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3M CANADA: MANAGING CHANGE, DISRUPTION, AND COVID-19

Professors Andreas Schotter and Kanina Blanchard wrote this case solely to provide material for class discussion. The authors do
not intend to illustrate either effective or ineffective handling of a managerial situation. The authors may have disguised certain names
and other identifying information to protect confidentiality.

This publication may not be transmitted, photocopied, digitized, or otherwise reproduced in any form or by any means without the
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Copyright © 2021, Ivey Business School Foundation Version: 2021-09-10

Early on Saturday, August 22, 2020, Penny Wise (she/her/hers), the newly appointed managing director of
3M Canada, headed straight for her laptop. Logging on to the websites of major Canadian news outlets, she
was pleased to note the ongoing media coverage and headlines concerning the start of N95 respirator
production at the company’s Brockville, Ontario plant. The day before, together with numerous leaders
from 3M, she had stood beside Canada’s Prime Minister Justin Trudeau and Ontario’s Premier Doug Ford
to make the announcement regarding the deal.1 Both levels of government and the company had agreed to
evenly split the financial investment, which was estimated to be at least $70 million, with the aim of
boosting production capacity at the plant. In addition, both levels of government had signed long-term
agreements to buy respirators from the company.

As the COVID-19 pandemic was ongoing, the agreement had come as a relief to those who had been calling
for a secure national supply of life-saving personal protective equipment (PPE).2 The announcement also
entailed the expansion of the footprint of the 29-year-old manufacturing facility3 in Brockville, a city of only
21,000 people, thereby securing jobs and creating a new strategic anchor for 3M’s Canadian subsidiary.

Reflecting on similar ceremonies she had attended in the past, Wise could not help but be struck by the flood of
photos and videos covering the event. The dignitaries and 3Mers (as employees of the company affectionately
called themselves) had all worn face coverings and had stood at least six feet apart to ensure proper physical
distancing. Wise felt that the images reflected not only the realities of life during the worst pandemic in more
than a century but also the significant challenge she and 3M Canada faced. It was evident that 3M Canada, aside
from having needed to adapt to the impact of the pandemic, was better positioned to weather the most significant
global corporate reorganization in decades, which was initiated long before COVID-19 surfaced. Wise was
increasingly confident that she could help the Canadian organization navigate the transformation. She decided
to put the weekend to good use and focus on how best to initiate a strategic planning process for Canada, but not
before scheduling a virtual meeting with her leadership team for the following Monday morning.

1
“Ontario Partners with Federal Government and 3M Canada on New N95 Respirator Manufacturing Facility: Expanded
Manufacturing Facility Will Secure Domestic Supply Well into the Future,” Office of the Premier, August 21, 2020,
https://news.ontario.ca/en/release/58102/ontario-partners-with-federal-government-and-3m-canada-on-new-n95-respirator-
manufacturing-facility.
2
David Cochrane and Vassy Kapelos, “3M to Make Critical N95 Masks at Brockville, Ont., Plant,” CBC News, August 20,
2020, https://www.cbc.ca/news/politics/n95-ford-trudeau-ppe-covid19-brockville-1.5693766.
3
“Case Study: 3M Canada’s Brockville Plant Achieves ISO 50001 Certification,” Natural Resources Canada, 2014,
https://www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/oee/pdf/publications/case-cas/ISO%2050001-3M_Canada_e.pdf.

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3M

3M, which was founded in 1902 and originally named Minnesota Mining and Manufacturing Company, began
as a small-scale mining venture in northern Minnesota, although it later moved its headquarters to Saint Paul.
By 2020, 3M was recognized as a global powerhouse. Since its inception, scientific, technical, and marketing
innovations had formed the foundation for 3M being a constant presence on the Fortune 500 list. 3M’s
corporate DNA included an innovation and perseverance mindset built on repeated cycles of constantly trying,
failing, and re-trying until an idea succeeded.

The key architect of 3M’s innovative culture was William McKnight, a bookkeeper who made his mark in
1906 by working directly with customers to solve their problems. McKnight’s can-do attitude rapidly
earned him many promotions, and his leadership skills soon began shaping the ideals of the entire company.
He famously stated,

Mistakes will be made, but if the man is essentially right himself, I think the mistakes he makes are
not so serious in the long run as the mistakes management makes if it is dictatorial and if it undertakes
to tell men. . .exactly how they must do their job. Management that is destructively critical when
mistakes are made kills initiative. And it’s essential that we have many people with initiative if we
are to continue to grow.4

Over the decades, 3M’s management style became well known, particularly the fact that the company
allowed its engineers and managers to follow their instincts. Institutionalized as the “15 per cent rule,”
employees were allowed, if not encouraged, to spend up to 15 per cent of their work time pursuing whatever
project they liked so long as it would be shared widely within the company. Later, in 1993, 3M introduced
the 30 per cent rule at the organizational level. This rule required that each of 3M’s divisions generate 30
per cent of their sales from new products or solutions invented during the previous four-year period. The
research and development (R&D) labs serving specific industries had research timelines of between one
and three years. The business segment labs followed a longer, three-to-ten-year cycle, while the corporate
labs, which had moonshot project ambitions, were given up to 20 years.

Another unique organizational characteristic was 3M’s annual internal technical fair, which showcased the
projects stemming from the 15 per cent rule with the goal of cross-fertilizing ideas across product lines and
research divisions, in addition to identifying opportunities for the blending of technologies. 3M also had its
own internal professional society, known as the Technical Forum, where 3M scientists presented their
industry-leading work.

In 2020, more than 55,000 3M products were used in homes, businesses, schools, hospitals, and industries.
Among the most famous products were Post-It® Notes and Scotch® Tape, although 3M’s broad and
diversified product portfolio ranged from chemicals and advanced materials to films, tapes, adhesives, and
automotive and commercial solutions to applications for construction, electronics, energy, healthcare,
manufacturing, mining, oil and gas, and transportation. Employees worked across borders in cross-cultural
teams with a focused, global mindset but a local perspective. Many of the company’s products were
embedded in client solutions and thus invisible to users, who were mostly unaware that their mobile phones,
kitchen appliances, medical devices, and cars would not operate without having 3M products inside.

From very early on, 3M’s leaders recognized that the company needed to create a mechanism for talent
retention and career progression that suited its large pool of engineers and scientists. At the same time, all

4
Paul Lukas and Maggie Overfelt, “3M: A Mining Company Built on a Mistake Stuck It Out until a Young Man Came Along
with Ideas about How to Tape Those Blunders Together as Innovations--Leading to Decades of Growth,” CNN Money, April
1, 2003, https://money.cnn.com/magazines/fsb/fsb_archive/2003/04/01/341016/.

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levels of management needed a balance between cutting-edge business and technical expertise. Elsewhere, most
corporate career ladders only led to management positions, which created a dilemma for those who preferred
laboratories, discovery, and inventing. Therefore, 3M launched the so-called dual-career track, in which
scientists maintained their focus on lab work while receiving the same hierarchical ranking and pay as their
management counterparts. As a result, 3M did not lose good scientists and engineers at any significant rate.

Financially, 3M relied on both its B2B (business-to-business) and B2C (business-to-consumer) businesses,
selling directly as well as through wholesalers, retailers, and distributors. With corporate operations in 70
countries, plants in 37 countries, R&D labs in 36 countries, and sales in 200 countries by 2020, 3M
generated $73.5 million in annual cash and product donations from $31.8 billion in global sales (see
Exhibits 1–5). 3M’s large, diversified portfolio was considered an advantage in terms of maintaining overall
resilience in case of major disruptions in any single area.

However, the manufacturing, distribution, and overall coordination associated with such a large product
range, as well as the involvement in so many different industries, created challenges in relation to remaining
relevant and agile. One major issue was that the company was previously structured in a matrix that would
allow product line management on the one side and country operations on the other with a more or less
equal influence. This approach sometimes resulted in lengthy consensus-finding processes and even blind
spots, since the matrix teams would rarely have a complete overview of all global initiatives.

As many of 3M’s products were supplementary items designed to improve the performance or marketability
of existing products, the company was unlikely to be industry disruptive, although its products potentially
enabled customers to be just that. Given its broad reach across industries, 3M faced competition from a
huge number of diverse and often more focused rivals.

In 2018, the company sold its communication markets business and reconfigured its operating model,
moving from 40 different business lines to 23, which were organized across four main segments, namely
safety and industrial, transportation and electronics, healthcare, and consumer business. As of 2020, 3M
remained committed to making adjustments through to 2023 in order to reach and maintain 8–11 per cent
growth in earnings per share and 3–5 per cent organic growth in revenue.

In 2020, in response to the COVID-19 pandemic, 3M produced two billion respirators at its global
manufacturing facilities––tripling production since 2019.5 3M also collaborated with other companies to
develop innovative solutions intended to protect healthcare workers and first responders.

3M CANADA

Headquartered in London, Ontario, 3M Canada was established in 1951. By 2020, it supervised six
manufacturing plants across Canada, in addition to customer technical centers in Calgary, Toronto, and
Montreal. Around half of its 1,900 employees worked in London and continued to maintain a high profile
locally, supporting health, education, and environmental projects. London, with its population of 400,000,
was located midway between the major automotive manufacturing hubs in Oakville and Windsor, which
were important customers for tapes and abrasives. There was also good access to air, road, and rail transport,
a skilled labor force, and good education and health facilities.

3M Canada enjoyed considerable freedom in terms of how best to execute the corporate strategy developed
at 3M’s headquarters in the United States. The country president had responsibility for developing business

5
“Helping the World Respond to COVID-19,” 3M, accessed August 27, 2021, https://www.3m.com/3M/en_US/company-
us/coronavirus/.

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plans, managing the local adaptation of products if required, and sales and marketing across all Canadian
divisions. Wise noted how it was not uncommon for 3M Canada to come up with product variations that
would eventually make their way back to corporate headquarters or even other country operations, although
the latter often happened more coincidentally than deliberately.

2019/2020 MAJOR TRANSFORMATION

It had become clear that 3M needed more agility to address the exponential challenges caused by the
widespread digital and other disruptions in the external environment.6 For example, the company
implemented a new company-wide information technology ecosystem, including a new enterprise resource
planning (ERP) system. In 2018, a major transformational journey was announced that included changes in
3M’s business portfolio, hierarchy, innovation, people, and culture. The goal was to drive long-term growth
and value. Management undertook several major streamlining and restructuring actions7 (see Exhibit 4). As
Wise explained, “It looked like everything was a lot easier when everyone reported up through the Canadian
Managing Director/President. But there were complexities that arose from other reporting/influencing
structures.” In April 2019, enabled by the new ecosystem, 3M moved from five to four business groups
while also rolling out new standardized business processes, service models, and digitalization capabilities.
In Europe and Canada, where the change was the furthest along, management could already see enhanced
customer service, improved margins, better use of data analytics, and lower inventories.

According to the new model, 3M’s business group leaders, who were based at or had reporting
responsibility directly to St. Paul, had full responsibility for all facets of strategy, portfolio optimization,
and resource prioritization across their entire global operations.8 Under the prior model, area and country
teams, which comprised 3M’s international operations organization, were responsible for setting priorities
in their individual countries and regions. As of 2020, all of 3M’s international executives reported to the
business groups and functions of which they were a part, while 3M no longer had an international operations
organization. The country leaders were now responsible for supporting the downstream execution of the
new global go-to-market model as well as the alignment of local operations with the needs of the four
business group priorities.

3M’s new business group-led operating model was intended to create several benefits for the company’s
customers and shareholders, including

• driving more accountability on the part of the business groups to serve global and local customers;
• enabling stronger customer insights to drive more powerful innovation;
• empowering 3Mers to make faster decisions and improve both speed and service to customers;
• streamlining the organization and simplifying reporting lines; and
• leveraging strengths across markets while maintaining strong local capabilities and expertise.

