bare, rumpled sandpaper. the heels of 3M’s first real success. When the large and
Quite simply, the crushed garnet fell off when the cus- established Carborundum Company of Niagara Falls,
tomers tried to use 3M’s product. New York, introduced a cloth coated with an artificial
After weeks of frantic study, a worker noticed some abrasive as a substitute for emery cloth used in the auto
crushed garnet left from manufacturing that had been industry, scrappy little 3M responded in kind. “We very
tossed in a water pail. The water’s surface was oily. quickly made arrangements to obtain a competing arti-
If the garnet had been contaminated with oil, it would ficial mineral produced by the Norton Company of
resist glue and never stick to the sandpaper backing. Worcester, Massachusetts, and we made ‘Three-M-ite
Background: 3M aluminum
oxide sandpaper
E ven though he started his McKnight knew risk was nec-
1 Record of early 2
dividends paid out on
December 18, 1916.
2 Early view of sand-
paper production.
Before machinery like
this, sandpaper had to
be coated by hand.
Early Struggles Plant the Seeds of Innovation 11
young company about the importance of patents, a phi- and John Dwan gathered to share the good news, Ober
losophy that endures today. was jubilant: “Gentlemen,” he said, “this is the day
Thanks to Three-M-ite cloth and a boost in business we’ve been waiting for. Some of us wondered if it
from World War I, 3M finally posted substantial profits would ever come. We’re out of debt and the future looks
and declared its first dividend of cents per share in good. Business has more than doubled in the past two
the last quarter of . The dividend totaled , years; and, for the first time, we’ll have enough left after
on , shares outstanding. When Edgar Ober, expenses to pay a dividend . . . There are a lot of people
William McKnight, Samuel Ordway (son of Lucius) who thought we’d never make it.”
time-tested truths
● “Patient money” and patient people help the big ideas germinate.
● Ask your customers what quality is—then never let the standard slip.
● Give good people opportunities, support them and watch them thrive.
Lab lessons
2
3M Innovation—
A‘Tolerance for Tinkerers’
In the same year a baseball game was broadcast on U.S.
radio for the first time and French scientists developed a
vaccine to combat tuberculosis, 3M welcomed three men
who turned the company into an innovation powerhouse
that would attract admiration—and analysis—for years
to come. ● The year was . The early architects
of innovation were Richard Carlton, Dick Drew and
Francis Okie. Looking back, observers might call this
one of the most “harmonic convergences” in the
annals of business.
14 Chapter 2
With his company in the black and annual sales wrote to McKnight asking for samples of every sand-
exceeding million, President William McKnight knew paper grit size 3M made, McKnight responded. Okie
it was time to hire a strong technical person to lead and was a young printing ink manufacturer who had an idea
coordinate 3M’s research, manufacturing and engineer- far removed from his own business. 3M didn’t sell bulk
ing activities. Carlton was an affable, quick, -year-old materials to anyone, but McKnight was curious about
engineering graduate from the University of Minnesota Okie’s unusual request typed on sky blue stationery.
McKnight dispatched his East Coast sales manager,
Robert Skillman, to check out Okie. Sitting at a worn
We’ve made a lot of mistakes. And we’ve
oak desk (that Okie used to test his sandpaper), he told
been very lucky at times. Some of our products Skillman he hadn’t planned to share his idea with any-
are things you might say we’ve just stumbled one, but he had been unable to find a reliable supply of
on. But, you can’t stumble if you’re not in motion.
> Richard Carlton quoted in “The 3M Way to Innovation:
Okie created quite a stir among the workers,
Balancing People and Profit,” Kodansha International Ltd., 2000
for he was the first live inventor they had
ever met. Like William McKnight, he was quiet,
with experience in drafting and electrical contracting. soft-spoken and unaffected. But he said he
The only trouble was that McKnight could pay Carlton
hated ‘to be confined to the specific.’
only a month—less than one-third of what he was
already making. No problem, the ambitious Carlton > Mildred Houghton Comfort author, “William L. McKnight,
2
16 Chapter 2
adhesive—softened by lacquer solvent—remained on facturing and sales objectives. Looking back, he was
the car’s surface. Profanity peppered the air. a visionary when he wrote in a manual he published
Not knowing how he would do it, the irrepressible in :
Drew promised he could produce a better, nondrying ● The time to get closest control of your product is
adhesive tape and solve their sticky problems—even during your manufacturing process. What you do after
though, after weeks of experimentation, McKnight this is just history, except in isolated cases.
ordered him to quit his work and get back to improving ● There is no room for a thin-skinned man in this
Okie’s Wetordry sandpaper. Drew’s “contraband” Scotch organization. Carelessness cannot exist. The future
masking tape debuted two years later in 1925. is in building even more exacting requirements so
refinements on machinery can be designed to meet
> The ‘Dream Team’ the demand.
The trio that joined 3M in shared characteristics ● The technical phase has passed from the laboratory
that set the tone for 3M’s innovative climate. Carlton to the production department. A free exchange of data
was an optimist, go-getter, calculated risk-taker and and ideas, we hope, will always be our policy and creed.
a leader. Drew shared Carlton’s optimism. He was also ● The laboratory of the modern industrial plant must
unconventional, innately curious, a rule-breaker and have something more than the men and equipment to
a leader who had his own distinctive style. Okie was do control work. It must be a two-fisted department
the consummate inventor: open to new ideas, resisting generating and testing ideas. This work, dressed in its
limits, probing the impossible. He might have been a best Sunday clothes, is termed “research.”
misfit in a more traditional organization, but at 3M, ● No plant can rest on its laurels—either it develops
2. If it is not good, we will have purchased our insur- every dollar invested in research and development
ance and peace of mind when we have proved it imprac- (R&D) from to the early s had a strong
tical. Research in business pays. “multiplier effect.” Each dollar invested returned
in gross sales. Even so, Carlton said, there were broader
research horizons to explore. What about pure research
During the dark days of the Depression, when
that focused on products not even imagined yet?
money was almost nonexistent, Carlton fought Thanks to Carlton’s sponsorship, 3M created its first
tooth and nail to keep the laboratories in Central Research Laboratory in with a twofold
existence and to keep the people from being purpose: to supplement activities of 3M’s division labs
that worked on product refinements and to explore inde-
hurt. I have never known a man more kind, pendent, long-range scientific problems beyond the ken
more considerate, more companionable or of any division. The Carlton Society, which even today
more inspirational than him. > Clarence Sampair recognizes 3M technical employees for career achieve-
ments, is named after Richard Carlton.
retired president, International Division
3
18 Chapter 2
Say What? of sales. “It was one of the most important decisions
ever made,” said Ray Richelsen, retired executive vice
Almost 50 years after 3M’s founding, Bob Adams, president, Transportation, Graphics and Safety Markets.
then senior vice president, Research and Develop- “Every business we’re in today is based on having
ment, and Les Krogh hosted two University of Illinois invented something new to the world and taking that
professors at 3M. One guest was John Bardeen, co- invention to customers around the world. 3M has spent
inventor of the transistor and 1956 Nobel Prize winner. a lot of time, money and effort to create a culture of
After the visiting professors gave technical presenta- invention.”
tions at 3M, they piled into Krogh’s van to head for a
local golf course.
> Among Cinders . . . Creativity
“We were driving down 35E in St. Paul and passed
The first Central Research Laboratory location was
the Benz Building,” Krogh, who later became senior
hardly conducive to creativity—it was located below
vice president, Research and Development, recalled.
“I pointed at it and said, quite proudly, ‘That’s where
an adhesive maker in Building #, in space that Les
Central Research got its start.’ ” Krogh, retired senior vice president, Research and
The car was silent. From the seat beside Krogh Development, called “too bad to describe.” Before long,
came a hesitant question, “You don’t use the building however, Central Research moved to the Benz Building
any more do you?” Bardeen asked. on Grove Street in St. Paul.
Beauty is in the eyes of the beholder. “I was
proud of the Benz Building heritage,” said Krogh, Annual investment in R&D in good years—
“and all they saw was an old, run-down factory
and bad—is a cornerstone of the company.
building. The fact is, we were still doing experiments
through the 1990s.” The consistency in the bad years is especially
important. > David Powell vice president, Marketing
every morning was to dust cinders off your desk before bered Carlton calling his lab staff the “shock troops,”
starting work. With no air conditioning, it was hot. One after the members of a university football team who
day, I remember a reading of degrees Fahrenheit played the role of the team’s next opponent and bumped
in the building. It was hard to conduct experiments.” heads with the first string players. “Dick’s idea was to
Even 3M technical directors might be spotted visit- have a group of us handle the dicey problems that 3M’s
ing the lab in their sandals, shorts and short-sleeved product labs didn’t have time for,” Hendricks said.
shirts. In spite of the heat and grit, however, Krogh said,
it was one of the most productive labs he’d ever seen
Thomas Edison believed that a small group of
in his long career. “A plaque at the entrance names the
discoveries that led to major products,” said Krogh, people with varied backgrounds could be the
“including magnetic tape, printing products, modern most inventive. That’s what I found when I joined
pressure-sensitive adhesives, acrylate adhesives (provid-
Central Research. I could talk to an analytical
ing the basis for medical tapes), Thermo-Fax copying,
chemist, a physicist, people working in biology and
3M has a tolerance for tinkerers and a pattern organic chemistry—people in all the sciences.
of experimentation that led to our broadly based, They were all within 50 yards. > Spencer Silver
2
W illiam McKnight’s desire
First You Find a Flower Pot . . .
for diversi cation some-
times led to surprising results
and a motherlode of innovative
thinking. About the time the
United States stock market
crashed in 1929, McKnight
learned that 3M’s only Midwest 2
roo ng gran ules and causing the Drew was an early icon for bootlegging. Krogh and
asphalt underneath to lose its adhe- others agreed that Drew’s response to McKnight led
sive properties. How would they solve to what is known today as the percent rule at 3M.
the problem? Make the granules Regardless of their assignment, 3M technical employees
more opaque to let in less light?
Would they have to nd a ne w mate-
Entrepreneurship, in my definition, is a spirit—
rial altogether?
Meanwhile, consumers were a quality—that believes so strongly in an idea
asking for blue roofs—a color 3M that it risks the security of the present for the
didn’t offer. Richard Carlton inspired
the team when their spirits waned. reward of the future. > Gordon Engdahl
in a staff meeting and someone asked, ‘I have a new > Incubating the ‘Birth Rate’
idea that could be useful to 3M, but it’s not related to Innovation isn’t complete until an idea explored in the
the business I’m working in right now. Am I allowed to laboratory is transformed into a product—and that prod-
work on it?’ The vice president of Research and Devel- uct goes to market. 3M’s most successful stories revolve
opment answered, ‘The facilities we have here—the lab around innovative products that solved problems and
and all the equipment—are for you to use. If you want met customer needs. In the best cases, these products
to work on those programs on your own time, you’re changed the basis of competition by introducing a never-
welcome to do it.’ ” before-seen idea to the marketplace. But, that wasn’t
happening fast enough to satisfy McKnight in .
The 15 percent rule is unique to 3M. Most One Saturday morning, McKnight analyzed the “birth
of the inventions that 3M depends upon today rate” of 3M products. He ticked them off: Wetordry
came out of that kind of individual initiative . . . waterproof sandpaper in , Scotch masking tape
in , Scotch transparent tape in , Colorquartz
You don’t make a difference by just following roofing granules in and rubber cement in .
orders. > Bill Coyne retired senior vice president, Then there was a six-year dry spell. Although Scotchlite
Research and Development reflective sheeting was created in , the rewards of
that new product had not yet been recognized.
During his years as senior vice president, Research “While these dates are only approximate and are
and Development, Krogh said the percent rule was really predicated on when the product commenced to
often greeted with skepticism by technical people from yield some profit, it indicates rather a long period of
other large companies. “They couldn’t understand how hunger . . . nothing appears to have been developed
we could allow people percent of their time to do since the rubber cement birthday,” McKnight wrote
what they wanted and still meet important deadlines. Carlton. He urged Carlton to push some of the ideas in
It was inconceivable that we would permit so much development stage to marketable products generating
freedom,” said Krogh. “Here was my answer. If 3Mers revenue or “to move on to other fields.”
have to get something done, they’ll do it. They’ll take In his memo to Carlton, McKnight said, “I do not
their percent on Saturdays or Sundays, if think there is anything we can do about it immedi-
need be. The percent philosophy flies in ately.” In spite of his own comments, later that same
the face of standard management ideas day, McKnight took action. After thinking about
about control.” the innovation dilemma and talking with
Carlton and others, McKnight created 3M’s first New Everything I Learned in
Products Department that Saturday afternoon. In a
second memo dated October , , McKnight
a Lab, I Learned From . . .
described his plan.
Much of what Paul E. Hansen, who retired as technical
“3M is spending a substantial and an increasing director, Nonwoven Technical Center, learned about
amount on research every year,” McKnight said. “It’s working successfully in a lab, he learned from Dick
time to create a department to cooperate with all inter- Drew. They are timeless lessons:
ested parties in studying the commercial value of each ● Anything worth doing is worth doing before it
research project upon which money is being spent.” is perfected. Don’t wait to try to do everything exactly
The goal was to recommend to management whether on your r st attempts in an experiment. If you knew
or not work should continue on a project. McKnight how to “do it right the r st time,” you would, but in
gave Joe Duke, who later retired as executive vice presi- most r st attempts, you don’t.
dent, Sales Administration, the responsibility of leading ● Be a jack of all trades and a master of one. It is
the effort. He told Duke to keep him informed on all good to know how to do a lot of things but also good
to be an authority in a speci c area.
new development work in research at 3M; learn about
● Put things in a nutshell. It is good to take a
the large new markets with product needs; conduct mar-
broader approach to things and look for a simple
ket surveys to identify the potential size and profitability
de nition of the task or pr oblem. Always update these
of a market; supervise product quality; design a sales objectives because the task can constantly evolve.
and distribution network; and—most importantly— ● It is easier to ask forgiveness than permission.
decide which research projects lived or died. With a sincere attitude toward one’s work, the chances
Duke was a s genius. He helped introduce of doing real damage or harm are small. Consequences
Wetordry sandpaper to the automotive industry; from bad calls, in the long run, do not outweigh the
time waiting to get everyone’s blessing.
● If you can do the task today, don’t wait for tomor-
row. A quick and marginally successful experiment
will fuel thought that evening for your next attempt.
● Keep the ball in the other person’s court. With
everyone doing their job responsibly and promptly,
tasks stay current and fresh and move quickly to
an end.
● Don’t keep blinders on all the time. It’s good to
have de ned goals, but don’t get so engrossed that
you miss other opportunities that may spawn from
your efforts.
2 ● Most people aren’t stubborn enough. Too many
people quit easily at the r st sign of failure.
● The reward for persistence is internal. The person
who is persistent and eventually succeeds is usually
only recognized for accomplishing the feat. Seldom
does anyone appreciate all that went into making the
success a reality.
● Follow your instincts.Your instincts are actually
your total experience in practice.
24 Chapter 2
3M Goes to War
was sales manager of 3M’s entire Abrasives Division special kind of innovation
when McKnight tapped him to lead the New Products at 3M. When the war broke out,
Department. the company was making its
Scotch transparent tape using
To succeed, McKnight said, Duke “should be a
natural rubber adhesives. But,
free-lancer in our organization” and interact with sales,
the United States government
manufacturing, engineering and research. Anticipating
cut off the supply for commercial
the obvious, McKnight said that when “differences of applications in order to stockpile
opinion” became serious enough, the 3M management rubber for the war effort. “The big
group would have the final vote on a product’s future. push to develop substitutes for
Eight years later, the New Products Department became rubber that could make a reason-
a division and its most productive years continued able adhesive started,” said John
through . In about years, the division produced Pearson, retired vice president,
new business that represented percent of company Development, who created a new
sales and percent of 3M’s profits.
There was more than one way to identify and launch
new products and 3M still was learning. McKnight cre-
ated a second option in the early s. He was a good
judge of people and he noticed that young Drew—the
inventor of Scotch masking tape and the even-more-
popular Scotch cellophane tape—was stuck. Stalled.
Unhappy. “Here was Dick Drew at age , a successful
inventor. 3M was busy developing many more tapes,”
said Paul E. Hansen, retired technical director, Non-
woven Technical Center, and a member of the Carlton
Society. “However, Dick was not a happy fit in this
thriving business where his maverick, free-wheeling
style didn’t fit the company’s organized, technical 1
approach to product development and line extensions.”
Seeing this, McKnight took Drew aside, encouraged
him to hire a few co-workers and return to his greatest in 3M. Drew saw something in them—something valu-
strength: inventing. able and creative.
Drew started the Products Fabrication Laboratory, “I was lucky enough to get hired in into Drew’s
known as the Pro-Fab Lab, a group that— years lab,” said Hansen. “We were in an old dairy building
later—has garnered admiration that far exceeds its own on Seventh Street in downtown St. Paul, away from
tenure as a lab. In many ways, the Pro-Fab Lab of the 3M headquarters. Dick created an environment where
s was a precursor to 3M’s Technical Centers today. people were always encouraged. He had passion but
also was easy going. He was a great mentor but proba-
bly not a strong manager. He created a greenhouse
Dick Drew took a bunch of misfits—people who
environment—a skunkworks—where we could do any-
wouldn’t fly in formation—and he put together thing, try anything. When you’re an oddball in a per-
a lab that created technologies that account missive environment, very often things turn out well.”
for 20 percent of 3M’s sales in 2000. > Art Fry
Four of us were the original inhabitants of the
retired corporate scientist, Office Supplies Division
Pro-Fab Lab—Al Boese, Ralph Oase, Warren
Because the tape business was thriving in the s, Hurd and me. I could purchase stuff and build
Drew’s Pro-Fab Lab focused on creating better backings things, and the engineering department agreed
and coating processes. During its -year lifetime, the to a hands-off policy. There was complete free-
lab was known for product breakthroughs that led to
dom to build and do. > John Pearson retired vice
Scotchlite reflective sheeting, Micropore surgical tape,
foam tape, decorative ribbon, face masks and respira- president, Development, and Carlton Society member
1 1 Hulda Meissner
performed tests in the
Pro-Fab lab, which
was known for product
breakthroughs.
3M Innovation—A ‘Tolerance for Tinkerers’ 27
his lab team to freely follow their instincts. Dick much education risked making people too rigid and
encouraged people to be themselves. He’d say, ‘Hey, reduced their ability to “think outside the box.”
your idea’s as good as anybody else’s.’ When people Some members of senior management made jokes
can be themselves, they use their gifts and talents to about the Pro-Fab Lab, on occasion calling it the “funny
the fullest.” farm.” Although that lab was the target of humor, it
Drew advocated the power of serendipity, said attracted considerable resources and some of the most
Hunder. “He called it the gift of finding something creative people in 3M’s early years. Drew never seemed
valuable in something not even sought out.” to have trouble funding projects, said Hunder. It helped
Hunder said Drew’s highest priority was new prod- to have a champion in McKnight.
ucts. In fact, he never gave up trying to find a replace- More than years after 3M created its first Central
ment for cellophane tape, his own creation. Drew liked Research Lab and the legendary Pro-Fab Lab, innova-
people who were good with their hands, as well as tion is still the hallmark. In , 3M was issued
their heads. He was leery of too many college degrees, patents and filed for more. It invested . billion
although he hired people with extensive technical train- in property, plants and equipment. To target even greater
ing. “What I really want is a creative person,” Hunder returns on 3M’s investment in research and develop-
recalled Drew saying. “You can always hire a Ph.D. to ment, the company sharpened its focus on growth areas
take care of the details.” Drew was concerned that too that had the greatest return for investors.
time-tested truths
lab in St. Paul during the s. The environment Systems Division. It produces products as diverse as
was unmistakable. “I discovered that the technologies repositionable systems for Post-it notes to high-perform-
belonged to the company not the business units,” ance tapes that replace rivets, bolts and screws on air-
Bailey said. Rather than protecting what they knew, planes, cars and trucks. In late 2001, he was named staff
3M employees shared knowledge. “I saw openness vice president, International Technical Operations.
and a spirit of immense cooperation that helped people
get things done,” he said. “I soon learned that the most > An Electric Atmosphere
successful people at 3M were good at getting out of When he looks back on his years at 3M, Moe
their offices, meeting people, interacting and knowing Nozari, executive vice president, Consumer and Office
where to find the expertise they needed.” Markets, said he will remember most and miss the
The young engineer also learned the difference innovators that he met—particularly those he encoun-
between invention and innovation. “Invention isn’t inno- tered during his first week in Central Research, Building
vation until you’ve delivered something to the market- . There was Cliff Jewett, inventor of the pre-sensi-
place,” said Bailey. “The engine that drives innovation tized printing plate. “The last guy before Cliff who
is technology, but understanding what people need and brought significant innovation to the printing industry
delivering the right product at the right price is equally was Guttenberg,” Nozari said with a laugh. “There I
important.” was, at years old, meeting him and shaking hands.
Next, a guy across the hall walked into my lab and said,
> Tell Your Story ‘You know, I’ve just made this adhesive. Look how
Although he held an advanced degree in chemistry, interesting it is. It sticks to paper, but I can lift it off and
Manley Johnston didn’t want to put down roots in an it doesn’t tear the paper.’ His name was Spence Silver,
isolated lab. He wanted to be close to the marketplace. and he was showing me the adhesive that made Post-it
“3M was diverse and entrepreneurial,” said Johnston, notes. Spence and colleague, Bob Olivera, took that
who joined the company right out of college, in . “I adhesive to the Commercial Tape Division and the rest,
wanted to work on things that would be commercialized as they say, is history.”
quickly. I was drawn to the business side of innovation. Nozari met Harry Heltzer, then chairman and
I learned that if you have a good story to tell in this com- CEO of 3M, and discovered that Heltzer had invented
pany—and if you have the guts to tell it—people will lis- reflective sheeting. Next, Nozari was introduced to
ten and support you.” After years in 3M labs around Ray Herzog, then president of 3M, who championed
the world, Johnston became technical director, Bonding office copying products, an innovation that produced
tracks, and Tartan Turf surfacing material designed for a responsibility to foster.” Among many accomplish-
ments, Mitra invented light-cure glass ionomer tech-
stadiums. “I went to my boss, George Allen, who later
nology, which is considered one of the signi cant
retired as senior vice president, Research and Develop-
breakthroughs in dental materials. When she is asked—
ment, and said, ‘I’ve finished this. What do I do now.’
as she often is—how to make a mark at 3M in the tech-
His answer was, ‘No, you’re not finished. Now you nical area, Mitra’s answer is pragmatic. “I tell my
go to every division in this company and show them younger peers that they must meet two criteria: there
what you’ve done and work with them to incorporate must be a market need, whether articulated or unartic-
your invention into their product lines.’ That was the ulated, and there must be a feasible technical pathway
best professional growth opportunity for me, because for getting there. That’s when things come together.”
I learned about the company and the wide range of While there is no formal mentoring program, Mitra,
skills and responsibilities that 3M people have.” who has approximately 30 patents to her name, is fre-
quently asked to advise younger scientists and intro-
> We Can Be Anything We Want To Be duce them to the 3M culture.
Cheryl Moore, 3M corporate scientist, Specialty
Paul Guehler was when he joined 3M as a senior
Materials Manufacturing Division, and Carlton Society
chemist in Central Research. “They told us to identify,
member, started her career at 3M as a technician
develop and commercialize new products. Every new
and took advantage of 3M’s Tuition Refund Program,
product had to have a percent operating income
earning her chemistry degree in her off-hours. Her
with specific growth targets. There was an attitude of development and application of acrylate pressure-
‘just do it, seize the opportunity.’ It was a way of life. sensitive adhesive technology led to new products
The administrative systems existed to support the work. that generated nearly $1 billion in sales for 3M. “I had
There was a will to grow—and to succeed.” a chance to work with technical giants, and my men-
tor, Francis Brown, still comes into our lab,” Moore
said. “I’d be lost without people like Fran, because
he has so many years of experience and knowledge
that aren’t recorded. Fran and other 3M ‘veterans’ are
also willing to say, ‘Give it a try; what have you got
2
to lose?’ ” Like Brown, Moore has become an informal
mentor to three scientists. “They want feedback and
they’re eager to learn about what happened in the past,”
said Moore. “Sometimes they want to know if they
should take a risk and how to go about it. Mentoring
our newest recruits is very important to 3M’s future.”
32 Chapter 3
Thirty-five years later, in , when Guehler suc- development efforts annually with up to seven cents
ceeded Bill Coyne as senior vice president, Research of every sales dollar.
and Development, his belief was unchanged. “We’ll Many have wondered how 3M could create and
continue to emphasize new technologies, new products sustain a culture of innovation, especially as the
and—especially—our ability to use them to build new company grew and reached global proportions. Some
businesses,” Guehler said. “I want to make sure that our observers have said that size—and its inevitable, creeping
technologies are converted into commercialized prod- bureaucracy—stifles creativity and innovation. Others
ucts.” And, in the characteristic “can-do” spirit of a man heartily disagree by pointing out that 3M’s magnitude
who made his career at 3M, he added, “We can be any- and considerable resources—human, financial and tech-
thing we want to be.” nological—actually make the company better equipped
to innovate more and faster.
> Walking the Innovation ‘High Wire’ People who know the company best point to four
When asked to describe his company in one sentence, key ingredients that foster a culture of innovation at
Coyne was succinct. In a book titled “Innovation: 3M: attracting and retaining imaginative and productive
Breakthrough Thinking at 3M, DuPont, GE, Pfizer and people; creating a challenging environment; designing
Rubbermaid,” Coyne said, “At 3M, we live by our wits. an organization that doesn’t get in people’s way; and
Innovation may be an important element of other corpo- offering rewards that nourish both self-esteem and per-
rate strategies; but for us, innovation is our strategy.” sonal bank accounts.
For decades, Coyne said, 3M has been balancing on
“the innovation high wire” and funding research and > A Forum for Honesty and Thorny Problems
Innovation has thrived at 3M because people talk. They
When I joined 3M in 1962 as an organic strike up lively conversations in hallways, cafeterias
and labs. They talk across departments and divisions.
chemist, some of us called 3M ‘the big red
They meet to share ideas in brainstorming sessions and
sandbox.’ Product innovation is our magic and forums. While more traditional organizations have kept
our soul. Today, 3M is the best and biggest researchers and engineers within their own areas or
divisions, where their loyalties were strongest, 3M has
sandbox to play in. > Leon Royer retired executive
instead fostered a strong sense of attachment to the
director, Leadership Development Center, formerly technical director,
company as a whole. The “granddaddy” of that concept
Commercial Office Supply Division was the Technical Forum, which had its start in —
1
3M Innovation: How It Flourished 33
the same year that the company formed the International technologies. In , it was combined with the Engi-
Division. While the latter merited a press conference, neering Information Exchange and is now known as the
the Tech Forum’s birth was quiet and just people were Technical Information Exchange.
at the inaugural meeting. The Tech Forum sponsored specialty subgroups or
“chapters.” Each of these chapters focuses on a scientific
discipline, such as polymer chemistry or coating pro-
We share ideas at their earliest stages, before
cesses. Scientists in each discipline gather to compare
we have an idea of a product. We talk about notes and share their technical expertise and prowess.
our problems, our failures. That takes a lot of “Think of the power of that concept,” said Marlyce
courage and trust. > Art Fry retired corporate scientist,
Office Supplies Division The forum built morale and respect among
colleagues. It got people talking—young with
Tech Forum’s first chair, James Hendricks, retired senior, basic scientist with applied technologist,
manager, Tape Research, a tall man with a professorial
experienced or famous with people new to the
style, invited every technical person at 3M— in all—
to join the forum. An organization in which participation company. Pride in being a 3M technical person
was purely voluntary, its original goals were to foster often began right there. > Roger Evans retired
idea sharing, discussion and inquiry among members of
research scientist
the 3M technical community, while educating technical
employees. To accomplish that, the Tech Forum brought
in Nobel Laureates and other luminaries to address the Paulson, now retired, who coordinated Tech Forum
group. The Tech Forum sponsored problem-solving activities from to . “3M has lots of polymer
sessions at which businesses presented their most recent chemists. They may be in tape; they may be in medical
technical nightmares with the hope that their colleagues or several other divisions. The forum pulls them from
would help them find answers. For innovators who had across 3M to share what they know. It is a simple but
newly issued patents in their name, the forum began the amazingly effective way to bring like minds together.”
annual Inventor Recognition Program. Illustrating its forward-thinking nature, the Tech
The forum also launched an annual event at which Forum sponsored a meeting to review the “computing
each 3M division put up a booth to show off its latest machines” at the University of Minnesota in . It
was followed by a series of lectures on the industrial math. To enrich 3M’s relationships with the schools,
uses of computers. Two years later, believing that sci- the forum began a 3M Visiting Wizards program in
ence education in the schools was crucial, the forum to the “oohs” and “ahs” of children. 3M volunteers visit
sponsored its first science fair for Minnesota high elementary schools and perform eye-popping science
school students. By , the Tech Forum had its first demonstrations that rival magic tricks—another way to
inspire the next generation of innovators.
By , 3M’s Tech Forum had grown to ,
The forum has not been bound by any set of
members in eight U.S. locations and countries.
rules but has been allowed to develop naturally.
> James Hendricks retired manager, Tape Research, and > The Rule That Isn’t
The Percent Rule, inspired by 3M inventor Dick
first chair, 3M Technology Forum
Drew decades earlier in 3M’s life, lost none of its power
as the company matured. In fact, the stories told and
female chair. Julianne Prager, who retired as executive re-told inside 3M have “institutionalized” this so-called
director, Corporate Technical Planning, was then a rule. It encourages technical people to devote percent
member of the Central Research technical staff. In an of their time to projects of their own choosing.
effort to encourage young women to pursue careers
in science and technology, the Tech Forum started its The beauty of 3M’s 15 percent rule is that
Visiting Technical Women program in St. Paul area
it’s not a rule at all: it’s permission. Most big
schools during the s.
During that same decade, recognizing the significant businesses are run like grade schools. 3M
global reach of 3M, the Tech Forum “cloned itself,” is college. > Dale Dauten newspaper columnist, nationally
establishing Tech Forums in Harlow, England, and
syndicated Corporate Curmudgeon
St. Marys, Australia. More Tech Forum outreach con-
tinued in the s: Teachers Working in Science and
Technology (TWIST) introduced teachers to science > A Wild Idea With No Home
in industry through summer internships, and STEP Ted “Flipper” Buchholtz, retired research scientist,
(Science Training Encouragement Program) combined never saw himself as an inventor. He just liked to do
education and work experience to give a boost to a diverse things that no one else had done. He resisted reading
group of high school students interested in science and instructions; he wanted to solve puzzles on his own.
heat and cold. McKnight told Buchholtz he was the one > ‘Give Me a Problem to Solve’
to sell the new product to the 3M Board of Directors. Roman Schoenherr, retired corporate engineer, was a
“ ‘Ted, it’s your project; if you don’t sell it, it’s going novice engineer in when he had his first brush with
to fail,’ he told me,” Buchholtz said. “I was scared.” innovation at the Decatur, Alabama, plant where poly-
In spite of that, the young researcher, who had never ester film backing was produced for Scotch magnetic
seen the inside of a corporate board room before, was tape. “The plant was producing film inches wide at
convincing enough to get , approved to pursue about pounds per hour and they needed to increase
product commercialization. output to , pounds an hour. Without changing the
Tartan Track and Tartan Turf synthetic surfaces were fundamental process, the production lines would have
the first in the world. Sports Illustrated magazine hailed to have been four times larger, a very costly proposition,”
the breakthrough in and virtually all the major Schoenherr said. He searched for an innovative manu-
horse racing tracks used Tartan Track surfacing material. facturing solution and found it using computer simula-
Tartan Turf surfacing material was used at a majority tions to test different ways to produce the film. “My job
of high school, college and professional sports arenas was to understand what was happening so we could
and stadiums. Tartan Track surfacing material was used design the proper size equipment to do the job.”
for the track and field events at the Olympic games held Retired Corporate Engineer Bob Vytlacil thought
in Mexico City in . Even with the introduction he had invented a better idea for slitting 3M tape prod-
of competing Astro Turf, 3M held its market lead. But, ucts during manufacturing in . “It started with a
when the company’s patents began to expire in the s, young engineer writing a letter,” Vytlacil said. “He knew
the days for Tartan Turf surfaces were numbered. “The what he wanted to accomplish, but he didn’t know what
market was saturated with our product,” Buchholtz said, the mechanism would look like.” A few months later,
“and there was little or no replacement business. The Vytlacil was cleaning his garage and ran across an old
surfacing material wasn’t like so many 3M products; it fishing reel. “I played with it for a few minutes, then I
wasn’t disposable. People didn’t use it up and buy more.” tossed it out,” he said. “That night, I was staring at the
Tartan surfacing materials were innovative, but their ceiling and the idea hit me between the eyes. That’s it!
market life was short. “It was a big let-down,” said “I didn’t have any money to pursue the idea, but
Buchholtz, “but then you grab yourself by your boot- Frank Vikingstad, then manager, Engineering, Science
straps and start a new project. And you get excited all and Technology lab, who later retired as staff vice presi-
over again. I was excited a lot in my career at 3M.” dent, Engineering, did. He told me I could use his little
lab machine shop and he gave me a couple bucks to
make the crudest prototype you ever saw,” Vytlacil we could save a lot of time and money if we slit the
said. “Next, I got permission to canvass the divisions tape as it was made.”
at 3M that I thought could use this new device, and Volin fashioned his first prototype using his child’s
I ended up raising , for my project. I called it Tinkertoys. “That just illustrated the idea, but it didn’t
CAMITE because those were the initials of the divisions confirm that the concept could work,” said Volin. “We
(Commercial Products, Abrasives, Medical, Industrial didn’t have a lot of lab space available in our engineer-
Minerals, Tape and Electrical Products) that chipped ing department, but I had what I needed at home. I was
in money. I built a better prototype with a hand crank, building a house and that’s where I also built the first
like the old fishing reel but larger, and I put together functioning prototype. My ‘lab’ was a couple of saw-
a little slide show.” horses in the hallway leading to the garage in my unfin-
By this time, Vytlacil’s work was becoming more ished house. When I needed a vacuum source, I used
visible inside 3M and, despite being told by his boss to my home shop vac.” Two years passed from the initial
turn his energies to other, more promising assignments idea to construction of the first production machine in
or “lose my job,” he persevered in classic 3M style. It . Volin’s invention—created with his percent
was about when Vytlacil got his big break at a time—had multiple patents.
gathering of specialist engineers. “I invited every vice Today, there are seven
president I could think of to come and see my prototype of these machines
and try it out personally,” Vytlacil said. “People really
liked it.” Later, at an engineering research meeting at
which Vytlacil was testing the waters in hopes of raising
, to see his project through, Joe Ramey, then
group vice president, Commercial Markets Group, now
retired, spoke up. “Joe said, ‘If this thing can do a lot of
good, then somebody should pick it up . . . and I will.’ ”
John Pearson, retired vice president, Development,
and a Carlton Society member, served as a mentor to
many young 3M engineers. He said Vytlacil had admir-
able staying power. “The development of that tape slit-
ter didn’t go like clockwork,” he said. “It was a very
difficult project.”
Ultimately, Vytlacil’s manufacturing
innovation was heralded as one of the most
significant in the company’s manufacturing
history.
used around the globe, and Volin reception wasn’t stellar. In other
estimates that each machine saves companies, this might have
the company about million been discouraging enough
annually. to scrap the idea, but Silver
For their innovative didn’t give up.
efforts, all three men, Five years after Silver’s initial
Schoenherr, Vytlacil and Volin, discovery, Art Fry was warming his
received the prestigious Engineering vocal chords while sitting in the choir
Achievement Award, the engi- loft at his church. Frustration rose with
neering equivalent of member-
ship in 3M’s Carlton Society.
At 3M we’re a bunch of ideas. We
> The Beginning never throw an idea away because
of a Blockbuster Idea
you never know when someone
Spencer Silver, retired corporate
else may need it. > Art Fry
scientist, Office Supplies Division,
was a senior scientist studying adhe-
sives in the Central Research lab in his scales as Fry turned to a hymn and
when he discovered an adhesive his scrap paper bookmark fell to the floor.
that didn’t act like any others. Instead “My mind began to wander during the
of forming a film, this adhesive turned sermon,” Fry confessed. “I thought about
into clear spheres that, according to Silver, Spence’s adhesive. If I could coat it on paper,
“kind of sparkled in the light.” Silver spent that would be just the ticket for a better bookmark.”
the next few years shopping his new adhesive Fry went to work the next day, ordered a sample
around 3M to find a product use for it, but the of the adhesive and began coating it on paper. He only
coated the edge of the paper so the part protruding from
his hymnal wouldn’t be sticky. “When I used these ‘book-
My discovery was a solution waiting for
marks’ to write messages to my boss, I came across the
a problem to solve. > Spencer Silver retired
heart of the idea. It wasn’t a bookmark at all, but a note,”
corporate scientist, Office Supplies Division said Fry. “Spence’s adhesive was most useful for making
paper adhere to paper and a whole lot of other surfaces. It would be years before the Post-it notes adhesive
Yet, it wasn’t so sticky that it would damage those sur- was perfected, prototypes created and the manufactur-
faces when it was pulled off. This was the insight. It was ing process developed. All the while, Fry busily handed
a whole new concept in pressure-sensitive adhesives. out product samples and Geoff Nicholson, then Fry’s
It was like moving from the outer ring of the target to technical director, made sure that secretaries of 3M sen-
the bull’s eye.” ior executives got them. Before long, their bosses were
borrowing the little yellow pads. Everyone who tried
We conducted a direct-mail program to the them wanted more.
In , with a host of product literature in tow,
secretaries of CEOs of Fortune 100 companies,
3M conducted market tests in four major cities. But,
and we got letters back from the likes of Lee consumers were lukewarm at best. Ramey was a new
Iacoca, Chrysler’s chairman and CEO, and the division vice president when Post-it notes tested so
CEO of Phillip Morris telling us how much they poorly. Seeing how many 3Mers truly believed in the
product, Ramey decided to figure out why the notes
loved our product [Post-it notes] and asking how
weren’t faring well. He and Nicholson traveled to a test
they could get more! > Jack Wilkins retired marketing market and met with people, only to discover that
director, Commercial Office Supplies Division advertising and brochures weren’t good enough. What
consumers really
Fry encountered serious technical problems very wanted was the prod-
early and his boss, Bob Molenda, encouraged him to uct itself. Sampling,
takes things one step at a time. First, there was the prob- however, was an
lem of getting the adhesive to stay in place on the note
instead of transferring to other surfaces. And, although
3M was known for its coating expertise, the com-
pany didn’t have coating equipment that could be
precise on an imprecise backing such as paper.
It was difficult to maintain a consistent range
of adhesion. “All of these things bothered
our production people,” Fry said, “but I was
delighted by the problems. If there is any-
thing that 3M loves, it’s to create a product
that is easy for the customer to use but
hard for competitors to make.” Fry used
his percent time to find manu-
facturing and technical solu-
tions over about months,
and Molenda helped
Fry find the time
and money to
dedicate to his
pet project.
2
40 Chapter 3
expensive proposition—especially for a product with ucts that quickly increased sales. Lehr championed
a questionable future. Ramey bypassed the traditional aggressive “stretch goals” for the company at the start
approval channels and went straight to Chairman of of the new decade and employees delivered. Five years
the Board and CEO Lew Lehr to fund the Post-it note earlier, in , 3M had inaugurated Challenge ’,
sampling. a program aimed at achieving percent of all sales
In , 3Mers descended on Boise, Idaho, with from products less than five years on the market. By
samples for what would later be called the “Boise Blitz.” the s, that stretch goal was raised to percent
The town was a perfect venue—not too big, not too and the total years reduced to less than four.
small and remote enough to truly be able to measure Lehr also created a -member Innovation Task
results accurately. Sample upon sample were handed Force led by Gary Pint, now retired group vice presi-
out, and 3M discovered that more than percent of the dent, Electrical Products Group, to take a candid look
people who tried them would buy them. With success inside the company. “We wanted people in 3M to under-
in Boise, 3M was convinced that the market potential stand that management, starting with Lehr, was sure
for the yellow note was enormous and, in , Post-it that the environment for innovation at 3M hasn’t deteri-
notes were introduced nationally. orated,” Pint said. “Or if it had, that the commitment
For their efforts, the Post-it note team was awarded and means were available to get it back to where it was.
the Golden Step Award, the highly coveted internal We’ve been successful because of innovators in the past
award recognizing teams that develop significant prof- and we wanted to continue to make sure that innovators,
itable products generating major new sales for 3M. the people who have that flair for making things happen,
By meeting this criteria twice, the team won the award feel like they’re working in a supportive environment.”
two years in a row, and . The task force goal was to not only stimulate innova-
tion in technical areas of 3M but at all levels and in
> Innovation: How Do We Sustain It? every kind of job at 3M. And, to gain a clearer picture
Even with public kudos from business observers, as of 3M’s climate of innovation, the group hired Gifford
3M entered the s, Lehr wanted to ensure that his Pinchot III, a management consultant and author who
company’s growth curve could be sustained in a global had coined a new term in his successful business book,
economy where the innovation rate was accelerating “Intrapreneuring: Why You Don’t Have to Leave the
and competition had multiplied. Perhaps on the heels of Corporation to Become an Entrepreneur.” Pinchot con-
the blockbuster Post-it note, some 3Mers wondered how ducted a four-month “innovation audit” for 3M aimed
the company could produce more revolutionary prod- at better understanding the delicate “climate.”
1 Cathy Arsenault, 1 2
product development
specialist, Software,
Electronics and
Mechanical Systems
Lab, uses computer
aided design and
analysis to help improve
the Pharmaceutical
Division’s metered dose
inhalers.
3M Innovation: How It Flourished 41
During their inquiry, Pint’s focus on innovation. “Genesis is all about optimizing
task force made some discov- the innovative spirit at 3M,” Abere said. The parameters
eries that ratified long-held are simple. The grant encourages technical entrepre-
ideas within 3M. For example, neurship by funding research projects that have not yet
innovative people are motivated qualified for 3M budget support through regular chan-
when they have freedom, support nels. In the first year, proposals came in a flood not
and encouragement. 3M intra- a trickle, even though people had less than two months
preneurs also have a way to develop proposals and win lab management support
of making middle man- for it. “Two days before the deadline, we had entries
agers and supervisors and I thought that was good,” said Prager. “Two days
uncomfortable. later we had with still more coming in.”
“Innovation,” Pint Genesis struck a chord. “We’re telling people who
affirmed, “is gener- work here that all the positive changes in 3M’s future
3
ally an untidy process.” A major- weren’t going to come from management,” said Prager.
ity of new ideas fail, but people shouldn’t fear for their “We told them that they are the innovators.” Other grant
jobs when that happens. “We estimate that percent and recognition programs to spark creativity would later
of our formal, new product programs never make it,” be added to time-honored programs
Lehr said. “When this happens, the important thing is such as the Carlton Society and the
not to punish the people involved.” Engineering Achievement Award
of Excellence. Alpha Grants for
> ‘Give Us the Attention and Support We Need’ innovation in administrative,
One key outcome of the task force study was the confir- marketing and other nontechnical
mation that innovation thrives on personal recognition areas were made available in
matched with financial and moral support. Coinciden- . The Technical Circle of
tally, a brand new project to support innovation surfaced Excellence and Innovation honors
in . The Genesis Program was spearheaded by Joe technical people for exercising
Abere, a highly respected corporate scientist, with full innovation and creativity to pro-
support from 3M’s technical leaders, Bob Adams and duce a significant impact on 3M’s
Les Krogh. The idea had been percolating for some products, processes or programs.
time, but Abere said it fit beautifully with 3M’s renewed These efforts ultimately lead to
5
measurable business or technical success and allow reflection based on the angle between transmitted and
3M to change the basis of competition. To largely rec- reflected light.
ognize manufacturing breakthroughs, 3M created the Research into multilayer film began in the s
Corporate Quality Achievement and the Process when the Central Research Process Technology Lab
Technology awards. (CRPTL) explored how a multilayer film could be used
as a relatively inexpensive backing on tapes. But, as sci-
> Charge of the Light Brigade entists began combining those layers, said John Stephan,
One of the recipients of Genesis funding was a team technical director, Traffic Control Materials Division,
that developed a whole new technology platform based “the whole was greater than the sum of the parts.” While
on multilayer film. It was not only strong and durable, it multilayer film was first used for tape backings, 3M
also possessed never-before-seen optical properties. It scientists later found it useful in products that required
puncture and tear resistance, such as substrates for signs
and in safety films for window glass.
3M doesn’t have the structural boundaries
The next breakthrough occurred in the s when
of other companies. It’s perfectly OK to call 3M researchers Andy Ouderkirk and Jim Jonza attended
someone anywhere in the company and offer the annual Technical Forum science fair highlighting
help or ask for help. We’re a good example. new technologies. Ouderkirk, then a researcher in
CRPTL, had been experimenting with “flash-lamp”
Jim was looking for applications; I was looking
treatments of films to prepare them for adhesion by
for a way to know if this was a useable tech- applying a sudden burst of energy to a film surface,
nology; and Mike wanted to solve the problem. melting it to a depth of . micron. Ouderkirk noticed a
difference in light refraction between the melted surface
> Andy Ouderkirk corporate scientist, Film and Light
and the rest of the film. He told Jonza, a researcher in
Management Technology Center Safety and Security Systems Division, that even more
variations could be created by combining several film
was a film that could create a mirror that was percent layers that had different refractive properties. “And,
reflective, could be combined in up to , layers with if you could put together layer after layer of film,”
a total thickness of nanometers, and—to the surprise Ouderkirk speculated, “you could make a very interest-
of many experts—it broke the -year-old Brewster’s ing reflective polarizer.” To Ouderkirk’s delight, Jonza
Law of Physics, which defines the characteristics of answered quickly, “We can do that.”
The two men went to work. Jonza had a special co- tilayer ball and turn it any way you want. It never loses
polymer made and demonstrated the feasibility of the its reflectivity. No one has been able to do that before
first reflective polarizer. Ouderkirk demonstrated the with a film.” That property has value in more serious
brightness enhancement this film provided to applications such as computer displays, win-
a liquid crystal display. Mike Weber, a dow reflectors, light piping products and
senior specialist in specialty materi- the reflective liners in light fixtures
als, Film and Light Management and signs. There are other applica-
Technical Center, provided optical tions for the auto industry, marine
calculations. The trio received supplies, commercial graphics,
two Genesis Grants to fund security products and next-gen-
additional research and began eration projectors and displays.
pilot production. Several groups The multilayer film project
within 3M helped sponsor devel- has been a passion, particularly
opment of the technology, includ- for Ouderkirk, Jonza and Weber,
ing the Optical Systems Division. whose time and energy have been
“Our multilayer film mirrors are consumed by the technology. Now,
significantly more reflective and versa- a significant number of patents protect
tile than competing products,” Stephan said, 3M’s multilayer film, and its commercializa-
“and we can do so many other things with this 2 tion is expected to generate billion in annual rev-
technology. Right now, we’re looking for the best enues for the company.
applications—where we should focus our investment—
and we’re in the steepest part of the learning curve.” > It’s Imperative . . .
When Ouderkirk explains how the potential applica- It was the early s when Chairman of the Board
tions embody “new-to-the-world physics,” with a nod to and CEO Allen Jacobson asked Ron Mitsch, then group
expanding Brewster’s Law of Physics, it’s clear that he’s vice president, Traffic and Personal Safety Products
not playing around. Group, to take six months off from his position at that
“Take this standard glitter ball,” Ouderkirk, now a time and examine how to take innovation to the next
corporate scientist in the Film and Light Management level at 3M. From that work came a set of “R&D
Technical Center, said, “and turn it slightly away from Imperatives” that heavily influenced new product devel-
the light. The reflectivity washes out. Now take the mul- opment in the s. “We have a great track record; we
3 4 4 Ouderkirk was a
leader in the develop-
ment team that broke
what was once consid-
ered a basic law of
physics by creating the
3M high efficiency mirror.
It uses 3M film technol-
ogy to create a surface
that is 99 percent reflec-
tive at all angles.
T aking a page out of the During the 1970s, 3M was ized in assembly and automation
3M Engineers—Getting Their Hands Dirty
Technical Forum history, making major investments in within 3M from 1982 until his
Gerry Mueller, director, Engineer- its manufacturing facilities and retirement. “We had about 24
ing, in the early 1970s, encour- the advice of the newly formed people who were dedicated to
aged the company’s engineers “minichapters” was invaluable. automated assembly technology
to organize and share their ideas “We used them as expert con- and we served any 3M division
and brainpower. These are the sultants to critique what was worldwide that assembled a
people who—over decades in being planned,” said John product,” Shafer said.
the life of 3M—have designed Pearson, retired vice president, Shafer said that 3M’s engi-
manufacturing equipment and Development, “and they per- neering minichapters are ideal
processes that ultimately pro- formed a tremendous service.” mechanisms for promoting infor-
duce the products that 3M sells. For the specialist engineers, mation sharing and education.
“There were engineering special- the minichapters were a shot in “We had two one-hour sessions
ists in each 3M division—some the arm, personally and profes- every Friday morning involving
of them following the same tech- sionally, said Roman Schoenherr, our engineers with expertise
nology—but we never met and retired corporate engineer. “I saw in automation,” Shafer said.
exchanged ideas until Gerry got people suddenly rise up and get “Because of their broad experi-
us together,” said Bob Vytlacil, involved,” he said. “They became ence, they could handle just
retired corporate engineer. Soon engaged with the whole corpora- about any question. It was infor-
afterward, the group broke into tion, rather than sitting back in mal. We saw people from the
minichapters, each with a spe- their corners just doing their labs and product development
ci c f ocus. “We recognized that jobs.” areas of the company come to
we had shared expertise and As time passed, the engineer- our sessions. The minichapter
common experience, so the mini- ing group added education and likes having a chance to offer
chapters began actively consult- mentoring to its program and, suggestions early in product
ing within 3M,” Vytlacil said. in recent years, more consulting development, rather than down
Vytlacil believed that these with 3M divisions. “Some of our the line when the product is more
consultants couldn’t be effective minichapters schedule regular fully formed and we discover that
without getting their hands dirty. consulting sessions as often manufacturing is dif cult or too
“You can’t just give advice as twice weekly,” said Len Volin, costly or both.”
and not be responsible for the associate corporate engineer,
results,” he said. “Someone in Bonding Systems. “Our automa-
the Consumer Products Division tion minichapter has done this
called and said, ‘We’d like you so that when somebody has a
to go to our Prairie du Chien, question, they don’t have to wait
Wisconsin, plant. The plant is too long for the answer.” In recent
yours for three days. We’re not years, the minichapters have
going to tell you what to do. The begun exploring how they can
employees can answer all your supply consultations across
questions. After three days, oceans, making use of fast com-
we’re going to meet here in a munications now available via
conference room and we want the Internet.
you to tell us the two biggest Dean Shafer, retired manager,
things that need to be x ed.”The Engineering, worked with 3M’s
specialist engineers came back automation minichapter for 10
with answers and saved the divi- years, serving as the group’s
sion, in Vytlacil’s words, “a lot of sponsor, to help clear roadblocks,
money and our advice was free.” secure funding or offer organiza-
tional guidance. Shafer special-
3M Innovation: How It Flourished 45
have a great culture and the way we operate is fine,” Initially, the list included product development
Mitsch said in his team’s recommendations. “But, at programs, according to Coyne, although it eventually
the same time, we believe we can move to a new level grew to include nearly . “The product development
of performance by taking the best practices in the com- programs that had been selected received additional cor-
pany and spreading them company-wide.” porate resources,” Coyne said, “and by the end of two
The first imperative was to implement the national years, percent of the company’s R&D expenditures
Baldrige Quality Award criteria that called for meeting were directed at those product development programs.
customer expectations combined with a need for “time “Narrowing the number down was significantly
compression”—moving products faster from concept more effective in speeding product development,”
through development and to the market. 3M called that Coyne explained. “Because the numbers were smaller,
new quality process Qs. it was also easier for international companies to address
The second imperative was Pacing Programs. the programs effectively, so that these new products
Each of the company’s sectors was asked to select could be brought to market on a global basis.” Among
product development programs that could really
make a difference in achieving profitable, global
Pacing Plus focused on ‘leapfrog technologies,’
growth. Because as many as programs were
selected by individual sectors, the programs had revolutionary ideas that changed the basis
limited success. of competition and introduced whole new
However, the concept was a good one. To technology platforms. > John Pearson retired vice
channel limited research dollars into the most
president, Development
important product development efforts, the
Pacing Plus Program was developed in .
That program asked businesses to select the successful programs were those in optics (brightness
a small number of programs for considera- enhancement film and dual brightness enhancement
tion, but the company’s top executives film), microelectronics, pharmaceuticals (immune
made the final decision on which prod- response modifiers) and fluorochemical fluids.
ucts won support. The selected pro- Other imperatives called for an increase in 3M’s R&D
grams received additional corporate investments yearly, a technical plan for growth in every
resources so they could be brought division, a global R&D strategy and the creation of tech-
to market more quickly. nology centers and more international labs.
Background: Vikuiti
light management film
> Technology for ‘Winners’
‘We’re the Audit Team . . .
3M’s technology centers actually evolved from
and We’re Here to Help You’ “sector labs” that were created initially to serve the
company’s large business “sectors” that were identified
Technical audits have been a valuable form of feed-
in a company-wide reorganization during the early
back at 3M. They’ve been around since about 1960
when Chuck Walton, senior vice president, Research
s. As time passed, those labs evolved into today’s
and Development (R&D), at that time, decided he technical centers that focus on specific technology plat-
needed to know more about what was working—or forms and serve the entire company. “Their charge is
not working—in the company’s labs. Realizing that simple,” said Bailey. “They develop new technologies
personal visits to each lab were too time-consuming that they transfer into divisions to create products that
for one man, Walton asked his colleague Les Krogh, will be the next winners. People in those centers are
now retired senior vice president, Research and judged based on their ability to invent and share their
Development, to invent a peer review process. knowledge. The question I usually ask is ‘Who’s using
Julianne Prager continued the tradition in 1980 when what you developed?’ A tech center will get ahead when
she became executive director, Corporate Technical it’s recognized for making contributions.” Similarly,
Planning, as did Dave Sorensen who followed her.
said Bailey, successful 3M divisions are those that seek
“The idea has been to provide internal appraisals
ideas from tech centers and staff their product teams
of major R&D programs in the company’s many labs,”
with tech center scientists.
Prager said. “The audit team, composed of about 10 to
15 business and technical people including technical
The centers are diverse, focusing on adhesives, non-
directors and senior scientists from other laborato- wovens, manufacturing engineering, microreplication,
ries, conducts the ‘exam’ and does the analysis. They ceramics, fiber optics and “advanced materials” such
look at program strengths, weaknesses and probabili- as technology for use on new generations of computer
ties of success—both technical and business.”The chips. “I know of no other company that has taken this
team makes recommendations, but they’re not bind- technology center approach,” said Bailey. “In most
ing. “Even so, people in management take them seri- companies, R&D is located in a major business unit.
ously,” Prager said. Our next step will be to set up satellite tech centers for
“From the start, the goal was to be positive,” said some of our large labs overseas.”
Prager. “The audit team focused on what was good The evolution of 3M’s labs outside the United
about a project and areas that needed improvement.
States followed its business growth. Nicholson, retired
Some people have used them to get support for more
staff vice president, Corporate Technical Planning and
resources. If the audit team said, ‘This is a terri c pr oj-
ect, but terribly underfunded,’ management would usu-
ally pay attention.’ ”
Conversely, when a project didn’t “score” well with
the audit team, it was often a motivator, said Prager.
“I’ve seen it happen. We’ve said, ‘We’d love it if you can
prove that our rating is wrong.’ And, the response has
often been, ‘I’m going to go out and make this project
work, if it’s the last thing I do.’
“3M has done a good job of combining the best of
both—the small, e xible and unorthodox attributes of
a small company, combined with the large technology,
manufacturing and nancial base of a lar ge company,”
Prager said. “As 3M grew and the divisional structure
continued to prove its worth, tech audits have helped
institutionalize that ‘small company’ ethic of sharing.”
Background: Imperial
Wetordry sandpaper
3M Innovation: How It Flourished 47
International Technical Operations, said, “As 3M devel- traveled the world working with 3M labs and customers,
oped businesses around the world, the companies needed has a strong message. “3M has a ‘candy store’ full of
technical support and service to customers.” Back in the technologies,” he said. “Take a look and help yourself.
s and s, labs were usually part of 3M manu- My job was to stimulate people to imagine how these
facturing and their key role was to check the quality of technologies could be used in their countries. They’re
local raw materials. By , 3M had created full service likely to come up with new applications and products
labs in Japan, Germany, Italy and the United Kingdom, that could be of value to all of us. I love music, so I like
and by the s, technical service labs were estab- to think of our technologies as notes on a piano, and
lished in every company that 3M operated outside the every day, people are inventing new tunes with them.”
United States. By the millennium, 3M had world-class expertise in
“Technical people at 3M work very hard at being about technologies and excellent grounding in about
a community around the world,” said Nicholson. “They more. By operating in dozens of markets and believ-
feel a strong need to share both their knowledge and ing in the importance of sharing these technologies,
their problems. There’s a lot of synergism. This is one 3M has a competitive advantage that few other compa-
of the key ingredients for innovation.” Nicholson, who nies enjoy.
time-tested truths
● It’s not up to 3M’s customers to ask for products they need; it’s up
to the company to anticipate the needs customers don’t even know
they have and develop product solutions.
Gambling on fluorochemicals
Rather than hunt for a new job, Boese found the best advice and visited North Star Woolen Mills where he
library on fibers at the University of Minnesota’s Home learned what a carding machine was. “I discovered
Economics Department, and he spent the summer there. that what I was trying to develop had been invented
Boese—who started his career at 3M as a mail boy years before,” Boese said. “I got a little -inch
without a high school diploma—had begun exploring machine, carded out the fibers to form a web, and
the fuzzy front-end of nonwoven science. When he applied heat and pressure to bond them. The next thing
retired years later as a corporate scientist and Carlton was to keep making it and find markets for it.” Boese
Society member, his willingness to tackle this uncharted and the cohorts he attracted to his project named their
territory had led to a dizzying array of never-before- group the Carfab Lab (for carded nonwoven fabrica-
seen nonwoven products including ribbon; cleaning tion) because they were an off-shoot of the eccentric,
pads; surgical tapes, drapes and masks; fasteners; but highly productive, Pro-Fab Lab.
floppy disk liners; absorbent material to
combat oil slicks; “metered” paint rollers > ‘You Have to Take Chances . . . ’
for home improvements; and sound dead- Boese’s new process didn’t produce a bet-
eners in cars. ter backing for electrical tape, but gazing
All alone, Boese spent studying at a department store window one day in
fibers, writing reports for Drew, conduct- the mid-s, he had an idea. Maybe,
ing modest experiments and, in his words, if the new nonwoven material was dyed
“building half a dozen little machines with and sprinkled with color flecks, it could
utter ineptness”—hoping to discover how be used in decorative displays. Or, why
to bind a mass of fibers together without not slit the material into strips and make
weaving them. “One day I was walking ribbon for decorating gifts? Boese’s early
by the rubber colander in the tape lab,” attempts at ribbon were modest, at best.
Boese said. “I stuck a little tuft of acetate The product, Mistlon ribbon (originally
fiber in the colander. It heated the sur- developed as a lint free lens cleaning
face of the fibers and bonded them tissue), was structurally weak for wrap-
together. That was the opening to make ping packages and it wasn’t very
nonwovens. Heat and pressure.” attractive.
Knowing nothing about textile “It was obvious to everybody that
equipment, Boese took a colleague’s we had a product failure,” Boese said.
3 4
52 Chapter 4
3M management gave him three years to improve the store to sell his new, improved ribbon at cents a roll.
ribbon and still there was no solution. The ribbon “Bush said in no uncertain terms, ‘No kid in the lab is
brought in about , in revenues, Boese recalled, going to set prices for ‘the Mining.’ ”
but the losses totaled about ,. “That was,” he The new product, 3M Sasheen decorative ribbon,
said, “enough money to have Mr. McKnight sit in on was a hit when it was introduced in , along with
the meeting.” Boese drew a deep breath and said his a companion product, Lacelon ribbon. “3M developed
team could produce a saleable ribbon in three months. the gift wrapping business with ribbon and then the
Management gave him the time. paper companies came in with paper patterns in the
“I went over to Beske’s -cent store and got a - early s,” Boese said. “We not only created a prod-
cent comb,” he said. “I knew enough about handling yarn uct, but a new market. Pursuing the nonwoven business
to know that they pulled it through combs as it went into was like being thrown up on shore when your ship gets
the looms. We needed bobbins to wind the yarn so we wrecked. You don’t know what you’re going to do and
bought from Singer Sewing Machine Company for . you wind up doing what you never expected.”
We got a cone of acetate yarn from American Viscose,
wound the fiber on bobbins and pulled it through the > Nonwoven ‘Progeny’
comb. We built a little set of hot drums and put the rib- From ribbon, 3M “married” nonwovens to abrasives in
bon on the bottom and laid the yarn shoulder to shoulder the s to produce Scotch-Brite scrubbing and pol-
on top. It worked like a dream. We had sheen, we had ishing pads, floor maintenance supplies and industrial
strength.” In less than a year, 3M sold , yards of polishing materials. A decade later, new dampening
the ribbon. “I found out one thing,” Boese said. “You sleeves from 3M’s nonwoven materials made offset
have to take chances. You printing much more economical. Nonwoven, disposable
have to fight. Nonwovens surgical face masks and Micropore surgical tape opened
never would have been the door to other nonwoven medical products.
successful if I hadn’t Still another nonwoven breakthrough product, called
pushed a little.” 3M oil sorbents, helped reduce the damage of oil spills.
That is precisely By the s, government-approved industrial respira-
what Boese remembered tors made with nonwovens helped reduce certain work-
when Archibald Bush, head place inhalation dangers to safe levels. Nonwoven tech-
of 3M sales, chastised him for mak- nology led to the development of Buf-Puf cleansing
ing a deal with a local St. Paul department sponges and Thinsulate thermal insulation, the product
2
54 Chapter 4
Finding uses for this new technology was not easy. talk with people on the project—one at a time. His
About a decade earlier, 3M had begun exploring sili- question was simple: Should 3M continue to pursue
cone, thinking that the new material would help make fluorochemicals? Imbedded in that question was another:
3M’s tape products even better. However, three major Will fluorochemicals make us money? When said
companies, including General Electric, had a head start “yes,” the project had new life.
on silicone experimentation and, by the time World Patsy Sherman joined 3M as a lab technician in
War II broke out, these competitors had already filed armed with degrees in math and chemistry. She had dab-
patents for silicone applications. The patents were bled in science as a young girl with her doting father—
“frozen” during the war, but as the fighting wound that is, until a failed experiment coated the kitchen
down, they were approved. Believing that the competi- ceiling and her mother called a halt to their embryonic
tion had beaten them, 3M asked the scientists at Penn “research.” As Sherman became acquainted with Central
State University what else they had in their inventory Research, she saw tests being done on a new kind of
of new ideas. rubber made with fluorochemicals, alongside natural
Fluorochemicals held promise, although marketable rubber and other synthetic versions. The fluorochemical
products were elusive. At first, 3M’s lab people could rubber could stand up to any solvent it faced in a test
only make low-boiling and inert fluorocarbon liquids. tube and Sherman was fascinated. “It wasn’t bothered
Even so, the concept was so new—and the materials by any solvents,” she said. “It was truly unique and I
produced so unusual—that the technology aroused great liked that. I asked for the assignment.” Sherman was
excitement. But, this was a costly venture. Only a few given a temporary task to find out if fluorochemical
good ideas surfaced and none led to practical applica- rubber could withstand exposure to a new jet fuel that
tions. Equally disturbing, these “products” were called Wright Patterson Air Force Base was testing. It did, but
by insiders, “the most expensive organic chemicals it failed in the bitter cold of the stratosphere.
known to man,” costing about a pound.
By , as many as people were > ‘Tennis Shoes Don’t Fly’
focused on the promise of fluorochemicals— With her lab job disappearing before her eyes and with
the largest research project ever undertaken, an inquiring mind open to the fuzzy front-end of experi-
up to that time, by 3M. McKnight wondered mentation, Sherman dabbled more with fluoro-
if the gamble would ever pay off, so he chemicals in . She cooked up a brew
asked his vice president of research of rubber particles suspended in water
and engineering, Dick Carlton, to that looked like milky latex and handed
the sample to a younger colleague, Joan Mullin, after “Our product had to be compatible with all the
asking her to run a test. But, the glass bottle slipped equipment used by textile mills,” said Smith. “That
from Mullin’s hands, crashed to the floor and sprayed meant learning a great deal about the industry and rely-
the milky brew on the assistant’s new tennis shoes. No ing on our marketing people to canvass the field. Our
amount of water, soap or other solvents weakened the first product could tolerate dry cleaning, but not
stubborn mixture. “Joan was bemoaning the loss of her laundering. We knew we had to find a way to
new shoes to her boss, George Rathmann,” Sherman treat nylon and cotton, make it stand up in
said. “He said, ‘Well, tennis shoes don’t fly, so it’s of washing, and make the treatment cheaper
no use to Wright Patterson, but maybe we should put than our original version.”
some of this stuff on fabric and see what happens.’ ” Along the way, two well-respected
Sherman and Rathmann applied the sample to fabric, experts in fluorochemicals told
dried it and held it under a faucet. “Water splashed on Sherman and Smith that
the fabric,” Sherman said, “and it took off degrees it would be “thermo-
the other way. So did solvent. That’s when we thought, dynamically impossible”
‘There’s something here.’ ” to combine a stain
repellent and a soil
Patsy was a gifted experimentalist. She was release component
in the same prod-
capable of doing very painstaking experiments.
uct. The fluoro-
> Sam Smith retired research scientist chemical treatment
for fabric made it
Sherman collaborated with her boss and mentor, water repellent, so
Sam Smith, on the project, and Scotchgard fabric and how could it permit
upholstery protector was introduced in . “It took the removal of oily, ground-
three years to introduce Scotchgard protector to the tex- in soil in laundering? “That challenge,”
tile industry and we had absolutely disastrous results,” said Sherman, “was like waving a red flag in front
said Sherman. “Our first product worked only on wool, of two bulls.”
and it took many more years and many more discoveries In her percent time, Sherman went to the 3M
to make a product with all the right properties and the library looking for a solution and found a new type
right cost to make it affordable for textiles.” of graft copolymer produced by a colleague, John
Erickson. “I asked him how he created it,” Sherman Since its introduction in , Scotchgard products
said, “and he shipped a sample over to me.” Sherman have been reformulated many times, always with an
went to work experimenting and Smith challenged her eye on improving the product. When 3M discovered
to keep trying. “I was working on a new process and environmental issues related to Scotchgard protectors
asked Sam if he could tell me why my idea wouldn’t in the late s, the company developed a substitute
work,” Sherman said. The next morning, Smith said he formulation at considerable cost. By , the popular
had an answer, but he was too late. “I said, ‘Sam, I ran Scotchgard line had grown to commercially applied
the process last night and I got a percent perfect and six consumer applied protectors and cleaners.
yield. It works great.’ ” More than years have passed since McKnight
put money on the fuzzy front-end of fluorochemical
If you take the aggregate character of the technology. “As recently as , we were making new
fluorine molecules and putting them in a catalogue and
company, I believe it’s one in which we think we
sending the catalogue around to people and saying,
can do anything. That’s what I look for in some- ‘Can you use this?’ ” said Craig Burton, research man-
one who runs a business. I want people who ager, Fluorochemical Process and Technology Center.
know they can run through walls. > Harold Wiens
executive vice president, Industrial Markets 3M’s fluorochemical technology has managed
to avoid maturity. It continues to generate
In all, the fuzzy front-end experimentation that new materials and new products at an
started with creating a viable fabric protector took about
impressive rate. > 3M Technology Platforms, 1996
seven years. When Scotchgard carpet and upholstery
protector was introduced to consumers in , sales
jumped from about , annually (largely to “Now we can design molecules for specific applications.
Australian wool producers) to million in the first year. We work with the divisions to see what applications
“3M invested two decades in fluorine research and they have and then build a molecule we think will work.”
it took years to realize our first profits,” said Smith. Ferro-electric liquid crystals are a good example of this
“This is a virtue of our company—having the patience approach. They were created in the mid-s for flat
to stand behind a good idea. That’s where leapfrog tech- panel and desktop displays and other electronic devices,
nologies and a lot of new business comes from.” to give the screens higher resolution.
1 2
Ingenuity Leads to Breakthroughs 57
Fluorochemicals, and later, hydrofluoroethers Appeldorn’s mentor and boss, Emil Grieshaber, chal-
(HFEs), have replaced ozone damaging chlorofluoro- lenged him to find a use for the transparencies used in
carbons (CFCs) used in cleaning circuit boards and copying colored images. “3M was marketing a Thermo-
other electronic components. They are used to cool Fax copier that reproduced colored images on white
supercomputers and are key ingredients in extra durable paper,” said Appeldorn, but it was a two-step process
rubber and plastic seals, O-rings and gaskets for hostile and the intermediate step involved a transparency with
environments. Versatile fluoropolymers are used in no other use. We tried to project an image from the
chemical processing, pollution control equipment and transparency on a screen using an old Bessler Vu-Graph
oil exploration. They even protect food from machine, but the image was dim and brown.”
contamination. Appeldorn said he then found a
Beyond their value as distinct process that created a better image
products, small amounts of fluoro- that led to 3M’s first marketable
chemicals allow 3M to manufac- transparency film. “One of our
ture extra thin films, and they help early, large customers was the
make 3M’s tapes peel off their Strategic Air Command base in
rolls more easily. “We receive Omaha,” Appeldorn said. “They
about patents a year based on used about , sheets of film
fluorochemical technology and each month in their war room.”
our high was in ,” said Up to that time, 3M had been
Burton, now laboratory manager, selling an overhead projector,
Fluoromaterials Research Group in the manufactured by an outside supplier.
Advanced Materials Technology Center. Appeldorn said 3M then decided to make
“We’re a long way from reaching the 3 its own projector to complement the new
limits of this technology.” transparency film. The “improved” equipment turned
out to be too costly, bulky, heavy, hot and noisy to be
> Through a Lens Dimly a big seller. Later adaptations improved the projector,
Roger Appeldorn, a young physicist, was working in the but, said Appeldorn, “We were pushing for a lower cost,
Thermo-Fax (Copying Products) Laboratory in the late even lighter version. When we polled people, they said
s when he encountered the early fuzzy front-end of they wanted one as small as a briefcase; it had to unfold
“incremental optics” later known as microreplication. and light up automatically.”
Appeldorn and his team of five colleagues met these > ‘We Started Having Fun . . . ’
criteria, but the prototype was so expensive that the That’s when the fuzzy front-end reappeared for
project was killed. When Appeldorn’s team appealed Appeldorn. “We started having fun with the idea,” he
to Bert Auger, manager of special projects, Auger gave said. “I’m a physicist. I was considering the science. My
them days to produce a product that cost less. They colleagues and I looked at the very fine pattern on the
did. It was . plastic fresnel lens and wondered, what else could we do
On January , , Appeldorn’s team demon- with structured surfaces?” These could be surfaces with
strated the first overhead projector with a new fresnel hundreds or even millions of structures per square inch
lens made with a structured-surface plastic that was repeated continuously and invisible to the naked eye.
superior to other plastic lenses and far less expensive “We soon renamed what we were experimenting
than a cut glass lens. “We showed it to Ray Herzog, with,” said Appeldorn. “We called them ‘structured sur-
faces.’ 3M management was particularly enamored with
the potential for replicating these surfaces, so we started
We didn’t sit down and say, ‘Microreplication is
to call it ‘microreplication’ in the early s.” At first,
the next thing to do; let’s go do it.’ It doesn’t work Appeldorn and his boss, Ron Mitsch, who later retired
that way. It evolved. It reached a critical mass as vice chairman and executive vice president, resisted
and it suddenly proliferated. > Roger Appeldorn
the “microreplication” term—not because it wasn’t accu-
rate, but because it might signal too much to the compe-
retired corporate scientist and Carlton Society member
tition. That’s why the Optics Technology Center—where
microreplication was the motherlode of technology—
later named chairman of the board and CEO, and Auger,” kept its name until , when it was officially renamed
said Appeldorn. “We said the projector could be manu- the Microreplication Technology Center.
factured at a fraction of the cost of previous models. The next application, after that initial breakthrough
They told us to be ready to go into production in August in the s, was a 3M fresnel lens imbedded in a traffic
and sales went through the roof the first year.” Schools signal light that gave U.S. drivers in the left lane a visible
wanted them. Businesses needed them; so did govern- cue to turn. 3M also began producing lenses for LED
ment agencies. The product became the basis for the watches and microfilm reader-printers. By the early
Visual Products Division within a few years. s, there were enough opportunities—particularly
in the automotive industry—to warrant a new business
initiative called the Industrial Optics Project. One of
the more advanced applications came with the in ,” said Charles Kiester, retired senior vice
acquisition of Polacoat, a company with the technologi- president, Engineering, Quality and Manufacturing
cal know-how to make liquid crystal displays (LCDs). Services. “Diamond Grade sheeting was the mother
“Our idea was to make LCDs that would combine with of all microreplication.” It would be another years
our overhead projectors to display electronic images,” before the product was formally introduced in .
Appeldorn said. The idea was ahead of its time. “The lab started working on Diamond Grade sheet-
Management didn’t like it. ing more than a decade before that introduction,” said
By the mid-s, Appeldorn was torn between Robert Finocchiaro, former technical director, 3M
putting his energy into making better fresnel lenses for Microreplication Technology Center, now technical
the rapidly expanding overhead projector market, while director, Engineered Adhesives Division. “It was a
also trying to respond to others in 3M who saw the challenging project because it involved creating several
value of structured surfaces—in abrasives, in magnetic thousand identical retroreflective prisms in a square
recording, in traffic control materials, in new frontiers inch using plastic that could stand a wide range of
on the fuzzy front-end. Appeldorn went to Mitsch and conditions—weather and otherwise. 3M
suggested that Industrial Optics should stand alone as was the only company with this new
a business. Moreover, an Optics Technology Center application.”
could be created to nurture, expand and develop all the Since the late s,
possibilities that structured surface science offered. there have been
About percent of all products sold by 3M were rooted numerous itera-
in optics technology when Appeldorn became the first tions combining
director of the center in . durable and flexible
fluorescent materials
> A Highway Gem and retroreflective
More promise for microreplication emerged when surfaces—everything
3M tooled its manufacturing to make the first run of from daytime traffic signs
Scotchlite Diamond Grade reflective sheeting, a product that are fluorescent to flexi-
that would revolutionize highway signs and vehicle ble, fluorescent signs used
markings many years later. “I was working in Traffic on cones in the work zone
Control Materials when we put in the first small and on canvas sidings on
Diamond Grade maker in Menomonie, Wisconsin, trucks in Europe.
2 3
60 Chapter 4
Scotchlite Diamond Grade sheeting has helped reduce pursuits that don’t qualify for other financial support,
traffic accidents, and the U.S. National Highway Traffic and the work accelerated. The result was a reflective film.
Safety Administration now requires all new trailers It looked ordinary on casual inspection, but a closer
and truck tractors to use what’s called “conspicuity look revealed one smooth side and one structured side
markings.” Other countries are instituting the same with tiny prismatic grooves. Rolled into a tube, the
requirements. film was capable of “piping” light evenly throughout
its length. It offered intriguing possibilities for street
> Film Futures lights, traffic signals, manufacturing facilities, hospital
In the same year Scotchlite Diamond operating rooms, airplane cabins, railroad cars and
Grade sheeting was introduced, 3M truck beds. “That film led to creating our Vikuiti bright-
also launched internal reflecting ness enhancement film (BEF) for laptop computers and
film, another new use of micro- cell phones,” said Finocchiaro. “BEF is basically
replication. Later renamed 3M optical lighting film with a finer pitch.
optical lighting film, the product We were able to get into the market
had its start with research conducted as fast as we did, in the early s,
by Lorne Whitehead at the University because the technology had already
of British Columbia in Vancouver, been developed. The manufacturing
Canada, a decade earlier. Whitehead processes were in place. 3M could
had experimented with lining up offer a unique approach to solv-
prisms running the length of an acrylic ing an unarticulated customer
sheet, then shaping that sheet into a need—namely, enhancing the
square tube and transporting light, via brightness of backlit flat panel
the prisms, from one end to the other. displays and extending the life
He called it “total internal reflection.” of batteries. We were able
Building on that concept, Appeldorn to deliver to percent
and Sandy Cobb focused on how more light to a display
1
microreplication could be used to pro- using our film.”
duce micro-prismatic structures on Appeldorn described
a large scale. The team received a 3M much of this work as “still
Genesis Grant, designed to fund technical embryonic,” even in the late
1 Vikuiti brightness 2 3
enhancement films
(BEF) deliver brighter,
sharper readouts on
computer screens,
pagers, cellular phones
and other electronic
displays. 2-3 Extended
battery life is an added
value of the brightness
enhancement films
(BEF).
T he pressure was on. After one materialized with almost
s, and he told a journalist, with obvious satisfac- There was no team and no formal project
tion, “Our learning curve, which began years ago,
designation . . . Mucci and Pieper were actively
is now trending sharply upward.”
It was clear to Appeldorn that, if microreplication bootlegging, borrowing equipment and expertise
was to be a commercial success, 3M had to make prod- from CRPTL . . . Everyone involved was
ucts through a continuous process, “by the yard, not experimenting . . . > 3M Today employee magazine,
the inch” in Appeldorn’s words. Process research efforts
1997 “Reinventing 3M’s Oldest Business”
started in earnest because microreplication required a
sophisticated, complicated set of steps including extru-
sion, casting, coating and molding. available for personnel and equipment. A retired manu-
facturing line from Traffic Control Materials Division—
> A Revolutionary Product and Process called the “blue monster”—became a testing
When microreplication “met” coated abra- ground and accelerated the process and
sives in the s, the result was new- product development work. Micro-
to-the-world products. But, it would replication experts from the Optics
be years before 3M Trizact abra- Technology Center became key
sives debuted in . The fuzzy advisors. Even Scott Culler, scien-
front-end of “structured abrasives” tist, Dental Products Division, who
required percent time; boot- knew nothing about sandpaper—
legging; collaboration among nine but a lot about light curing—joined
labs at 3M; and an ardent sponsor, the team.
In Sun Hong, then technical director, As it turned out, a major, early
Abrasive Systems Laboratory. hurdle was figuring out how to coat
and cure a mixture of mineral and resin
1 (a “slurry”) onto a backing, such as cloth, to form
Innovation tells us where to go; precise microscopic pyramids. Light curing became a
we don’t tell innovation where to go. key factor in making it work. “In , we were lucky
> L.D. DeSimone retired chairman of the board and
if we could make one sample a week before things
started going wrong,” said Stan Collins, who led the
chief executive officer (CEO)
project’s technical team. “For a management review at
the end of the year, we were making product at feet
Mike Mucci was a technical service senior specialist a minute and we were proud of that.”
in the Abrasive Systems Division during the mid-s. Once the project team was able to create -foot
He was looking for ways to make aircraft more fuel belts of the prototype, there were weeks and months
efficient by sanding grooves into airplane wings. Mean- of testing. Day after day, Mucci used the prototypes to
while, Jon Pieper, process engineer, Abrasive Systems, sand golf club heads and plumbing fixtures. He became
was exploring how light curing could eliminate the use known as the single, most notorious, source of noise
of solvents and heating by oven in the production of in his building.
coated abrasives. Both Mucci and Pieper knew scientists With an effective prototype, the focus turned to
in the Central Research Process Technology Laboratory boosting speed and quality in manufacturing so that
(CRPTL) who were examining how to link microrepli- 3M Trizact abrasives could be produced for a commer-
cation to abrasives. cial market. Dave Quast, division engineer, Abrasive
When this informal, though intensive, effort won Systems, then technical director, Abrasive Systems
a Genesis Grant, there were newly dedicated dollars Lab, designed all the equipment upgrades for the blue
Ingenuity Leads to Breakthroughs 63
monster, so the team could run small test batches. conductors and reduces the margin of error in the
Hong was a relentless advocate and, through his process. This product and application are in an industry
efforts, Trizact abrasives became a Corporate Pacing expected to reach billion by . 3M hopes that it
Plus Program. That designation guaranteed them three will generate million in new sales by . “This
years of funding to accelerate product development product is highly dependent on process,” said Chuck
and commercialization. Kummeth, business director, Chemical Mechanical
The real breakthrough came in September , Planarization Programs. “That’s why we’re partnering
when Culler field tested the new product for a manu- with the world’s leaders, Rodel and Applied Material.
facturer of titanium jet turbine blades. “That was the It’s an extremely challenging technology, but as elec-
litmus test,” Culler said. “We had a customer saying, tronic devices get smaller, there is even more growth
‘You guys have something really unique here.’ From potential.”
that point on, it was ‘Turn the crank and let’s get scaled
up and get this out as fast as we can.’ ” > Partners in Microreplication
With new technologies in electronics emerging—on
> Today Golf Clubs, Tomorrow Semiconductors average—in two years or less, 3M decided to exploit
In , when 3M Trizact abrasive belts were formally its microreplication technology platform in the s
introduced, 3M changed the basis of competition in
the abrasives industry and there were significant sales As the semiconductor industry shifts to making
by . Hong called the structured abrasive discovery
semiconductor wafers that can process more
“a process revolution and a product revolution.”
“When we first started,” he said, “we didn’t see and more information, they’re looking to 3M to
the full scope of the product. There are still many appli- make the transition less costly. With our special-
cations that have not yet been thought of and many
ized abrasives, we can help a customer cut the
other market areas where we can change the basis of
competition.” number of process steps by as much as half.
One of the most exciting prospects is semiconductor > Harold Wiens
wafer polishing, called “planarization,” a high-tech
application that became a Pacing Plus Program in . by finding worldwide manufacturing partners. In this
Put simply, planarization is sophisticated sanding that way, new applications could reach the marketplace
cuts the time required to make wafers used in semi- sooner. Finocchiaro traveled to Sumitomo 3M in Japan
2 3 1 Close-up of structured
surface using micro-
replication technology.
2 Structured abrasives,
employing microreplica-
tion technology, offer
superior performance for
finishing metal products
from golf clubs to medical
implants. 3 Smoothing the
surface of semiconductor
wafers is faster using
structured abrasives.
64 Chapter 4
and called on companies including Hitachi, 3M’s stake in plasma display panel man-
Sony, Fujitsu, Seiko-Epson and Canon. ufacturing is the rear panel of glass, called a
The objective was to introduce 3M’s micro- “barrier rib,” that has vertical channels less than
replication expertise and find partner- microns apart, five times smaller than
ships that would be mutual and strong. “I the width of a human hair. Plasma, in
reviewed our capabilities,” said Finocchiaro. the form of phosphors giving off color,
“I said we’re able to produce some of the is trapped in these narrow channels, then
most precise microstructures available ignited to produce colored light that pro-
and we can manufacture them into products duces an image.
in large volumes and on a large scale.” 1 “The most expensive part of manufacturing
These exploratory discussions led to the plasma display panel was producing that
confidential agreements with manufacturers barrier rib,” said Finocchiaro. “The glass
of plasma display panels in Japan and Korea. was sandblasted under high pressure; it was
a slow, messy and expensive process, taking
about minutes for each barrier rib. But,
Technologies have a shelf life. Micro-
we have expertise in making structured surfaces.
replication has a life of perhaps 15 years. Not only could we make the structures, we also
We need to get as much out of the plat- developed a manufacturing process to do it.”
form in the time that we can. Then, we’ll Rather than make the barrier rib panels and
sell them to manufacturers, 3M chose to license its
migrate to something else. > Robert Finocchiaro
process technology to manufacturers, saving them time
technical director, Engineered Adhesives Division and money and ensuring high-quality production. “Our
Japanese customer, Fujitsu, has told us—of all the
While relatively new to consumers, plasma displays options they know of today—our solution has the poten-
are common in business, for example, serving as airline tial to be the lowest cost in producing the barrier rib,”
arrival and departure displays. The displays can be as
large as feet (on a diagonal measurement) and yet
Like a conspiracy in an Oliver Stone film,
they are only about inches thick. A hot gas, or plasma,
is ignited in these panels to give off light, much like microreplication is suddenly everywhere in 3M.
fluorescent gas illuminates a fluorescent lamp. > Fortune magazine, February 5, 1996
1 A model of a strand of 2
DNA. 2 Senior research
biologist Anila Prabhu,
in the Biomaterials
Technology Center,
studied a gel used to
analyze DNA. Micro-
replication allows
researchers to conduct
thousands of tests on
one protein at one time.
Ingenuity Leads to Breakthroughs 65
The barrier rib project is what we call ‘white application for our technology,” said Finocchiaro. “In
the human genome program, for example, researchers
space’ at 3M. Acceleration programs, like
are decoding the genetic makeup of humans. To accom-
this one, address very large opportunities and plish that, they must analyze hundreds of millions—
markets. But there are other opportunities that if not billions—of protein samples. By using micro-
we shouldn’t ignore. ‘White space’ projects replication, we can create thousands of tiny channels
on plastic so that researchers can conduct thousands
bring diversity to 3M’s technology portfolio
of tests on one protein at the same time. This approach
and that’s what will keep us profitable. brings about huge improvements in efficiency while
> Raymond C. Chiu product development specialist, simultaneously enabling miniaturization of the process.
I expect this will bring tremendous value in the market-
3M Microreplication Technology Center
place.”
By , 3M products using microreplication tech-
said Finocchiaro. This new application could cut the cost nology generated more than billion in revenue after
of in-home entertainment centers with plasma display peaking at about million annually only a decade
panels from , to , in a matter of a few years. before. By , 3M estimated that microreplication
Yet another white space for microreplication would be an integral part of one-fourth to one-third of
involves biomedical uses. “This would be a brand new all its products.
time-tested truths
● Have the patience and persistence to let the fuzzy front-end sharpen.
3M legends
What it takes
5
No One Succeeds Alone
The myth was demystified decades ago at 3M. Very few
people succeed in business on their own. The self-made
man or woman is more folklore than fact. While people
must take personal initiative to realize their dreams—
and even buck the system at times—they are usually
not “lone rangers.” Even before there were popular
buzzwords to name what they were doing, 3M people
naturally gravitated toward being champions, spon-
sors and mentors for others. ● Sponsors, mentors
and champions. 3M people can be one or all three.
68 Chapter 5
Kay Grenz became vice president, Human Resources, Guthrie was clear about how he wanted to coach
but years before she was a novice HR coordinator Grenz but, she said, “I didn’t know it was mentoring
in her first job at 3M. “I moved into manufacturing engi- at the time and, if you asked him, I don’t think he
neering and met Don Guthrie, now retired vice presi- would have either—even though he’d been doing it
dent, Engineering and Manufacturing,” Grenz for years.
said. “I didn’t walk into his office one “Don’s counsel was extraordinarily
day and say, ‘Don, will you be my objective and yet personalized,”
mentor?’ Instead, when I had an Grenz said. “He could help
issue to solve, we’d discuss a person find the answers,
the situation, talk about instead of giving them the
answers.”
It started with Lucius Steve Buckingham,
intellectual property
Ordway. 3M needed
counsel, explained his
a sponsor who said, role as a mentor. “My
‘I believe in your goal is to teach people
company, I’m going about the culture of 3M
and the unwritten rules
to put money into it we live by here.”
and I’m going to stay for
the long haul.’ > Leon Royer Dick Drew was the classic
retired executive director, Leadership mentor. He always encour-
Development Center, Human Resources aged his people to pursue ideas . . .
1
He said, ‘If it’s a dumb idea, you’ll find out.
what steps could be taken, examine how the approach You’ll smack right into that brick wall, then you’ll
fit 3M’s decision-making process, and then we’d identify
stagger back and see another opportunity that
a solution. He took a personal interest in helping me
understand the culture of the company and its strengths. you wouldn’t have seen otherwise.’ > Art Fry
It was an early version of knowledge transfer.” retired corporate scientist, Office Supplies Division
> ‘Go South, Young Man’ agement. The other thing he gave me was trust. I had
L.D. DeSimone became an engineer at 3M Canada, in a lot of freedom.”
his native country. But, when an opportunity surfaced When 3M needed a new Scotch-Brite manufacturing
to leave London, Ontario, and tackle a new assignment, plant in Brazil, DeSimone found a champion in John
DeSimone, who retired as 3M chairman and CEO, was Whitcomb, group vice president, Abrasives, Adhesives,
reluctant. “I wasn’t keen on going anywhere. I was happy Building Services and Chemicals. 3M Brazil’s business
was growing at an astronomical rate in the early s
and DeSimone needed more production capacity. From
I was 20 years old in 1957. . . when Don Guthrie
experience, however, 3M had learned not to concentrate
came in and talked with me. Having a person all of its manufacturing at one site, so Chairman Harry
who was that interested in a young man’s Heltzer and President Ray Herzog told DeSimone to
find a new location on which to build a manufacturing
work was a real confidence builder. I think it’s
plant for Scotch-Brite products. “We had a very skinny
impossible to go from joining 3M to having staff,” DeSimone said, “and building a whole new loca-
a great career without some mentoring. It’s part tion would have been tough.” In the meantime, however,
of the learning experience. > L.D. DeSimone
retired chairman of the board and chief executive officer Mentoring is an established part of the fabric of
3M and one of the key reasons why the culture
with what I was doing,” he said. “But Jim Mingle, who has been sustained for so long. > Kay Grenz
hired me, said ‘You know, Desi, you ought to go.’ If
vice president, Human Resources
he hadn’t given me this advice, I’d still be in Canada.”
DeSimone would not have become managing direc-
tor of 3M Brazil without the mentoring and sponsorship DeSimone managed to get the OK to build the Scotch-
of M.J. Monteiro (Em to his colleagues), who became Brite plant next to the existing facility. “We started
executive vice president, International Operations. “He building in a hurry,” he said, “because we needed the
helped me make the transition from being an engineer plant so badly.” Soon afterward, however, Monteiro
with a technical orientation to becoming a business per- wired DeSimone telling him to stop all work and come
son,” said DeSimone. “As I worked for him, Em taught to St. Paul. 3M’s international head of manufacturing
me the business and financial considerations of man- didn’t support the plan. “We had a hell of an argument,”
DeSimone recalled. “The talks went on for almost encouraged me to be the first technical director at 3M
three days. Finally, the decision went to Whitcomb. We to leave a division lab and return to Central Research.
repeated the arguments in front of Mr. Whitcomb and The divisions were growing and they rarely hired
he listened to our wrangling for minutes. I was very Ph.D.s. Central Research did hire Ph.D.s and, soon,
aggressive and so was the other guy.” many became technical directors. Eventually, Central
Finally Whitcomb put an end to the battle and Research became a hiring pool for the divisions.”
DeSimone has never forgotten the outcome. “Whitcomb
said, ‘These guys in Brazil have the best business of all > The Mentor and Motivator
our businesses outside of the United States. Why don’t Jim Klein, retired, who held a variety of financial
you leave them alone and let them do what they want assignments during his -year 3M career, remembers
to do?’ ” End of discussion. the powerful role William McKnight played as a spon-
sor and mentor. “Tim Raymond, retired research scien-
> Sponsors with Vision and Pluck tist, had been working on a porous rubber sheeting for
“Tom Reid was one of my first sponsors and mentors hospital beds,” said Klein, who sat in on many manage-
at 3M,” said Les Krogh, retired senior vice president, ment reviews of new products. “Tim called it Porcel
Research and Development. “I worked for him in the rubber sheeting and he worked on it for years. Every
summer of . He talked to me about fluorochemi- six months, the product team reported to the Manage-
cals and how they could carry 3M into agricultural ment Committee on their progress, expenses and pro-
chemicals and pharmaceuticals. I learned about vision jected costs. Tim knew, from the tone of one meeting,
from Tom.” Mathew Miller, manager, 3M Abrasives that the project was going to be killed.”
Lab in , told his colleagues to look seriously at that Raymond had a huge emotional investment in the
young guy, Krogh. “Matt taught me how to run a lab project and, as the meeting progressed, Klein remem-
in one of the toughest situations—a division that was bered him saying, “You know, I’ve worked seven years
of my life on this. You’re not listening to me. You’re
going to kill this project.” Tears ran down Raymond’s
William McKnight established fundamental
cheeks. It was then, Klein said, that McKnight stepped
operating principles for 3M including belief in in, “Wait a minute, Tim. What I want to tell you is we
people, trust in people and a willingness to let
people try new things. > Lew Lehr retired chairman
have a project involving resin bond disks that is more We’ll see if this is as good as you say it is.’ ” Six months
important and we need you for that one. It’s worth mil- later, 3M had two customers, the United States Air
lions of dollars to 3M. Porcel sheeting is a good product, Force and the University of Minnesota. “We told them
but we can’t afford to have you focused on it right now.” we were going out of business and they said, ‘No, you’re
Klein said Raymond went from fighting tears to not,’ ” Lehr recalled. “That’s how the medical business
“walking five feet off the ground because McKnight got reinstated at 3M. It was Tierney, a 3M champion,
said, ‘I’ve got a project for you; you’re the best man who had the faith to keep the program going. You could
in the company for this job.’ ” say he ‘sat on the eggs and helped them hatch.’ ”
> The Persistence of Champions The Boise, Idaho, blitz a few months later confirmed
Lehr said Jim Thwaits was the original champion of the fact that once consumers tried this product, they
Post-it notes when he led 3M’s Tape Group while Art Fry, wanted more.
retired corporate scientist, Office Supplies Division, pur- Clarence Sampair, Maynard Patterson, M.J. Monteiro
sued a lonely cause: trying to sell people on the value and Thwaits, all long retired from leadership positions
of a pad of yellow memo paper with impermanent adhe- in International Operations, were the “international
sive. “Thwaits was the one who kept pushing and saying, champions” who made 3M a global enterprise, as early
‘This might be a product,’ ” Lehr said. Lehr’s executive as the s, when other American companies were
assistant, Shirley Tholander, was also a champion of focused largely on domestic growth. “Establishing and
Post-it notes. At the request of 3M marketers, she sent expanding 3M’s international operations was remark-
a letter to her executive secretary peers at Fortune able,” said Lehr. “They had indomitable spirit. They
companies and enclosed a product sample. “All of a were able to wear dirty shirts out of suitcases they’d
sudden, those little yellow things were coming from the been carrying around for three weeks. With little experi-
CEO’s offices in companies,” said Lehr. “The next ence to guide them, Sampair and Patterson had uncanny,
question was, ‘Where can I get more?’ ” accurate instincts for international business.” They, in
After Post-it notes failed in a five-city test, Joe turn, were mentors to Thwaits who followed them.
Ramey, who retired as group vice president, Commercial
Markets Group, and Geoff Nicholson, who retired as > The Champion of Shared Knowledge
staff vice president, Corporate Technical Planning and Bob Bringer, retired staff vice president, Environmental
International Technical Operations, were two champi- Technology and Services, and former chair of 3M’s
ons who packed a pickup and trailer with samples and Technical Council, said Bob Adams was the champion
drove to one of those cities, Richmond, Virginia, to give of technology sharing within 3M. “Bob, who retired
the product one last try. “They traveled from one end as vice president, Research and Development, formed
of town to the other,” said Jerry Chernivec, intellectual 3M’s Technical Council,” said Bringer. “He saw it as
property counsel, who wrote the first Post-it note an open forum for technical leaders from all the labora-
patent and has defended the product from competitive tories in the company to share information about new
infringement around the world. “They gave Post-it notes technologies. This was the first time that peers got a
to every potential customer and said, ‘We’ll be back in chance to meet together for three or four days. Creating
three weeks to see what you think.’ When people actu- the council solidified the idea that technology belongs
ally had a chance to try them, Post-it notes were a hit.” to the company.”
As the champion of knowledge transfer, Adams also new things—ideas that were completely apart from
advocated a strong market orientation, said Bringer. our normal lab assignments. He’d often walk in and ask
“He started at 3M as a salesman with a Ph.D. in chem- ‘What’s new?’—and he’d expect an answer.”
ical engineering. He encouraged all of us to think more On most Friday afternoons, Grieshaber gathered
about markets rather than just about technology.” his team for what he called, “show and tell.” “He’d buy
Mentors, sponsors and champions often have long coffee and doughnuts and we’d all sit around and dis-
lasting impact. Roger Appeldorn, retired corporate sci- cuss the personal lab projects we were working on,”
entist, remembers Emil Grieshaber, technical director, Appeldorn said. “One idea sparked another. I can
Visual Products Division, the nattily dressed individual- remember people from other divisions attending,
ist who arrived at work wearing a bow tie and a flower including some from Visual Products Division, the group
in his lapel. Appeldorn was taking additional courses working on overhead transparencies and later the over-
at the University of Minnesota in when he went head projector.” Those early, casual meetings planted
to work for Grieshaber in the Thermo-Fax laboratory. the seeds for 3M’s microreplication technology plat-
“3M didn’t have an education policy at the time, so form. Even today, more than years later, Appeldorn
Emil covered for me when I attended day classes,” said said Grieshaber’s impact was pivotal. “He was my first
Appeldorn. “He was a taskmaster; he expected people major mentor. He influenced me more than anyone else
to work hard. We all had projects that were important in technical work and technical management.”
to the division, but he also encouraged us to think about
time-tested truths
3M Pharmaceuticals—Riker Labs,
Tambocor and Aldara
6
No Risk, No Reward—
‘Patient Money’
Twelve years after its founding, 3M finally made money on
its sandpaper. Eight long, dry years plagued the company
before 3M Scotchlite reflective technology produced a
minimal profit. When 3M entered the health care business
in with surgical drapes, it was an inexperienced
newcomer with anemic product revenues taking on giant
Johnson & Johnson. In pharmaceuticals, 3M invested
in years of research before Tambocor, a drug to
treat heart arrhythmia, was introduced. It took
years before Minitran, a transdermal nitroglycerin
78 Chapter 6
drug delivery system, and years before 3M has a tradition of applying patient money
Aldara, an immune response modifier, and patient support to ideas that ultimately can
made it to market. change the basis of competition. Baukol calls them
For a century, 3M has demonstrated a bias the “holy grail” of 3M. “You just know that some
toward growth through diversification. On many things are going to be worth working on and that
occasions, these new directions have involved requires technological patience,” said Baukol.
considerable risk and long-term investment known “You don’t put too much money into the
as “patient money.” This investment has often investigation, but you keep one to
led to leapfrog technologies with far five people working on it for
reaching applications. “We have to years, if you have to. You do it
because you know that, once you
Scotchlite sheeting didn’t show crack the code, it’s going to be big.”
Creating a reflective road striping material
much profit for nearly 10 years. The same was
2 that is durable and replaces paint is an example
true for fluorochemicals and duplicating products. of a “holy grail” product. Developing a dental
It takes ‘patient money’ to make some ideas
succeed. > Philip Palmquist retired technical director, In the early stages of a new product or technol-
Reflective Products Division, and Carlton Society member ogy, it shouldn’t be overly managed. If we start
asking for business plans too early and insist on
bring in new technologies that will enable 3M to win tight financial evaluations, we’ll kill an idea or
in the future, along with focusing on what we already
surely slow it down. > Harry Hammerly retired executive
do best,” said Ron Baukol, retired executive vice presi-
dent, International Operations, who started his career vice president, International Operations, formerly vice president, Finance
the place in the human body that needs them. “That’s whether you’re successful or not. If you’re successful,
why 3M’s metered-dose inhaler is such a strong product, you’re called persistent; if you aren’t, you’re stubborn.
because it delivers drugs for asthma directly to the But, while you’re doing it, nobody can tell the differ-
lungs,” said Baukol. ence.’ ” Baukol said. “We have to have a lot of patience
The challenge, of course, is to discern these holy with our stubborn people.”
grail product ideas from what Baukol calls the “ever-
greens”—products that demand years of attention and > Stubborn at First, Successful at Last
A young research chemist named Phil Palmquist and
The willingness to bet on embryonic rookie engineer Heltzer were probably considered stub-
born when they wouldn’t give up on the “Glass Beads
businesses—and fund them—is the key to Project,” a product development team started in .
3M’s future. Fortunately for 3M Health Care, Assigned to develop durable roadway striping, the team
there was considerable patient money around coated a plastic adhesive tape with small glass beads,
but it wasn’t as reflective as it needed to be.
30 years ago. > Jerry Robertson retired executive
One year later, after 3M’s senior management had
vice president, Life Sciences Sector told the team to stop work, Heltzer and Palmquist perse-
vered. Working after hours, Palmquist managed to create
investment but never blossom. “You have to have a product times brighter than white paint and
patience with some ideas, but not with everything you’re times better than earlier reflective prototypes. But, the
working on,” he said. stripes weren’t tough enough to stand up to frost and
Golden Step Awards were created in at 3M heavy traffic; they peeled away from the road surface
to recognize teams of people who develop break- and waved in the breeze. Passing motorists dubbed the
through, profitable products and
demonstrate persistence, or 4
stubbornness, to see their efforts
through. “I remember our former
chairman of the board, Harry
Heltzer, once saying, ‘The dif-
ference between persistence and
stubbornness is, fundamentally,
3
80 Chapter 6
product “3M’s friendly tape.” Undaunted, the team Scotchlite sheeting on the side-arm stop signal of school
scrambled to improve the stripes before winter arrived buses, but when the temperature dropped, so did the
by using asphalt to stick them to the pavement. Eight sheeting. Reflective “Go For Safety” emblems were dis-
volunteers from several 3M departments helped lay a tributed far and wide to car owners, but they became
three-quarter-mile-long stripe on busy Highway near brittle in the cold and fell off the cars. Rain significantly
the company’s plant on the east side of St. Paul. cut the visibility of the reflective signs and dirt quickly
lodged between the glass beads, making them look
unsightly in daytime. Working with other technical peo-
We had a machine to dispense the asphalt, ple, Palmquist, who eventually retired as technical direc-
but we had no way to keep it hot enough to go tor, Reflective Products Division, improved the sheeting
though the dispenser. Harry Heltzer volunteered with a smooth topcoat that protected the glass beads
from dirt and weather. In addition, the new Scotchlite
to bring buckets of hot asphalt from the plant.
engineer-grade, flattop sheeting made it possible to apply
That’s when he got into trouble. On his third trip, words and other design elements with weather-resistant
a St. Paul policeman stopped him for speeding. inks. That breakthrough meant that Scotchlite sheeting
could also be used in graphics and advertising.
> A Scotchlite project volunteer
1 1 A 1940s advertisement
recommended using
Scotchlite reflective
material on billboards
like this one for Sweet-
heart bread. 2 Scotchlite
reflective sheeting made
taxi cabs in England
more visible at night.
3 A 1948 advertisement
for Scotchlite reflective
fabrics.
No Risk, No Reward—‘Patient Money’ 81
The division didn’t actually earn its own way until but nobody could produce it yard after yard and have
. Bert Cross, the company’s new products manager the optical properties, the durability and the handling
(and later CEO), became the next champion of reflec- properties of Scotchlite products.”
tive products when he envisioned multiple markets and Over the decades, the original reflective technology
applications. By fiscal year , the division grossed has become more and more sophisticated and its uses
about million. have multiplied. According to a two-year study
funded by the National Highway Traffic Safety
administration in the s, Scotchlite
3M was a driving force in advocating
Diamond Grade sheeting on truck trac-
a universal, international traffic tors and trailers has helped reduce
sign system in the 1960s. When accidents by percent. Diamond
that agreement was successful, Grade reflective sheeting also
makes construction zones and
we went on to be—by far—the pedestrian crossings safer. Scotchlite
leading supplier of signing materials reflective fabric retains its reflectivity after
around the world. > Donn Osmon retired group repeated industrial washing. Reflective fabrics
and yarns for shoes and clothing answer a safety
vice president, Traffic and Personal Safety Products Group
2 3
82 Chapter 6
1 3
No Risk, No Reward—‘Patient Money’ 83
knew about Scotch brand tapes from 3M; that’s why Lou Weyand, who later retired as executive vice
they came to us.” president and director, Sales, told Lehr, Auger and their
The physicians sought a licensing agreement with boss, Hugh Tierney, who later retired as vice president,
3M to produce the surgical sheets, but Vice President Reinforced Plastics Division, to halt production. “But,
of Research and Development Richard Carlton sug- Hugh said, ‘You guys say you have something. Before
gested collaboration instead. After all, he reasoned, 3M we stop, why don’t you make enough so you’ll have a
had experience with developing new products and the six-month inventory to sell off and then go out and sell
physicians didn’t. Carlton assigned the project to 3M’s it,’ ” Lehr recalled.
tape lab where Lehr and Burt Auger, who later retired
as staff vice president, Program Development, went to People were telling Lew Lehr, ‘What the hell
work. “It was a Rube Goldberg project; we were making
are you doing getting into health care?’ He
kept plugging away and he created a hugely
We began marketing and we had about six
successful business. > Bill McLellan retired staff
sales people. After six months, we’d spent more
vice president, Corporate Services, Austin, Texas, and former
on advertising and marketing than we sold . . .
division vice president, Orthopedic Products Division
That wasn’t the way 3M did things. > Lew Lehr
“We offered to buy the business from 3M,” Lehr said. We took our top tape salesmen and tried to have
“People in management probably said, ‘Those young
them sell surgical drapes to hospitals. They didn’t
punks want to buy it; they must know more about the
venture than we do. Let’s let them go ahead for a while.’ know the chief surgeon from the intern or the
We were serious, but we didn’t have any money to buy it.” purchasing agent from anybody else. It was very
As fortune would have it, a branch of the U.S. Air slow getting started. > Frank Copeland retired research
Force and the University of Minnesota surgical depart-
scientist, Medical Products Division
ment both decided to buy large quantities of 3M’s new
surgical drape. “At the end of six months, we told them
we were going out of the business,” Lehr recalled, “and our surgical tape. Our consultant had to fly out and tell
our new customers said, ‘No, you can’t!’ ” Lehr and the fellow at the FDA that tapes aren’t put on by the
Tierney appealed to management and won a reprieve. spoonful or in capsule form.”
By , 3M had a lab staff of five people trying to
> A High-Risk Proposition develop new products. The team began using the com-
3M funded a pilot plant to supply its new medical cus- pany’s new synthetic adhesive technology to develop
tomers and, by , Lehr had convinced management tapes that could be applied to human skin because 3M’s
to fund more research. Medical products was a tough new adhesives were much less irritating than the com-
arena for 3M and others. “No industrial company had mon zinc oxide adhesive tapes used at the time. From
successfully entered health care,” Lehr said. “The two this work came the introduction of Scotch plastic surgi-
or three others that tried, failed.” Success required sig- cal tape, in the late s,
nificantly more investment in research; long, painstak- and a “breathable”
ing and expensive clinical studies before going to mar- tape, Scotch micro-
ket; and selling physicians on new products. In addition, porous surgical tape,
there was the threat of serious liability should a product later renamed
fail. It was a new, risky world for 3M. Only ambitious
people and patient money had a chance of success.
“We were ignorant about dealing with the U.S.
Food and Drug Administration (FDA),” said
Lehr. “Our first drug application was refused
because we had failed to specify a dosage for
1
Micropore surgical tape in . The two products McKnight, who was retired from day-to-day 3M opera-
became the leaders in reducing skin irritation. tions and living in Florida. “We laid out a -year pro-
“Johnson & Johnson was already selling an adhesive gram of product development, sales and marketing,”
surgical tape, so we had to have something completely Lehr said. “We projected sales and profits years out.
different,” said Frank Copeland, retired 3M research McKnight was very enthusiastic and wondered out loud
scientist, a key developer of Micropore surgical tape.
“Lew Lehr suggested that we look at nonwoven tech-
When Lew Lehr was manager of the $5 million
nology, which was in its infancy at 3M.”
health care business, he was offered a higher
ranking job in another 3M business. He turned
If you think about it, 3M’s tape-type medical
it down because he wanted to build health care.
products fit the company’s philosophy of ‘make
> Harry Hammerly
it by the mile and sell it by the inch,’ which has
served 3M well. > Frank Copeland
why we hadn’t done this years before. When we looked
into the records, we discovered that a researcher had
Soon after the introduction of Micropore tape, an proposed marketing a masking tape for medical use
inventive doctor snipped the tape into pieces and used in the mid-s, but it went nowhere. McKnight was
it in place of stitches to close a wound. The opportunity eager to take on Johnson & Johnson.”
was obvious. 3M cut the tape in ⅛-inch to ½-inch McKnight; Chuck Walton, senior vice president,
widths, sterilized it, packaged it and Research and Development; and Clarence
introduced Steri-Strip wound closures “Sam” Sampair, the architect of 3M
to the marketplace in . After International, all became champions
a few product improvements, the of 3M’s fledgling business. This is
product became the best answer probably why Medical Products
to closing a wound simply and was named a division in
painlessly. even though it fell short of 3M’s
About this time, Lehr and stringent revenue requirements.
Frank Scully, a research scien- After years, the actual
tist, paid a visit to William numbers for the Medical
2
86 Chapter 6
Products Division exceeded even Lehr’s projections. mask, later called the Aseptex surgical mask ();
“Our cumulative sales were percent of our forecast, Reston foam pads (), created to reduce bed sores;
and our cumulative profit was percent—even though Transpore surgical tape (), a nonirritating, trans-
only about percent of the products we projected were parent, easy-to-use tape that caught on quickly around
actually developed,” Lehr said. the world; Durapore surgical tape (), made of
Lehr assigned a young chemist, Jerry Robertson, strong cloth; soft, stretchy Microfoam surgical tape
who later retired as executive vice president, Life
Sciences Sector, to manage a new Surgical Products
You have the freedom at 3M to maneuver things
Department. “We were small, probably million in
sales,” Robertson said, “but we grew it over about eight to your benefit if you want to take advantage
years with a compound annual rate that I don’t think of it. Some things won’t work, so you fail once
has been equaled. We had to change the way surgeons in a while, but that’s a lot better than the cost
practiced medicine, one surgeon at a time. We had to
of a missed opportunity. > Les Krogh retired senior
2
No Risk, No Reward—‘Patient Money’ 87
exploded to . billion, representing nearly percent Patience was necessary from the start. “I remember
of the company’s total business worldwide. Health Care the first technical audit the Biochemical Research Lab
Markets became one of 3M’s strategic market centers had in about ,” Tom Reid, then the lab’s manager,
in . said. “Our audit was combined with the Medical
Products Division because we had so little to talk about.
They had all these projects and all we had were wishes.
Pharmaceutical research is not for the weak
It was a pretty embarrassing review and some of the
of heart. The stakes are high: years of devel- auditors weren’t impressed.” Even so, Lehr took an
opment and testing and millions of dollars of active interest in the team’s work because he knew it
was a logical extension for medical products. So did
investment . . . then it still has to succeed in the
McKnight and Cross, McKnight’s successor as chair-
marketplace. Given all that, wouldn’t it be easier man of the board and CEO in .
and more rewarding to invest in lottery tickets? About six years earlier, McKnight had struck up
> 3M Technology Platforms, 1996
a merger conversation with his Florida neighbor, the
chairman of Warner-Lambert Company. Though that
idea fell through, it set the stage for 3M considering
> 3M Pharmaceuticals: ‘All We Had Were Wishes’ growth in pharmaceuticals through a strategic acquisi-
Investing in fluorine chemistry back in the s may tion. “We knew we either would have to build the busi-
have been much like buying a lottery ticket because ness ourselves or acquire it,” Lehr said. “It was becom-
3M had no specific product in mind. But, even as early ing more and more obvious that this would require a
as , 3M’s annual report mentioned using fluoro- different mentality than selling sandpaper. Along with
chemicals to make drugs. It wasn’t until , however, a different mentality, we needed a sales force familiar
that 3M created a Biochemical Research Group Labo- with the market.”
ratory inside Central Research. Robertson was hired Cross knew Justin Dart, chairman, Dart Industries,
as the company’s first experienced biochemist. Don the parent company of Riker Laboratories, a Los
Kvan, the first pharmacologist, and Bob Nelson, the Angeles-based pharmaceutical company. Riker had
first veterinarian/toxicologist, made up the rest of the made its mark in by introducing Veriloid, a break-
team. They started investigating drugs for the heart, through drug for high blood pressure. But, Dart was
central nervous system and high blood pressure. They reluctant to sell. “3M doesn’t have enough money to
even dabbled in agricultural herbicides. buy Riker,” Dart challenged Cross. “Try us,” was Cross’
reply. Within two months, the two companies had a panies worked through the agonizing intricacies of
deal and Riker—with its , employees worldwide— integration, while learning from each other.
officially became a subsidiary of 3M on January , “I was predicting that 3M would move toward the
. Many observers later said that Riker was 3M’s pharmaceutical model as Riker moved toward 3M,”
most successful acquisition because it grew—by a said Baukol, who was named general manager of Riker
factor of —after becoming part of 3M. “It moved in . “I said we couldn’t go it alone—that Riker was
from a little understood, peripheral activity of 3M to a not going to succeed as a stand-alone pharmaceutical
business area recognized as a major contributor,” said company, maybe not even survive. The competitive
W. George Meredith, who became executive vice presi-
dent, Life Sciences Sector, and retired as executive 3M’s acquisition of Riker signaled the real start
vice president, Corporate Services and Supply Chain
of our drug discovery era. > Richard Miller
Management.
Along with a strong portfolio of products and a solid corporate scientist, Pharmaceuticals Division
1 2 1 3M’s acquisition of
Riker Laboratories in
1970 expanded the com-
pany’s health care busi-
ness. 2 Riker brought
a strong portfolio of
pharmaceutical products
and a solid reputation
with the U.S. Food and
Drug Administration.
3 Elden Banitt was
one of the creators of
Tambocor.
No Risk, No Reward—‘Patient Money’ 89
“window to becoming a modern pharmaceutical com- The compound was the “lead” molecule in the team’s
pany,” Robertson said, but it was a long, difficult and search for a drug to treat the heart, but it had a “tight
costly project that required extraordinary patience. therapeutic index,” meaning that the margin between
When Tambocor finally was introduced to the U.S. an effective dose and a toxic one was too narrow. So,
market in January , 3M had invested years and the team continued looking.
at least million in Tambocor. Some observers say
the cost was considerably higher than that estimate. The process is really slow. It was a matter
The story of Tambocor—one of the first of a class
of continually going back to the chalkboard
of drugs for treating irregular heartbeats—started in
when 3M’s Biomedical Group began exploring and redesigning. > Bill Bronn research scientist,
3
90 Chapter 6
that showed great promise—at least on paper—in treating > The Story Continues
heart arrhythmias. Still, questions persisted. It would By , the U.S. Food and Drug Administration (FDA)
still take clinical trials to prove that Tambocor could be decided that Tambocor was a significant enough drug
effective in humans. that it received higher priority in the review process.
By , 3M was betting on the compound in the The next year, Tambocor was sold in West Germany
brown bottle. Trials with healthy human volunteers where the national drug approval process is shorter.
began two years later. 3M applied for patents on Determining which patients would benefit most
Tambocor in that same year, knowing that years of from Tambocor without side effects was challenging.
At one point, Grentzkow had to halt testing. A few days
later, Grentzkow had to face his peers at an American
There were many people who felt this was Heart Association Annual Meeting. “I can remember
not an area for 3M to get into. It was far away so vividly people coming up to me on the convention
from the company’s usual line of businesses. floor and saying flecainide would never make it to mar-
ket,” he said.
