Management of Technology & Innovation BUSI 4607

3M Optical Systems: Managing Corporate Entrepreneurship

March 3, 2008
John Callahan

Optical Systems (OS)

1979-1990
Formed in 1979 through consolidation of several 3M optical technologies Experienced 11 year microlouver development effort with minimal products Lost between 3 to 5 million dollars per year Technology in search of a market

1991-1992
In 1990 new top management appointed Focus on applications for technology

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First computer privacy screen late 1990

Microlouver technology Poor market reaction by early 1991
large number of sizes needed high purchase price

Modified product re-launched in late 1991

minor changes not successful

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New privacy screen

Combined features of competitors such as anti-glare, anti-static and anti-radiation Through prior-product analysis, market research, and harnessing some of 3Ms other technologies Ready for decision on Authority to Proceed in 1992

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The issue
Should 3M Optical Systems (OS) business unit deploy the new computer privacy screen despite two previous marketing failures?

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Wongs options
Go for Authority to Proceed Learning from two previous launches Met rigorous three-phase process Team closest to market, competition, technology (trust them, dont second-guess) Committed team (motivational impact) Last chance for OS Wong must be the champion Postpone/Cancel Poor market research Other Options Self fund

Poor product concept

Price too high Unrealistic market share forecasts Unrealistic risk assessment Needs more data, further study

Mentors support
Outsource

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Guehlers options
Approve Project passed three-phase review (Shouldnt second-guess
now)

Reject/Send Back Recognize as well intentional failure Has other high-profile Pacing Projects Problems with product, price, marketing strategy Lacks internal support

Cost relatively low ($750K) OS unit believes, is committed

Dont want to kill OS unit

(Big project in pipeline, needs 30% new products

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Roles of Wong and Guehler

Wong Guehler

Attracting good people

(e.g., Noirjean, Melby)

Empower frontline manager to find/develop attractive opportunities

Coach/nurture/support frontline managers to develop confidence and capabilities Set standards/goals for and develop self-discipline among frontline Balance between discipline and support

Developing/motivating his team, building units capabilities

Creating, pursuing growth opportunities

Keeping management in the boat

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Recommendation
Wong - go for it
Its his job His team believes It is a good team They have been beaten on the head through the 3 phase review They know the market from their failures

Guehler - support Wong

Its his job Wong and his team did what he had asked Low initial investment

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3M Corporation
100 Years of Innovation Highly Diversified Global Company High-Tech: Spends twice the U.S. Industry Average on R&D (6-7% of sales) Strong emphasis on new products and technologies Fosters individuals innovation within the workforce (15% rule)

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Internal context at 3M
Respect for the individual
Stimulate ordinary people to produce extraordinary performance

Supportive policies/practices
15% bootleg rule Make a little, sell a little

High standards, stretch objectives

10% real sales growth, 20% pretax profit margin, 27% return on capital employed 30% sales from products introduced within past 4 years

Acceptance of well-intentioned failure Share/leverage resources

Technology belongs to company
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References

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