To support 3M’s new operating model and ensure cross-functional efficiency, the company enhanced its
business group support functions. These enhancements included

6
By 2020, it was widely acknowledged that the Exponential Age had begun in the early- to mid-2000s. See Lee Ann Del
Carpio, Paul Kinsinger, and Andreas Schotter, What Got You Here Will Leave You Here (London, ON: Ivey Publishing, 2018).
Available from Ivey Publishing, product no. IM1056.
7
“3M to Cut 2,900 Jobs in Restructuring,” Reuters, December 3, 2020, www.reuters.com/article/us-3m-restructuring-
idUSKBN28D1KR.
8
“3M Accelerates Pace of Transformation Journey: Implements New Global Operating Model and Streamlined Structure to
Improve Growth and Operational Efficiency,” 3M News Center, January 28, 2020, https://news.3m.com/English/press-
releases/press-releases-details/2020/3M-Accelerates-Pace-of-Transformation-Journey/default.aspx.

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• the consolidation of manufacturing, supply chain, and customer operations into a new enterprise
operations organization focused on optimizing the customer experience end-to-end;
• a newly formed global corporate affairs organization focused on advancing and protecting the
company’s brand and reputation worldwide; and
• the realignment of all existing corporate functions to drive more effective operations across
geographies.

As a result of these actions, approximately 1,500 positions, which spanned all of the business groups,
functions, and geographies, were eliminated. On a pre-tax basis, 3M took a restructuring charge of $134
million in the fourth quarter of 2019, although management expected annual pre-tax savings of $110 to
$120 million (with $40 to $50 million in 2020).

CHANGE AND CHALLENGE FOR 3M CANADA

As with any major transformation, both opportunities and challenges emerged. For 3M, one such area of
focus involved the impact and influence of change on the headquarters and subsidiary relationship.9
Founded in 1951, 3M Canada had a proven track record of adapting not only to local needs but also to shifts
in corporate strategy coming out of the United States.

In 2020, the Canadian employees not only had a new leader and a new organizational structure to get to grips
with, as it was also clear that the very concept of being a Canadian 3Mer had been completely upended. With
a mix of both excitement and angst, the organization and employees at all levels were eager to learn how their
voices and the needs of Canadian customers would be heard in the new 3M. While the goal of organizational
change was often phrased in terms of the external world, transformation was concerned with intergroup
reinvention––bringing groups together in new directions to cross-out restrictive boundaries. Doing so,
however, was imbued with natural and sometimes even necessary tensions and conflicts.

During an interview, Wise noted that “From roles, scope of roles, reporting, structures and processes—it’s
all changing so we can better serve customers.” Wise described the change as complex and driven by
customers who are and will stay local to Canada as well as those who operate globally and within North
America. “As way of example,” she shared, “We have customers who have wanted one point of contact
with 3M and we haven’t in the past been able to make that happen with the two-country model. So, we are
harnessing a tremendous opportunity to do things better.”

Having recognized that 3M was by no means the first company to have attempted to pivot, Wise
acknowledged the risk associated with the change:

Other companies have tried and it is well documented that they have ended up with less trust and
collaboration internally and frustrated customers externally. But companies that don’t change, don’t
exist in the long term. We have been around a long time and plan to be, so we need to focus on
making the changes in the right way.

One specific learning point for leaders in the new regional organization was to “be mindful when trying to
push back or push things forward,” according to Wise.

9
Andreas P. Schotter and Paul W. Beamish, “Intra-organizational Turbulences in Multinational Corporations,” chap. 6
in Politics and Power in the Multinational Corporation: The Role of Institutions, Interests and Identities (Cambridge: Cambridge
University Press, 2011), 191–230.

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Across the board we have to focus on the big picture or narrowly look at individual and country
priorities. It is difficult. I have to check myself and think. . .why am I opposing one thing and supporting
another? It is exciting to be part of this kind of change, but it is hard work, thinking about all
stakeholders and finding ways to lobby and negotiate for what really matters.