> Elden Banitt
But instead of giving up, 3M quickly started more
testing. By November , the test results showed
testing leading up to FDA approval would erode its that Tambocor could be used safely. The company’s
-year patent and competitors would quickly jump ultimate triumph came on October , , when the
in with nearly identical compounds. Testing on healthy FDA gave 3M approval to sell Tambocor.
humans lasted for three years before the drug was given
to ill patients in . While 3M and Riker had other > Aldara: ‘It’s Not Over ’Til It’s Over’
drugs in testing (an anti-inflammatory for arthritis and The bomb dropped at a morning team meeting
an analgesic for control of postsurgical pain), the com- on January , . The anti-viral research
pany put those on the back burner in and focused project, headed by Richard Miller, was a
its resources on Tambocor. “We leapfrogged over casualty of Tambocor. 3M had decided to
two or three competitors who were ahead of us in the put his team’s work, and others, on hold
research process,” said Dr. Gary Grentzkow, retired in order to focus resources
director, medical affairs, Pharmaceuticals Division. 3M on the promising heart
set a goal of preparing its new drug application for the arrhythmia drug. “It was
FDA in about half the time it normally took. like getting punched in
1
No Risk, No Reward—‘Patient Money’ 91
the stomach,” Miller remembered, “but pharmaceuticals “He asked if it was hopeless,” Miller’s former
needed a success, and Tambocor had been the first prod-
supervisor, Ed Erickson recalled. “I said, ‘Well,
uct to come out of our drug discovery program. We
needed to get it to market as fast as possible and having you’re still here. And, it’s not over until it’s over.’ ”
more money would speed that up.” > Minneapolis Star Tribune
Miller and the biologists who reported to him were
put on 3M’s “unassigned list.” It was time to find
another job in the company, his colleagues advised,
and do it quickly. “Our management
set up meetings with all of us
to talk about networking to
find new positions,” Miller said.
But, Miller was either too
stubborn or persistent to walk
away from his promising project.
Miller, then a research scientist,
had joined 3M in to lead a team
with John Gerster that was exploring
how drugs might fight off viruses in 2
the human body. Miller had focused
his doctoral and postdoctoral study on
viruses, before anti-viral drugs even
existed. He was excited about this new we had something totally new and different. We discov-
frontier, and the work consumed him. ered later that our drugs stimulated the immune system
to fight off a virus.”
After being put on the unassigned list, Miller looked
The development time for pharmaceuticals
for a new position within 3M, but his heart wasn’t in it.
is 10 to 15 years from discovery to FDA approval “I didn’t do a very good job in my interviews,” he said.
and it can cost as much as $300 million. Only “When they’d ask what I wanted most to be doing, I’d
one compound out of every 10,000 makes it to say, ‘Go back and work on anti-viral drugs.’ ”
supportive and encouraged us to keep working; Gerster, tinued through , and imiquimod cream was shown
who was a Ph.D. chemist, continued making compounds to be effective in treating genital warts. Meanwhile, the
for us to test.” challenges posed in manufacturing the drug on a large
For six months, the team continued its experiments scale were significant, said Eric Jensen, manufacturing
and the results were consistently good. Miller “shopped” technical manager, Pharmaceuticals Division. “It was a
the project around 3M looking for a permanent home for very different product for 3M and even for our Pharma-
the research, but his desire was to remain in pharmaceu- ceuticals Division,” he said. “The drug itself has very
ticals. The team brought in a nationally respected expert complicated chemistry. It’s produced in a cream that,
in anti-viral drugs to review the results. This expert con- in itself, is difficult to make. We made the drug in
firmed that no other compound of its kind existed.
By July , Miller and team members who hadn’t Here was a brilliant scientist who knew that
gone on to other jobs were reinstated as a full-fledged
this drug had value. He wasn’t going to let it die
research team. “It was great—like having a big weight
lifted,” Miller said. “By the end of the year, we selected and he found a way to push it forward. Richard
the drug for development: imiquimod. By the end of Miller embodies the entrepreneurial spirit of 3M:
a person with passion who won’t be stopped.
It’s really important to keep management > John Benson executive vice president, Health Care Markets
1 1 Aldara, a highly
effective treatment for
genital warts, also shows
promise in treating other
viral infections and some
forms of skin cancer.
No Risk, No Reward—‘Patient Money’ 93
of treatment. By contrast, surgery for genital warts costs system that you need to get rid of virus infections and
hundreds of dollars and causes pain and scarring. tumors. We think we have made a very important addi-
Miller’s persistence over years paid off and his tion to the drugs doctors have to use.”
interest in the subject has not waned. “Understanding Asked by a reporter if he would still be working on
the body’s immune system is an exploding area of the drug years after approval of its initial introduction,
research,” he said. “We’re learning more about how Miller said, “It could take me to retirement. Physicians
to enhance immunity with drugs. Back in , we call and say they want to thank me. That’s very satisfying.
knew about interferon and interlukin, but today there Most people in pharmaceuticals want to do research to
are as many as different proteins that can affect the create drugs that help people.”
immune system. We hope to produce several genera- After the success of Aldara, 3M allocated an extra
tions of immune response modifiers.” million in corporate funding to the Pharmaceu-
Topically applied, Aldara also has shown promise ticals Division in to accelerate research into the
in treating other viral infections and some forms of drug’s other applications. Aldara’s success required
skin cancer, including basal cell carcinoma and actinic patience and persistence and, at times, stubborn people.
keratosis, a precancerous condition caused by too much Over time, the development of Aldara is the largest,
exposure to sunlight. “Our drug enhances cellular single investment made in a pharmaceutical product
immunity,” Miller, now corporate scientist, Pharma- in 3M’s history.
ceuticals Division, said. “That’s the part of the immune
time-tested truths
● Products that require years of attention and investment but will never
blossom need to be “weeded” out as early as possible.
Leveraging ‘IP’
7
The Power of Patents
Intellectual property (IP) is imbedded in 3M’s “DNA.”
Protecting the company’s unique products and processes
has been a priority for years. In a company in which
innovation is the growth engine and new products replace
their predecessors at a surprisingly rapid rate, intellectual
property has more currency than cold cash. ● In the
s alone, 3M received , U.S. patents and
ranked in the top international companies based
on the total number of U.S. patents awarded. In its
best year of that decade——3M ranked th
among international companies and sixth among
96 Chapter 7
U.S. companies receiving patents. These rank- McKnight was visiting his boyhood home in
ings put 3M in a league with other patent Brookings, South Dakota, when the news of the
powerhouses such as IBM, NEC, Canon, potential Carborundum lawsuit broke. When the
Motorola, Toshiba, Mitsubishi and Hitachi. troubled general manager told his parents, Joseph
and Cordelia, his father offered practical advice.
> ‘William’s right smart, but . . . ’ “William’s right smart, Mother, but he doesn’t
William McKnight’s introduction to the know anything about patents, and it would be a
power of patents came early—and painfully. waste of time for him to become a patent expert
After years without producing a really in time to handle this. Get a good lawyer, son.”
profitable product, 3M finally introduced The singularly memorable lawyer, Paul
Carpenter of Chicago, who was eventually hired
Vigorous defense of our patents and by 3M, was a precursor to a staff of about
intellectual property lawyers at 3M in . In
trademarks was crucial in 3M’s early
addition, today 3M also has numerous other out-
years. They were our franchises side counsel. Working together, they obtain and
1
around the world: our capital. defend the company’s patents, trademarks and
> Audun Fredriksen retired vice president,
product brand names.
In this instance, Carpenter notified Carbor-
3M Health Care Division
undum that 3M would continue production, and
the struggling company never heard from its competitor
its Three-M-ite abrasive cloth in to the relief of again. In fact, revenues generated by the flexible abrasive
everyone with a stake in the struggling company. The
product sales took off as the United States’ need for
All the time Paul Carpenter was checking
Army vehicles, airplanes and munitions increased. The
flexible cloth was superior, particularly for workers patents, he wrote voluminous letters to Ober
who hand sanded around moldings and curved metal and McKnight . . . briefing them in the intricacies
surfaces. Then bad news came in a sternly worded
and value of patents . . . The Three-M-ite incident
letter from 3M’s rival, Carborundum Company, saying
that 3M had infringed on Carborundum’s patent for its gave 3M its first real patent consciousness.
abrasive, “Aloxite.” > Virginia Huck author, “Brand of the Tartan”
Chapter opening 2 3
photos 3M’s patent
staff works diligently
to protect the company’s
intellectual property;
McKnight’s patent
for Hand Block for
Abrasives was filed in
1922 and approved
in 1925; Scotch-Brite
floor pads, 1962; Colorful
Scotchcast Plus casting
tape.
The Power of Patents 97
cloth grew from about , in to more than > Bulldog with a Law Degree
, by . McKnight’s education in patents Carpenter was a character—tall and slim, bordering
made him a fierce defender of 3M’s unique knowledge, on gaunt, and outspoken. “You never knew what he
and his philosophy guided the company’s approach to was going to do or say,” McKnight recalled. “We were
patent and trademark defense into the st century. having this struggle with Johnson & Johnson (J&J) in
a patent infringement. They had eight lawyers and one
3M’s success was built on unique products— of them got up and preached a whole sermon. Carpenter
finally got up and said, ‘Do we have to listen to this
products that were protected by patents.
crap?’ Then we all walked out, leaving them
> Carolyn Bates 3M intellectual property counsel sitting there.”
McKnight soon hired Carpenter full time and moved president, International Operations, “He gave us pres-
him to St. Paul, reasoning that, in his words, “He tige in the sandpaper community. Before that, we were
charged so much, we thought we could get him cheaper a poor third cousin of Carborundum and other big com-
if we hired him.” Even as late as the s, 3M’s inter- panies. Carpenter’s patent group made all the people
nal patent counsel still had its own separate name— in 3M patent-minded.”
Alexander, Sell, Steldt and DeLaHunt.
> Getting Tough, Standing Firm
When 3M’s unique Scotch brand cellophane tape was
The Wetordry patent helped us get distribution
introduced in , Americans found multiple uses
in the automotive market. We had the top quality for it—from mending torn book pages, ceiling plaster
product and set the standard in the marketplace. and sheet music to patching cracked turkey eggs on
the farm. “Infringers were eager to get a share of the
> John F. Whitcomb retired group vice president,
market,” said Bob Wolfe, retired director and senior
Coated Abrasives Group vice president, Engineering and Manufacturing.
“William McKnight made one of the most significant
But it wasn’t just economics that moved McKnight decisions of his tenure when he insisted on defending
to corner Carpenter’s time. The patent attorney was Dick Drew’s patent for cellophane tape.”
an astute legal bulldog who was highly productive and The decision took nerve, Hugh Tierney, retired
shunned wasted time. “He had lots of statues in his vice president, Reinforced Plastics Division, agreed.
office,” said Bob Tucker, retired vice president, Legal “Col. Johnson of Johnson & Johnson reared up and told
Affairs. “When he thought you had been there long Mr. McKnight that his father and his father before him
enough, he’d reach for his big feather duster and start had coated pressure-sensitive adhesive on any backing
dusting the statues. That was your signal to get out.” they cared to put it on and McKnight wasn’t going to
When Carpenter wrote and defended 3M’s Wetordry tell them they couldn’t. ‘You do,’ McKnight said, ‘and
abrasives patent, said Clarence “Sam” Sampair, retired you’ll be in a lawsuit.’ Mr. McKnight made it stick.”
Drew’s original cellophane tape patent application
was called “the grandfather application,” Tierney said,
because it contained broad claims of new and novel fea-
tures. “We fought nine lawsuits in nine years, and those
novel features gave us patent extensions for more
2
The Power of Patents 99
years. Because of patent protection, 3M had time to Congress in the s and they stifled all the
learn to make its tape better than anybody else in the patent coverage they could influence,” he said.
country.” “Some courts said the only patents that were
With degrees in chemistry and library science, Harold valid were the ones they hadn’t gotten their
Hughesdon was drawn to technical information and hands on yet.” McKnight wanted to protect
patent work in the s. “My job was to walk around every idea or technology that could be
the 3M labs, be a sounding board and listen to people patented. “He didn’t want anybody
who thought they had inventions,” said Hughesdon, who stealing anything that we had,” Lauder
retired as director, Technical Contracts, International said. But, that didn’t stop competi-
Lab Operations. He corralled all the experimental work tors from trying.
available, talked to the inventors and patent lawyers,
and identified what further experiments had to be done > A Crimp in a
before a patent was filed. “McKnight’s philosophy was Competitor’s Plans
clear,” Hughesdon said. “I remember a Business Week On the same day in that 3M
magazine cover story on 3M in the s. It said our introduced its new -inch circular
strategy was to get strong patents and charge what the floor pad for industrial cleaning,
traffic would bear. When I describe 3M in a nutshell, a customer of a major rival, Norton
I use three P’s: patents, profits and paternalism.” Company, shipped samples to Norton’s
In the United States, when 3M puts a new product lab for analysis. “Every company of any
on the market, there is a -month “grace period” to size keeps track of its competitors, but
apply for the patent. In most other countries, there is when you go to the other guy’s back-
no such allowance. “It was an uphill battle to try to yard and pick up a product and ana-
convince 3M people there was more to patent protection lyze it, that’s meaningful,” said Stan
than just in the United States,” Hughesdon said. By the DeLaHunt, who was part of the
s, however, 3M was taking no chances with its U.S. 3M team that defended the patent
and international patents. They were filed before a new for years. When Norton
product was disclosed outside the company. introduced a similar product a 4
Even so, securing and defending a patent decades few months later, it claimed
ago was tough, said Charlie Lauder, retired 3M patent that 3M’s Scotch-Brite floor
counsel. “The antitrust supporters had taken over pad couldn’t be patented
because of “prior art”—a combination of information Affairs and General Counsel. “The Danville case (so
and drawings of similar inventions that already had called because the court was in Danville, Illinois) caused
been published. Any person with reasonable imagina- us to pay attention to the practical limits of exploiting
tion and skill could have come up with the same idea, intellectual property,” he said. “As a result, 3M devel-
Norton argued. oped a strong compliance program that is the best of any
3M brought patent infringement suits against com- company in the world. That serious attention to compli-
petitors in France, Germany, the United Kingdom and ance evolved into a strong corporate value. Integrity and
Australia, among others. Millions of dollars of sales reputation have always been important to 3M.”
were at stake, said DeLaHunt, not to mention a pivotal
legal battle with Norton. 3M had successes in its for- Without the patent system, 3M innovation would
eign suits and DeLaHunt said this aggressive approach
come to a screeching halt. > Carolyn Bates
was crucial to 3M. “Our successes outside the United
States put a crimp in our competitors’ plans,” he said.
When Gary Griswold, president and chief intel-
> The Justice Department Calls lectual property counsel, 3M Innovative Properties
Antitrust issues made headlines in the s, and 3M Company, joined 3M in the early s, 3M’s patent
was not untouched. This was a decade of rapid growth staff was one-third the size it was by . By the
for 3M, and the U.S. Justice Department argued that the s, the term intellectual property was in vogue.
company was monopolizing key businesses—including It was first used to describe that broad category of
pressure-sensitive tape, magnetic tape and presensitized ideas, inventions, technologies and brands protected
aluminum printing plates—beyond the scope of 3M’s by patent, trademark, copyright and trade-secret law.
patents. 3M didn’t contest the charges and entered into Griswold watched a shift occur—from an “anti-
a consent decree in a companion civil case. patent” attitude in government and the courts charac-
But, the outcome of that loss was long lasting and teristic of earlier decades—to an environment in the
positive, said John Ursu, senior vice president, Legal s where patents were more highly valued and
protected. Traditionally, appeals in patent cases
were heard in various circuit courts of appeal
around the country. There was little uniformity
in the decisions, Griswold said, and some of
these courts consistently found patents invalid
1 2
The Power of Patents 101
million, representing more than times J&J’s United States. They must have known that 3M would
profits on the offending products and nearly twice as call “foul.” When the case went to trial in February
much as their total sales for those products. For 3M, , the International Trade Commission decided in
it was the largest recovery in the company’s history favor of 3M and U.S. customs officials were told to
and, at that time, the fourth-largest patent infringement refuse to let in Seibu’s product.
award in the United States. “3M has been very aggres- There was much at stake, said Roger Tamte, 3M intel-
sive in enforcing its patent rights,” Bates said. “We lectual property counsel. “High-intensity sheeting was
believe in respecting the intellectual property rights a mainstay of our Traffic Control Materials Division.
of others and this case reinforced the importance of An earlier product had been subjected to tough pricing
that 3M policy.” competition by Seibu and others,” Tamte said. “3M was
For Bates, personally, who began her career at 3M concerned that Seibu would drive down the price of this
in a lab, this was a legal assignment of a lifetime. “This new product in the effort to sell their own product.”
case was a patent attorney’s dream,” Bates, who earned Ray Richelsen, who retired as executive vice presi-
her law degree in , said. “It was a fantastic learning dent, Transportation, Graphics and Safety Markets,
experience.” was the division’s vice president at the time. He made
Since resolving this case, 3M has worked closely the decision to defend the patent in the United States
with J&J and has developed some strong business rela- and abroad. “Patent enforcement is expensive,” said
tionships with the company. Tamte. “You try to judge your chances of success. It
was a gutsy move because the cost of litigation shows
> Keeping Infringers at Bay up on the division’s bottom line, and it can cost mil-
About , 3M introduced a new and improved version lions.” From until , when 3M’s U.S. patent
of its Scotchlite high-intensity reflective sheeting, a prod- expired, the company had no competition in the United
uct with its “roots” in a material invented by Eugene States for Scotchlite high-intensity reflective sheeting,
McKenzie in the early s. The new product was cov- and 3M’s successful enforcement of its patents in other
ered by a patent issued to a young 3M scientist, Joe countries limited competitors’ sales around in the world.
McGrath. A few years after the introduction, Seibu, a
Japanese company, began selling a competitive product > Protecting the Canary Yellow Notes
and insisted that their Seibulite Ultralite sheeting did not When 3M introduced its revolutionary Post-it notes in
infringe 3M’s patent. After long negotiations that led to , the little yellow notes changed the basis of com-
no resolution, Seibu began exporting its product to the petition and quickly became the highest value-added
1 1 Scotchcast Plus
casting tape offers cast
wearers colorful options.
The Power of Patents 103
product the paper industry had seen. but protecting Post-it notes from tough
“Naturally, there were a lot of com- competition in the product’s infancy was
panies looking for an adhesive to do crucial. 3M won its patent case, and Mead
the same thing,” said Jerry Chernivec, and 3M negotiated a settlement. Most impor-
3M intellectual property counsel. At the tantly, Mead got out of the repositionable notes
time, the Post-it note adhesive was business, Chernivec said: “That put teeth in our
patented only in the United patents. Other competitors took a strong look
States and, although at whether they should do anything that
offshore competition might infringe on our patent coverage.”
had access to the pub- In , the U.S. Patent and Trademark
lished patent information, a Office registered 3M’s famous canary yellow
strong competitor did not surface. color trademark for Post-it notes. Soon afterward, 3M
“We had some competitors in Japan,” also registered the color blue used on its premium
Chernivec said, “but their adhesive aged, making it quality Scotch painters’ tapes and 3M is pursuing the
difficult to pull a note off the pad. Then we ran into color purple for some of its sandpaper. “All three colors
American Pad and Paper (AMPAD) in Massachusetts.” are clearly associated with 3M,” said Robert Hoke,
AMPAD was a mature company with less than stellar 3M intellectual property counsel. “We’re not trying to
growth whose major product was yellow legal pads. exclude competition, but we’re making sure that our
“They tried to structure an adhesive that would provide competitors play fairly.”
the same characteristics as those in Post-it notes but
wouldn’t infringe on our patent,” Chernivec said. When > Where’s the BEF? Defending a Market
AMPAD introduced its product in the mid-s, 3M Protecting a strategic business with huge potential for
decided AMPAD had, in fact, crossed the line. growth was crucial to 3M in the s when the com-
3M sued AMPAD and the case went to trial in . pany introduced Vikuiti brightness enhancement film
Two years before the trial, Mead Corporation—a 3M
customer—acquired AMPAD. “Mead was a good friend
of 3M,” Chernivec said. “They bought our products,
and we bought from them.” Involving
a customer in litigation was not
what 3M wanted to do
2
104 Chapter 7
(BEF). The unique surface material with tiny “micro- Those companies then sold their backlighting modules
replicated” structures was designed to enhance bright- to display manufacturers who, in turn, made liquid crys-
ness and conserve battery power in computers, cellular tal displays for computer manufacturers. 3M had pend-
phones and other devices that rely on liquid crystal ing patent applications in Japan, but issued patents in
displays (LCDs). the United States. “As far as the patents on our film were
“3M got into this market at precisely the right time, concerned,” Buckingham said, “our competitors didn’t
when the sale of laptop computers was exploding in the infringe on our U.S. patents until the assembled products
early s,” said Steve Buckingham, 3M intellectual were imported into the United States by major computer
property counsel. “By that time, the size, weight and
price of laptops were dropping. Our film made the The power of our patents is the reason for
LCD screens brighter and the batteries last longer.”
the success of every division of our company.
At first, 3M commanded the entire market, but within
Patent protection gave 3M the time to develop
In intellectual property law, our strategy is to markets that weren’t developed and change
map out and protect a key competitive product the basis of competition. > Ron Mitsch
area. 3M has invested in the research to develop retired vice chairman and executive vice president
decision. If it hadn’t been for our patents and our will- even more,” Mitsch said. Six months later, Mitsch came
ingness to assert them, our competitors would have been back with a set of recommendations that he called
willing to sell their films at a price we simply couldn’t the “Research and Development (R&D) Imperatives.”
afford to match; they would have taken the market away Among key strategies, one focused on 3M’s knowl-
from us.” edge base. “It was an unequivocal endorsement of intel-
3M took action in late and gave two of its lectual property,” he said. “It stressed the importance
most important customers an early warning. After about of an intellectual property training program in the com-
four months of negotiations, both companies agreed pany, a patent strategy based on being the ‘first to file,’
not to purchase products from film manufacturers that
infringed on 3M’s patents. Since then, 3M’s patents on
No company can rest on its laurels—it either
Vikuiti film have been respected, and 3M expects the
film to continue to be an important product in the st develops and improves or loses ground. Our
century. company has adopted the policy ‘Research in
Fortunately, and perhaps surprisingly, 3M’s relation-
business pays.’ > Richard Carlton retired 3M president
ship with its two customers became stronger, Bucking-
ham said. “The experience opened up communication
between us and the companies’ design teams in Japan, for and an IP audit of our major technology programs.”
example,” he said. “3M came to understand better what That greater emphasis kicked off an increase in patent
they were looking for and what was important to them.” applications that continued through the s.
As part of those R&D imperatives, 3M developed
> Leveraging 3M’s Intellectual Property a new Corporate Intellectual Property Policy in
The s sparked an even greater emphasis on making that asked every business unit and research and devel-
the most of 3M’s storehouse of discoveries, processes opment group in the company to develop worldwide
and technologies. IP strategies and implementation plans. From on,
In , 3M’s Chairman of the Board and CEO technical people were expected to become familiar
Allen Jacobson asked Ron Mitsch to leave his position with the patent and nonpatent literature related to their
as group vice president temporarily and focus on how areas. The policy further said that 3M would continue
the company could accelerate its innovation rate. “I
went through all of our technical audit reports, talked
to a lot of people and listened
1 A 1959 Technical
Forum course on patents
gave 3M’s technical
community a better
understanding of their
importance.
The Power of Patents 107
to “protect its substantial investment in research and 3M’s innovative culture and our intellectual
development by obtaining, maintaining and enforcing”
property are like motherhood and the American
patents and copyrights and by protecting trade secret
rights. In addition, 3M underscored the importance flag around here. > Gary Griswold
If they were lucky, they got an order. But, McKnight had office “gatekeeper” let McKnight into the factory’s
a bold idea that took more initiative. It could have easily inner sanctum and men on the production line told him
backfired, too. what they thought, including how sub-par some 3M
McKnight knew that 3M’s products were probably products they had tried actually were. Not only did
no better than its competitors’, but he was ambitious McKnight have to insist on better quality back at
enough to try his unconventional approach by calling home in St. Paul, Minnesota, but he faced a price war.
on Rockford, Illinois, furniture manufacturers in a McKnight and Ober agreed that 3M could win with bet-
single day. Those companies were the most important ter quality, but they wouldn’t be victors on price alone.
During this era, McKnight expanded his philosophy
His plan was to get into the back shop of a firm, of looking “behind the smokestacks,” going right to the
factory floor. As he rose in the company, he insisted that
talk with the workmen to learn whether or not
new salesmen go into the back shop of a factory, just
they were satisfied with the product they were as he had done. They must talk to workers and find out
using. And, if they were willing, he demonstrated their problems, he said. On the spot, they must identify
his own product from 3M right on the spot. the abrasives the workers needed. They must demon-
strate 3M products and follow up by bringing samples
> Mildred Houghton Comfort author of “William F. McKnight,
to the companies’ factories. To ensure that 3M products
Industrialist” were consistently of good quality, McKnight wrote to
Ober suggesting that a general manager coordinate 3M
sandpaper buyers, but they were a tough sell. The tall, factory output and field experience. Ober agreed and
thin young man with red hair asked if he could step gave McKnight the job.
into the back shop to talk to workers. The usual front
office answer was, “What for?” When they
asked the name of McKnight’s
company, most people
had never heard of 3M.
“We’re new,” he said,
“that’s why we’re anxious
to learn what you need.”
Grudgingly, the front
> Sparks, Sawdust and Inspiration Health Care Markets, said, “I remember hearing that
While the product was created well before Richard if you were to succeed as a sales rep in abrasives at 3M,
McGrath’s time, he remembers Stikit sanding discs you had to go to the back of the shop and throw sparks.
with glue on the back so they could be easily attached It meant putting a new belt on the equipment, picking
to a sanding tool. “Before Stikit discs, people had disc up a piece of metal, grinding it and throwing sparks.
adhesive that they applied to the sandpaper backing If it was a woodworking customer, it meant making saw-
with a little brush, then they waited for it to dry before dust. The idea was to get out with the customers; live
with them; see what they see.”
I recall coming across historical records from On Benson’s first day at 3M in , he saw this
principle in action. “Ron Baukol (then working in the
abrasives that described McKnight’s first sales health care area of 3M, now retired executive vice presi-
meeting in the early 1920s. He said, ‘Go and dent, International Operations) hired me,” Benson said.
find out what the customers want . . . and “He wanted me to work with anesthesiologists to under-
stand their needs. 3M had never worked
come back and tell us what it is.’ That was the
with them before, but it
founding philosophy of 3M. From that came seemed that some of
huge advances . . . from our understanding
of the marketplace we served. > Richard McGrath
our products ought to be useful.” Baukol and Benson technologies could be of value to them. Since ,
set off for Northwestern Hospital in Minneapolis (now 3M has collaborated with United Hospitals in St. Paul
part of Abbot-Northwestern) that same day. “We were in a program called Partnership in Patient Care in which
sitting in the surgeons’ lounge. The anesthesiologist 3M employees meet with medical staff to gather feed-
tried to describe his work and he finally said, ‘Look, I back on existing products and prototypes in conferences
can’t do it here. You’ve got to come into the operating and focus group panels. Originally created as a way for
room and see it firsthand.’ ” 3M technical employees to gain a closer understanding
of the customer’s environment, the program has been
I used to define innovation as something that expanded to include anyone in the division. The goal is
to understand medical staff and patient needs by learn-
happened in the lab, but our customers don’t see
ing together, sharing information about 3M technolo-
it that way. We’re innovative when we help them. gies, and developing personal working relationships
We’re innovative when we give them solutions. with staff.
In a similar partnership with Woodwinds Health
> Katja Finger communications manager, 3M Public Relations
Campus in Woodbury, Minnesota, 3M developed a new
and Communications, Latin America and Africa
medical tape by asking nurses to test the tape and offer
feedback. At the Mayo Clinic in Rochester, Minnesota,
Benson was invited to witness an open-heart proce- 3M is working with the world renowned medical center
dure the next morning at a.m. “I didn’t sleep a wink.” to learn more about the issue of preventing infection
Benson said. “I was excited and scared. The experience during hospital stays.
drove the point home. I think our very best ideas come When Gary Pint participated in the start up of 3M’s
from people who spend time with our customers on Telecom Business Unit in , the team’s role was to
their turf.” build the business from an embryonic idea to a leading,
Lew Lehr, the “father” of 3M’s medical business and worldwide business group. The smokestack lesson was
later chairman of the board and chief executive officer, part of their strategic thinking. “To start and build the
went on grand rounds in the early s Telecom business, we had to listen
with local doctors, especially surgeons, carefully to customers and be
to understand how 3M products and as responsive as possible,”
said Pint. “We followed
Mr. McKnight’s philosophy
1
Look ‘Behind the Smokestacks’ 113
the more successful Simoniz polish, Retsul polish— from re-claimed rubber. “General Motors and Chrysler
sold with Wetordry sandpaper—demonstrated 3M’s were big customers in Detroit and so was Briggs, an
eagerness to solve customers’ problems, while preserv- auto body manufacturer,” said Jim Hendricks, founder
ing the market for Wetordry sandpaper. and first chairman of 3M’s Technical Forum, who spent
Dick Drew, the affable, maverick inventor, followed years in Central Research and served as manager,
McKnight’s advice to get onto the factory floor and Tape Research.
talk to the production people. He had exceptional “I moved to Detroit right after joining 3M in
results. Drew’s innovative Scotch masking tape, intro- to work with our auto customers,” Hendricks explained.
duced in , gave automobile painters razor sharp “Our adhesive was better than the competition’s because
separations in two-tone paint jobs and made Drew a it was flexible and it wouldn’t harden in lower tempera-
legend around 3M. tures.” 3M’s spray adhesive sales grew quickly and
soon demand exceeded supply. The company financed
When I was a kid, I remember a Christmas a special plant devoted to the new adhesive, rather than
settling for an improvised wagon shed-turned-manufac-
package from 3M. My dad was an engineer
turing-plant where the product’s raw materials were
at Cadillac in Detroit and he later became stored in converted horse stalls.
president of General Motors. I especially When 3M introduced Scotchlite reflective sheeting
remember the sandpaper. Dad always used for highway markings in , automotive uses again
surfaced quickly with applications for cars and semi-
it in his shop. > David Cole director, Office of the Study
trailer trucks. Until the early s, however, masking
of Automotive Transportation, University of Michigan tape and abrasives were 3M’s entree into the auto indus-
try. With the acquisition of Dynoc Company, a maker
When all-steel cars emerged in the s, manu- of decorative wood grain for cars, a new product line
facturers needed adhesives to attach upholstery, trim emerged; 3M created the first vinyl film that replaced
and sound-deadening materials to soften the noise of paint for automotive graphics in . This break-
reverberating steel bouncing over rough roads and through gave 3M a major boost in its automotive busi-
potholes. 3M’s solution was a spray ness and manufacturers had more colorful and elaborate
rubber adhesive, also graphics to attract consumers. 3M’s glass bead technol-
called rubber ogy used in reflective products made these graphics
cement, made even more sophisticated.
1 2
Look ‘Behind the Smokestacks’ 115
form on the outside of a car, and it gave 3M the chance It was a defining moment for 3M Automotive when
to demonstrate how it could attach moldings and orna- Brown and Joe Jones visited the GM production facility
mentation for Ford, Chrysler and later General Motors. that made flexible bumpers for the Monte Carlo.
Neoprene tape was generating approximately million “When we arrived, we found thousands of moldings on
in sales by the late s, but the tape’s holding power the floor,” Brown said. “None of them adhered. It was
wasn’t consistent. It worked with car moldings that were breathtaking. Why 3M’s tape failed was, at first, a mys-
engineered to accommodate tape instead of screws and tery. 3M later learned that General Motors’ supplier of
rivets. But, moldings that weren’t designed for tape often car moldings—in preparation for a potential union
failed. Parts started dropping off cars.
“We had the chance to develop products for bonding We operated more like commandos than a big
trim to the new, flexible bumpers that were coming out
army. I think a lot of the small projects that got
on the Monte Carlo,” said David Brown, business
director, 3M Automotive, “but General Motors’ body started at 3M operated like that. It was hard to
side moldings attached with neoprene tape weren’t draw the line between marketing, sales and
holding. That drove us to find something new that could technical. Everybody did a little bit of everything.
outperform neoprene tape, even though the performance
> Art de St. Aubin retired executive director, Automotive
requirements were still not clear.”
Innovation Center
1
Look ‘Behind the Smokestacks’ 117
numbers for every key person. national product planning manager, Toyota Motor Sales
I always knew they’d get back
to me right away.”
In the new century, 3M is producing more than
, different automotive products for uses as broad
as bonding, acoustical insulation, fastening, air filtra-
tion, decorative trim and graphics, fabric protectors,
electrical and lighting components and security label-
ing. 3M automotive customers can tap into more than
global automotive centers, dubbed “answer centers,”
where the staff is focused on pinpointing solutions to
specific customer needs.
Background: Scotchcal
paint protector film
120 Chapter 8
> Pursuing a Plethora of New Customers gave the business sharper focus, as well as more visi-
It wasn’t until the early s that 3M looked beyond bility and legitimacy in 3M’s internal world of product
its traditional, industrial roots and explored the global innovation and profit centers.”
potential for its consumer business. The impetus started A recession in the United States during the early
with Lehr, then chairman of the board and chief execu- s actually worked in favor of building the consumer
tive officer, who reorganized the company into business business. Nozari put it this way: “When General Motors
“sectors” and carved out the consumer business to report sells fewer cars, it needs fewer products from 3M, but
directly to him. consumers don’t stop eating or washing their dishes with
“Consumer had grown almost by sheer accident Scotch-Brite cleaning products. An economic downturn
until Lew Lehr’s decision,” said Moe Nozari, executive affects our consumer business less—especially if the
vice president, Consumer and Office Markets. “If we
made sandpaper and tape for industrial customers, we Our goal is to give people a product that’s
said, ‘Why not sell it in grocery or hardware stores?’ better than what they have today . . . or a brand
We’d start with a product, then go with it, wherever it fit.
new product they didn’t know they needed.
We’d find our way into new markets.
Lew’s decision to let con- > Moe Nozari executive vice president, Consumer
2
122 Chapter 8
> We Have This New Idea . . . tomers access to the newest products. They’re not all
It was a win-win-win opportunity for Sam’s Club, ‘home runs,’ but many are.”
Costco and 3M. The idea emerged at “top to top” meet- Costco, a customer since , gave 3M access
ings in which executives from each company met with to one of its -store regions to test the new cleaning
their 3M peers to share ideas and mutual marketing cloth. “We put together customer focus groups to find
strategies. 3M had a new cleaning product informally out what they liked about the wipes,” Banholzer said.
called “wipes” that had just emerged from a company “Our market research is valuable to Costco and Sam’s
lab in October . “We said, because they don’t always
‘We’ve got this material, it’s have the time to do it. From
unique and here’s what it can that research, we developed
do,” said Bill Banholzer, direc- a display for Costco that was
tor of club trade at 3M. “We’d highly visible and displayed
like to see if your members are the product’s benefits.”
attracted to it and, at the same “3M works hard at listening
time, bring value to you.” to us, creating better product
Brad Feagans, vice presi- presentations in our clubs,
dent and divisional merchan- and offering attractive, value-
dise manager for Sam’s added promotional ideas,”
discount retail clubs in the said Steve Messmer,
United States, suggested assistant general manager,
introducing the cloth in 3M’s Costco Wholesale.
own “backyard” in Minnesota. “They’ll include a Post-it
Less than eight weeks note holder in a pack of
after that initial discussion, - by -inch Post-it notes or
the new Scotch-Brite a dispenser, valued at to ,
microfiber cleaning cloth with six rolls of packaging tape.
was stocked in five Sam’s stores. We work diligently with 3M to create
“A new product needs awareness and 1 packages that display well in our clubs and
sampling,” said Banholzer. “Within three weeks, cost less to produce so we can pass those savings on.”
we had a success on our hands.”
“Next it was Florida,” Feagans said, “and once the
We buy the cream of the crop. We shop from the
sales took off, we went to all of our stores.” In fact, in an
annual event at which Sam’s executives each select a new top two to three vendors in a product category.
product to promote, Jim Haworth, senior vice president With 3M, quality has never been an issue.
of operations, singled out 3M’s new product. “The idea
> Steve Messmer assistant general manager, Costco Wholesale
is to promote that item and build sales,” said Feagans.
“3M’s wipes started the year generating about ,
a week in our stores and we aimed to double that.” Pennies saved matter a lot when the volume pur-
“3M looks at what products are right for our custo- chased is so large. “We sell about million yards
mers,” said Feagans. “We’ve worked with 3M since of 3M premium packaging tape a year at our clubs
. They have a strong work ethic, they’re fair, honest in the United States,” said Messmer, “ million sheets
and do what they say they’ll do. Our company cultures of Post-it notes, - by -inch size, and billion inches
are similar. They bring us new product ideas and we can of Scotch Magic tape.”
help test how successful they might be. It gives our cus- Since , when Nozari developed the key accounts
Look ‘Behind the Smokestacks’ 123
program for 3M consumer and office markets, the com- including dropping the lighter repeatedly from feet
pany’s business with the country’s major buying clubs off the ground and exposing it to cycles of extreme heat
has doubled, said Banholzer. “We have a good under- and cold over eight hours.”
standing of each other’s businesses,” he said. “We share But, that wasn’t the only production issue Zippo
our corporate strategies. Our goals are the same—to grow faced. When the company exposed a lighter to an acid
our businesses.” bath to stencil a customer logo on its product, the
chance of that acid damaging other surfaces was high.
> Lifetime Lighters “There were times,” said Atherton, “when percent
Zippo Manufacturing Company—the largest manufac- of the manufacturing run was scrap. The acid leaked
turer of lighters in the world—had a huge problem in and contaminated the rest of the lighter in the process.
. Of the more than million lighters the company This was at the end of our manufacturing process and
produced in a typical year, about million were losing we were left with nothing. It cost us a lot of money.”
their custom emblems. “We were getting calls from 3M created a special “masking” tape that covers
customers,” said Fred Atherton, senior buyer for Zippo, the surface and won’t allow the acid to damage the
based in Bradford, Pennsylvania. “People said, ‘Gee, surface. “It’s like a window frame that we place over
your lighter works great, but our logo fell off. That’s the lighters and it allows only the exposed area to get
where 3M came in. It took a lot of research and a cou- the acid,” Atherton said. “That product reduced our
ple years to develop an adhesive that could withstand rejected lighters to virtually zero.”
extreme humidity and temperature conditions as well
as repeated shock.” > The Customer in the Next Cubicle
Zippo couldn’t take any chances—the company, 3M’s new business in ergonomics had its start in no
founded in , had a long tradition of offering lifetime less than the chief executive officer’s office. “Desi (L.D.
guarantees for its products. “Although Zippo doesn’t DeSimone) had always been extremely vocal about the
guarantee the various finishes, we treated this problem importance of health and safety for employees,” said
with the utmost urgency. We put on a full court press Claude Denais, now managing director, 3M Venezuela,
to find a solution,” said Atherton. formerly business unit director, Office Supplies Division.
3M developed a very high bond (VHB) tape that is In , 3M examined the source of computer-related
only . of an inch thick. “It was a long time in devel- injuries and illnesses, and found that nearly half were
opment,” said Paul Smithmyer, senior product/process related to ergonomic issues. The study also indicated
engineer for Zippo. “A lot of testing had to be done, that over a decade the average cost of all lost time inci-
dents at 3M were—at a minimum—, to , the products available,” Albin said, “either they didn’t do
per person. what we thought they should do or they only addressed
3M focused first on muscular skeletal cases that a few ergonomic issues.”
show up in plant activities. A training program reduced It was an unlikely new business for the then Com-
the number of lost-time cases related to ergonomics by mercial Office Supply Division. “When Chuck Harstad,
percent. Before long, attention expanded to the entire now staff vice president, Corporate Marketing, was
company, said Tom Albin, retired manager, Ergonomics division vice president,” said Denais, who ran 3M’s
Services, Office Supplies Division. “The same injuries office and stationery businesses in France and later
can occur in offices and industrial settings,” he said. managed the embryonic ergonomics business, “most
“Someone doing data entry at a desk can develop wrist of the products in our division were sticky products—
problems; someone in a plant who assembles a product Post-it notes and Post-it flags, for instance. Chuck wanted
uses repetitive motion. Injuries related to ergonomics us to think outside the box. He said, ‘It doesn’t have to
can also come from too much exertion or working in an stick to anything.’ ”
awkward position.” Denais’ team looked outside their division to find
By , there were about , 3M people who 3M technologies. For example, the gel used in the wrist
routinely used computers for as long as eight hours each rests was first developed by 3M Health Care for other
workday. 3M’s corporate ergonomics group worked with medical needs. His team had built in “consumer focus
engineering to develop a company-wide training pro- groups” of 3M employees who gave them feedback on
gram, called Turbo Ergo. Albin and his colleague, Nancy their early product designs. The team even videotaped
Larson, applied for a 3M Alpha Grant to develop educa- people at their work stations to understand how they
tional materials focused on computer ergonomics for worked. “We noticed people massaging their wrists
employees, including an informational Web site. without even thinking about it,” Denais said. “We had
Ultimately, this focus on healthy environments for videoconferences with our peers in Europe, Canada
3M office and plant workers spawned the company’s and Japan to review our product concept drawings. It
new line of specially designed gel-filled wrist rests for was important to have international involvement early.”
computer keyboards and mouse platforms, document Harstad, the team’s sponsor, “sheltered us from the
holders and stands, foot rests, polarizing task lights, skeptics” as the project evolved, Denais said. He pro-
office air cleaners, safety mats, and computer filters to vided resources without expecting immediate, tangible
reduce eye strain. It had become evident that a business results. “We were the equivalent of a small, start-up
opportunity was ripe for picking. “When we looked at company. Our team had the imagination, creativity
1 1 Patented gel-filled
wrist rests contain
a compound originally
developed for medical
needs. 3M’s adjustable
keyboard also helps
reduce ergonomic
injuries.
Look ‘Behind the Smokestacks’ 125
and speed of a new venture. Chuck protected us from tions—wherever people work, in offices, plants, at home,
the bureaucracy that’s inevitable in a big company. We in hotel rooms, on airplanes.” By , 3M’s ergonom-
also had an advantage over our competition. We started ics business had an annual growth rate of percent.
with a clean sheet of paper, rather than trying to modify “What we’re most proud of is that percent of our
existing products to make them more ergonomic.” customers are outside the United States,” said Denais.
After three years of work, beginning in , 3M “People in Europe, Scandinavia, Canada, Australia and
introduced its first four products in July —a wrist New Zealand are very savvy about ergonomics.” And,
rest, document holder, foot rest and air cleaner. “We in the categories in which 3M has ergonomic products,
continued to add new products each year,” Denais said. the little start-up business—that learned from its internal
“We want to be the leading provider of ergonomic solu- customers first—now has significant worldwide sales.
time-tested truths
● Give people a product that’s better than they have—or one they
didn’t know they needed, until they tried it.
126 Timeline
1900 s 1910 s
3M Events
1903 Harriet (Hattie) 1914 Oil soaked garnet produces flawed sandpaper;
Swailes, 3M’s first female 3M begins its first quality control program.
employee, hired.
Three-M-ite abrasive cloth introduced.
1904 3M has its first and
only sale of Crystal Bay 1916 First 3M laboratory
corundum. established; 3M headquarters
moves to St. Paul.
1905 3M moves to Duluth, Minn.
3M pays its first dividend—
Lucius Ordway invests in the company. 6 cents a share on August 11.
(3M has paid quarterly
1906 First sandpaper sale to South Bend Toy Co. totals $2. dividends on common stock
without interruption since then.)
1907 William F. McKnight hired as assistant bookkeeper
for $11.55 per week. 1919 Annual sales exceed
$1 million.
1910 3M moves manufacturing operations to St. Paul;
first factory built. Board approves 2-for-1 stock split.
1902 Enrico Caruso makes 1906 San Francisco earth- 1911 Marie Curie is awarded 1914 WW I begins.
his first phonograph recording. quake kills 700; $400 million the Nobel Prize in chemistry.
property loss. 1915 First transcontinental
1903 Henry Ford founds 1912 Woodrow Wilson wins telephone call between
the Ford Motor Co. 1907 Robert Baden-Powell U.S. presidential election. Alexander Graham Bell in
founds Boy Scout movement New York and Thomas
1904 Theodore Roosevelt in Great Britain. S.S. Titanic sinks on her A. Watson in San Francisco.
wins U.S. presidential election. maiden voyage after colliding
1908 General Motors Corp. with an iceberg. 1916 Woodrow Wilson
London Symphony Orchestra formed. is re-elected president.
gives its first concert. 1913 Federal income tax
Ford Motor Co. produces introduced in the United 1919 WW I Peace
1905 Albert Einstein formu- the first mass-produced car, States through the 16th Conference begins at
lates his Theory of Relativity. the Model T. Amendment. Versailles.
A Century of Innovation 127
1920 s
1925 Scotch
masking tape introduced.
1928 3M Engineering
Department organized.
1920 U.S. Senate rejects 1923 Popular songs include 1925 “The Great Gatsby,” Charles Lindbergh makes first
League of Nations. George Gershwin’s authored by St. Paul native, solo nonstop flight across the
“Rhapsody in Blue.” F. Scott Fitzgerald, published. Atlantic Ocean.
19th Amendment gives
American women the right U.S. President Warren G. Madison Square Garden 1928 Herbert Hoover
to vote. Harding dies in office; opens in New York City. elected U.S. president.
Vice President Calvin
1921 Former President Coolidge succeeds him. 1926 Kodak produces the 1929 “Black Friday” as U.S.
William Howard Taft named first 16mm movie film. Stock Exchange collapses
chief justice of the United 1924 Ford Motor Co. on Oct. 28.
States. produces 10 millionth car. 1927 Holland Tunnel opens,
linking New York and New Construction begins on
1922 Soviet states form J. Edgar Hoover named Jersey. Empire State Building.
U.S.S.R. director of the FBI.
128 Timeline
1930 s
3M Events
1930 South African micro- The Lambeth Bridge in 1936 Roosevelt is re-elected London bus drivers strike.
biologist Max Theiler develops London and the Harbour U.S. president.
a yellow fever vaccine. Bridge in Sydney open. 1938 President Roosevelt
Margaret Mitchell’s sends appeal to Hitler and
1931 “Star Spangled 1933 21st Amendment to “Gone With the Wind” wins Mussolini to settle European
Banner” becomes official U.S. Constitution repeals Pulitzer Prize. problems amicably.
U.S. national anthem. prohibition.
Henry Luce begins Lajos Biró of Hungary invents
1932 Franklin D. Roosevelt 1935 President Roosevelt publication of Life magazine. the ballpoint pen.
wins U.S. presidential election signs U.S. Social Security Act.
in Democratic landslide. 1937 Amelia Earhart lost 1939 First baseball game is
“Porgy and Bess” opera on solo Pacific flight. televised in the United States.
The Lindbergh baby is by George Gershwin opens
kidnapped. in New York.
A Century of Innovation 129
1940 s
1942 Inland Rubber Corp. acquired. 1948 3M’s first nonwoven product—
decorative ribbon for gifts introduced.
1945 More than 2,000 3M employees
are on military leave. 3M organized along divisional lines.
1946 3M listed on the New York 3M debuts its first surgical drape.
Stock Exchange on Jan. 14.
1949 McKnight becomes chairman of the board;
Carlton named president.
1940 Winston Churchill 1942 Enrico Fermi of the United States drops 1948 Indian leader Mahatma
becomes British prime United States splits the atom. atomic bombs on Hiroshima Gandhi is assassinated.
minister. and on Nagasaki; Japan
1944 D-Day in WW II, surrenders; war ends. U.S. Congress passes the
Roosevelt re-elected to third the Normandy Invasion. Marshall Plan Act providing
term as U.S. president. 1946 U.N. General Assembly $17 billion in aid for Europe.
President Roosevelt holds its first session in
1941 Japanese bomb Pearl re-elected to a fourth term. London. Harry Truman elected
Harbor on December 7. U.S. president.
1945 Roosevelt dies; Harry 1947 Jackie Robinson
Joe DiMaggio successfully Truman becomes president. becomes first black to sign 1949 Apartheid begins
hits in 56 consecutive games a major league baseball in South Africa.
to establish record. WW II ends in Europe. contract.
130 Timeline
1950 s
3M Events
Explosion in minerals building kills 15 employees, injures 49. 1957 The city of St. Paul renames
two streets after McKnight and
3M announces first 4-for-1 stock split. Archibald G. Bush.
1950 Record crowd of 1953 Queen Elizabeth II 1954 Dr. Jonas Salk 1958 European Common
199,854 attends World Cup crowned. develops polio vaccine. Market established.
soccer game in Rio de Janeiro.
Nobel Prize in literature 1956 Prince Rainier of Governor Orval Faubus of
1951 “I Love Lucy” TV is awarded to Winston S. Monaco and Grace Kelley Arkansas defies Supreme
comedy debuts. Churchill. are married. Court integration order by
closing schools in Little Rock.
North Korean forces take Ben Hogan wins Masters, 1957 U.S.S.R. launches
Seoul and reject American U.S. Open and British Open Sputnik I and II, the first United States establishes
truce offers. golf championships. satellites. National Aeronautics and
Space Administration (NASA).
Color television introduced. Edmund Hillary of New Mackinac Straits Bridge,
Zealand becomes first man Michigan—world’s longest 1959 Fidel Castro becomes
to climb Mount Everest. suspension bridge—opens. premier of Cuba.
A Century of Innovation 131
1960 s
1960 Scotch Brand Magic transparent tape 3M’s first research lab
introduced. outside of the United
States is completed
Micropore surgical tape, the first hypoallergenic tape, in Harlow, England,
introduced. It is a key to success of 3M Health Care business. near London.
1961 John F. Kennedy inau- Dr. Michael DeBakey uses 1966 Indira Gandhi becomes Sen. Robert Kennedy
gurated as 35th U.S. president; first artificial heart to take over prime minister of India. assassinated in Los Angeles.
establishes Peace Corps. the circulation of a patient’s
blood during heart surgery. 1967 Thurgood Marshall 1969 Richard M. Nixon
Yuri Gagarin (U.S.S.R.) orbits appointed to the U.S. inaugurated as 37th U.S.
the earth in 6-ton satellite. 1964 Martin Luther King Jr. Supreme Court. president.
wins Nobel Peace Prize.
Alan Shepard makes first U.S. Dr. Christiaan N. Barnard Golda Meir named prime
space flight. 1965 Lyndon B. Johnson performs the world’s first minister of Israel.
inaugurated as 36th president human heart transplant
1963 President Kennedy of the United States. in South Africa. Apollo 11 lands on the
assassinated in Dallas, Tex.; moon’s surface on July 20;
Lyndon B. Johnson becomes U.S. astronaut Edward White 1968 Martin Luther Neil Armstrong walks on
president. completes first space walk. King is assassinated. the moon.
132 Timeline
1970 s
3M Events
3M creates
the first van-
pooling program
in the United States.
1975 Pollution
Prevention Pays (3P)
program introduced.
3M Riker introduces
Buf-Puf skin products.
1976 3M becomes
one of 30 companies
included in Dow Jones
industrial average.
World Events
1971 The 26th Amendment 1974 Richard Nixon resigns; 1977 Massive blackout in 1979 The Shah of Iran
to the U.S. Constitution, Vice President Gerald Ford New York City leaves 9 million is forced into exile and is
allowing 18-year-olds to vote, becomes 38th U.S. president. people without electricity for replaced as Iranian leader
is ratified. up to 25 hours. by Ayatollah Khomeini; nearly
1976 North and South 100 U.S. Embassy staff and
1972 Arab terrorists kill Vietnam are reunited as 1978 The first “test-tube Marines are taken hostage.
two Israeli Olympic athletes one country after 22 years baby” is born in England.
and nine other hostages in of separation, with Hanoi Conservative Margaret
Munich. as its capital. U.S. President Carter, Israeli Thatcher becomes prime
Premier Menachem Begin minister of Great Britain.
1973 In a tennis match billed Jimmy Carter is elected and Egyptian President Anwar
as the “battle of the sexes,” 39th U.S. president. Sadat agree on a Camp David Disaster is narrowly averted
Billie Jean King defeats Bobby peace accord. at U.S. Three-Mile Island
Riggs, 6-4, 6-3, 6-3. nuclear power plant.
A Century of Innovation 133
1980 s
1980 Post-it notes and Scotchcast 1986 Lehr retires; Allen Jacobson succeeds
casting tape introduced. him as chairman of the board and CEO.
1980 The World Health Egyptian President Anwar 1984 A silicon microchip The U.S. space shuttle
Organization formally Sadat is assassinated. that stores four times more Challenger explodes, killing
announces the global data than previously possible all seven crew members.
eradication of smallpox. 1982 The Vietnam Veterans’ is developed.
War Memorial is dedicated in 1989 The Exxon Valdez
John Lennon is shot and Washington, D.C.; the names 1985 President Ronald causes the world’s largest
killed in New York City. of more than 58,000 dead are Reagan begins second term oil spill.
inscribed. in office.
Ronald Reagan is elected The Berlin Wall is opened by
the 40th U.S. president. 1983 U.S. space shuttle 1986 The world’s worst East Germany and eventually
Challenger is launched on its nuclear accident takes place torn down.
1981 Iran releases all maiden flight and completes when a reactor blows up at
hostages. three missions in 1983. Chernobyl power station, George Bush becomes the 41st
Kiev, U.S.S.R. president of the United States.
134 Timeline
1990 s
3M Events
1990 More than 30 percent of 3M’s sales come from 1995 Imation is launched as an
products introduced within the last five years. independent, publicly owned company
with Bill Monahan as CEO.
3M introduces Pacing Plus product development programs
that receive priority funding to speed product development.
1993 A toll free number, 1-800-3M HELPS, answers product 3M introduces the
inquiries from customers and 3Mers in the United States. first metered dose
asthma inhaler, free
1994 Post-it easel pads introduced. of ozone depleting
chlorofluorocarbons.
3M announces 2-for-1 stock split.
World Events
1990 The first edition 1992 President George Bush 1993 William Clinton 1995 A bomb explodes
of Microsoft Windows 3.0 and Russian President Boris becomes the 42nd U.S. outside the Alfred P. Murrah
software is shipped to Yeltsin proclaim a formal end president. Federal Building in Oklahoma
consumers. to the Cold War. City, killing 168 people.
A bomb explodes in the base-
The Hubble space telescope The Mall of America, the ment garage of the World 1996 President Clinton
is placed into orbit by the largest shopping complex Trade Center in New York City. appoints Madeline Albright
U.S. space shuttle Discovery. in the United States, opens the first female secretary
in Bloomington, Minn. Martin Luther King national of state.
1991 Operation Desert holiday is observed for the
Storm begins in response Ten thousand cellular phones first time in all 50 states. AT&T introduces Internet
to the Iraqi army seizing sold in the United States. access service.
of Kuwait.
A Century of Innovation 135
2000
1996 New products include 2000 For the first time, nearly
flexible circuits for electronic 35 percent of sales come
products and HFEs from products
(hydroflouroethers), introduced in
replacing ozone the previous Michael
depleting chloro- four years. Johnson wins
fluorocarbons. gold in the 2000
3M introduces the Olympics’ 400-meter
1997 Dental sprint wearing shoes
Vikuiti brand for light
made from 24-carat
Products Division management products gold Scotchlite fabric
receives the that make electronic developed by 3M.
Malcolm Baldrige displays easier to read.
National Quality
Award, the most Restored 3M/Dwan Museum reopens
coveted quality in Two Harbors, Minnesota.
award in American
business. 2001 DeSimone retires; W. James McNerney, Jr.
named new chairman of the board and CEO.
National Ad Co., now
known as 3M Media, sold. Six Sigma quality improvement tools introduced at 3M.
3M acquires the
outstanding minority
interest in Dyneon.
1998 The Dow Jones 1999 The Senate fails to 2000 Dot.com companies than 4,000. A fourth hijacked
industrial average hits 9,000 convict President Clinton on proliferate, but the bubble plane crashes in a field in
for the first time in a single two articles of impeachment. bursts in spring 2001. Pennsylvania.
day’s trading.
Scientists from the United George W. Bush wins the U.S. Congress approves
The Associated Press States, Japan and England U.S. presidential race after military action in retaliation
celebrates its 150th announce the first mapping a lengthy recount in Florida. for “acts of war” and nations
anniversary. of an entire human genome, around the world join this
part of the Human Genome 2001 Three hijacked “War on Terrorism.”
President Clinton names Project. commercial jetliners destroy
Eileen M. Collins the first World Trade Center towers 2002 12 European nations
woman to lead a U.S. space in New York City and hit the start using the Euro, a common
mission. U.S. Pentagon, killing more unit of monetary exchange.
The building of 3M International
While Britain’s Parliament considered banning lead home country, not imported. Competition also was
paint altogether, McKnight wrote to major companies growing. American companies wanted a piece of the
suggesting the Wetordry sandpaper solution. Brimsdown global business and they formed an export venture to
Lead Co. Ltd. of Brimsdown, Middlesex, contacted promote U.S. abrasives in Europe, Africa and South
McKnight immediately and 3M shipped off samples. America. In , 3M joined that association (called
Meanwhile, McKnight also dispatched Robert Skillman, the American Surface Abrasive Export Corporation)
3M’s Eastern Division sales manager, to Europe in along with eight major competitors.
to search for distributors who would handle 3M prod- But, McKnight had more ambitious plans than
ucts, especially Wetordry sandpaper. Skillman’s efforts export trade alone. He believed that 3M’s global future
paid off—in one year, sales of 3M’s waterproof sandpa- would be based on strong patents around the world,
per in Britain jumped from less than to more than strategic manufacturing sites chosen to serve interna-
, with a majority of the orders coming from auto tional markets, a global sales and marketing network
manufacturers, wood workers and the railroads. and—eventually—3M Research and Development labs
in many countries.
William McKnight had a wide vision in the
> McKnight: All Business in France
1930s. America was in a depression and McKnight made his first Atlantic crossing in to
Europe was in turmoil. It wasn’t a time when explore what it would take to secure foreign patents and
a person would eagerly say, ‘Let’s go for it.’ begin manufacturing outside the United States, includ-
ing acquiring other existing abrasives plants. Although
But, he did. > John Marshall retired director,
he was years old and on his first trip to Paris, the all-
International Operations business McKnight took almost no time off to see the
sights. When he finally convinced his boss to visit the
Understanding the potential of global expansion, Louvre Museum, Skillman complained that McKnight
McKnight made a compelling case to his board to raced past miles of extraordinary art in minutes.
budget , for manufacturing plants “across the After his first trip to Europe, McKnight decided to
pond.” But, building a business in Europe wasn’t like learn at least one language before he returned, said
expanding in the United States. 3M needed foreign Virginia Huck, author of “The Brand of the Tartan” and
patents to cover its products. And, in several countries, 3M historian. “He asked his secretary, who spoke French
products for sale could only be manufactured in the fluently, if she would give him a lesson each morning,”
Huck wrote. “McKnight’s spirit was willing, but his business—was formed in . The U.S. Congress had
tongue was inept. He gave up and decided to depend passed a law that allowed American companies to pool
on interpreters.” their interests in order to compete in foreign trade. 3M
and eight North American competitors created Durex,
As 3M expanded its international reach in the a holding company based in England, that could acquire
stock in foreign ventures and manufacture abrasives and
1950s, the company recognized that technology
other patented products overseas. The partners also cre-
wasn’t just being developed in the United States. ated Durex Abrasives Corporation, an organization that
New businesses overseas needed technical would sell a single line of coated abrasives all over the
service support, just as 3M had always done world using one sales force, instead of nine, and one
brand, Durex, instead of many. In its first decade, how-
in America. > Geoff Nicholson retired staff vice president,
ever, Durex lacked focus and momentum.
Corporate Technical Planning and International Technical Operations After Armistice Day in , McKnight stepped in
and turned to Clarence Sampair, vice president, Manu-
McKnight’s first attempts to acquire abrasives opera- facturing: “Mr. McKnight said, ‘Our foreign operations
tions in France and Germany failed. His first try at man- are dying on the vine,’ ” Sampair recalled. “ ‘If we’re
ufacturing Wetordry sandpaper in England, in a shared going to develop our overseas business, we’ve got to
patent arrangement with two British companies, have people in the Durex operation to help develop new
also failed when 3M’s major rival, Carborundum products and manufacturing ideas.’ ”
Company, threatened to build its own manufactur-
ing operation on British soil. They predicted that
more American competitors would surely follow.
The year was . McKnight took a step
back. He believed that the British market only
could support one American abrasives opera-
tion. If the Americans were going to gain
a foothold in Europe, they would either
swim together or sink separately. That’s
why Durex Corporation—the company
that ultimately propelled 3M into global
Background:
3M purple sanding belt
Going Global—The Formative Years 141
desk. This “anti-merger” bill took a rifle shot at merg- Adhesives, Building Services and Chemicals Group,
ers and acquisitions that hinted of monopoly and 3M quipped that a portrait of Judge Charles Wyzanski, who
scrapped a plan to merge with Carborundum. ordered Durex’s dissolution, should have been framed
The U.S. Justice Department also took direct aim and hung in 3M’s boardroom to honor his “jump start”
at Durex and argued that the holding company was in of 3M’s International Operations.
violation of the Sherman Antitrust Act. “We weren’t too
unhappy with the breakup of Durex. It left us free to
Instead of participating in joint ventures and
go our own way and Mr. McKnight had great intuition
for international business,” said Sampair, “but we were coalitions, 3M created one of the most significant,
very disappointed in losing Carborundum. It was a coin- competitive advantages in the world: a long-
cidence that both events happened at the same time.” standing, strong, international presence.
During the Durex years, 3M had invested about
> John Ursu senior vice president, Legal Affairs and General Counsel
, in its foreign operations and the returns hadn’t
met McKnight’s expectations.
There were only four partners left in Durex when it But, the choice to pursue international growth was not
was dissolved: 3M, Behr-Manning, Carborundum and an obvious one. In the early s, most American com-
Armour. When they divided up the company’s assets in panies were focused on domestic growth and few had
, 3M inherited a sandpaper plant in England, a small the international ambitions of McKnight and his entre-
plant in France, an office in Germany and a tape factory preneurial sidekicks, Sampair and Maynard Patterson,
in Brazil. They agreed that top managers from Durex who later retired as group vice president, International
could choose where they wanted to go. “We got a good Division. There were few global trade models to follow
cross section of the top people,” Sampair said. “In fact, so 3M, in characteristic fashion, invented its own.
we probably got more than our share.” 3M’s total inter- “American companies had the advantage of an indus-
national sales in its first year reached million. trial and research base largely in place and a large home
market in the United States, while Europe and Asia were
> Frame that Judge! rebuilding after the war,” said Harry Hammerly, retired
Fifty years later, people who experienced the breakup of executive vice president, 3M International Operations.
Durex and others—who only heard about it—agree that 3M got a head start in developing its European busi-
it was one of the most important events in the life of 3M. ness because Jack Davies, the former sales manager for
John Whitcomb, retired group vice president, Abrasives, Durex, joined 3M and brought percent of Durex’s
1 Memo to 3M President
Dick Carlton confirming
the opening of 3M France
operations. 2 A 1958
French television com-
mercial for Sasheen
ribbon and Scotch
cellophane and gift
wrap tapes.
Background:
Scotch Magic tape
Going Global—The Formative Years 143
home in France and an office and address we could be companies survive and thrive. “It was an adrenaline
proud of—something we didn’t have before,” Sampair rush, day after day,” said Patterson. “My feet weren’t
said. To help finance growth in that country, 3M also even touching the ground. We were dealing with big
borrowed against CETA’s valuable real estate—an asset decisions and big numbers. I built a strong fence around
that meant more to French bankers than sales and prof- International Division to keep most everybody out. If
we got caught up in all the red tape of a big corporation,
The timing was right. 3M got off to a fast start we were sure to drown.
“Let’s say the Australia factory needed a new boiler
at a time when world trade was expanding.
house. We couldn’t afford to send different people
> Jim Thwaits retired president, International Operations to Australia to build it.” Instead, Patterson had his own,
small engineering team. They picked the brains of 3M
its. 3M did the same in Germany in which the old and experts in St. Paul and used that reservoir of knowledge
respected Carstens name matched with prime property to get the job done quickly.
in Hamburg. It helped them avoid running to St. Paul
for a cash infusion.
Until the late 1960s, the International Division
From the start of 3M’s international business, the
company insisted that foreign ventures pay their own was separate. Management basically said,
way. In addition, 3M’s international companies were ‘You guys go out there and see what you can do.’
expected to pay St. Paul a percent to percent roy-
Then, all of a sudden, it was a big business.
alty, first. “Our biggest problem was providing ourselves
with working capital because we were expanding so > Harry Hammerly retired vice president, International Operations
2
144 Chapter 9
you call me.’ ” It was the same way Richard Carlton set up shop in about three days in Milan,” Sampair said.
counseled Patterson when he joined 3M and took the “The same thing happened in Switzerland.” By ,
assignment to start 3M Canada. “My job was to keep 3M had either acquired all of its European distributors
all those helpful folks away,” said Patterson. or gone into business on its own.
3M’s international growth occurred in stages, said
3M’s strategy is global, but implementation John McDevitt, retired 3M corporate economist. “We
started out exporting to a country and working through
has to be local. > Giulio Agostini retired senior vice
Background:
3M purple sanding belt
where they were converted and packaged in the local The Bootstrap Kid
language. The last stage was designing and building
plants, buying machinery, and getting them up and run- The choice was easy for Maynard
ning. It was a relatively low cost, affordable approach.” Patterson. When Durex disap-
peared, he picked 3M. “They had
> International: Creator of Champions more products,” he said, “and
From the start of the International business, Sampair more diversity.”
believed that overseas management was the training Patterson was a native of
ground for 3M’s future leaders, even though some the Gaspe region of Quebec,
Canada, whose family moved to
viewed the assignment as a career-breaker.
New Jersey when he was a boy. After graduating from
Managing directors of international companies
high school, Patterson found work as a messenger at
ranked considerably lower than U.S. group vice presi-
AT&T headquarters in New York. He became a “page”
dents, even though Sampair believed they had equal or (a glori ed errand bo y) for the chairman of the company
and the top man took an interest in the hard working
Some of us still remember seeing the crate teen-ager.
“What are you doing in a job like this?” he asked
stamped ‘Reject, Ship to International’
Patterson. “ ‘I’ve got to work, Mr. Gifford,’ ” Patterson
in 3M European warehouses in the 1960s. answered. “Ever thought of going to college?” the CEO
Come to think of it, maybe that’s how I got asked. Patterson had no resources, so Gifford arranged
a full scholarship through AT&T. The page became a
into international . . . > Harry Hammerly
metallurgical engineer at Lehigh University and enlisted
in the U.S. Army only a few months after the bombing
of Pearl Harbor. Patterson was assigned to a colonel
even greater responsibility. “International is the place to
who, in his civilian life, was a Durex executive.
train future 3M presidents,” Sampair argued forcefully.
In 1951, in his r st assignment for 3M, Patterson
“If we give those jobs the recognition they deserve, we
returned to his home country to organize the company’s
could interest some of our new group vice presidents Canadian subsidiary in London, Ontario, with a check
and they’d get a lot more education than they do in the for $5,000.
United States. We should have ambitious people in “Although global expansion probably would have
those leadership positions and they should occurred even if Canada wasn’t here, we are the grand-
have staff people of their own to daddy of the international companies,” said Ian Service,
senior specialist, Environmental & Regulatory Affairs,
3M Canada. “Many other international companies still
2 come to 3M Canada to nd out ho w we get things done.”
In its r st nine months, 3M Canada generated
$284,000 in revenues. Just ve y ears later, Clarence
Sampair chose Patterson as his successor to run the
International Division. With the help of Patterson’s lead-
ership, 3M’s global sales rose from $54 million in 1956
to more than $675 million in 1970 with operations on six
continents. By 2001, international sales would account
for 53 percent of global sales.
146 Chapter 9
give them the counsel they need.” Time would prove whole year. Equally challenging, the plant didn’t have
Sampair right. electrical power, so 3M shipped a big, second-hand
“Sampair and Patterson established an environment diesel generator to Brazil from the United States.
in which people in each country could grow,” said Jim The trouble was, Thwaits said, “It only worked
Thwaits, retired president, International Operations. a couple days a week and no one knew how to fix or
“They gathered together a lean and hungry team and maintain it.” Tariffs and stiff regulations made import-
they pinned the rose of responsibility on the line man- ing engine parts to Brazil virtually impossible, so—
agement in each country. They had the U.S. company on a brief return to the States—Thwaits visited the
to draw from, but they didn’t have it trying to run every-
thing around the world. They were flexible enough to When I began with 3M in 1954, I didn’t believe
marry a solid business philosophy with local customs
how that small beginning was the start of a
and patterns. 3M was able to be first with the most in
many places.” successful, multimillion-dollar company. There
was a spirit of pitching in, being in a big family
> Voices from the Field and working together to solve problems, no
but it wasn’t meant to be. Thwaits was chief engineer retired managing director, 3M Australia
1
Going Global—The Formative Years 147
until Sampair asked him to go to 3M England, instead. Gilhespy in the Eastern Bloc Brayshaw (Bob) Gilhespy,
No way, thought Thwaits, and he said so. “But, you just a native of the United Kingdom, was part of the original
don’t understand,” Sampair said in a return cable. “We team that founded Minnesota/Europa (later called 3M
need you in England. I’ll guarantee that you’ll be back East) in Switzerland in the late s with the aim of
in North America in three years. We’ll send you over building business for 3M in the Eastern Bloc Communist
first class with your family. We’ll take care of every- countries of Europe. The assignment required patience.
thing. Trust me. Please accept.” Each country worked on a five-year plan and imbedded
“I cabled back and said, ‘Mr. Sampair, I got the mes- in that plan were the clues about what 3M products
sage. I trust you,’ ” Thwaits said. “3M expected every- would be most saleable.
thing from you, but they wouldn’t shortchange you, if
you didn’t shortchange them. Anyone who got the job In Belfast, I knew and worked with no one else
done went on to another country.”
but Irishmen. Then I came to New Zealand
Woody on the Fly Woody Woods started 3M South and joined 3M. Straight-away, I found I was
Africa in his Johannesburg home in . “My wife was working in a real United Nations. There were 12
the typist on an old manual typewriter,” he said. “We ran different nationalities, not just in 3M as a whole,
the company for two years like that.” Woods said 3M
soon outstripped its competitors and claimed a major but in my department! > Ian Mackay tape factory
share of the market. “We moved from importing tapes, production foreman, 3M United Kingdom
1 A special international 2
issue of the Megaphone,
3M’s employee publi-
cation, in 1954. 2 Jim
Thwaits (center) pictured
in 1972 with Woody
Woods, managing
director, 3M South Africa,
and Woods’ wife.
148 Chapter 9 Background:
Imperial Wetordry sandpaper
Fredriksen: Relentless Pursuit Audun Fredriksen relentless in our pursuit of higher quality and leading
remembers 3M “inheriting the remnants” of Durex when edge products,” Fredriksen said. “We believed we could
he traveled to Europe in the early s to do research outperform our competitors at any time and we had an
on a reflective sheeting. (He’d wind up becoming man- inventive campus back in St. Paul that supported us.”
aging director, 3M Germany, five years later.) “Some of But, not always. 3M products made in America were
the operations were up-to-date but, in other cases, they not one-size-fits-all. Because it had a different format,
were virtually nonexistent. Basically, we had to start for example, European letterhead was a different size
from scratch. The drive and motivation to build Interna- so it couldn’t be used with 3M’s American overhead
tional came only after 3M controlled its own future.” projectors. And, because electrical cables were larger
in Europe than the United States, the American molds
for making splicing products were useless overseas.
I met a gentleman recently in 3M Thailand.
“We had a tough time convincing headquarters that we
He said, ‘Let me tell you what just happened. needed product adaptations,” Fredriksen said. “We just
My new neighbor introduced himself and asked did it ourselves, but it wasn’t always approved. That
was our version of bootlegging. Sampair and Patterson
me where I worked. I said, ‘I work for 3M’ and
covered our flanks back home.”
he said, ‘That’s a very fine company.’ It made
me proud.’ We want our people to be proud Spiess: South of the Border Lou Spiess spent years
to be a part of 3M. > Ron Baukol retired executive
in Mexico, later retiring as vice president, Manufactur-
ing and Engineering, after years with 3M. His career
vice president, International Operations
began in when 3M rented an old tannery and
bought a , coating machine. “It may sound unbe-
The opportunities, Fredriksen said, seemed limit- lievable, but we turned it into a nice plant that, inciden-
less. “There were still enormous wounds and destruc- tally, had the lowest factory cost of any 3M international
tion from World War II, but there was a terrific work company at the time,” Spiess said. “I was devoted to
ethic in Europe because people were very grateful to 3M and I liked the challenges I was given. Everyone
have a job.” 3M tapes, adhesives, Scotchlite reflective I worked with seemed to feel the same way. If 3M suc-
sheeting and abrasives were the best selling products ceeded, we would too.
and 3M had tough competition in abrasives from “We imported all our raw materials, and our biggest
German and other American competitors. “We were product was masking tape because GM, Ford and
1 2
Going Global—The Formative Years 151
3 1 An employee at 3M
Mexico fabricated
Scotchlite road signs in
1958. 2 Vern Guion (left)
with employees involved
in a Little League club
sponsored by 3M Mexico
in 1962. 3 3M Mexico’s
Little League club.
4 Lou Spiess, who later
retired as vice president,
Manufacturing and
Engineering, spent
15 years in Mexico.
152 Chapter 9
> Japan: A Frontier with High Potential The negotiations in Japan were
After World War II ended, 3M created a task long and hard, but 3M was able to
force to examine the opportunities in Japan, but craft a very unusual / ownership
there was some resistance in St. Paul. Dennis arrangement that was a first in 3M
Maher, who rose from a 3M office boy to manag-
ing director, 3M Germany, was part of that task
At most Japanese companies, you’re told
force, which also included 3M’s future CEO,
Harry Heltzer: “We went back and forth to to do just as your superiors instruct. At
Japan two or three times in and ,” Sumitomo 3M, within two months I was
Maher said. “We explored markets for entrusted with my own customers and
our product lines, laid out a strategy and put
territory and encouraged to take responsibility
together presentations to convince the Japanese that
we should be allowed in their country. That’s when and make decisions on my own. At first it was
I really became enamoured with International.” difficult, but I came to appreciate the freedom
“There were still anti-Japanese feelings right after
to think on my own. > Yoshiharu Maeda salesman,
the war,” said Patterson, not to mention a touch of
Industrial Tape Division, Sumitomo 3M
American provincialism in St. Paul. But, Sampair
backed Patterson and told him to get McKnight’s bless-
ing, which he did. history. 3M had always insisted on percent owner-
“When Sumitomo 3M was established, Japanese ship of any international subsidiary, perhaps harkening
companies were not very competitive,” said Hiroshi back to the Durex days when 3M was only one voice
Kurosaki, technical service, Electrical Specialties and among many. “Sumitomo 3M Limited was formed in
Electronic Products Divisions, Sumitomo 3M. “Even ,” said Shigeru (“Lefty”) Sato, retired director,
just importing U.S. products and selling them ‘as is’ was Public Relations and Government Affairs, a native of
better than what Japanese manufacturers could offer. Osaka who joined Sumitomo Corp. after his college
The very mention of 3M entering the Japanese market graduation. “There were companies in the Sumitomo
caused an uproar from local corporations and it was Group and the joint venture was designed to import,
compounded because 3M was in a joint venture with manufacture and market 3M products to the Japanese.
very powerful and well-known corporations—Sumitomo The first year we only had employees and sales of
Electric and NEC. It scared the competition.” about ,.”
Today, Sumitomo 3M has about , employees We speak the same language around the world.
and the largest Research and Development lab outside
Not the English language, but the language of
of the United States, housing more than scientists
and technical people. “3M had a policy about going our company. > Giulio Agostini
● Get a foot in the door early, build from there and consider
international a long-term investment.
● “Just do it” entrepreneurs who had freedom to act and the right
support from St. Paul helped International thrive.
● Hire good, local people, give them responsibility and trust them.
Sampair and Patterson fueled 3M’s international growth and—perhaps most importantly—having the patience
from the s onward. “It’s the troops who run the to wait for profitability. From the start, 3M’s approach
business,” Thwaits said, “not the generals. You can’t took the long view.
have people sitting in their jobs waiting for the com- The s’ challenge was to build market share
mand to come down from on high. All that top manage- in every international location—a network that by the
ment can do is provide the climate for people in the decade’s end grew to companies in as many countries
business to run it in the best possible way.” which were sprinkled all over the world map. In most
cases, it was expedient to exploit an existing product
> No ‘Cookie Cutter’ Companies or technology in global locations, but by the end of
Thwaits believed in giving overall direction and then the s, 3M’s international companies were not only
having faith in 3M people. “Outline the challenges and producing solid financial results, they were also innova-
the tasks and ask them to set their eyes on the heights,” he tors in marketing, product adaptations and operations.
said. “It’s important to be available for support and coun-
sel, but never—ever—tell them how to get the job done.
We were flexible enough to marry our business
That’s up to them.” Thwaits defended the uniqueness
of 3M’s international business. “I made it quite clear,” philosophy with local customs and patterns;
he said, “that I did not expect them to be stamped out we were able to be the first with the most in
of the same ‘cookie cutter’ as 3M U.S.A. I wanted them
many places. > Jim Thwaits retired president,
to have their own goals and ambitions. We had no right
International Operations
to stifle the creativity of our people in other countries.”
By , 3M’s international business had grown
from virtually zero sales in to a whopping per- “These ideas have spilled over to other international
cent of the company’s total revenues. Some observers companies as well as 3M U.S.A.,” Thwaits said. He
wondered out loud if the early years had been easier— believed that the international growth curve would be
after all, the company was filling a marketplace vacuum. steeper than its U.S. counterpart. This prediction was
While that was true, the challenging aspect of interna- fueled by Thwaits’ own drive to succeed. “We have an
tional growth had been entering those first countries absolute need—a duty—to do much better,” he said.
in the s and s; building sound companies that “We’re an elite company. Any limitations on our growth
could sustain themselves; developing professional man- are strictly the limitations of our own imaginations.
agement by finding, hiring and training local people; I personally feel we can always do better.”
