Driving Global Innovation- The Evolution of 3Ms Culture and Strategy

Driving Global Innovation- The Evolution of 3Ms Culture and Strategy

Entrepreneurship and innovation play a vital role in an organization’s growth and development. Many organizations focus on promoting a culture of entrepreneurship and innovation by supporting their employees’ innovative ideas and giving them the resources needed to implement innovative ideas. One of the organizations that have experienced significant growth over the years through entrepreneurship and innovation is 3M. This report analyzes how the culture of entrepreneurship was nurtured at 3M from the era of Mcknight through to that of Desimone, the institutionalization of entrepreneurship in the company, strengths and potential weaknesses of the organization and culture of 3M during the Mcknight to Desimone Era and related and unrelated diversification in the company.

The Culture of Entrepreneurship and Innovation at 3M

According to Kanhaiya (2013), organizations play a significant role in nurturing entrepreneurship by creating an innovative culture. One of the strategies used to nurture the culture of entrepreneurship at 3M from the Mcknight era to the Desimone era was allowing employees to explore their ideas. For example, McKnight gave Dew the go-ahead to pursue his masking tape idea, which led to the company’s first product diversification. The second strategy was challenging employees to be innovative. McKnight set ambitious targets for the employees and encouraged them to produce new products by investing 5% of the money generated from sales in research and development.3M also used the Pacing Plus Program to nurture the culture of entrepreneurship and innovation. The program focused on offering priority funding to businesses. Another strategy used to nurture the culture of entrepreneurship and innovation at 3M was establishing various recognition and reward programs to honor employees who significantly impacted the company. The company also emphasized dual career tracks, allowing employees to select a career path with equal advancement opportunities.

Entrepreneurship Institutionalization Within the Company

Notably, the institutionalization of entrepreneurship includes making entrepreneurship a norm or convention in the organization (Fayolle et al., 2019). Accordingly, 3M institutionalized entrepreneurship by allowing employees to use the company’s resources to explore their ideas. The company also institutionalized entrepreneurship by adding the products invented by employees to the company’s product line. The company also introduced awards such as the Circle of Technical Excellence and Innovation Award and Carton Society award to reward entrepreneurial employees. 3M also allowed researchers to develop their professional interests through the dual career tracks.

Strengths and Potential Weaknesses of the Organization and 3M’s Culture

One of the strengths of 3 M’s organizational culture and organization was the collaboration between employees and leaders. The company allowed employees to give feedback and express their ideas, thus promoting innovation. For example, employees could approach the CEO to share their ideas on new products and request assistance, enabling the company to innovate new products. The second strength was the innovative culture, which enabled employees to work on new ideas and use their knowledge and expertise to improve existing products.

One of the potential weaknesses of 3M’s organization and culture is too much emphasis on research and development, which strains the company’s financial resources. For instance, the company thinly spread its research and development resources over many opportunities, leading to underfunding of major projects. Another weakness was slow decision-making. After Desimone took over the CEO position, there were complaints that he was slow in making decisions, which could have resulted in the company’s failure to meet its sales targets.

Related and Unrelated Diversification at 3M

Diversification is among the strategies organizations use to gain a competitive advantage (Chirani & Effatdoost, 2013). The main categories of diversification include unrelated and related diversification. According to Hill & Schilling (2024), related diversification includes creating a business unit in a new industry related to the current business units within a company through linkage or commonality between the functions in the value chain. Unrelated diversification, on the other hand, includes owning unrelated businesses and attempting to increase their value by leveraging the general organizational competencies, the internal market, or both. One of the unrelated diversifications utilized by 3M was offering post-it notes for building and office use materials. The company also used related diversification by selling masking tapes. Consequently, unrelated diversification did not work out well for the company because the marketing strategy was ineffective. The use of brochures and ads was not embraced well by the customers who did not value the Post-it-Notes. However, the related diversification worked out well for the company and enabled it to increase sales.

One of the things that 3M has done right with its diversification is using diversification to improve existing products. For example, the company invented cellophane to improve the masking tape. Cellophane was marketed and sold as sealing tape, thus increasing the company’s product range. The second thing that the company did right with its diversification was focusing on products that addressed specific problems. For example, the company began selling Scotch Guard to protect fabrics and continued improving the product until it met customers’ expectations. Although the two diversifications effectively enhanced the company’s growth, diversifying into the medical sector was done incorrectly. For instance, selling low-cost surgical blades created a bad reputation for the company because patients complained about surgical site infections.

Conclusion

3M’s rapid growth during the Mcknight to Desimone Era can be attributed to diversification and nurturing entrepreneurship and innovation. The company nurtured entrepreneurship and innovation by allowing employees to explore their ideas and challenging them to be innovative. The company also used related and unrelated diversification to increase its product, thus creating a competitive advantage. The two things that 3M did right with its diversification are using diversification to improve existing products and focusing on products that addressed specific problems. However, diversifying into the medical sector was done incorrectly, leading to increased customer complaints.

References

Chirani, E., & Effatdoost, M. (2013). Diversification strategy is a way toward competitive advantage. Kuwait Chapter of Arabian Journal of Business and Management Review, 3(1), 23–27. https://doi.org/10.12816/0001278

Fayolle, A., Landström, H., Gartner, W. B., & Berglund, K. (2019). The institutionalization of entrepreneurship. Institutionalization of Entrepreneurship Research, 1–10. https://doi.org/10.4324/9781351270762-1

Hill, C., & Schilling, M. A. (2024). Strategic management: Theory & cases: An integrated approach. Cengage Learning Asia Pte Ltd.

Kanhaiya, