You are on page 1of 3

You have read about the history of innovation at 3M.

Now, assess the intrapreneurial revolution at


3M by responding to the questions given below. The relevant material can be found at:
http://solutions.3m.com/wps/portal/3M/en_US/3M-Company/Information/Resources/History/

What, in your view, are the key characteristics of 3M that have made it intrapreneurial over
the course of its history?

What are the similarities and differences between intrapreneurship at 3M and the kind of
entrepreneurship with which you are most familiar?

What recommendations would you make to the top managers of your company to become
as intrapreneurial as 3M?

What, in your view, are the key characteristics of 3M that have made it
intrapreneurial over the course of its history?
3M is a century old company and during this period it has established itself as one
of the leading innovative organization in the industry. This has not happened
overnight but because of a very consistent approach over a very long period of time
since its inception. They have been able to create a strong culture of innovation in
the company and get it ingrained among its employees. This cultural motivation
comes directly from the top management and all of their leaders have been wellknown to create, nurture and strongly endorse and propagate their characteristic
innovative culture. They have markedly different policies enabling and inspiring the
employees to innovate. A few of them which deserve mention are:

Setting sales target from innovation: 3M has always been setting up stretch
sales target from new products (like a% of sales from products launched in
past b years). Currently their 1/3rd of sales comes from products introduced
over past 5 years. This is as clear as possible in terms of setting a quantified
target boosting as well as enforcing innovation.
Allowing employees to innovate: while they set sales target from innovation,
they are very consistent with the message in execution. They mandate
employees to spend a certain % of their bandwidth for working with their new
ideas. This is remarkably different from the rest of the lot. Strategic
orientation towards innovation can be found in any other company but while
executing it is hardly found that any company can mandate and enable their
employees to actually work with new ideas like 3M does.

Their innovation strategy is based on a major pillar of strength their deep


technological competency and new product development capability. The
consistent flow of new breakthrough products as well as enhancement/extension

of existing product lines is a result of this. Their hiring policy is aligned to their
core innovative competency and it hasnt compromised with growing size of
operation.
What makes them intrepreneurial is their wonderful support to its innovative
employees to work on a new idea. Not only they mandate them to dedicate a
certain % of their working hours for innovation, they also encourage them by
creating a positively competitive environment among all employees. They have
bidding system for internal projects for management funding which encourages
intrapreneurship. Employees dont feel that in order to give a shape to their own
innovative ideas they have to move out and do on their own.

What are the similarities and differences between intrapreneurship at


3M and the kind of entrepreneurship with which you are most familiar?
Similarities between 3M and other entrepreneurial organizations are that both
are passionate about innovation, can set stretched target in front of them to
motivate themselves, customer-centric in their innovation, can foresee implicit
demand and build products which customers will embrace, culturally inclined
towards thinking out of the box and taking those ideas ahead.
Major difference what I can observe here is 3Ms century long consistency in its
innovative strategy. As a large public enterprise they are answerable to their
shareholders for outstanding return on their investment. Most of the
organizations which were well-known for their innovation one point of time could
not take the challenge of continuing to be so with growing operation, recession
etc. But 3M has been really able to walk the talk. During 2003-12 their EPS
(earning per share) increased at 11% CAGR, sales increased at 6% CAGR and
average ROIC at 22% CAGR. Their dividend per share increased every year from
2009 even during the recession. An outstanding fact is that their NPVI (New
Product Vitality Index = Sales from products introduced within last 5 years / total
sales) has increased from 25% in 2008 to 33% in 2012. At 2012 their sales
crossed $30 billion.
Achieving this kind of magical figures would not have been possible if they were
not passionate and truly committed towards innovation which is their core
strategy. Innovation has always been their center of plan which opened limitless
market opportunities, help them sustainably grow their organic business and
enable premium return. Their R&D investment stands at a whopping 5.5% which
is expected to touch 6% by 2017. Over the past 5 years they have been focusing
on targeting emerging markets. They are increasing their penetration in the
developing market and which has been their growth lever.

Very few organizations have been able to be on the track in the path of
innovation like 3M.

What recommendations would you make to the top managers of your


company to become as intrapreneurial as 3M?

To create a culture of innovation by consistently motivating its employees to


innovate
To be consistent in its statement of innovation strategy and actions taken.
They need to really walk the talk and not just talk the talk
To keep additional target from innovative ideas for services/offerings/service
models/products
To allow and encourage associates to dedicate a part of their bandwidth to
work on their own ideas
To create an innovation council that inspires healthy competition among fresh
ideas and encourage that by special sponsorship from management
To create a flat organization where associates of all level can work on new
ideas, present that to innovation council without much hierarchical workflows