INNOVATION AT 3M

“IF THE OUTER APPEARANCE OF THINGS MATCHED THEIR

INNER NATURE, THERE WOULD BE NO POINT TO SCIENCE”
- GALILEO

Rubini, Nikunj & Madhuvanthy

 Facts

 Company: Minnesota Mining and Manufacturing

Company (3M)
 Formed in 1902
 Nature of business: Conglomerate
 Tape products
 Abrasive products
 Automotive and chemical products
 Connecting and insulating products
 Consumer and office products
 Health Care products
 Safety and personal care products
 Other products
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 Facts contd …

 Operates in 60 countries
 Highlights of the company:
– Places heavy emphasis on R & D (7% of every
sales dollar spent on R & D)
– Has nearly 6500 scientists, engineers and
technicians (figures as of 1997)
– Revenue – $ 15.07 Bn*
– Operating Income - $2.7 Bn*

* Figures as on 1997. Half of the revenue and operating income

comes from overseas.

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 Facts…

 The case discusses:

– New methodology for customer needs
research
 Lead User Research

– The market research teams’ idea of upstream

containment and the feasibility of
implementing the same

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 Innovation at 3M

 Technical individuals were behind making

new products. Process engineers involved
for feedback on manufacturing capability
 Market input-
– Current customers – Customer evaluation of
currently marketed products
– Sales representatives
– Focus groups- Market researchers at 3M
– Market research firms
– On site visits by 3M scientists & technologists
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 The need for new mode of customer needs
research

 Disadvantages
– Information was not necessarily proprietary
– Focus groups failed to give clues on market
needs, 5 to 10 years down the road
– Customers – Blind about own needs, no new
insight on revolutionary products
– The product developers never assumed
ownership for understanding customer needs
Ergo, a need for a new method to understand
the latent demand arose

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The lead user research for Medical Markets
Division

 Premise: “Certain consumers experienced

needs ahead of other consumers and that
some of the former would seek to innovate
on their own- Lead users”
 The lead user method benefits
– Richer and more reliable information
– Better product and service concept
– Acceleration of the product and service
development process

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 Mandatory elements for the success of this
approach
– Supportive management
– Use of a cross disciplinary team of highly
skilled people
– A clear understanding of the principles of the
Lead User Research

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 Lead user research stages

 Stage 1- Project planning (4-6 weeks)

– What
Identify the type of markets and the new
products of interest and the desired level of
innovation
– How
Informally interviewing industry experts,
customers, suppliers, internal company
managers

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 Stage I @ 3M

 Team met 4 hours each week

 Discussed questions like ”What do you know about
this market? What don’t you know? How about
reimbursement policies? How important is the skin
itself as a source of infection?”
 Findings:
– 30% of infections occurred from the
patients own skin
– This highlighted the need for good surgical
drapes

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 Stage I

 Trends or needs Identification (5-6

weeks)
– What
Identify specific need related trends to focus upon
for the remainder of the study
– How
Digest information collected in stage 1
Helps in understanding major trends, helps the
team in framing a customer need that can be
addressed by a product or service

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 Stage 2 @ 3M

 5 day workshop
 Developed parameters for a breakthrough
product
– It should conform to the body
– Prove more effective than the current products
– Should be easy to apply and remove
 MASH unit: Was considered a potential lead user
– Reason: It has needs for portable, inexpensive and
flexible products
 But MASH was not a Lead User

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 Stage III

Preliminary concept generation (5-6 weeks)

Having selected the area of focus, the team
– Starts generating preliminary concepts
– Informally assess business potential product/service
being conceptualized
– Continues interviewing lead user experts
– Meets Key Managers to confirm that identified needs
and initial concepts fit well with important interests

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 Stage III @ 3M

 Realized there was more potential in developing countries

than in developed countries
 2 groups of product developers traveled to visit potential
customers.
 Fact finding trip lengthened stage 3 duration
 Visits yielded invaluable information but it did not turn up
to be experts on lead use in terms of product efficacy
 Team found no single lead user who proposed 3M
specifications that the breakthrough product would need

 Challenge:
To pool together the combined knowledge and talent of this
diverse array of knowledge to develop product concepts
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 Stage IV

Final Concept Generation (5-6 Weeks)

The team
 Takes the preliminary concepts developed in
Stage III towards completion
 Alternatives product concepts are generated
 Evaluation of concepts- technical feasibility,
market appeal and mgmt priority
 Finally arrive at the most commercially promising
concept and develop recommendations

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Post-Workshop-
 Refining preliminary concepts based on
the knowledge
 Presentation of the proposed
products/services covering design
principles and justifying why customers
would pay for it.
 1 Member of the Lead User Team remains
involved for the further steps

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 Stage IV @ 3M

 The new Business Unit Manager believed

in traditional market research
 He had a mandate to “stop the
hemorrhage of profits and reconsolidate
the division”
 By reducing one member from the Lead
User Team, he made his opposition clear

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Challenges faced by Group-Members and Facilitators

1. Lack of structure in many corporate

meetings
2. Introverted and Extroverted Participants
3. Finding ways to marry very creative ideas
with technical feasibility
4. Navigating a sea of facts

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 Metrics for evaluation of product
development concepts

 Customer preference for the new product

 Creation of new growth for the division & Creation
of new businesses and industries that could
change the basis of competition for the business
unit
 Higher growth for the rest of 3M through
incorporation of proprietary 3M technology with
patent protection

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 Recommendations

The team ended up with 3 product

recommendations
2. The Economy Line
3. The Skin Doctor Line
4. The Antimicrobial “armor” line
5. Evolution or Revolution

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 4. Evolution or Revolution

 Include upstream containment of

infections
 This requires sophistication like combining
technologies from more than one core
area(s)
 Asks for combining technology from
medical surgical division with diagnostics
 MSD- Core; Diagnostics- Area which lacks
depth

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 Market Research Aspect

 Various forms of market research have been

discussed in this case
– Data from sales representatives
– Focus groups
– Current evaluations of currently marketed
products
– Site visits by 3M scientists and technologists
– Data on risk factors for diseases
 The case also discusses other ways that can be
used in market research
– Lead user research

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 HR Aspects

 Change Management
– The case talks about getting the support of the team
members and the management (Post lead user method
implementation)
 Need for a structure in meetings to enhance
proper communication
 Increased presence of introversion among
participants
 Need for a proper succession planning- Wrong
selection of BUM

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 Our recommendations

1. Develop the fourth recommendation into a

structured concept, patent it and sell it to other
health care companies. Advantage: A possible
source of revenue
2. Continue with the existing 3 recommendations
that came out of the meeting
3. Do not solely depend on the lead user method,
supplement it with the other traditional market
research methods

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 Other Learnings from 3M

 By-passing purchasing agents to

understand customer needs
 Motivated innovation by giving grants and
awards (15 % time on innovation)
 Dual-ladder
 Inclusion of process engineers to under
the feasibility

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