When describing the kinds of change she had both experienced and led at 3M, Wise spoke of both
evolutionary and revolutionary change. She described the recent transformation as being as significant and
revolutionary for the organization as the introduction and adoption of Six Sigma in 2000. “Six Sigma
fundamentally changed the organization and how we did things. It was revolutionary then. It had to happen,
and it had to happen rapidly.” Similarly, Wise said, “The announcement and the transition announced in
2019 is like that—it is a fundamentally new approach for 3M doing business and the turnaround time for
change is fast, because it has to be.” The 2019 announcement prompted 3M’s refocus on diverse customers
with local, national, regional, and global needs and interests. Wise shared that for a subsidiary such as
Canada, the speed and magnitude of the change reflected both opportunities and challenges. “The challenge
is how not to lose the good, amazing parts of the subsidiary culture, what it means to be a 3Mer in Canada
through the necessary change.” As the leader of 3M Canada, the need to span the boundaries between the
subsidiaries and the corporation was a key part of Wise’s role.

With regard to 3M Canada, Wise shared, “There are opportunities for 3Mers in Canada and the subsidiary
with the transformation. That said, there is also stress in terms of the how. The question at times like this,
is how to navigate the change? How to try and capitalize on the opportunities?” By way of an example,
Wise highlighted that in terms of opportunities stemming from the transformation, talented Canadians were
now in more global and regional USAC (United States and Canada) roles, without having had to relocate.
The pandemic, despite the challenges associated with it, had accelerated that kind of positive change. At
the same time, Wise noted that the Canadian organization had to bring forward the needs of local and global
customers within a regional approach. While “no one knows the Canadian market like us here in Canada,”
said Wise, processes and decision making were being performed within the context of the region, which
was challenging for everyone—“trying to find the right balance.”

THE POWER AND POTENTIAL OF BOUNDARY SPANNING

The concept of achieving balance through understanding multiple perspectives, leveraging high levels of
professional expertise, and cultivating strong and wide-reaching social ties was fundamental in relation to
boundary spanning.10 Boundary spanners were themselves often less driven by financial rewards, seeing
themselves, and being seen as members of both the headquarters and subsidiary communities.

Studies had shown how positive headquarters–subsidiary relationships were formed through boundary-
spanning leadership but maintained by the effective management of executive attention. While too much
subsidiary management could disempower country managers, too little attention could result in unhappy
employees or missed opportunities. Executive attention naturally correlated directly with the size of the
subsidiary, the strategic importance of the local market, and the strength of the subsidiary’s operations.

The management of attention in a multinational corporation was the product of small, specific actions. Leaders
who continuously practiced buffering, reflecting, connecting, mobilizing, and weaving, for example, could
ensure that subsidiaries had the attention they needed. More specifically, buffering required leaders to foster
intergroup safety and cohesion given that group members were less likely to feel comfortable collaborating
outside of their groups if they did not feel supported by their own. Reflecting referred to leaders asking group
10
Andreas P. Schotter, Ram Mudambi, Yves L. Doz, and Ajai Gaur, “Boundary Spanning in Global Organizations,” Journal
of Management Studies 54 no. 4 (2017): 403–421.

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members to understand the differences and similarities among the other groups with which they worked and
to appreciate the different perspectives that both groups had. For example, having groups attend other groups’
meetings in an attempt to better understand their values and priorities could facilitate reflection. Such
engagement could foster intergroup respect. In addition, studies had shown that managers with experience
working in both headquarters and subsidiaries were more effective as boundary spanners due to their
heightened ability to understand the perspectives of employees on both sides. Connecting was a practice
through which leaders endorsed and encouraged their employees to create relationships with those with whom
they did not normally work. By mobilizing, boundary-spanning leaders began to reframe boundaries and to
use the confidence and trust that had been built in such as way as to develop an intergroup community.
Mobilizing required the identification of the commonalities that bonded the group as a whole. Finally, through
weaving, a boundary spanner acknowledged that there were reasons why boundaries existed while celebrating
the differences between groups and how they could contribute to the goals of the team at large. This resulted
in group interdependence, which allowed the group as a whole to work more cohesively and effectively.

Research had shown that boundary-spanning leaders could increase the positive outcomes of conflicts between
headquarters and subsidiaries by as much as 70 per cent.11 As such, the development and mobilization of
boundary-spanning leaders were integral to the successful growth and operation of any multinational
corporation. Boundary spanning allowed organizations to recognize the benefits of a diverse workforce by
linking groups from different hierarchical or functional levels so that they could share expertise. While they were
more effective as subsidiary heads, boundary-spanning leaders could help reduce negative conflict in any role.