3Mers from the country’s population.” In the so-called These 3M companies began operating in the 1980s:
“Third World nations,” 3M looked for government poli-
1981 3M Gulf (United Arab Emirates)
cies that welcomed long-term foreign investment.
1984 China
1988 India, Turkey
> Dismantling ‘Silos’
It became apparent in the s that 3M’s U.S. and These international companies began operating
International Operations should work more closely in the 1990s:
together. Given the size of its revenues, 3M International
1991 Czech Republic, Hungary, Poland
had a right to shed what some called its “second-class 1992 Russia
citizen” status. In addition, Thwaits and 3M CEOs Harry 1993 Pakistan
Heltzer and his successor, Ray Herzog, were convinced 1994 Egypt, Sri Lanka, Vietnam
that International would flourish even more if 3M’s 1995 Israel, Morocco
domestic and global businesses were integrated as 1997 Romania
equals. “The gates were open,” Thwaits said, “and there
was a flow of people, information and assistance.” Group
vice presidents began working with the international
companies to refine their business strategies. Some of
those companies started developing their own new prod-
ucts. More international people were invited to St. Paul
1 In Bangkok, Thailand, 2
a woman sells Scotch-
Brite products from her
sampan. 3M international
companies find ways to
marry their business to
local customs. 2 3M
Vietnam was established
in 1994.
158 Chapter 10
Background:
Nomad floor matting
to participate in meetings on business strategy and new ing and distributing 3M products. But, in the words
products. Because international sales and marketing peo- of retired Chairman of the Board and CEO Lew Lehr,
ple needed more technical support, they called on 3M’s “The integration process could best be described as
stateside technical community more frequently. Plans evolution, not a revolution.”
were made to expand lab facilities around the world.
> Overseas Innovation
By the s, 3M was benefiting in tangible ways from
I came to 3M after toiling for six years to
its Pathfinder Program, started in , to encourage
obtain a Ph.D. and nobody addressed me as new products and new business initiatives born outside
‘Dr. Nicholson’ or even ‘Dr. Geoff.’ I was ‘Geoff’ the United States. By , winning Pathfinder teams
and I quickly came to appreciate that informality. had generated million in new sales since the pro-
gram began. 3M Brazil invented a low cost, hot-melt
It exemplified a climate of close, friendly and adhesive from local raw materials; an adhesive transfer
encouraging cooperation. > Geoff Nicholson tape designed for local car manufacturers; and a low
retired staff vice president, Corporate Technical Planning and cost microfilm reader for their local market. To comple-
ment 3M’s line of audio and videotape products, 3M
International Technical Operations
Germany marketed compatible hardware purchased
from outside 3M to serve the growing broadcast indus-
Integrating U.S. and “OUS” (outside the U.S.) opera- try. 3M Germany also teamed up with Sumitomo 3M to
tions, as it was called, wasn’t easy. “When we first started develop electronic connectors with new features for the
to talk about manufacturing overseas, we got lip serv- worldwide electronics industry. 3M Philippines designed
ice,” said Heltzer, 3M’s chairman of the board and CEO a Scotch-Brite cleaning pad shaped like a foot after
in the early s. “People went to meetings and said, learning that Filipinos polished floors with their feet.
‘Yes,’ and then did exactly as they pleased. Gradually, 3M Sweden discovered a new application for packaging
they understood that because a plant was located in a tape when it persuaded the Swedish Postal Service to
country, the managing director had responsibility for use the tape instead of sealing wax on registered mail.
that plant, but he was also responsible to the head of Recognition formerly reserved only for Americans
production in St. Paul. Over time, 3M managers began finally began including the accomplishments of interna-
to think of management on a global basis.” They began tional employees, too. International researchers were
to see the advantages of worldwide cooperation in sell- elected to the company’s prestigious Circle of Technical
1 3M international
employee publica-
tions from the mid-
1970s played a key
role in developing
companies that share
3M’s culture.
M ost veterans of 3M Inter- president, International, paid their one-way ticket to Colombia,
Lessons Learned
national learned on the job, him a visit and delivered “a Peru, Venezuela, Ecuador and
and the lessons are still useful lecture.” “He talked for three I’d say, ‘Good luck. Build a good
to employees heading to interna- hours, almost without stopping,” business and you’ll be success-
tional assignments. Schoen, retired executive vice ful.’ I remember Em Monteiro,
president, Information and who later became executive vice
Among many, Imaging Technologies Sector, president, 3M International,
major assign- said. “He told me Americans heading off to Colombia, and
ments, Josef in International have to change L.D. DeSimone, later 3M chair-
Kuhn, who their mindset. They have to man of the board and CEO, as
joined 3M in understand there is more than a young engineer on his way
1952, became one way to get things done. to Brazil. What they all had in
managing director, Sumitomo He talked about listening and common was the desire to seize
3M, in 1972 when its sales were learning more before making an opportunity.”
about $300 million. “I learned decisions. He emphasized how
a lot from the Japanese,” said important it was to appreciate When Fred
Kuhn, who spent much of his the local customs, to get to know Harris Jr.
career in manufacturing. “Back the people. That’s the miracle became manag-
in the early 1970s, they were of International. We’ve blended ing director,
already using methods that later many cultures with our 3M phi- 3M Thailand,
became world manufacturing losophy of doing business. In the in 1975, he was
standards. One of them involved end, everyone around the world glad to have an overseas assign-
employees in what were later says, ‘I’m a 3Mer.’ ” ment even though that region
called ‘quality circles.’ Groups was still unsettled after the
of employees got together to Vince Ruane Vietnam War. “There was no for-
brainstorm how to improve plant was 22 years mal coach,” said Harris, “Nobody
productivity and reduce costs.” old when he in 3M who said, ‘I’m your Thailand
Kuhn, retired senior vice went to work expert.’ But, like a lot of new
president, Engineering, Quality in 3M’s export experiences, sometimes the best
and Manufacturing Services, also of ce in Ne w thing to do is just plunge in when
recalled learning patience and York. “Al Butz often came in from you hit the ground.” Harris had
negotiating discipline in Japan. St. Paul on his way to Europe and considerable independence,
“In those long meetings,” he he told us about the companies which he preferred. “I was 10,000
said, “we’d sit around the table that were being established,” miles away,” he said. “The phones
and the Japanese would remain said Ruane who, in 40 years with worked, sometimes; and the
silent. Meanwhile, Westerners 3M, worked all over the world. Telex worked, sometimes. I had
like me were uncomfortable with “It was a great event when Al to make most decisions on my
the silence and we’d talk too visited, because it made me own.” Harris, whose 3M career
soon and too much.” understand, in a very personal began in 1971, used the experi-
way, what William McKnight was ence he gained in Thailand when
Ken Schoen trying to do with our international he became division vice presi-
became manag- business.” Ruane trained young dent for several 3M businesses
ing director, people in preparation for their and, most recently, staff vice
3M Italy, in the overseas assignments. “They’d president, Community Affairs
1970s when the come from good schools and and Workforce Diversity.
business was we’d prepare them,” Ruane,
struggling. About three weeks retired division vice president,
into Schoen’s assignment, 3M Traf c Contr ol Materials
Maynard Patterson, then vice Division, said. “We’d give them
160 Chapter 10
Excellence, among them Helmut Karrasch at 3M’s elec- 3M in the United States each topped the other with
trical lab in Hamburg, Germany, who developed a resin improvements to the Stickit coated abrasive disc.
splicing system for crucial submarine equipment that By the s, lab operations outside the United
withstood high pressure underwater. The first two inter- States were also becoming notable contributors to
national companies to receive Genesis grants to support corporate-wide product research and development.
entrepreneurial product development were 3M Canada More than , technical employees worked on prod-
and 3M Italy. Canada earned a grant for a bone growth uct and process development across the oceans. 3M’s
stimulator program that delivers an electric current across Hamburg, Germany, lab focused on electrical innova-
tion. Labs in Gorseinon, Wales, and Caserta, Italy,
The United States accounts for less than honed in on recording materials. 3M France explored
new tape applications and the Antwerp, Belgium, lab
5 percent of the world’s population, so the other studied specialty chemicals. The Sumitomo 3M lab
95 percent became our marketplace to pursue. worked hard to stay on top of rigid standards set by
Expanding globally was a business-driven Japan’s high-tech manufacturers. 3M’s European com-
panies as well as 3M Japan, Brazil and Colombia took
decision. > John McDevitt retired 3M corporate economist
part in a global effort to accelerate automation in abra-
sives manufacturing. Other international companies
fractured bones to promote healing. Italy’s Ferrania studied ways to improve product packaging, make
research lab used a grant to work on an X-ray dosimeter warehousing more efficient and conserve energy and
program to measure radiation. reduce pollution—not just in their own locations, but
Other new product innovations with broad, interna- with valuable implications for 3M worldwide.
tional applications also began attracting stateside atten- Recognizing the intensity of global competition in
tion. When a Canadian marketer, Robin Pitman, came the s, Thwaits appealed to 3M to examine its mar-
up with a product idea to clean ships underwater, he keting. “We have to approach this from a global per-
was invited to St. Paul to work with 3M lab people. spective and not from a national perspective expanded
From that collaboration came the Scotch-Brite marine globally,” he cautioned. “We must have accurate local
cleaning disc. 3M Switzerland designed a smaller, intelligence about markets. With all of the variables
hand-held dispenser for tape that other 3M companies, in market characteristics, manufacturing, distribution,
including the United States, adopted. In several rounds communications and pricing, it can be bewildering.
of friendly, intracompany competition, 3M U.K. and But, it can also be quite satisfying and profitable . . .
as we know.” Thwaits said it was crucial to know the 3M’s , products that had the highest potential
difference between a 3M product with universal appeal for sales outside the United States. The top product
versus one that needed modifications to fit a country’s areas, in keeping with Thwait’s worldwide marketing
particular wants or needs. And, he said, as “call to arms,” developed global strategic
some 3M products moved from propri- plans. In addition, under Jacobson’s lead-
etary positions to commodity status, ership, 3M made dramatic gains in
3M marketers had to be creative plant efficiencies all over the world
and successful in “distinguishing so that 3M had the wherewithal
us from our competitors and to compete in any geographic
making us unique in the eyes location on price. From
of our customers.” to , 3M cut the labor
With each new international needed to make its products by
company created through the percent and the manufactur-
s, 3M made a modest ing time required by percent.
investment to get started, pro-
moted basic products such as > Let’s Hear it for 50/50
reflective sheeting and scouring The impetus behind International
pads to build a customer base, and then Operation’s stretch goals in the s
added products to build the business. “We came from Manuel (Em) Monteiro, who
don’t have a lot of brain surgeons,” Greg Lewis, 4 joined the company in as a cost analyst but
department manager, Post-it flags and commercial spent virtually all of his career overseas. Monteiro
print market, Office Supplies Division, told The Wall became executive vice president, International Opera-
Street Journal. “We have well-rounded individuals tions, in , working closely with Thwaits. By ,
who care about the business.” Allen Jacobson, who suc- when international revenues had been riveted at the
ceeded Lehr as chairman of the board and CEO in the same percent level for several years, he wasn’t satis-
mid-s, told the Journal that 3M keeps its approach fied. “I want us to reach percent of the sales of 3M
elegantly simple. After all, it had worked well for more products worldwide, and I’m confident we can reach it
than years. There were some refinements in that sim- in the next five years,” Monteiro said. “To do it, inter-
ple strategy in the s, however. Jacobson called on national sales will need to nearly double the U.S.
leaders in 3M’s product groups to identify those among growth rate.”
2 3
162 Chapter 10
Background:
Nextel flame shield
Speaking from experience, Monteiro knew why this hallmarks has been our financial strength that enables
goal could be achieved. “Considering that our penetra- us to take that long-term view,” Hammerly said and then
tion overseas is typically half that of the United States,” smiled. “However, I like what Em Monteiro said, ‘We
he said. “I know the opportunity is there.” Monteiro want to maximize the short-term results indefinitely.’ ”
predicted that his / plan could be achieved by By the early s, international business processes
converting 3M technologies into unique, high-quality had changed dramatically. Market “windows” closed
products faster, selling those products at a profit and sooner than ever. There would be shifts away from
providing customers with value that they could find 3M’s methods of running international businesses.
nowhere else. He set up management action teams on Given its sheer size and scope— countries by —
each continent to develop growth strategies that the Hammerly said there would be a gradual move away
teams coordinated with divisional global strategies and from country-by-country management to more regional
local company plans. In , International Operations management. That’s why the first European Business
contributed percent of the company’s total revenues Center (EBC) was created in to manage 3M’s
for the first time. chemical business across Europe. The EBC was charged
with product development, manufacturing, sales and
marketing, as well as paying attention to local country
We’ve been through hyperinflation, we’ve
requirements. EBCs for the Disposable Products busi-
been through military governments, coups ness and Pharmaceuticals as well as other EBCs soon
and tremendous political upheaval. 3M has followed. But, even with broader, geographic manage-
a lot of staying power. > John McDevitt
ment, Hammerly—like Thwaits—emphasized that 3M
International would never be a “cookie cutter” organi-
zation. Instead, it would continue to rely on informal
> Enter the ‘Transnational’ Company organization.
Just five days short of having years with 3M, “We’re moving into a new kind of global manage-
Monteiro retired with a statement that most people in 3M ment structure,” Hammerly said. “It’s called ‘transna-
International probably echo in their careers. “I’ll never tional’ and, unlike more centralized organizations,
like anything better than this,” he said in . “I’d like a transnational corporation depends on an integrated
to do it all over again.” Harry Hammerly, who succeeded network and teamwork. It’s driven by the needs of the
him, felt the same. Like Monteiro, Hammerly empha- marketplace and the need to be competitive. For each
sized the long view for 3M International. “One of our business, we have to create the right mix of global,
Background:
O-Cel-O Stay-Fresh sponge
regional and local components—and that mix will differ changes. In , the top five economies were the
by business.” Eastern European nations were a good United States, Japan, China, Germany and France, in
case in point in . That’s where 3M would continue that order. But, in , the economic map is expected
to use its FIDO strategy (First In Defeats Others) in the to shift dramatically. The top five will likely be China,
Czech Republic, Hungary, Poland and Russia. the United States, Japan, India and Indonesia.
By , 3M International’s penetration of its mar-
> A Single Voice with ‘Accents’ kets was percent of U.S. levels and Baukol was
As the s progressed and 3M added even more convinced the percentage could increase by focusing on
countries to its international roster, speaking in one the company’s three growth initiatives—Supply Chain
voice, worldwide, became a high priority. That effort Excellence, Earning Customer Loyalty and Pacing Plus
was linked directly to the company’s emphasis on a new Programs. While they were expressed in capital letters,
identity strategy, introduced in , that focused on these initiatives weren’t new or revolutionary to 3M.
creating a consistent, positive image of 3M around the
world. With so many products to sell, the company had
In 1995, more than 70 percent of 3M’s total
presented many “voices” to customers in the past and
research showed that 3M could be much better known. growth was achieved outside the United States.
Applied on the international level, the company’s new We have tremendous opportunities open to us.
voice would not have a single “accent,” however. Instead,
> Ron Baukol retired executive vice president,
the voice would have many accents to acknowledge the
International Operations
diversity of cultures, languages and customers it served.
The continued potential for 3M International busi-
ness was clear to Ron Baukol, who succeeded Hammerly They echoed what the architects of 3M International
as executive vice president, International Operations, espoused five decades earlier: produce innovative prod-
and retired in . By , more than percent ucts that our customers need, do it quickly and efficiently,
of the world’s gross domestic product (GDP) growth then deliver their orders complete and on time. By the
occurred outside the United States. “We had better be s, the pace had accelerated considerably and the
there,” Baukol said, “and be a vital part of that growth.” stakes were higher for 3M. “In both developed and
In its own analysis of how the world was swiftly chang- emerging countries, we need to be very nimble,” Baukol
ing, the World Bank compared the top economies in said. “The pace of change is fast and dynamic. If you
the year to the year with some astonishing can’t respond quickly, you miss many opportunities.”
Several factors led to the stepped-up pace. In some by the international laboratories, just as regional labora-
countries, such as Brazil, economic barriers had fallen. tories provide technical support in the United States.
The same was true in Eastern Europe. In other parts of “Technical innovation simply could not happen
the world, new trade agreements had transformed the without active information sharing among the labs,” said
economic landscape. And, in some emerging economies, Geoff Nicholson, retired staff vice president, Corporate
industrialization was happening more quickly. “In the and Technical Planning and International Technical
past,” Baukol said, “countries first developed by exploit- Operations. A high-strength adhesive tape used for
ing their natural resources. Next, the national infrastruc- bonding baseplates designed to attach rearview mirrors
ture was built, including roads and utilities. After that to auto windshields was created at Sumitomo 3M in
came industry and technology and finally a full-blown Japan and first used in the United Kingdom. A pharma-
consumer economy. All that took many years and 3M ceuticals lab in the United Kingdom developed a new
could grow along with the economies. Now everything breath-activated aerosol device for asthma sufferers, but
happens quickly and 3M has to be ready to do business they struggled with designing the mechanism. 3M’s lab
immediately.” That was particularly true because other in Germany had the expertise in plastics and moldings.
multinational companies were 3M’s key customers. “Together they developed an incredible product,” said
As expectations of 3M International Operations Nicholson. “It’s up to us to create the kind of environ-
grew, investment in research and development (R&D) ment that will make this collaboration happen all over
kept pace. Of 3M’s , scientists, approximately the world.”
, are now located outside the United States. On
average, the company spends . cents of every sales > Community Impact and Turbulent Times
dollar on R&D in operations around the world. 3M employees have reason to be proud of their com-
Thirty-eight international companies have manufac- pany’s international impact. For each job 3M creates in
turing operations, while have laboratories to help a country of the world, three to people are supported
support 3M business plans. Their work includes techni- by that job. 3M donates funds for local education,
cal service and support, manufacturing support and health, arts programs and disaster relief. Not only is
product modifications. Full-service laboratories exist in 3M successful, it is well-respected. In a s survey
some of the international companies, such as Japan, the in Japan, for example, 3M was named the third most-
United Kingdom, Belgium and Germany. All interna- respected company in that country. 3M has won kudos
tional companies provide technical support to their cus- for its environmental work in several countries includ-
tomers through local technical service engineers backed ing Korea, Taiwan and Germany.
Countries of the Asia Pacific region especially they need; if we preserve our margins, balance sheet
appreciated 3M’s historic “staying power” when a dra- and market share; if we continue to treat our employees
matic economic downturn smacked the region in well, we’ll be even more competitive going forward.”
and . In the United States, Wall Street suggested 3M International weathered that difficult period and did
that 3M should reduce its risk and step back from the better than just “holding its own.” In addition, 3M’s
region. But Chairman of the Board and CEO DeSimone presence in countries by gave the company a
stood firm. He was proven right. Referring to the tough strong foundation that could offset regional downturns.
economic conditions at the time, Baukol observed, “People outside 3M frequently tell me how amazed
“There’s an old adage that says ‘It’s better to be poor they are by our ability to deal with turbulence,” Baukol
and healthy than rich and sick.’ Right now, we need to said. “It’s rewarding to hear that, but it’s not surprising.
make sure we stay healthy. If we can continue to supply We are accustomed to our strengths, because we live
our customers and give them the products and service with them every day.”
time-tested truths
demands for products, people and diversification had “Almost without exception, that new unit began
set the stage for the company’s rapid growth. growing at a faster rate,” said Lew Lehr, retired 3M
“Mr. McKnight wanted to keep the divisions small chairman of the board and CEO, and—earlier in his
and focused on satisfying customers and giving people career—a beneficiary of this philosophy when he
a chance to be entrepreneurial,” said Dick Lidstad, launched the embryonic medical products unit.
retired vice president, Human Resources. “What we When the new business was separated, the estab-
did was follow our technologies wherever they led us lished division had to find new products and markets to
and leverage them into new businesses. Mr. McKnight meet its growth objectives to make up for contributions
didn’t want bureaucracy to slow us down.” from the business that became independent. Observers
But, it wasn’t a free-for-all environment. McKnight of the phenomenon called it “renewal.” As each small
made sure that 3M remained strongly centralized in a program was successful, it progressed in ever increasing
few core functions—engineering, research and develop- sizes to: a project, a department and then a division.
ment, finance and human resources. A manager from Diversification accelerated.
each of these three areas was assigned to a division’s The examples are legion. When Magnetic Recording
operating committee to ensure consistent practices Materials was spun off from the Electrical Products
throughout the company. In their book, “In Search of Division, it grew to become its own division and then
Excellence,” authors Tom Peters and Robert Waterman spawned a spate of divisions. A copying machine project
said 3M operated with simultaneous “loose-tight” for Thermo-Fax copiers grew to become the Office
properties—loose when entrepreneurial action mattered Equipment Division. A new venture in printing products
and tight when corporate consistency was the key. turned into several divisions that became the Graphic
Arts Group. The Occupational Health and Environ-
> Count on Change mental Safety Division was a spin-off from the Retail
McKnight’s decision to organize the company into Tape Division. Personal Care Products stepped out from
divisions crafted a climate of perpetual change. As a the Tape Group. 3M’s huge Reflective Products Division
division grew, it reached a size where it tended to spend eventually was divided into four separate divisions.
too much of its time on established products and mar- To create never-before-seen products for new
kets and less time on new products and businesses. markets, McKnight also established a New Products
That’s when McKnight’s “divide and grow” philosophy Department in and, although it had different names
took over—new businesses were spun off and given over the decades including New Business Ventures,
new management teams. The results were gratifying. it had essentially the same charter. More recently, 3M
created a Corporate Enterprise Development program > Optical Systems: A Near Death Experience
in to look years out to see trends and opportunities Back in the s, 3M had developed a microlouver
that could help 3M leverage its technologies into “white technology—the ability to create the equivalent of a
spaces”—those untapped markets that the company had microscopic Venetian blind in a single piece of clear
not yet entered. film. This film featured about , tiny “blinds” per
There were two other major organizational changes foot that looked transparent from one angle and opaque
in the company’s life, aimed at creating more renewal from another. Surely this film had multiple uses, from
and innovation synergy. After the company’s first for- window treatments and automatic teller machines to ski
mal strategic planning effort in , 3M was divided goggles and maybe even computer screens. Believing
into four business “sectors” based on related technolo- this was “a technology in search of a market,” 3M’s
gies. Each sector had its own research lab to give 3M New Business Ventures Division spun it off to become
the Industrial Optics unit in . But, the business had
From top to bottom, 3M’s management provides a shaky start and only one customer, 3M’s own Visual
Products Division, which bought the film to reduce
active, spirited encouragement for new venture
glare in the overhead projectors they manufactured.
generation. > Harvard Business Review, 1980 When it was next “adopted” by 3M’s large Traffic
and Personal Safety Products Group, the little business
increased clout. Seventeen years later, in , 3M was limped along with what one observer called “a grab bag
organized into six “market centers” to more closely align of optical technologies,” the best being light control film
the company’s core businesses with the markets they applied to car dashboards to reduce windshield reflec-
served. A “millennium study” that sparked those most tion. But, the film was too pricey for the auto industry,
recent changes reinforced the power of the divisional and Industrial Optics was losing millions of dollars a
structure from a half century earlier. Looking back, year by the s. That’s when Ron Mitsch, then group
observers agree that this was the single most important vice president, Traffic and Personal Safety Products
organizational decision in 3M’s history. The divisional Group, recruited Andy Wong to take on, what Mitsch
structure with its “divide and grow” imperative created called, an “exciting, stimulating and kind of risky”
a unique climate for renewal, corporate self examina- assignment.
tion and re-creation. Coming from a lab management background, Wong
was eager to embrace the new challenge of being a
business unit manager. And, what a challenge it was.
Scotchlite Diamond Grade reflective sheeting. You can rapidly growing industry,” said Terry Jones, former
imagine the challenge we had using equipment to make business director, Electronic Display Lighting, Optical
highway signs visible at a couple thousand feet, versus Systems Division, now director, Touch Systems. “We’ve
making a film for an LCD viewed at a distance of made a point of obsoleting our products with newer and
inches. We couldn’t tolerate even the most minor defects better ones.”
or flaws.” Once the immense market potential for the Among the eight, major display-related innovations
film was proven, 3M made a manufacturing investment. cited by computer manufacturer Compaq as part of the
“We developed the improved manufacturing process in successful development of laptop computers worldwide
and on an accelerated timetable,” said Miller. over a decade, Optical Systems produced two of them—
“Our customers’ needs were almost as embryonic as our 3M brightness enhancement film and 3M dual bright-
product was. As their requirements matured, we were ness enhancement film. Both are now marketed under
able to keep even or a little ahead.” Miller explained the the Vikuiti brand.
manufacturing process was constantly being refined. In recent times, Optical Systems entered the touch-
“We had to meet the higher expectations of an industry screen market by combining two consecutive acquisi-
that was changing yearly,” said Miller. “We had a world- tions—Dynapro in mid- and MicroTouch in early
wide team focused on improving our processes as well .
as the cost of our product.”
By Optical Systems had its first profitable > OH&ESD: Action Teams Transform a Division
year and between and the business grew When Robert Hershock returned to St. Paul in
nearly times, from million in sales to just under after serving as managing director, 3M Switzerland,
million. The business became a full-fledged 3M he became the new general manager, Occupational
division in , and Wong was named division general Health and Environmental Safety Division (OH&ESD).
manager (and, shortly thereafter, division vice president). He discovered that the fast growing division had been
It was the fastest growing business in 3M throughout depending primarily on two products: the dust
the s and is the unqualified industry leader with mask, the first disposable, lightweight, effective mask
its products sold in almost countries. During this ever seen when it was developed in ; and the
tremendous growth spurt, the division consistently industrial respirator that successfully matched new U.S.
exceeded company targets with percent of its global Occupational Safety and Health Act standards estab-
sales each year coming from products introduced within lished in . Together, those two products accounted
the most recent four years. “We’re in a changing, for most of the division’s sales and profits.
2
174 Chapter 11
“But, OH&ESD was a 3M aberration,” said Professor He shared his vision of an innovative division where
Anne Donnellon, in a case study developed for the employees could take risks and have a high degree of
Harvard Business School. “It suffered from a technology autonomy in their work. He described a division where
base that was incapable of sustaining its earlier growth. communications flowed freely up, down and across the
It had no potentially successful new products in develop- organization. Hershock asked his managers to consider
ment.” Profits were generated, but there was minimal what they could do to help him realize that vision.
Over the next two years, OH&ESD experimented
Bob came into our lab and said, ‘We have with business development teams focused on charting
new opportunities and products, but their progress
terrific market share, but our market is shrinking.
wasn’t producing the results the division needed. That’s
We have to broaden into other kinds of safety when Hershock explored a whole new approach called
products.’ He was a fantastic leader. “cross-functional action teams.” The goal was to trans-
form the division from a complacent and risk-averse one
> David Braun retired 3M corporate scientist, Occupational
to an innovative, flexible, daring organization. Creating
Health and Environmental Safety Division
the action teams meant significant restructuring of the
division, Hershock said. “Change like this is a revolu-
investment in pace-setting new products. People worked tionary process. You can’t expect to move from one
in their isolated “silos” and they had not been encouraged system to another without some complications.”
to take the kinds of risks that might require substantial The action teams were pivotal to success. The
financing. “The division generated only percent of its teams focused only on new products with high poten-
sales from products introduced in the past five years not tial. People who led the teams were those with a demon-
the percent goal established by the company overall,” strated passion for the product not seniority. Team
Donnellon said. “Bob Hershock knew the division had leaders recruited team members, but individuals could
to make dramatic changes.” decide to join or not. Team membership was above and
Hershock worked to change beyond each employee’s own existing job. Each mem-
the division’s culture. He asked ber had training in the interpersonal challenge of real
senior managers to partici- team work and each team established its own goals,
pate in a cultural audit and budgets and milestones. Hershock, who retired as vice
self assessment of their president, Marketing, made sure that each action team
own leadership styles. had the support it needed, including a “senior sponsor”
Background: Dyneon
fluoroelastomer raw gum
r st nonaerospace company
from the division’s executive team. The sponsor ran and currently is executive vice president, Electro
interference when a team faced resource problems or and Communications Market and Corporate Services.
political resistance. Teams met quarterly with Hershock Dental products had become a fast paced industry,
in informal lunches to review their progress. a lot like a consumer business. New products had to
From to , OH&ESD introduced new be introduced quickly or the competition would step
products, and out of the products developed by in and fill the void. Consistent quality in dental prod-
the division’s action teams—those with the highest ucts was not the industry norm. If 3M Dental could
potential—made it to market on time. be synonymous with quality, that would
Overall, the time involved in new prod- give the division a decided marketplace
uct development was cut in half. By advantage.
, percent of the division’s 3M’s chairman of the board
sales came from products devel- and CEO, Allen Jacobson, had
oped in the previous five years. just introduced a new quality
Time to market ranged from four program called Qs, patterned
months to months depending after the Baldrige Quality Award.
upon whether new manufacturing The seven-step Baldrige process
processes and equipment had to involved important business dimen-
be invented. Quality in the division sions including leadership, product
reached a new high. “We met every sin- development, information systems,
gle one of our objectives,” Hershock said. human resources, results measurement
“We significantly reduced internal barriers and customer satisfaction. Reich asked the qual-
1
to innovation . . . and pushed decision making ity manager of Dental Products, Duane Miller, to get
down to include more levels than ever before. And, details. “We weren’t trying to win the award,” Reich
we could honestly say that we built a workplace culture said. “What we wanted most was to know how the
that really energized the division for growth.” Baldrige process could work for us.”
> Dental Products: Renewal From the Ground Up I was planning to retire. But, when I heard
Few companies have ever won the Malcolm Baldrige
what management wanted to do, I rethought
National Quality Award—the most coveted recognition
for quality in American business. In , 3M Dental my plans. I was convinced we could do it if
Products Division joined this elite group. Bob Sossaman, we worked together. And, I wanted to be part
a senior tool and die maker at 3M’s Irvine, California,
of the process. > Jim Peterson retired advanced
plant where dental products are manufactured, echoed
technologist, Dental Products Division
his co-workers when he said, “It was like winning an
Oscar. It confirms that—every day—each of us is mak-
ing an important contribution to something great.” What happened next involved every one of the divi-
In the s, 3M’s dental business was years sion’s employees. For the first time, strategic plan-
old. It had established a strong niche in dental bonding ning wasn’t done by an isolated management group;
adhesives and was the market leader. But, by the late instead, one-third of the employees were involved.
s, strong competition was eroding 3M’s business Teamwork—especially focused on identifying problems
and its patents were expiring. “New product flow was and solving them to benefit customers—became a top
down to about zero, the division had product quality priority. Dental Products teams learned to work together
issues and the financials looked poor,” said Charles to significantly accelerate new product development
Reich, who became division vice president in April and commercialization.
Divide and Grow—Follow the Technology 177
On the way to winning the Baldrige Award, the we could get out there, do it and lead by example,” said
Dental Products Division re-created itself with astonish- Reich. “I hoped we could have a positive impact on the
ing results. From to , there was a whopping company and we have.”
percent increase in productivity. Sales doubled, the In late , the Dental Products Division com-
division’s customer base grew by percent, distributors bined with ESPE, a developer and manufacturer of
gave 3M high marks and 3M dental employee satisfac- dental products and delivery systems based in Munich,
tion results far exceeded those of their competitors. Germany. The combined businesses now operate as 3M
ESPE, a division of 3M Health Care.
. . . the culture of striving for excellence—
> 3M Hutchinson—A Resolve to Renew
continuous improvement in how we meet our Just after World War II, the community leaders of
customers’ expectations—that’s what matters Hutchinson, Minnesota, met to decide how best to use
to me. And, it matters very much. the local plant no longer needed by the U.S. government.
Their search led them to St. Paul where they persuaded
> Christelle Dufaut materials management coordinator,
3M to buy the empty plant. It was February when
Dental Products Division Business Center, 3M France 3M began producing what had already become its
famous Scotch cellophane tape.
When Reich moved on to become vice president
of the Occupational Health and Environmental Safety It was a small factory; it grew, it grew and it kept
Division in , Fred Palensky succeeded him and took
on growing . . . > Arnold Piepenburg one of the first 10
the long awaited phone call from the Baldrige Award
committee. Dental Products had applied twice in eight 3M Hutchinson plant employees
1 In 1997, 3M Dental 2
Products Division won
the coveted Malcolm
Baldrige Quality Award.
2 The Hutchinson plant
held an open house in
1948, just a year after it
first began manufacturing
Scotch cellophane tape.
178 Chapter 11
produced its first roll of commercial videotape. With the pop-up tape strips, surface mount supplies and specialty
fast growth of 3M Magnetic Media Division’s products, media. The plant also opened a new tape development
the plant expanded again with a ,-square-foot center focused on pharmaceutical and microabrasives
addition in . Meanwhile, the neighboring 3M tape applications. Employment at 3M Hutchinson stabilized
plant saw multiple additions. When Post-it notes were at about , employees after .
introduced nationwide in , the 3M Hutchinson
plant was selected to manufacture them. There were
When 3M made the announcement, the whole
many more plant additions over the years as manufac-
turing at Hutchinson grew. city of Hutchinson held its breath. 3M people
Deservedly proud of its accomplishments, the 3M came out and said, “We’ll do everything possible
Hutchinson plant also became the first 3M facility to not to lay off employees.” And, they did.
earn ISO- recognition for meeting tough global
> Linda Rosenow long-time 3M Hutchinson employee
quality standards. Within four years of that milestone,
however, the 3M Hutchinson plant had the most chal-
lenging assignment in its history. When 3M exited the One of the plant’s strengths was its “focused fac-
consumer and professional videotape business in , tories,” a system employed at all 3M manufacturing
the plant lost most of the work on which it had come facilities that divides the work into business groupings
to depend. Doug Ward, now manufacturing director, to serve 3M customers at the highest level. Each of
Personal Care and Related Products Division, was plant these focused factories had its own production and sup-
manager when that occurred. port employees. When the transition occurred, the plant
3M’s goal was not to lay off a single employee invol- was reorganized into seven focused factories: stationery
untarily. Some senior employees took separation pack- and office supplies; high-performance tapes; specialty
ages and retired early, losing what Jim Bauman, who coating and converting; specialty media; tape develop-
succeeded Ward as plant manager, estimated to be , ment for pharmaceuticals and microabrasives; vinyl and
years of manufacturing experience. That loss made the nonwovens; and surface mount supplies. Plant employ-
transition even more challenging, Bauman said, but with ees participated in process and business teams to iden-
the help of manufacturing executives at 3M Center in St. tify, plan and implement ongoing plant improvements.
Paul, the 3M Hutchinson plant was able to add six new Today, 3M Hutchinson is the company’s largest
manufacturing lines. They included VHB (very high manufacturing operation—covering . million square
bond) tape for the aircraft industry, Post-it flags, Scotch feet, on acres and serving divisions. To provide
a sense of the plant’s scale, in a single year, it produces continued in a category of fluoropolymer compositions
nearly one billion molded parts used in 3M’s transpar- called fluoroelastomers.
ent tape business and . million miles of transparent That early work led to high tech applications for the
tape—enough to circle the earth times. It is a proud military and aerospace, but the products were costly,
plant. People who work there point to a strong safety said Bob Brullo, who joined 3M as a product develop-
record, extensive training programs for employees, high ment engineer in . “Les Krogh, who later retired
productivity, clean, neat surroundings and employee as senior vice president, Research and Development,
volunteerism in the community. was then vice president of the Commercial Chemicals
Division,” said Brullo. “We were trying to decide what
> Follow the Technology Wherever it Leads to do with this little elastomer business. Les said,
At the heart of renewal are new applications of tech- ‘We’re either going to get serious or get out of it.’ The
nologies. People call this “uninhibited research for materials were ahead of their time and DuPont domi-
uninhabited markets” at 3M, and the philosophy means nated the business. We decided to pick and choose
following technology wherever it leads, often into new where we were going to fight. We found exploitable,
product areas never imagined. 3M’s experimentation vulnerable niches where we could go in, develop new
with fluorochemicals back in the mid-s is a prime technologies and establish strong customer relation-
example. Without knowing how the technology would ships. We came out of nowhere and became a player;
be applied, 3M bought key fluorochemical patents from DuPont couldn’t ignore us anymore.” 3M’s new key cus-
a Penn State University professor in . Although she tomers were the manufacturers of O-rings for a myriad
worked on developing a rubber material that could of uses. Since the late s, the business has grown
resist deterioration from jet aircraft fuel, Patsy Sherman, in double digits annually.
then a 3M lab technician, happened upon a totally dif- Looking for ways to expand its customer base, 3M
ferent use for the compound that became the successful sought out the automotive industry. “We started calling
Scotchgard fabric protector in . Experimentation on GM, Ford and Chrysler with the idea of understand-
ing their end-user requirements,” “We were a very small part of 3M’s chemical
said Brullo. “We developed prod- business,” said Brullo, “but we operated like
ucts to meet those specific needs.” a little, entrepreneurial company. We
Not long afterward, Brullo filled focused on offering innovative tech-
a small box with 3M’s automo- nologies and a very fast response
tive parts samples and headed time to our customers. We had a
to Europe, at the encouragement tremendous amount of freedom
of George Hegg, an executive to do what we had to do.
with extensive experience in We also knew how
3M’s international business. to circumvent the
“I went from coun- bureaucracy when
try to country work- we had to. It was
ing with our local about when
3M employees, call- we caught up to
ing on fabricators and DuPont globally and
end-users, explaining passed them.” Brullo cred-
2
what our materials were and its cross functional teamwork
what they could do. We had to position ourselves as and strategic alliances with the success of the business.
a raw material solution provider because we sold only “Sid Leahy was our group vice president,” Brullo
the base polymer and proprietary curing agents not the said. “He urged us to start building alliances outside the
finished parts. The next year it was Asia.” Over time, company that could lead to codevelopment projects.”
Brullo upgraded his “sample box” to a fishing lure box Experimentation followed with several alliances; some
that nicely accommodated his array of fuel line hoses, worked, others didn’t. There were lessons learned, but
O-rings, oil seals for engines, engine valve seals, little out of these relationships came technology and product
rubber molded “elbows” for crank case ventilation and gains and the recognition that 3M should team up with
other prosaic pieces and parts made from 3M’s Fluorel a “big player” to leverage its applications know-how
fluoroelastomers. From a percent market share in and technological expertise to the broader fluoropolymer
, Brullo said 3M’s share in this high potential niche industry. Along the way, the group won two Golden
grew to about percent in the United States by the late Step awards for their commercialization of major new
s. products in and .
2 1-3 3M is a leading 3
supplier of connecting,
splicing, insulating and
protective products for
the electronics, tele-
communications and
electrical markets.