Successful boundary spanners had the ability to understand multiple perspectives, high levels of
professional expertise, strong and wide-reaching social ties, awareness of the need for boundary spanning,
and a global mind.12 They were less driven by financial rewards and able to be members of both the
headquarters and subsidiary communities. Boundary-spanning leadership involved acknowledging
entrenched boundaries, developing intergroup trust and a sense of community, and using intergroup
reinvention to identify new directions for the organization.

PENNY WISE, 3M CANADA’S NEW LEADER

When Wise was appointed to lead 3M Canada, she was excited to return home. With more than 20 years of
global brand and marketing experience at 3M, she not only had a background in leading Canadian businesses,
commercialization projects, and brand and corporate marketing initiatives, she had also served as the executive
director of the Canadian consumer business group before relocating to 3M’s global headquarters in Minneapolis,
Minnesota in 2010. As 3M’s international marketing director and chief branding officer, Wise had led the
successful launch of the company’s newest tagline, “3M Science. Applied to LifeTM.”

Underscoring the importance of developing strong relationships and building a reputation for collaboration
across businesses and geographies, Wise recognized how such skills were critical to ensuring a strong future
for the Canadian organization within the wider corporation. “This is a company with a long history of
innovation built upon the collaborative culture of people,” she said. “It is because of the culture and
connections we share that we find our way through difficult challenges.” An advocate for diversity, equity,
and inclusion, Wise was internally involved in working with the 3M Canada team to ensure that the unique
voice and perspective of the subsidiary were brought forward to elevate the experience of Canadian

11
Andreas P. Schotter and Paul W. Beamish, “Performance Effects of MNC Headquarters–Subsidiary Conflict and the Role
of Boundary Spanners: The Case of Headquarter Initiative Rejection,” Journal of International Management 17, no. 3 (2011):
243–259.
12
Andreas P. Schotter, Ram Mudambi, Yves L. Doz, and Ajai Gaur, “Boundary Spanning in Global Organizations,” Journal
of Management Studies 54, no. 4 (2017): 403–421.

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customers. Externally, Wise also took on the role of co-chair of the Canadian Chamber’s Council for
Women’s Advocacy to help identify issues and break down barriers that impacted the ability of women to
contribute to their greatest capacity.

“I can’t say that I have ever chosen to be a certain kind of leader or followed some particular style,” noted
Wise. “People say to me that I am an empathetic leader and I know I like solving problems working with
really smart people. I like helping people and this last year, 2020 has really helped shape me––the new role,
the change and then the pandemic.” Wise pinpointed how she had further developed her listening skills and
her willingness to be vulnerable and care for others, and recognized the need for her to “play her role with
others” in being accountable. Critical to the role was developing clarity in terms of how accountability
worked in the new organization and how responsibility could be effectively shared in a manner that
respected the various stakeholders and benefited customers.

Wise reflected on the lessons learned in school and during her early career that helped in her new role:

I remember from my days in school, I was always a hard worker. I had to work hard to do well and that
is a huge part of who I am. I’m not afraid of the challenges and I enjoy being able to move between lots
of different groups and people. I never belonged to a clique… that’s not me, never has been. At my
core I am very driven, but most enjoy working with others to make big things happen.

COVID-19 AND ITS IMPACT ON 3M CANADA

During a time of unprecedented internal change, transformation, and reorganization, 3M, along with
organizations worldwide, was suddenly faced with struggling to continue operating. The COVID-19
pandemic struck in early 2020. Prioritizing the safety of 93,000 employees in more than 87 countries13
emerged as a foundational tenet in the 3M world.

As a central player in the healthcare sector, 3M’s strategic decisions concerning operations, supplier
relationships, and distribution became headline worthy—particularly in Canada, where healthcare was
public and 3M’s role was very prominent. Due to the breadth of its offering of products and services related
to human health and safety, the company sought to maximize global production of a wide array of solutions
used in responding to COVID-19, including biopharma filtration, hand sanitizers, and disinfectants.14
However, it was President Donald Trump’s demand that 3M stop exporting N95 respirators (which were
considered critical PPE15) to Canada and Latin America that left 3M employees, especially those in Canada,
deeply concerned.16

Mike Roman, the chief executive officer of 3M, responded swiftly to the American public: “The idea that
3M is not doing all it can to fight price gouging and unauthorized reselling is absurd. The idea that we’re
not doing everything we can to maximize deliveries of respirators in our home country – nothing is further
from the truth.” Roman and his team highlighted how 3M was already working with the Trump
administration on getting more respirators into the United States, including securing approval from China

13
“3M Careers,” 3M, accessed June 4, 2021, https://www.3m.com/3M/en_US/careers-us/.
14
“Helping the World Respond to COVID-19: 3M Is Playing a Critical Role,” 3M, accessed October 5, 2020,
www.3m.com/3M/en_US/company-us/coronavirus/.
15
Maham Abedi, “Coronavirus: Trump Asks Medical Supply Firm 3M to Stop Selling N95 Respirators to Canada,” Global
News, April 3, 2020, https://globalnews.ca/news/6772979/coronavirus-3m-n95-respirators-trump-canada/.
16
“Coronavirus: US 'Wants 3M to End Mask Exports to Canada and Latin America,'” BBC News, April 3, 2020,
www.bbc.com/news/world-us-canada-52161032.

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to ship 10 million N95 respirators manufactured by 3M in China to the United States.17 At the same time,
Roman warned that halting exports to the Canadian and Latin American markets could actually hinder the
number of respirators brought into the United States. He noted that “Ceasing all export of respirators
produced in the United States would likely cause other countries to retaliate and do the same, as some have
already done. If that were to occur, the net number of respirators being made available to the United States
would actually decrease.”18

Wise explained that “The company’s swift response to the U.S. Administration was well received, but deep
concern within the Canadian organization also surfaced. Our family and friends, neighbors were asking us
what the company was going to do—what we were going to do.” She was acutely aware that in the midst
of both an internal reorganization and an external crisis, questions about the future of 3M Canada were at
the forefront of many minds.

THE BROCKVILLE N95 RESPIRATOR STORY

For Wise and her leadership team, the events that occurred between 3M’s headquarters and the Trump
administration on April 3, 2020, as well as the tense days that followed, represented a call to action. “We
recognized how this was a key moment in time, that we had to come together and try to shape the path
forward,” Wise noted. As a subsidiary within the new organizational model, a great deal of decision-making
power had been shifted away from the geography, although that did not mean that they could not come
together, collaborate, and brainstorm ideas. From the perspective of leaders with a breadth of experience in
the company, working through complex problems across geographic boundaries was nothing new. Thus,
from the business and organizational leadership in government affairs and other functions, a short list of
possible options emerged––options that would be good for 3M globally, for 3M Canada and its employees,
and for Canada and Canadians. At the top of the list was the potential for a domestic (Canadian)
manufacturing facility.

“We knew the answer to such a proposal would be no,” noted Wise. “Given the new structure and model,
the approach to prioritizing investment, and plans in place, the idea of investing in Canadian manufacturing
was not in the cards.” Yet, recognizing that unprecedented times could create opportunities, the team began
working in the 3M way, which Wise described as being grounded in a culture of relationships.

A lot companies in Canada are subsidiaries. 3M is no different. The key I think is to position
yourselves as more than just implementers of strategy, but part of the strategic conversation. I say
this all the time, but no one is responsible to know the Canadian market, Canadian customers, and
the economy but those of us in 3M Canada. We as a subsidiary and as leaders in 3M Canada must
leverage our networks and our relationships to be heard when strategy is being made. We must
position ourselves to be heard so our global strategy teams make the right decisions.

Wise referred to learning how and when to push back and push forward ideas.

It’s not always comfortable, but that’s part of our jobs in the new structure. I’ve been called a
disruptor in my career, maybe that’s one of the reasons I am here. In the case of the respirators, it
was a time to push. We had a unique opportunity in Canada, and we were committed to capitalize on
it. There was a need, we have a center of expertise and so we had to push. It takes some intestinal
17
Kevin Breuninger, “3M Warns Trump: Halting Exports under Defense Production Act Would Reduce Number of Masks Available
to US,” CNBC, April 3, 2020, www.cnbc.com/2020/04/03/coronavirus-3m-tells-trump-halting-exports-would-reduce-number-of-
masks.html.
18
Ibid.

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Page 10 W25534

fortitude… sure there were times I asked myself and others asked me… “How far to push?” My boss,
I even went to her and she said, “Keep going until someone really stops you.” There is this balance
between conforming and pushing that is part of your role leading in a subsidiary.

Wise acknowledged that change took time and that part of leadership within a subsidiary, especially during
a time of change, involved learning to “push, gauge the waters and maybe pull back a bit. Don’t give up
easily and definitely not early. You keep trying when you feel it is right. There is risk for sure in terms of
how you are perceived, but that’s part of this kind of work.”

THEN AND NOW

In April 2021, the Government of Canada officially announced that Canadian-made 3M N95 respirators
would be manufactured in the newly expanded facility in Brockville, Ontario.

The N95 respirators were among the most critical supplies required to help protect front-line workers from
COVID-19. Thus, addressing supply gaps was critical to protecting the lives of Canadians, reducing the
pandemic’s impact on the economy, and ensuring preparedness. By securing domestically manufactured
products, Canada increased its self-sufficiency and reduced the risk of supply-chain interruptions.

While August 2020 seemed a lifetime ago, the question on Wise’s mind as she considered her Monday
leadership meeting was the same as the question that confronted her in 2021: How could 3M Canada remain
a relevant, vital, and contributing subsidiary within the greater 3M network?

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EXHIBIT 1: 3M MULTI-YEAR COMPANY FINANCIALS (FY ENDS 12/31)

Total Revenue (US$ Millions) Year (US$ Millions)

2016 30,109
2017 31,657
2018 32,765
2019 32,136
2020 32,184
1-year growth 0.15%
4-year CAGR 1.7%

Net Income (US$ Millions) Year (US$ Millions)

2016 5,050
2017 4,858
2018 5,349
2019 4,570
2020 5,384
1-year growth 17.8%
4-year CAGR 1.6%

Assets (US$ Millions) (US$ Millions)

Total Assets
47.344B
2020
Current Market
Value as of 115.57B
07/16/2021

Employees Year #
2016 91,584
2017 91,536
2018 93,516
2019 96,163
2020 94,987
1-year growth -1.2%
4-year CAGR 0.9%

Note: CAGR = Compound annual growth rate; *All numbers and dates align with the company’s fiscal year conventions.
Source: Company files.

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EXHIBIT 2: TOTAL SALES BY BUSINESS GROUP, 2020

Source: Company files.

Page 12

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EXHIBIT 3: BUSINESS GROUP PERFORMANCE, 2020 QUARTER 4

2020 Q4/2021 Q1 Business Group Perfromance

$3.5 30%

$3.0
25%

$2.5
20%

$2.0
15%
$1.5

10%
$1.0

5%
$0.5

$- 0%
Consumer Healthcare Safety and Industrial Transportation and
Electronics
Q1 2021 Sales Q4 2020 Sales
Q1 2021 Group operating margins Q4 2020 Group operating margins

Source: Company files.

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 For the exclusive use of J. Otálora, 2023.

W25534

EXHIBIT 4: GLOBAL ORGANIZATIONAL STRUCTURE CHART, OLD AND NEW

Before Transformation
Page 14

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EXHIBIT 4 (CONTINUED)

New Organization Structure

Source: Company files.

Page 15

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EXHIBIT 5: NET SALES BY COUNTRY/REGION 2019 AND 2020 IN MILLION US DOLLARS

Net Sales by Country/Region 2019

$14.000

$12.000

$10.000
Million USD

$8.000

$6.000

$4.000

$2.000

$-
United States Asia Pacific Europe, Middle Latin America and
East, and Africa Canada

Net Sales by Country/Region 2020

$18.000
$16.000
$14.000
$12.000
Million USD

$10.000
$8.000
$6.000
$4.000
$2.000
$-
Americas Asia Pacific Europe, Middle East, and
Africa

Source: Company files.

This document is authorized for use only by Johanna Otálora in 2023.