Divide and Grow—Follow the Technology 183
written by the two men. “It was classic 3M at its best,” in project funding and he agreed to the plan on April ,
Pint recalled. “We had high-level sponsorship in Wayne, , recalled Pint. “He left us alone,” said Pint. “After
who trusted us and welcomed new ideas. He encour- about nine months, he came to us and asked, ‘How long
aged us to look at how 3M could build a market focus is it going to take to prove that what we did was right?’
on communications and electronics combined.” I said, ‘By the end of this year, we’ll have million to
At the time, the businesses were worth no more than million in business and we’ll be off and running.’
million. “We had connectors and insulating products Wayne believed in the business and he put up the money.
and tapes and splice closures for the electrical industry,” The market was dynamic; it had a lot of unknowns, but
said Pint, who went on to become group vice president, he trusted us and believed 3M had a big opportunity.”
Telecom Systems. “We had technology breakthroughs By following the technology wherever it led, that
in connecting small gauge wires for electronics and embryonic start led to a huge business. From originally
telecommunications. We had splicing plastic that was offering a few tapes and simple copper connectors, the
insulated for telephone cables and something new— 3M telecommunications business has expanded into
flat ribbon cables with multiconductor connectors that about , products across several markets by applying
could be used in the emerging computer industry. But, the many innovative technologies available. In addition
this was the s and there wasn’t much computer to inventing one of the first multiple copper splicing
business. We figured we could cover the market with systems and the first multiple fiber mechanical splicing
to sales reps, four sales managers and a small system, 3M products help deliver transmission signals
staff in St. Paul with a little bit dedicated to R&D.” to people’s homes through the switches that send those
Carter and Pint asked Bollmeier for about million signals.
time-tested truths
Corporate core attributes and values combine to Lawrence, vice president, Personnel, told the Dispatch.
influence decisions—big and small, day after day. They “We were determined not to make them dependents,
establish the guidelines for how a company and its peo- but to help keep them on an even keel and restore their
ple will act. Over time, 3M’s decisions and practices lives as close as possible to what they were before the
have underscored a commitment to “doing the right explosions.”
thing”—not the easy, expeditious or less costly thing. The company quickly made sure that workers’ com-
pensation and insurance payments, as well as company
> The Day “the Mining” Blew Up benefits, were paid to the survivors. 3M also contacted
At : a.m. on Thursday, February , , a massive the U.S. Office of Social Security to speed up payments.
gas explosion rocked three 3M buildings at the corner Since the day after the blast was a payday, a special pay-
of Arcade and Fauquier Streets on St. Paul’s East Side. master’s window was created to distribute wages on time.
About , 3M employees had just reported for work. Damage to 3M property totaled about million
The explosion started in Building , a six-story struc- but settling that claim was a distant second to caring for
ture where minerals were crushed and treated in ovens 3M people and their families. “The company just took
heated with butane. The blast swept through under- care of people,” said John Pitblado, branch sales man-
ground tunnels and damaged a neighboring tape pack- ager, Los Angeles, at the time. Pitblado later retired as
ing plant as well as 3M’s main office building. Fifteen president, U.S. Operations.
people died and others were injured in St. Paul’s
worst disaster. Two sides of the minerals building were > Pollution Prevention Pays and Pays and . . .
blown out and employees were pinned under falling The s would prove to be a massive test of 3M’s
floors, walls and ceilings. corporate culture and resolve. That was when environ-
“Mobilizing its forces quickly,” the St. Paul Dispatch mentalists and the federal government took aim at
newspaper reported, “the company assigned one man long-standing, approved environmental practices used
to each victim’s family to work with them as long as by American companies. When Rachel Carson’s book,
necessary. A , emergency fund was set up to pay “Silent Spring,” was published in , it began to raise
for taxi fares to hospitals, baby sitters, transportation the nation’s collective awareness to the dangers of water
of relatives from out of town, telegrams to survivors, pollution. Millions of people across the country marched
funeral costs and whatever else was needed.” in the country’s first Earth Day in to call attention
3M also created an emergency aid committee. “The to environmental concerns. And, Congress passed the
idea was to help families re-establish themselves,” Ivan Clean Water Act.
After the Clean Water Act was passed, 3M realized but the climate was oppressive. “My wife and I had
it needed to address all three parts of the environmental many special privileges . . . But, this was not our China,”
equation: air, water and waste. For 3M, the biggest Ling said. “Everyone was suspicious of everyone else.
issue by far was air emissions because hundreds of the Everyone carried a notebook. Everyone was afraid to
company’s products required solvents during manufac- speak.” The Lings left China for the United States and
turing. In many cases, the only way to eliminate solvents Joe Ling joined 3M.
was by developing completely new manufacturing “Like most American companies, 3M was just begin-
methods that did not require their use. The search was ning to grapple with water issues,” Ling said, “water
on for alternatives. for air conditioning, water for boilers, water sources for
Technical people were encouraged to eliminate or manufacturing and handling wastewater. 3M had lots
replace the solvents that they had used for decades. The of chemical engineers but only one environmental engi-
company devoted more than million annually to R&D neer, me.” Unlike other companies, 3M, under Ling’s
efforts relating to just this issue. Because 3M recognized direction, chose to adopt environmental policies that
the benefits of pollution prevention early, it soon was far exceeded the letter of the law. In , Ling and fel-
viewed as a leader in this arena. low 3M engineer Charles Kiester, who later retired as
3M’s leadership was due, in part, to the hiring senior vice president, Engineering, Manufacturing and
of its first Ph.D. engineer who specialized in what was Logistics, presented a paper to the st Industrial Waste
then called “sanitary engineering.” Joe Ling came to Conference and advocated a carefully planned waste
Minnesota from China in to earn an advanced reduction program in addition to a waste disposal system.
degree. Ling wanted to focus on municipal engineering, When Ling appeared before Congress as it was craft-
but there was no such program at the University of ing its first clean water bill, he advocated “a total envi-
Minnesota. His advisors encouraged him to design the ronment concept” that focused on more than water
first degree in sanitary engineering, and Ling ran up alone. He explained to Congress that it would be counter-
course credits instead of the required . “My advisors productive to mandate a zero-pollutant discharge into
were so proud of their new major that they kept asking the nation’s streams because moving to this level would
me to take more courses,” he joked. create more pollution elsewhere than it would eliminate.
Ling and his wife, Rose, returned to China to help At 3M, Ling authored a comprehensive program in
their country cope with its primitive conditions, but the that he called Pollution Prevention Pays (3P). The
Communists had taken over the country prior to their goal was to eliminate or reduce sources of pollution in
return. The Lings were treated well in their homeland, 3M products and processes rather than clean it up later.
The third P—Pays—was a critical element. Ling mental conference in , Ling could already
believed that without a pay back there was no point to 3P projects at 3M that had elimi-
real incentive to change products or processes nated million gallons of wastewater, ,
that were easy to use and worked well, even tons of air pollutants and , tons of sludge.
if they contained pollutants. Ling’s ideas were By , when Bob Bringer succeeded Ling
radical for the era, but he caught the ear of Ray as vice president, Environmental Engineering
Herzog, then 3M’s chairman of the board and and Pollution Control, he estimated that the 3P
CEO. Both men shared the philosophy that it program had saved the company million—
would cost less to reduce or eliminate pollution a conservative estimate because the sum was
at the source—rather than trying to clean it up based only on first-year results from , 3P
afterward. When Herzog gave Ling the okay projects. Together, these projects had reduced
to proceed with 3P, it became one of the first
environmental programs of its kind in the world 1
According to our chairman of the board and
launched by a major manufacturing company.
One early example was striking. 3M engineers CEO, Allen Jacobson, all new air pollution
replaced a proven, solvent-based manufacturing process control installations will be judged not by return
with a water-based system for applying adhesive to on investment but by their technical acceptability
Scotch Magic tape. That change eliminated millions
and environmental benefit. > Bob Bringer retired
of pounds of air discharges and significantly reduced
pollution-control costs. staff vice president, Environmental Technology and Services
2 1 3M’s innovative 3P
program was a winner
of a 1996 Presidential
Award for Sustainable
Development.
2 A system developed
by 3M engineers reclaims
more than 95 percent
of a solvent used at the
3M Greenville, South
Carolina, facility.
Defining Moments Strengthen 3M’s Culture 189
Over the years, 3M’s focus on the environment also Environment Center and America’s Corporate
began to embrace the company’s long-standing world- Conscience Award from the Council on Economic
wide effort to reduce workplace injuries and illness as Priorities; the 3P program won the first U.S. President’s
well as a pragmatic belief in sustainable development— Sustainable Development Award; and, in Germany, 3M
producing products with fewer environmental, health was ranked second in the world for “eco-performance”
and safety effects. By , the project that Ling started among the largest chemical using companies.
in had saved 3M more than million and pre-
vented . billion pounds of pollution through , > An Unpopular Decision Proven Right
programs. Between and , the company has “To a growing number of multinational corporations,
reduced its volatile organic air emissions by percent, South Africa is like a piece of flypaper,” one business
cut its manufacturing releases to water by percent reporter observed in . “It can hardly be overlooked.
and reduced its solid waste by percent. It tends to be pesky and it certainly is sticky.”
One unanticipated off shoot of the environmental 3M had been in South Africa for years when a
program has been the development of new products that small, but vocal, group of shareholders pressured the
were only possible because of the company’s new sol- company to stop doing business there because the coun-
ventless processes. Film polymers in paper-thin sheets try was segregated and run by a white minority in a
system called “apartheid.” Many American companies
Sustainable development meets the needs left South Africa in the mid-s and others heard
the same resolution posed at their annual meetings.
of the present generation without compromising
“It’s a complex question,” Robert Adams, retired vice
the needs of future generations. > Joe Ling president, Research and Development, and chair of the
company’s Corporate Social Responsibility Committee,
that transmit and reflect light are among many technolo- said in answering an angry shareholder at 3M’s annual
gies that have emerged. These brilliantly colored mirrors meeting in May . “We certainly share the views of
produced from polymers might never have been created the proponents to eliminate racism in South Africa, but
if the process had involved solvents. By not using sol- we differ on how it should be done.”
vents, technical employees have often found it easier to 3M was among the first American companies to
get products developed and out the door. adopt the Sullivan Principles in , a voluntary code
3M received the first annual Gold Medal for Corpo- in which the companies pledged to practice fair and
rate Environmental Achievement given by the World equal employment practices as well as contribute to the
progress of black South Africans in the workplace and returned. When that occurred, 3M was in the top per-
community. cent of South African wage payers; the percent of people
3M South Africa was one of the first companies to of color in management had increased to percent;
integrate its workplace, even though local laws required and the company’s goal was to increase that number
segregation. The company’s first full-scale cafeteria built even more. By , nearly percent of all managers
for employees in the mid-s was also integrated— and professionals were people of color. By staying put,
another radical step. To help speed the advancement of 3M South Africa became known for fair and equal treat-
blacks into higher level jobs, 3M South Africa created ment and for supporting the emergence of a new society.
its own education and training center in .
By the mid-s, most American companies had > Thinking Long-Term
bowed to shareholder pressure, but 3M was among the This same willingness to remain when times were tough
few that stayed in South Africa. “We believed that our served 3M well in the Asia Pacific Region when a dra-
aggressive effort to help blacks would ultimately prove matic economic downturn in that region and depreciating
more effective than pulling out of the country and for- currencies hit the company hard in and . For
saking our , employees there,” Jim Thwaits, retired more than years, 3M had operated in the region and
president, International Operations, said. “By with- it had strong market positions. The region represented
drawing, we would have eliminated an opportunity to . billion in sales and percent of 3M’s total interna-
influence change.” tional revenues in . As months passed, however, it
Donn Osmon, now retired, then vice president, became apparent that the economic weakness in Asia
Marketing and Public Affairs, was assigned to coordi- was deeper and more widespread than anyone expected.
nate the company’s activities in South Africa during
this controversial era. “We had boycotts against us, and
we started to lose some business. The losses grew when Our goal is to be sustainable in countries that
customers withheld their orders because of our decision have a meltdown. It takes rigorous attention
to stay,” he said. “Our employees needed reassurance and action. We know how to do it and we
that we weren’t going to leave. I met with church groups
do it well. Our employees and our customers
opposing our position. It wasn’t pleasant, but at least
they could understand our side when we said our in those countries value the fact that we’ll be
employees had full careers in South Africa and most around. > Ron Baukol retired executive vice president,
had their pensions built up. How could we walk away
International Operations
and dump them?”
Osmon remembered several highly lucrative offers
made by large local companies to buy 3M South Africa, Wall Street was impatient with 3M’s performance
but the 3M Board of Directors’ answer was “No thanks.” and some observers suggested that the company should
“The whole decision boiled down to the economic wel- reduce its vulnerability and step back from Asia. But,
fare of our employees and their families.” Chairman of the Board and Chief Executive Officer
3M was among major American companies, L.D. DeSimone stood firm. “We have the ability to with-
including Kodak, General Motors, Control Data, Honey- stand difficult periods and we must,” he said in .
well, Coca-Cola and Ford, that signed ads in South “It was a steep, weighty problem for us, but we demon-
African newspapers in pledging to “play an active strated that this company takes a long-term view. We’re
role” in ending apartheid. part of the Asian economies and we’re tough enough to
Ultimately, 3M was proven right when South Africa go through a rough period and come out stronger.”
gained its independence from apartheid in and a
large number of companies that had left the country
Background: Volition
multimode fiber optic cable
F or 30 years, Jerry Cederholm
‘Sorry, Mr. Ordway, Your Nametag has Expired’
has had a glimpse of 3M’s
culture from a unique vantage
point. As a security guard,
Cederholm has walked the halls
of 3M at all hours of the day
and night. He’s elded phone
calls; reported leaky roofs; shut
off Bunsen burners; responded
to alarms; and greeted execu-
tives, politicians, entertainers
and athletes visiting 3M Center
in St. Paul.
In recent years, Cederholm
has been the r st 3M employee
most visitors to 3M Center meet.
In hot or cold weather, he works
in the guard shack greeting those
who ask to park in the visitors’
lot that is surrounded by the four
administrative buildings.
Cederholm has noticed the
quirks in 3M’s culture of innova-
tion. “I really respect the scien-
tists,” he said. “Some of them are
a bit eccentric. I remember one
fellow who kept his black dial
phone long after we had push
button phones installed in the think 3M should ever stray from nametag had expired. Cederholm
labs. He had a corner cubicle that McKnight’s values.” politely but sternly asked the
was piled high with papers. He Comedian Red Skelton was man to wait, while Cederholm
must have crawled over a table Cederholm’s favorite celebrity called the front desk at 3M Center
to leave his of ce .” visitor. “He came for an anniver- to con rm his decision. “I told
3M is still a family company, sary event and took an informal Dorothy Fisher his name was
Cederholm said, but its size is walk around 3M Center,” Ceder- John Ordway,” said Cederholm,
challenging. “There’s so much holm said. “He was telling jokes a native of Wisconsin who then
diversity—in products, in the and people were buckled over had little knowledge of 3M’s his-
number of projects the com- with laughter. He kept shaking tory. “She said, ‘For crying out
pany’s involved in, with people employees’ hands and saying loud, let him in! He’s on the
taking assignments all over the ‘thank you.’ ” Governors, city board and he owns half of 3M.’
world,” he said. But, even with mayors, Olympians, President Mr. Ordway was so nice about it;
all the change, the McKnight Gerald Ford, NASCAR drivers, he never made an issue of it. He
in uence is palpab le. “His spirit even professional wrestlers have promised he’d get a new ID, too.”
is still here,” Cederholm said. been guests at 3M.
“McKnight and 3M are synony- Then there was the distin-
mous. It feels like he might come guished man wearing a suit
in any day and look over my and walking fast to a meeting.
shoulder. I know we’re operating Cederholm was new to the com-
in a changing world, but I don’t pany and he noticed the man’s
Defining Moments Strengthen 3M’s Culture 193
> At its Heart, a Strong Culture ership is welcomed. When 3M employees show poten-
In 3M’s most challenging times, the company’s culture tial, they can expect broad responsibilities and multiple,
has been tested and remained strong. The plant varied assignments in their careers. The most effective
explosion brought out 3M’s compassion for its employ- leaders within 3M understand the value of teamwork,
ees and their families. When 3M was criticized for they promote openness and cooperation, and they
harming the environment, the company became a leader actively share information and knowledge. Remarkably,
whether a 3M employee is based in Finland, Japan,
McKnight did not want the evolution and France, the United States or other countries around
the world, they share the same values with their col-
expansion of the company to depend only on
leagues oceans away. Some observers have said that this
himself. He wanted to create an organization shared belief system—combined with cultural diversity—
that would continually self-mutate from within, comes from international assignments that move people
impelled forward by employees exercising out of their home countries.
3M promotes a close-knit, caring, family-like atmos-
their individual initiative. > James Collins and
phere. Given its considerable size, this description may
Jerry Porras authors of “Built to Last” seem like a contradiction, but it is not. 3M tries to hire
people for a career not just a job along a path of many
in pollution prevention. The company chose to be part corporate jobs. In fact, even in an era of “job-hopping,”
of the solution, rather than a contributor to the growing, 3M’s turnover rate is among the lowest of America’s
global problem. 3M believed it could also be part of
a solution in South Africa and it did not bow to consid- Although 3M’s leaders could never predict
erable public and shareholder pressure to leave the
where the company would go in the future, they
country. By remaining there, 3M put its South African
employees and their families first. Similarly, when a had little doubt that it would go far. It became
steep economic downturn plagued Asia, 3M remained a ticking, whirring, clicking, clattering clock with
committed to being a long-term participant in the econ- a myriad of tangible mechanisms well aligned
omy of that region.
to stimulate continual evolutionary progress.
William McKnight imagined a “flat” organization
decades before the concept was a popular business > James Collins and Jerry Porras
Background: Scotchlite
Diamond Grade reflective sheeting
194 Chapter 12
were much more likely to be loyal and spend their support and education focused on child care, long-term
careers with the company if they had a tangible stake care, elder care, insurance options and a survivor support
in the organization. Equally important, McKnight and program for employees who lost loved ones.
the leaders who followed him believed that people
needed to be recognized for their contributions. That’s > Good Corporate Citizenship
why the company has a plethora of award programs that Raised on a small, South Dakota farm and the son of a
honor individual, as well as team, initiative and success. community activist father, McKnight had a strong belief
in giving. He made sure that his company was a solid
corporate citizen and that it supported worthy local
People who have benefited from 3M’s culture causes. McKnight also believed that 3M’s community
have moved a number of times and worked their involvement would make its employees feel proud of
way up. I’m one of them. > Ken Bothof plant manager, their company and more connected to its broader goals.
In , 3M was one of the first companies in
3M Nevada, Missouri, plant
Minnesota to create a corporate foundation. This formal
commitment to community giving ensured that the
As the 3M work force changed and life demands on money would be there for years to come, regardless
employees and their families increased over the decades of economic fluctuations in the marketplace. Along
of the th century, the company worked to be attentive with cash contributions to education, health and human
to those changes. 3M was one of the first companies in services, 3M has given numerous product donations
Minnesota to start an Employee Assistance Program, each year and put great emphasis on employee volun-
in . And, in the s, the company focused on how teerism. In fact, a recent study of 3M volunteerism
more women and minorities could advance their careers by the University of Minnesota Carlson School of
and become leaders.
When economic recessions rocked American compa-
nies, 3M gave employees whose jobs were eliminated Mr. McKnight was a man with a golden heart.
time to find a new job within 3M. And, if that effort was He felt very fortunate about what happened in
unsuccessful, they were offered outplacement services
his career and he wanted to give that benefit
and a severance package. By the s, when two-career
couples and care for elderly parents became more com- back. > Don Larson retired president, 3M Foundation
mon, 3M created a Work and Family Department to offer and Community Affairs
1 1 Denise Loving, 3M 2
information analyst, is one
of the many 3M employ-
ees who tutors students
at St. Paul area schools.
2 Frank Junghans, a
retired 3M chemical
engineer, donates his
time and skills to Habitat
for Humanity through
3M Community Action
Retired Employee
Services (3M CARES).
Defining Moments Strengthen 3M’s Culture 195
notes with the museum logo, Interam wrap used during Iowa, plant
building construction, Nomad floor mats and mainte-
nance supplies. “Because we hire locally, we’ve worked with our
community college to identify the skills people need to
succeed in a job at 3M,” said Jim King, retired Decatur
We had a last-minute request during construc-
site manager. “Since , the college has made a major
tion. It was just wonderful being able to call effort to help us with production training, and we have
3M and ask, ‘Can we get some help?’ and the people from our plant working on degrees in electrical
answer would always be, ‘We’ll go to work on it.’ and mechanical technology. The college is expanding
its coursework and we’re getting the training support
> James Peterson president, Science Museum of Minnesota
we need.” King is proud of the lives that his employees
have outside the plant. “Sandra Klack is a production
In 3M’s plant communities, the spirit of giving really employee,” he said,
shines. “We’re a company of people who care about our “and she’s won 3M’s
communities,” said Barbara Kaufmann, manager, 3M national Community 1 3M organized the first Stuff for
School Program in 1995. By 2001,
Foundation, Education Contributions. “We’ve always Volunteer Award two
the program had expanded and
believed in being good citizens and looking out for the years in a row for provided supplies to more than
places from where we come. We want to work for good helping teen-agers 14,000 students in 29 St. Paul
schools, healthy and safe communities.” Each 3M plant at risk.” public schools.
Defining Moments Strengthen 3M’s Culture 197
Over the years, 3M’s penchant for giving has twin towers. John Becker, senior account representa-
increased. 3M’s cash contributions grew from , tive, Occupational Health and Environmental Safety
in —the first year of the 3M Foundation—to Division, slept in his van near the site so he could help
million in . Product donations also have steadily rescue workers.
risen to more than million annually over more By September , 3M teams were in place in New
recent years. Early in , 3M was awarded the Points York City and Washington, D.C., to support the rescue
of Light Foundation’s Award for Excellence in Corporate workers. “Our mission was to get the proper respirator
Community Service in recognition of years of vol- products to the right people in the shortest time,”
unteer service by 3M employees. said Dirk Edmiston, regional sales manager. Behind
3M employees have always been willing to rise to a that simple statement was an all out effort on the East
pressing need, including the aftermath of terrorist attacks Coast as well as St. Paul and manufacturing plants in
on New York City and the Pentagon in Washington, D.C., Aberdeen, South Dakota, and Valley, Nebraska. 3M
on September , . 3M employees from New York donated more than , respirators to rescue workers
City and New Jersey assisted rescue workers at “ground at both disaster sites.”
zero,” the site of the collapse of the World Trade Center’s
time-tested truths
analysis would be superficial and incomplete. Over the 3M even has shed businesses in industries it actually
years, 3M has worked to make its own products obsolete created when those ventures matured or changed so
before its competition does—or the protection of crucial much that they no longer fit 3M or delivered the returns
patents expires. 3M also has acquired companies with they once did. New competition often has been a factor
an eye on strengthening a core business. Some of these in these tough decisions. For example, Xerox plain
acquisitions have succeeded, while others failed to yield paper copying ultimately eclipsed 3M Thermo-Fax
the expected product synergy or financial returns. For copiers, the first dry copying system in the world. 3M
example, 3M acquired National Outdoor Advertising invented magnetic audio and video recording in
in (later called National Ad), believing that bill- and led the industry for decades before the business
boards would be natural venues for miles of Scotchlite
reflective sheeting. Years later, even though National Ad Yes, there were mistakes made. You work
produced strong revenues, the real goal—strong product
with human beings and you’re going to make
synergy—hadn’t materialized, so, in , 3M sold the
business. mistakes. > Ken Schoen retired executive vice president,
In , 3M sold its cardiovascular and orthopedic 3M Information and Imaging Technologies Sector
surgical products businesses valued at approximately
million when it became clear that 3M had no com- became a low-price, low-margin commodity product in
petitive advantage in an industry that favored suppliers the s. 3M also invented the world’s fastest, high-
with broad, deep product lines. In many cases, even speed, digital fax machine, but the product was ahead
though a business is exited, it leaves behind technologi- of its time, and 3M chose not to capitalize on the idea,
cal know-how that is valuable years later. believing that consumer acceptance would be slow.
In virtually every case, a product or business is shed
3M has an organic, living nature. Pruning when it no longer meets the rigorous financial expecta-
tions established in when William McKnight set
is the natural, though difficult part of annual sales growth at percent and
continuous revitalization. Meanwhile, profit targets at percent.
new technology platforms become
the seeds of future growth.
> L.D. DeSimone retired chairman
The decision to eliminate a product or business always decided to spin off its data-storage and imaging-systems
involves soul-searching and loss for 3M decision- businesses (with historical roots in magnetic recording
makers and employees alike. In making these decisions, and photography).
3M reflects an element of its culture dating back to Of all the businesses 3M has shed over its years,
, when optimism and a can-do spirit prevailed over the two, seminal decisions that people point to as most
potentially fatal crises that threatened the very existence significant involved the sale of 3M’s Duplicating
of the company. Products business to Harris Corporation in Atlanta,
Alex Cirillo Jr., vice president, Commercial Graphics Georgia, and the spin-off of 3M’s data-storage and imag-
Division, calls it the “MacGyver culture of 3M” (based ing-systems businesses in creating a new company
on a s’ American television show): “We’ve always called Imation in Oakdale, Minnesota, near 3M head-
believed that we can take what’s at hand—baling wire, quarters. The two decisions have several elements in
this and that—and make something out of it, no matter common—both involved businesses that 3M created
what,” he said. “We believe this in the beginning of and, in fact, ranked number one in the marketplace for
projects, during projects and at the end of projects. We decades. They were “homegrown” businesses—largely
do everything possible to make something work before created within 3M and commercialized and built with
it’s cut loose. This is a good thing, not a bad thing.” the energy of many internal sponsors and champions.
The businesses were risky because the products were
We need to have winning technologies, winning based on pioneering technologies. They not only changed
products and winning business positions. the basis of competition; they also created all new,
global industries. The businesses were highly profitable
And, if we don’t, we have to take tough action. for decades, and they represented a significant share of
> John Benson executive vice president, 3M Health Care Markets the company’s total annual revenues. They also produced
many of 3M’s next generation of leaders.
Some observers have criticized 3M for the amount Deciding to shed these businesses also set major
of time it takes to make a decision about “shedding” precedents. Until the sale of the Duplicating Products
a business. The company kept National Ad in the fold Division to Harris, employees never had left 3M
for nearly years. Some say the very existence of at once. While they were guaranteed jobs at the new
Duplicating Products (home of Thermo-Fax copiers) company, they no longer were part of 3M.
was questioned well before it departed 3M in . The Even more difficult was the spin-off of 3M’s data-
same observation was made a decade later when 3M storage and imaging-systems businesses, when ,
employees left to form a new company. At the same age , became the youngest general manager of a 3M
time, another , jobs were eliminated worldwide. division that created a brand new industry and generated
Both decisions occurred in a -year time span billion in annual revenues by .
when the nature and pace of business changed dramati- The story of the invention and commercialization
cally in the United States and worldwide. A recession of Thermo-Fax copiers is a classic 3M innovation
began in the early s, followed by voracious corpo- model: create a product never seen before using new
rate acquisitions in the mid-s; then a stunning technology, grow that business through aggressive sales
market “correction” in led to another recession and distribution, lead the market for decades, exit the
in America, financial losses, layoffs and a new term business when it has reached the end of its most prof-
introduced to the corporate lexicon, “downsizing.” itable life cycle, harvest technological know-how and
Many companies, including 3M, faced hard choices. apply it to new products.
While some areas remained profitable, they didn’t meet In retrospect, some believe that 3M should have
the company’s financial objectives. 3M’s decision to committed more research and development (R&D)
sell the Duplicating Products Division prepared the dollars to “obsolete” its copiers and stay ahead of the
company for the most wrenching decision in its history, competition that ultimately surfaced. Others have sug-
a decade later. gested that 3M’s undisputed leadership led the company
to underrate the impact of competition. Whether these
> The Long Rise—and Ultimate Fall— perspectives are accurate or not, Thermo-Fax copiers
of Thermo-Fax Copiers and the line of duplicating products that it spawned
When mechanical engineering produced major, sustained profits over decades, acceler-
student Carl Kuhrmeyer grad- ated 3M’s international growth and proved that the com-
uated from the University of pany could successfully make and sell a product com-
Minnesota in , even this bining hardware (a copying machine) and a consumable
ambitious grad didn’t see product (coated paper). But, like most breakthroughs at
himself occupying an executive 3M, the path wasn’t easy or straight.
office next to William Copying a document in the s meant putting
McKnight years pen to paper, typing the document using carbon paper
later. But, that’s what or creating – copies on the mimeograph or
happened, after Ditto machine, a process that produced less than
Kuhrmeyer, at perfect copies.
1
A Culture of Change 203
But, that all changed when Carl Miller, a scientist that positioned the original document and copy sheet
in 3M Central Research Laboratories, discovered the like mirror images. In addition to Miller’s Thermo-Fax
process that became Thermo-Fax copiers in . 3M’s process, the company’s patents covered each of these
New Products Division in the fabled Benz Building three elements of the new copier.
landed the assignment to transform his invention into Around , sales took off, and the Duplicating
a saleable product. There were about five projects being Products Division was born, with Ray Herzog, later
explored at the time including an offset plate for print- named chairman and CEO, as its general manager and
ing and a fluorochemical project that led to Scotchgard relentless champion. The division stayed in the Benz
fabric protector eight years later. Building on the East Side of downtown St. Paul, where
“We had to fight to get enough money to develop the people knew they were breaking new ground. “We were
Thermo-Fax machine,” Kuhrmeyer recalled, “because separate,” Kuhrmeyer said, “so we were independent.
no one was sure of the market. ‘Why do you want to We had freedom to do what we needed to do. That was
do this; where’s the market?,’ they asked. We said, ‘We good because we were in a new business, very different
think people are going to want to make copies of things from tape, abrasives or reflective sheeting. We were
and it’s hard to do it today.’ We thought, here’s a chance plowing new ground and building thousands of copying
to broaden 3M’s product line beyond tapes and adhe- machines a month. Making a coated product like tape or
sives into something new and really make a mark on abrasives is quite different than making a piece of hard-
the world.” ware. We had to hire different kinds of people to get the
The development of Thermo-Fax copiers into a job done, and we built factories that were different from
commercially viable product took a decade and an anything else in 3M.”
investment of about million. Kuhrmeyer and a team Through the s and s, Duplicating Products
of chemists and engineers worked closely with Miller grew rapidly, because the Thermo-Fax machine had
to create the first desktop copying machine, called the no real competition. While Xerox had surfaced by this
Model Secretary, in . They overcame three, time, their plain-paper copier was, “bigger than a
key technical obstacles. First, they needed a consistent, piano,” cumbersome and had a nasty habit of catching
high-energy light source to shine across a sheet of on fire, according to Dick Lidstad, retired 3M vice pres-
paper. They went to General Electric for that invention. ident, Human Resources, who began his 3M career in
Second, they needed to build a reflector that would the Copying Products Division. The Xerox product was
concentrate light into a narrow beam that crossed the much more expensive at , per unit, compared to
paper’s surface. Finally, they had to create a mechanism a Thermo-Fax copier that used a specially coated
3 1 A 1955 advertisement
for Thermo-Fax copiers.
2 A 1956 advertisement
extolled the efficiency of
the four-second copies.
3 Ray Herzog (right)
and E.F. Boverman
mapped out the market
for new office products
in the 1950s.
204 Chapter 13
paper sold by 3M. To counter the cost issue, Xerox Kuhrmeyer’s opinion, the power shift occurred when
leased its machines and made money by charging about Xerox could tout permanent, plain-paper copies and 3M
½ cent for every copy a customer made. could not. Before long, other competitors, including
The easily portable Thermo-Fax machine, dubbed Kodak and IBM, were pursuing the fast growing, lucra-
“the down the street machine” by 3M sales representa- tive copying business. By this time, Kurhmeyer was vice
tives, had broad appeal inside and outside the United president of 3M’s largest division—Duplicating Products.
States. “Copying was a prime mover in helping us estab-
lish our foreign ventures,” recalled Maynard Patterson,
3M was the market leader in tapes and
a leading architect of 3M’s global expansion. “That was
especially true in the s when copying products’ sales abrasives in the United States, but in other
were going wild and so was 3M’s international growth.” countries there were local competitors that led
In fact, the first Thermo-Fax copier was introduced to
the category. With copying machines, we won
Europe in , only a few years after its United States
debut. “The Thermo-Fax machine was a product that we the business and the world beat a path to our
could sell in almost any country or city of the world,” door. That success generated cash flow 3M
said Kuhrmeyer. “After opening an office to sell copying needed to invest in global growth. > Ron Mitsch
products, 3M then could introduce tapes and abrasives.”
retired vice chairman of the board and executive vice president
3M was the undisputed world leader in copying
from to . In addition to copiers, the division
introduced the first overhead projector (the Thermo-Fax It wasn’t until the mid-s that 3M introduced
copier was the only one on the market that also made a copier that could compete with Xerox. “It took many
transparencies). By , the division introduced a millions of dollars to come out with a plain-paper copy
dual spectrum dry copying process that produced an product and we were late,” said Kuhrmeyer. “We had
improved image, followed by a color copier in . been making about a percent profit on our coated-
By , Xerox was nipping at 3M’s heels. It had paper copiers. When a product is pulling in revenues
developed smaller, faster, more reliable machines. like that, it takes remarkable judgment to admit that
Japanese competitors had begun licensing xerography your product might, in fact, be obsolete.” In retrospect,
and making their own copy machines. Xerox also Kuhrmeyer and others say that 3M should have pur-
had targeted the larger volume markets, while 3M chased the Xerox technology when it had the chance
had focused on smaller markets, such as schools. In years earlier.
We were trying desperately to develop another Harris, in , and, about three years later, 3M sold
its share to Harris. About 3M employees joined
thermography product that would compete with
their new employer. With the departure of Duplicating
xerography. We introduced a lot of machines Products, another , 3M employees found their jobs
with a lot of different technologies. It was like eliminated. To find new opportunities for these people,
searching for the Holy Grail. > Dick Lidstad
3M created a company-wide early retirement package,
allowing people age or older to retire with enhanced
retired vice president, Human Resources
benefits and a separation bonus. About people took
that option, while , found new positions at 3M.
3M’s dual-spectrum product competed head to head
with Xerox until the late s, when the competition Recognizing that we had lost our ability to
finally pulled ahead for good.
compete and offer a distinctive and unique
“There is a life cycle for every product and that is
one of the hardest things for management to recognize,” product was really hard for 3M. > Dick Lidstad
1
A Culture of Change 207
which to test samples. In addition, the backing solved manufacturers to create magnetic tape expressly for
coating and slitting challenges that were more difficult their equipment.
than any they’d ever encountered. Within a few months, In , 3M formed its Magnetic Products Division
3M had already improved upon its first product. and, with audio recording tape a resounding success,
About the same time the 3M team was inventing work had already begun on videotape. As early as ,
the world’s first commercial magnetic tape, John Mullin, 3M produced a black and white video recording tape
an electrical engineer who had served in the U.S. Signal for Bing Crosby. A few years later, 3M developed a
Corps during the war, wowed his colleagues at a conven- sophisticated “quadruplex” videotape for a brand new
tion of radio engineers in . After the war, Mullin video recorder that Ampex Corporation was preparing
had disassembled two German Magnetophones and to demonstrate for the Association of Radio and Televi-
mailed the pieces, along with reels of tape, to his sion Broadcasters in Chicago. Ampex was using another
San Francisco home in small packets. Mullin company’s magnetic tape that kept failing, putting the
reassembled the machines, experimented with improv- whole project in jeopardy.
ing them, and unveiled audio tape recording to his
stunned peers at the convention. Soon afterward, Bing We weren’t always the smartest guys, but
Crosby, then America’s most popular crooner, got wind
we were persistent. > Hugh Tierney retired vice
of Mullin’s demonstration and hired him to mastermind
prerecording Crosby’s weekly radio shows, a contro- president, Reinforced Plastics Division
astounding: “photographic picture quality,” one viewer I had product responsibility for what we called
gushed. The audience erupted in whistles, cheers and
floppy disks when they were first on the market.
stamping feet. It took years for phonograph record-
ings to evolve to spoken words and longer for good We projected $100 million in sales for the disks
music reproduction. It also took years before “talkie” and people said, what’s your basis for specu-
motion pictures on film were available. 3M had pro- lating 20 to 30 percent growth? Nothing grows
gressed from inventing sound recording tape to high-
that fast. It turns out we underestimated it.
fidelity video in just nine years.
From to the early s, 3M produced a con- > Dick Hanson retired director, Community Affairs, and vice
tinuous stream of new products including open-reel president, 3M Foundation, formerly in the Magnetic Media business
audio and videotapes and tape cassettes,
-track audiotape cartridges, magnetic
tape for motion picture sound track the television networks and companies special-
mastering and computer tapes and izing in instrumentation, from geophysical study
diskettes. Videotape technology moved to space exploration. Then magnetic tape became
from a -pound roll of -inch-wide tape a consumer business and attracted competition
nearly a half-mile long used by broadcasters to from all over the world, primarily Japan. “The
video cassettes for home use. Consumer audio- projected growth seemed too good to be true. We
tape cassettes became small and compact, and didn’t have the capacity to produce fast enough to
the tape itself was only one-eighth-inch wide. meet the explosive demand,” said Alfred E. Smith,
In , when 3M won an Emmy award for general manager, Magnetic Audio Visual Division,
pioneering the development of videotape, observers in the early s. “We didn’t move as quickly
might have thought 3M’s magnetic recording business as our Japanese competition, and they
was on top of the world. In fact, said Dick Hanson, invested a lot more in the business. We saw
who spent years in 3M’s Memory Technology 1 our operating margins cut in half, from
Group, “by then, the whole magnetic media roughly percent down to percent
business was heavy in red ink.” 3M had or lower. That diluted the rest of
invented and “owned” the business with 3M’s performance.” Japan was par-
huge market shares and strong profits in ticularly strong in the booming com-
the professional markets. 3M supplied all puter diskette business, as personal
computers became popular, and in the low-margin Electronic and Information Technologies Sector. “3M
consumer audiocassette markets. invested heavily. We modernized existing plants,
The computer business, later called “data storage,” put in new plants and added the latest equip-
quickly became a commodity business with large-scale, ment in the United States, Europe and
automated production, multiple competitors, narrow Japan. The end goal was to push the
margins and product offerings that were basically the cost of manufacturing floppy disks,
same from company to company. diskettes and videocassettes down
“If we were going to compete effectively in the to the lowest level possible. We
industrial markets, we had to compete in consumer,” succeeded in doing that in
said Smith. “We decided to do battle in the videocassette about four years. We could
market. Our magnetic manufacturing processes became go toe to toe with the
the best in the company; they had to be—we had the Japanese and do well.”
most competition. Data Storage introduced a new stan- Because 3M’s tradi-
dard of manufacturing expertise to 3M.” tional focus was in the
“We put our best efforts toward being a world-class industrial and profes-
competitor,” said Al Huber, retired sector vice president, sional markets, no one
had strong background
in the consumer arena.
We had superior technology. We made magnetic
“Historically, our con-
media better than anyone else in the world, sumer experience was
including the Japanese, but they were willing limited to products in which
to accept a lesser profit. We thought we could we had great strength, like
Scotch brand tapes,” said
be better technologically. Ultimately, we thought
Huber. “We didn’t have experi-
we could win. This drove the decision to spin ence with distribution to the huge
off the business. We knew the new company discounters like Target, Wal-Mart
and the electronics superstores.”
(later called Imation) would have the best tech-
Competition for the consumer dollar
nology in the world. > Charlton “Chuck” Dietz was fierce in the s and s—TDK and
retired senior vice president, 3M Legal Affairs Maxell were two well-known Japanese brands.
5
4
210 Chapter 13
We kept trying to fix the same problem (with “We decided we had to look at where product prices
and the cost of manufacturing were going. We exam-
copying and magnetic) with the same solutions,
ined every step of our process and made big changes.”
so we ended up with the same answers. One Through high-speed automation and major simplifica-
of the positive sides of 3M is knowing what its tion of the whole manufacturing process, Thomason
core competencies are. The negative side is said magnetic media reduced its costs dramatically. For
example, the manufacturing team reduced 3M’s cost
when we come across a business that’s on the
of producing a videocassette, including the tape itself,
border of our core competencies, we still apply
the traditional techniques. > Fred Harris Jr. It’s sad that it’s gone, but it served its purpose
formerly division vice president, Audio and Video Products Division, and had a good life. Video recording completely
now staff vice president, Community Affairs and Workforce Diversity changed the television industry, and the computer
business wouldn’t have gotten off the ground
In the United States, the biggest audiotape competitor
without magnetic tape. > Dennis Horsford retired
was Memorex, which promoted its product superiority
product coordinator and marketing manager, Magnetic Media Division
in commercials featuring Ella Fitzgerald hitting a high
note on tape and shattering glass. 3M struggled with
quality issues, while the Japanese touted superior quality. from about to cents, even though the plastic cas-
“By and , our competition was investing sette “shell” alone contained different parts. “In most
heavily and taking an aggressive approach to winning of our operations, we increased our production speed
market share,” said Huber. “Frankly, we by more than two and a half times,”
got behind the curve in competing Thomason said, “while ensuring high
with ‘Japan, Incorporated.’ It was quality. We consolidated all of our
a dog fight.” magnetic manufacturing from four fac-
“After about four years, we were tories to one in Hutchinson, Minnesota,
getting hammered,” said Larry and we did it in months.”
Thomason, then manufacturing Although 3M’s magnetic media
director, Magnetic Media. business earned awards for produc-
tivity improvements and topnotch
1 Scotch select 1
series video-
cassettes helped
consumers pick the
right one for the right
use. The theme was:
“choose them based
on how you use them.”
A Culture of Change 211
manufacturing, 3M was in a bind. While it sold its lacked,” said Kuhn. “Ultimately we learned a lot from
products for little or no profit, its competition sold their Ferrania.” Ferrania was a respected company with a
products for even less. Even though the consumer busi- major presence in Europe. 3M acquired Ferrania S.p.A.
ness had huge growth potential, 3M had little experi- in in a stock purchase valued at million. It was
ence with a low-cost, low-profit-margin model. 3M’s largest acquisition in its -year history. “They had
The markings were clear—exit this business, even technology and well-educated, good people but taking
though 3M invented it. To stay in the “dog fight” meant on Kodak was a big challenge and, in today’s market-
3M had to invest enormous amounts of money in order place, perhaps insane,” said Kuhn.
to remain the low-cost producer, with no assurance that While 3M’s coating expertise was a plus, the photo-
profit margins ever would improve. “Exiting it was the graphic business struggled with quality issues and
right decision,” Huber said. effective marketing eluded them. Meanwhile, other
new competitors entered the scene including Germany’s
> Challenging the Giant Agfa, Britain’s Illford and Japan’s Fuji.
In marked contrast to 3M’s leadership in magnetic prod- Ultimately, 3M’s photographic business became
ucts, the company made a bold move in to face the largest supplier of private label film to customers
off with large, successful Eastman Kodak. Bert Cross, around the world, but the consumer business stayed
then 3M’s president, believed that 3M’s strong expertise with Kodak and the newest up-and-comer, Fuji. 3M
in coating technology was a natural entrée into the photo- even introduced the world’s fastest daylight-balanced
graphic film business. To kick off this venture, in color transparency film in but chose not to invest
3M purchased Dynacolor, an American film processor further in the business, especially when adaptation to
and manufacturer, and a small French film manufac- digital photography would have required significant
turer. Unfortunately, the -person French company dollars. 3M actually made its greatest strides in medical
was nearly bankrupt; its film product was substandard X-ray films, including a high-speed film that cut down
and 3M had agreed to build a movie film plant in India exposure time and a high light system that eliminated
without the expertise it needed. the need for a darkroom to load and process X-ray film.
Although 3M exited the photographic business in
Kodak was head and shoulders above anyone its restructuring and spin-off of businesses in later years,
the Ferrania acquisition gave 3M a major presence in
else in the world. > Ralph Ebbott retired vice president
Italy. By , 3M Italy ranked No. in Europe and
and treasurer and one of the first 3M employees to relocate to Ferrania No. in the world, after Japan, in total 3M business.
How we went about this is unusual in business. Imation, whose major products would be data car-
tridges, diskettes and optical disks, medical imaging,
We didn’t give Imation a poor balance sheet.
X-ray film and color proofing products, became a
We gave them a balance sheet that looked very . billion publicly traded company on July , .
much like 3M’s. 3M didn’t need to get richer from Bill Monahan, a -year 3M veteran, became Imation’s
the transaction. Our main concern was a clean new chief executive officer. Monahan’s challenge was
to create a nimble company that could keep pace with
break and a good start for the new company.
an ever changing market.
> L.D. DeSimone At 3M, the decision was painful but uniformly
supported by upper management. Ultimately, 3M’s
chairman of the board and chief executive officer,
L.D. DeSimone, sat at a table and polled every member
of his management team. He asked each person to tell
him what he or she thought of the spin-off idea and
whether this was the best decision. They all agreed it
was, knowing that 3M would not be the
same company after the spin-off.
It was hard getting to the decision,
not making it, said DeSimone. “I said,
‘This is the best option we have’ . . .
there was no perfect option.”
1 A 1996 advertisement
announced the spin-off
of 3M’s data storage
business into a new
company, called Imation.
1
A Culture of Change 213
The spin-off was one of those reality checks, “It was a joyless process to tell people the reason
was that we just couldn’t be successful in the business
pointing out our need to stay competitive
and that they had to leave the company, knowing that
as a company . . . it was a wake up call—and they didn’t want to leave,” said Lidstad.
a sobering one—for a lot of our employees. “Our policy has always been to be honest with
> John Benson executive vice president, Health Care Markets
people,” said Lidstad. “Tell them as much as you can
and do it very well.” 3M created a “transition center”
not only for 3M employees affected by the spin-off,
The decision was a shock and a loss for employees but also for anyone in 3M who wanted information,
at all levels. At 3M, where people had come to believe support and counseling. It gave employees an opportu-
that they were guaranteed a “job for life,” the spin-off nity to deal with the loss, and it gave them a chance to
proved this assumption wrong. It was Lidstad’s role as consider all their job options. It also offered financial
vice president of Human Resources at that time to see and retirement planning. “I think people viewed that as
that 3M people who had to leave made a safe landing. important and timely assistance,” Lidstad said. “We also
He had learned much from the sale of Duplicating offered employee assistance for people going through
Products years earlier. the grieving process. For many employees, it was like
a death in the family.”
time-tested truths
● There’s time to win and a time to cut your losses: know the difference.
the opportunities that came their way. But, that didn’t We all buy equipment from the same vendors
keep them from tackling new assignments with gusto.
and raw materials from the same people. We buy
“The leaders of 3M were common people with
modest beginnings,” said John Pitblado, who joined the same computers and software. We listen to
3M at age and retired several decades later as presi- the same consultants. We hire from the same
dent, U.S. Operations. “They were willing to work hard schools. So what’s the difference? It’s people.
and they were curious. Nobody tried to climb the social
Plain and simple. This company relies on people.
ladder in St. Paul. We didn’t have lunch at the down-
town Minnesota Club; our headquarters were out in > Charles Kiester retired senior vice president, Engineering,
for electrocoating sandpaper, giving it more cutting and this together and he’ll get something entirely dif-
power. By the s, the versatile Carlton had added ferent.” A move at that time to hire only people with
labor relations to his responsibilities. In , at age college degrees for technical jobs fizzled.
, Carlton became 3M’s fifth president, serving until Carlton created a technical policy committee in the
ill health forced him to resign in just a few s that became a forerunner to 3M’s Technical
weeks before his death. Council and Technical Forum in which, even
Carlton was a man who nurtured today, ideas are freely shared company-
innovation, rejected the notion that wide. John Pearson, a Carlton Society
only people with degrees could member, served on that committee.
come up with the best ideas, “That effort was the first intended
fostered knowledge sharing to ‘institutionalize’ a culture of
and served as a mentor to many. innovation at 3M,” he said. “Dick
When Maynard Patterson was a strong proponent of getting
became general manager of people involved so they didn’t
3M Canada, Carlton gave him become isolated islands. On Sat-
“ground cover.” “We anticipated urday mornings, we brought our
some trouble because all 3M busi- lab notebooks up-to-date and we
ness in Canada was to be done through talked with people from other labs. We’d
this new, little company,” said Patterson, sit down, tackle problems and pick each
who later retired as group vice president, 5 other’s brains. Carlton encouraged that.” It isn’t
International Division. “ ‘If you ever have any surprising that the Carlton Society, named after him,
trouble,’ Carlton told me, ‘pick up the phone and call.’ honors 3M technical employees whose careers exem-
He gave me wide scope to do what I felt had to be done.” plify innovative research that led to patentable products.
“Dick Carlton called a meeting of all the lab people, Carlton created 3M’s Central Research Laboratory
including the flunkies like me without college degrees,” with a broad imperative for experimentation as well
said Don Douglas, who retired as 3M’s vice president, as for conducting research to support the company’s
Reflective Products. Carlton addressed the educated: division labs.
“You all know that if you put this and this together, “Carlton set the tone for all the labs,” said Les Krogh,
you’ll get this,” Carlton said. “But, you take Don retired senior vice president, Research and Development.
Douglas, he doesn’t know any better, and he’ll put this “He was an idea man and he had a huge tolerance for
do less than our best at solving problems and filling office to congratulate him and he asked, ‘Where are
needs would limit our growth . . . I don’t believe any of my –– charts?’ ”
us wants that.” Buetow also appreciated the need for a skilled
By the time Buetow became president, 3M had a sales team. “He helped strengthen sales and marketing
“vertical organization” in which divisions and interna- with the help of A.G. Bush, who had been hired by
tional subsidiaries had a strong measure of autonomy. McKnight,” said Don Larson, retired president, 3M
This plan was based on McKnight’s notion that 3M Foundation. “He sold top management on the need for
would “divide and grow” by creating entrepreneurial
businesses led by people who were in charge of their
Herb Buetow learned everything he knew from
own product and profit destinies. It was a creative
approach when McKnight envisioned it in . Peter William McKnight. They had the same philoso-
Drucker, the guru of management theory, told McKnight phies. Herb put trust in people. When he gave
it was a bad idea. Never mind, McKnight did it anyway, you an assignment, he expected it to be done
and Buetow inherited a stable of ambitious 3M people
right and on time. > James Klein retired manager,
with an entrepreneurial bias.
Buetow was particularly strong in finance and that International Customs and Trade Affairs
3 4
220 Chapter 14
> Cross: The Entrepreneur as CEO and weather. Another embryonic product designed to
Bert Cross started his career at 3M in as a lab tech- make street and highway signs more visible wasn’t
nician, advancing to manufacturing manager, Adhesives much better.
Division, five years later. Cross soon distinguished him- Phil Palmquist, a pioneer in reflective technology,
self as a risk-taker and champion for a seemingly profit- had been told to stop working on the project and go
less product—Scotchlite reflective sheeting. While it was back to working on coated abrasives, a proven money-
a large profit generator in later years, when Cross was
manager, New Products, in , the product’s future One of the most significant factors in creating
was uncertain.
the 3M of today was reflective products. The
Here’s one of the things I liked about 3M. Sure, technology led to all of our light management
you had a boss and you were theoretically applications. They represent about 25 percent
working for him, but Bert Cross and Harry of the company’s total sales. > Paul Guehler
1
3M Leaders—The Right Choice at the Right Time 221
> Heltzer: Extending the Global Arena as a big surprise to Heltzer: “I arrived home from a busi-
When -year-old Heltzer knocked on 3M’s door ness trip and there was a note from Bert to come and
looking for work in in the depths of the Great see him,” Heltzer remembered. “I went in and he said,
Depression, he got a job unloading freight cars and ‘Well, we’ve made our selection.’ I was a candidate, but
feeding mineral crushers. “I started as close to the bot- there were others, too. I said, kind of resigned, ‘Well,
tom as anyone could,” Heltzer said. But, he had aspira- that’s fine.’ Then Bert said, ‘It’s you’ and I answered,
tions, and Sampair, then head of production, and Cross, ‘You’ve got to be kidding!’ ”
then new products’ champion, became Heltzer’s role A creative and persistent innovator himself, to this
models. “I found people I had great respect for and day Heltzer believes that no matter how large 3M
I said, ultimately, ‘I’d like to be in their jobs.’ ” becomes, the spirit of innovation will stay intact as long
From the factory to sales to production management as people have the freedom to pursue their best ideas.
and finally group vice president managing multiple divi- “You have to gamble on people who are creative and
sions and businesses, Heltzer’s span of responsibility willing to work hard with an appetite for challenge,”
grew over years, until he was named CEO in he said. “If you keep enough ideas cooking, some will
to succeed his role model Cross. The appointment came come along as products. Then, when you find you’ve got
a breakthrough product, you pour as much effort, talent
and money into it as you can. That was McKnight’s phi-
losophy and it continues to be a sound one.”
On Heltzer’s watch from to , 3M added
new international companies, bringing the total out-
side the United States to . He was a strong proponent
of overseas experience for 3M’s future leaders, well
before an offshore assignment was considered a career-
maker. And, while these companies had broad autonomy
and authority, Heltzer could see the importance of inte-
grating 3M’s international and domestic businesses so
that both were operating with a one-company mindset,
regardless of geography. That was a hard sell but, under
Heltzer, this shift in thinking began.
Given his involvement with the origin and growth
of reflective products, Heltzer was a strong advocate
of maintaining solid, trusted relationships with govern-
ment policymakers and regulators. “Legislation doesn’t
come as a result of one day or one hour or one period
of time,” Heltzer said. “It may take years before it’s
drawn and there has to be a continuing relationship to
get our story across.”
Heltzer was also a proponent of strategic acquisi-
tions, even though the company’s bias had always been
to “grow its own” new ventures. “Not everything can
be invented here, no matter how much we provide in
1 the way of talent, imagination and dollars,” Heltzer said
in the early s. “Sometimes an acquisition is the
obvious answer.”
3M Leaders—The Right Choice at the Right Time 223
As one who benefited from good mentors, Heltzer he wanted and he wasn’t a pushover, but he was very
was supportive of new ideas, said Ray Richelsen, retired courtly in the way he went about things.”
executive vice president, Transportation, Graphics and When Gordon Engdahl, retired vice president,
Safety Markets. “I was an engineer in Reflective Products Human Resources, went over budget on a capital expen-
and barely years old. I remember walking into an diture, Heltzer took him to task. “He read me the riot
Operations Committee meeting—it was like walking into act because I’d overspent and I admitted I had done
a room full of gods. We were asking for money to make exactly that,” Engdahl said. That same evening in the
glass beads in a completely different way and here was parking garage, he came over and put his arm around
Harry, the inventor of glass beads. When I finished, he me and said, ‘Gordy, I just want you to know that talk
said, ‘Let me get this straight. You’re going to make was nothing personal.’ He could differentiate between
them wider; you’re going to get the lead out; and you’re business and human relationships. He didn’t want me
going to make them for less cost?’ I said, ‘Yes, sir.’ He to see it as a personal attack.”
said, ‘I tried to do that for years and couldn’t get it
done. Good luck, son.’ The project was approved. What > Herzog: Stepping Up, Standing Tall
struck me about Harry was that he was so supportive.” With Duplicating Products Division generating more
When 3M was implicated in making illegal political than percent of the company’s revenues, Herzog—
contributions to national candidates, including the the man who built that business—rode his success to
committee to re-elect President Richard Nixon, many the CEO’s office in after Heltzer’s abrupt resigna-
at 3M regard Heltzer as standing tall in one of the tion. It probably was the most challenging moment in
company’s biggest—and most publicized—challenges. his career: Herzog briefly assumed three roles as CEO,
“Whether or not he was personally involved, I don’t president and chairman of the board. “He wore three
know,” said Richelsen. “But, he was the guy in charge hats and it was very hard,” Herzog’s wife, Jane, remem-
and I remember he said in , ‘I’m going to resign bered. “He was exhausted all the time. The responsibil-
because it happened while I was CEO and I’m going ity was unnerving, but he also believed he was up to it.”
to take the blame for it.’ That was a very classy move Observers credit Herzog with helping the company
on his part.” regain its self-esteem after the political scandal.
Observers remember Heltzer’s leadership style as out- “When Ray took over, there was no one else in the
going, warm-hearted and gentlemanly. “Harry was like succession plan, so he had to take over everything,” said
an old shoe, easy to approach and affable,” said Ebbott, John Ordway, long-time board member and grandson of
retired 3M vice president and treasurer. “He knew what 3M’s early investor Lucius P. Ordway. “For two to three
years, he ran the company, domestic, international, hesitate to go ahead and do it,” said Appeldorn. “He
everything—with a couple vice presidents. It was tough. created BPSI, Business Products Sales Incorporated,
He led 3M with an iron fist and he had to do it. There and without that 3M never would have built the divi-
were a lot of decisions to make because the company sion into a billion-dollar business. When we came up
was growing fast.” with the prototype for a new overhead projector in
Not long after becoming CEO, Herzog reflected January , he told us he wanted to be in production
on what it would take to move the billion company by August. He’d show up in the lab unannounced
forward: “If I could ask for anything,” he said in , and invite us to lunch or dinner. It was an impromptu
“it would be for good people who are deter- recognition of our efforts and, when we
mined to be successful. I guess maybe talked about the project, he knew
I’m lucky, because it seems to me the details.” Herzog practiced
we’ve got them.” McKnight’s philosophy of giving
Herzog didn’t set out to people latitude. “He allowed
be a corporate leader at all. people to make mistakes and
He taught high school math he didn’t penalize them for
and science and coached mistakes that might even
the St. Croix Falls, cost the company money,”
Wisconsin, high school said Jane Herzog.
basketball team. Herzog Although duplicating
met his future wife, Jane, products had been Herzog’s
while teaching in St. Croix pride and joy, generating
Falls, her hometown. But, he multimillion-dollar revenues
realized the opportunities were for 3M over many years, he
better in business than in educa- knew they would run their course
tion so Herzog took a job as quality and disappear, Appeldorn said.
control analyst in 3M’s main abrasives “The only thing we can do,” Herzog told
plant in . “I don’t think Ray ever aspired Appledorn, “is create as many new businesses
1
to be CEO,” Jane Herzog said. “But, he would as we can because this Thermo-Fax business will die.”
always grab another challenge. Competition is an inte- This was a premonition that would come true in the
gral part of 3M, I believe, and my husband was a great early s. “He knew this even before Xerox came on
competitor, along with most of the others who climbed the scene,” Appledorn said. “He understood that every
the corporate ladder.” product has a life cycle and the cycle ultimately comes
Herzog had an affinity for numbers. He could pick to an end.”
up a sheet of figures and analyze it immediately. When In support of innovation with profitable results,
new assignments surfaced, he gravitated toward the Herzog created the Golden Step Award in to rec-
one with which he could do the most good, for exam- ognize people responsible for new business ventures
ple, new product development. Herzog was an advocate that meet a high level of sales and profitability. Since
of new ideas. “Ray was charismatic; he had a keen then, more than , employees have won Golden Step
business sense; and he exercised it rapidly,” said Roger awards as members of new product teams.
Appeldorn, retired 3M corporate scientist and a driving Herzog had a strong personality—authoritative and
force behind 3M’s important new microreplication dynamic. Some described him as a “hard driver,” while
technology. others called him the “Iron Duke.” Herzog was willing
“Ray had a complete perspective from product cre- to live with his decisions, whether popular or not. “Ray
ation to market. When he saw an opportunity, he didn’t was tall, muscular and powerful looking,” said Ebbott.
3M Leaders—The Right Choice at the Right Time 225
“When he made a decision, it was done. He was also > Lehr: The Amiable Planner with Vision
the person who said work has to be fun and if it’s not When Herzog became CEO in , he tapped Lewis
fun anymore it’s time to move on.” Lehr, a chemical engineer, to become president of U.S.
“Ray was chairman of the board and CEO when Operations. When Lehr was named 3M chairman of the
I was involved in starting an Orthopedic Products board and CEO four years later, he already had earned
Division at 3M,” said Bill McLellan, retired staff vice universal respect and was favorably regarded by associ-
president, 3M Corporate Services, Austin, Texas. “I ates and employees alike.
remember going in for Operations Committee reviews, Like Herzog and the other leaders who preceded
and my knees were shaking behind the podium. Ray him, Lehr came from a modest background. He was
was a tough guy and very astute. He did things that born in Elgin, Nebraska, and worked summers on farms
were important to the company, notably foster the during the Great Depression. Those years taught Lehr
growth of our copying business.” the value of work and all-out effort. Lettering in foot-
“Ray was disciplined and tough-minded,” said Dick ball and basketball, Lehr was class president and vale-
Lidstad, retired vice president, 3M Human Resources. dictorian. After serving in World War II under Gen.
“I liked him because he wasn’t one who was taken with George Patton, Lehr earned his engineering degree
power. You knew he had power, but he didn’t manhandle at the University of Nebraska and, on a professor’s
it. He was fond of saying, ‘People only use about per- advice, traveled to Minnesota in to find a job
cent of the authority they have and, at 3M, we’re look- in the 3M Tape Division. Evenings, he attended law
ing for people that use the other percent.’ school because he had a keen
“In saying that, Ray was giving people permission
to do things. He encouraged them to go out and
follow their instincts.”
Ray Herzog died in at age .
3M’s Leaders interest in patent law. But, his life at 3M soon became
too busy for him to continue law school.
Henry S. Bryan President 1902–1905 In the s, Lehr had a chance to try his hand at
product development; his creativity and persistence ulti-
Edgar B. Ober President 1905–1906, 1909 –1929
mately spawned a new division. Three surgeons from the
Lucius P. Ordway President 1906–1909
highly respected Cleveland Clinic asked 3M to develop
William L. McKnight President 1929 –1949, an impermeable adhesive-backed plastic surgical drape
COB 1949 –1966 to reduce the risk of infection during operations, and
Richard P. Carlton President 1949 –1953 Carlton asked Lehr to conduct the clinical work. By
, the new surgical drape satisfied doctors, and it
Herbert P. Buetow President 1953 –1963
generated revenue for the first time.
Bert S. Cross President 1963 –1966 The pioneering success of the new product was
Bert S. Cross COB and CEO 1966 –1970 challenged when the drape shriveled in high tempera-
Harry Heltzer COB and CEO 1970 –1974,
tures during sterilization. Told to stop working on the
COB 1974 –1975 project, cease manufacturing and unload the inventory,
Lehr said “Yes, sir,” but he waited until the factory had
Raymond H. Herzog CEO 1974 –1975,
produced six months’ worth of drapes. In his spare time,
COB and CEO 1975 –1979, COB 1979 –1980
Lehr sold a government agency on the drapes; he showed
Lewis W. Lehr CEO 1979 –1980, his boss the receipt and convinced him to rescind his
COB and CEO 1980–1986 cease-and-desist order. On the heels of that shaky,
John M. Pitblado President, U.S. Operations entrepreneurial start came autoclave tape for hospital
1979–1981 linens, surgical tapes, wound closures and nonwoven
James A. Thwaits President, International surgical masks in about a ten-year time span. By the
Operations 1975–1987 time Lehr was named president, U.S. Operations, in
, 3M Health Care was producing percent of 3M’s
Allen F. Jacobson COB and CEO 1986 –1991
global sales.
L.D. DeSimone COB and CEO 1991–2001 Lehr inherited a tough business environment in the
W. James McNerney, Jr. COB and CEO 2001– s when the economies of the United States and
other major industrialized nations were suffering simul-
COB = Chairman of the Board taneous recessions. At the same time, the United States
CEO = Chief Executive Officer
faced an energy crisis and the cost of raw materials five business groups, each with different management
soared. 3M’s earnings were off and savvy competitors and business goals. In some cases, sales representatives
with new technologies nipped at the company’s heels. from 3M divisions were competing against each other
Soon after Lehr was named chairman of the board by offering similar products to the same customers.
and CEO in , a Fortune magazine article offered When they met on this competitive turf, some 3M reps
insight into his nature: “Lehr is more cerebral than didn’t even realize they represented the same company.
Herzog,” the article noted. “He is generous with his time This duplication of effort moved Lehr to propose
the first formal strategic planning process that 3M had
undertaken in its eight decades. He established seven
Lew Lehr brought strategic planning to 3M.
study committees of 3M senior management to exam-
He was a visionary and he encouraged new ine what 3M could expect in the year . The com-
business models. > Ron Mitsch retired vice chairman mittees included research, international, community
of the board and executive vice president
2
228 Chapter 14
The committees did, however, conduct careful research sector labs would handle a five- to-year span; and
with outside sources in modern business parlance, known Central Research could return to its long-range research
as “benchmarking.” mission focused on new ideas and a time frame of
This “organic” approach to planning was effective, to years.
Lehr said. Those who had participated in the work The planning process also underscored the impor-
from beginning to end were accepting of the results. tance of continuing to integrate 3M’s domestic and
The process was efficient, focused and took five months. international functions while giving people working
From that planning came significant changes for 3M. in the United States and outside the United States more
The company was reorganized into four business “sec- chances for “cross training.” In addition, because the
tors” in which divisions with compatible technologies
were grouped together. (Nearly years later, in , To be a good manager, you have to like people,
3M would reorganize into six market centers focused
on compatible or allied markets.) you must have a sense of humor, and you cannot
In addition, because Central Research was being fix your feet in concrete unless you’re willing to
torn between long-range research and more immediate crack the concrete once in a while to get your
research needs requested by 3M divisions, “sector
feet out. > Lew Lehr retired chairman of the board and CEO
labs” were created. That meant that division labs would
focus on shorter range research, up to seven years out;
company had grown dramatically, it became clear that
3M needed a more formal structure for identifying
Lew Lehr took the lead in transforming 3M into people with top potential and giving them the experience
a very quality-minded company. Historically, 3M and opportunities to move into senior positions in 3M’s
heavily “promote from within” corporate culture. To
cared about quality, but he understood that we
achieve this, 3M created a Human Resources Policy
had to have systems to ensure reliability and Committee in .
quality throughout our organization, rather than Given his own creative approach to starting and
building 3M Health Care, Lehr was concerned about
just inspecting the end quality of our products.
promoting a spirit of internal entrepreneurship. To help
> Charles Reich executive vice president, Electro and
accomplish this, Lehr asked Gary Pint, then group vice
Communications Markets and Corporate Services president, Electrical Products Group, to chair the effort.
“Gary created subgroups in manufacturing, in our The usually amiable Lehr also was willing to take
sales offices, in our plants,” said Lehr. “He asked on Minnesota’s governor in when the state
them all to develop guidelines for internal entrepre- adopted a “superfund law” that expanded corpora-
neurship and to determine how people should be tions’ liability for hazardous waste damages. On
recognized for being entrepreneurs inside the a broader level, Lehr became an outspoken critic
company. It was an awareness program designed of Minnesota’s business climate. Not long after-
to make people understand that even if they ward, Lehr announced the decision to invest in
came from the tax department or the fire a major new research and development facility
department, there was always room for doing in Austin, Texas.
things a better way.” About the same time, Before and after his retirement, Lehr was
the committee, with Lehr’s full support, active in a large number of volunteer organi-
hired Gifford Pinchot, a well-known manage- zations, often serving in a leadership position.
ment consultant and author of the book He felt strongly that contributing to society
“Intrapreneurship,” to do his own assess- as a volunteer was a responsibility for every
ment of 3M’s intrapreneurship quotient. successful business person.
People inside 3M also began using
Pinchot’s apt term. > Jacobson: Disciplined,
Lehr also is credited with seeing Cost-Conscious and Big-Hearted
the huge potential in consumer prod- Like some of 3M’s earlier chairmen,
ucts at a time when the company was Allen Jacobson was a chemical
still operating on a strong industrial engineer, but among all of 3M’s
products mindset. He put his full sup- leaders he knew the most about man-
port behind Post-it notes when others ufacturing, because he spent years
inside the company were openly skep- 3 of his career in and around plants. While
“Jake”—as he was nicknamed—spent his first three
years in the 3M Tape Lab, he quickly moved into
Lew Lehr was a visionary and a terrific people
process engineering and manufacturing production,
person. He’d reach out to everyone. He won the working as a technical assistant to plant managers in
respect of 3M employees, customers, other Hutchinson, Minnesota, and Bristol, Pennsylvania.
CEOs and people in government. > Dave Powell
in Canada and Europe and later the industrial and con- Jacobson was the right choice to steer around the shoals.
sumer sector in the early s, Jacobson didn’t forget Slower economic growth had become a worldwide phe-
his roots in manufacturing when he became chairman nomenon in that decade, and 3M could no longer bank
of the board and CEO in . on brisk business in one part of the world counteracting
To outside observers, Jacobson had a style dramati-
cally different from his predecessor, Lehr. In contrast
I was new to my position in Environmental
to Lehr’s personal warmth and salesmanship, Jacobson
was seen as the analytical, tough-minded leader who Engineering and Pollution Control and I brought
focused on cost cutting and efficiencies in the second a number of recommendations to the Operations
half of the s as America—and the world—slid into
Committee about things that I thought we
a deep, long recession. Lehr told Jacobson that, among
many qualities he admired in him, Jake was pleasantly needed to do. Jake got fully behind them, and
“predictable.” he made the environmental commitment for
the company. > Bob Bringer retired staff vice president,
engineering; and manufacturing “cycle time.” “We had given substantial early retirement packages. “In order
to make some basic changes,” Jacobson said, “and we to preserve our culture, I felt we had to treat people
needed to give people time to make them. If you have the way we would like to be treated,” said Jacobson.
to change a factory layout and install more automated “We put them on an unassigned list and did everything
equipment, you can’t do that overnight. The pro- possible to find jobs inside 3M for them. I think
gram lasted five years and, because of it, we that decision did a great deal to preserve
became a more competitive company.” our credibility with 3M employees.”
Those efficiency gains were par- During his tenure, Jacobson
ticularly important in helping 3M emphasized the importance of
compete in lower margin product grooming future 3M leadership
categories. And, when the U.S. by encouraging people to take
international assignments. Of
the approximately members
Jake had a strong,
of his Management Committee,
engineering mind. The percent had 3M experience
efficiencies were probably outside the United States. “That,”
very visible to him, before Jacobson said, “was not the norm
among American companies.” Under
others saw them. > Don Larson
Jacobson, 3M set a goal of generating
2
percent of the company’s total revenues from out-
recession reached 3M’s door in , observers credit side the United States by . Between and ,
Jacobson’s cost-cutting program with helping the com- international revenues grew from just under billion to
pany weather the economic downturn better than most. billion and reached the percent goal. Jacobson also
When Jacobson became chairman of the board and emphasized the importance of strong technical support
chief executive officer, 3M management already had worldwide not just in the United States.
decided to get out of its once highly prized office copy-
ing business. Seven hundred people joined the joint ven-
Allen Jacobson was very disciplined. He is the
ture formed with Harris. It was Jacobson who insisted
that approximately , other people displaced by the reason 3M made it into the 1990s successfully.
decision be helped to find jobs elsewhere in 3M or be > Paul Guehler
3 4
232 Chapter 14
It was on Jacobson’s watch that 3M reached its first Thwaits said that DeSimone’s success in Brazil
billion year in . To mark the occasion in the demonstrated that he understood all the steps taken
United States, he announced that December would along the production path. The assignment also involved
be an extra holiday for all U.S. employees, and he traveling to remote places. Thwaits remembers when
encouraged the general managers of 3M’s international bad weather forced him, DeSimone and other 3M man-
companies to follow suit. agers to take refuge in a remote Costa Rican hotel,
Jacobson, like other chairmen, was active in his com- sleeping six to a room with an open shower and toilet
munity through his years at 3M. Well into his retirement, in the corner. DeSimone’s adaptability in that incident
Jacobson, like Lehr, continued to volunteer his time. and over the years showed Thwaits that, in his words,
“Desi wasn’t a stuffed shirt.”
> DeSimone: The Champion with Grit DeSimone’s leadership at 3M will be remembered
and Persistence for his empathy for people, his commitment to inno-
L.D. DeSimone was , a native of Montreal, Canada, vation and his willingness to make hard decisions and
and a chemical engineering graduate of McGill Univer- weather tough economic times.
sity when he joined 3M in Canada. Eager for challenges, When he became 3M’s chairman of the board and
DeSimone—nicknamed “Desi”—took technical posi- chief executive officer in November , DeSimone
tions in the United States, Canada, Australia and Brazil, was about five years younger—at age —than most
all in a single year. of his predecessors. His tenure lasted a full decade until
“Desi was a brash kid who was running around the his retirement shortly before he was . In the company’s
world,” Jim Thwaits, then 3M president, International first century, no one, with the exception of McKnight,
Operations, told a newspaper reporter in . “But, he served longer as chairman of the board and CEO.
was very innovative and smart.” When he was sent to DeSimone inherited a company threatened by a deep
Brazil in , DeSimone was given responsibility for recession in . Observers credit him with recognizing
all manufacturing there within three years. It was a mixed that 3M could not “save its way out of crisis,” said
blessing because tough import restrictions meant that Appeldorn. “He said we had to get back to creating new
neither equipment nor raw goods were available for many products and developing new businesses. We had to
3M products. DeSimone and his employees jury-rigged regain our intrapreneurial edge. He did it by leading
machines and scrounged for alternative materials to by example. He acted as a champion for a lot of little
make products ranging from surgical masks and respi- businesses. For example, he kept our Industrial Optics
rators to abrasives. business alive when it had been formally killed a couple
1 1 In 1995, 27 percent
of 3M’s sales came from
products introduced
within the previous four
years. 2 DeSimone,
pictured in 1995, served
as chairman and CEO
from 1991–2001.
3M Leaders—The Right Choice at the Right Time 233
times. He was able to keep little projects moving and Desi will be remembered years from now as one
funded so they didn’t get lost. Desi was a champion like
of the most thoughtful leaders of our company.
Herzog and Heltzer—only more so. To a great extent, I
think Desi developed the intrapreneurial CEO manage- He didn’t make a decision without considering
ment style at 3M.” every potential ramification and, for him,
Under DeSimone’s leadership, 3M inaugurated the the number one consideration was employees.
Pacing Plus Program that singled out the most promis-
I know, because I saw this first hand. > Kay Grenz
ing new products and business ventures and rewarded
them with additional corporate resources, attention vice president, Human Resources
Desi’s tenure as chairman was the longest since Engines in Cincinnati, Ohio. He had been at GE for
years before joining 3M.
William McKnight’s. The leaders he singled out,
Shortly after his appointment, McNerney and the
the decisions he made and the technology he 3M management team launched a number of initiatives
supported are important to 3M today and will to drive growth and performance in the midst of one
continue to be vital in 3M’s future. He embodied of the toughest postwar manufacturing recessions.
Rejuvenating volume growth, improving quality and
the culture of 3M—multicultural, multilingual,
driving efficiency were the immediate objectives.
multidisciplinary. He has been all of those things Six Sigma, the company’s primary initiative, pre-
and more. > Bill Coyne retired senior vice president, sented a new, data-driven pathway to process improve-
ment. Nearly every employee is involved in this quest
Research and Development
for improvements in costs, cash and growth that will
benefit 3M, its customers and its suppliers.
Rim went into a tailspin in the late s, its impact 3M Acceleration is focused on faster and more effec-
on 3M’s performance was significant. Though he was tive commercialization of new products. This initiative
criticized by Wall Street, DeSimone stayed the course, provides a process to prioritize research and develop-
believing that the company’s long-term investment in ment investments and to make sure that the very best
that region would pay off. Rather than back away from high priority and high potential opportunities are fully
business interests there, 3M held firm and the decision funded and commercialized.
continues to pay off. The Sourcing initiative not only helped the company
overcome a challenging economic environment, it set
Desi’s legacy will be a strong, almost dominating, the stage for long-term improvement of 3M’s financial
performance.
attitude toward the environment. > Alex Cirillo
eProductivity is helping 3M take better advantage
division vice president, Commercial Graphics Division of the Web to increase speed, enhance customer service
and build customer relationships. This initiative uses the
DeSimone will also be remembered for his belief latest technologies both to drive down cost and acceler-
that business has a key role in sustaining the planet’s ate growth.
environmental resources. He co-authored a book with In , the management team, under McNerney’s
Frank Popoff, chairman, Dow Chemical Company, guidance, also fundamentally changed the dynamics
called “Eco-Efficiency” that outlines how business has of leadership development at 3M. These advances were
a major stake in sustainable development. The book based on 3M’s deep-rooted respect for an individual’s
makes a case for eco-efficiency and its direct rewards for personal ownership over his or her own development
business including enhanced productivity, better access as a leader and were designed to give each person both
to capital and new product and business opportunities. the freedom and the tools to make a difference for the
company.
> McNerney: Focus on Global Competitiveness “First, we established what we expect from our
As 3M moved into the st century, it named its first leaders and put programs in place to further their devel-
chairman of the board and chief executive officer from opment,” McNerney said.
outside the company. W. James McNerney, Jr. took over “Second, we formed the 3M
1 W. James McNerney,
the company’s reins on January , . A native of Leadership Development
Jr., named CEO in 2001,
Providence, Rhode Island, McNerney came to 3M from Institute to foster the attain- was the first 3M leader
General Electric (GE), where he last served as president ment of these critical leader- recruited from outside
and chief executive officer of General Electric Aircraft ship attributes. Third, we the company.
3M Leaders—The Right Choice at the Right Time 235
● 3M’s top executives needed mentors, too; over time, they learned
to be mentors, sponsors and champions of others.
● Over 100 years, 3M has had the right person at the right time
in the top job.
Acknowledgments
This book is a compilation of 3M voices, memories, facts and experiences from
the company’s first years. In the course of three years, more than employees,
retirees, customers, board members, journalists, business scholars and other
observers of 3M were interviewed for this book. They told us stories we’ve heard
before, as well as new ones that may surprise readers of this book. Countless others
contributed photos, memorabilia, research support and feedback on the manuscript.
The Minnesota Historical Society, which houses the 3M archives, was most helpful
in providing both research materials and many of the images used in this book.
Our thanks to them all.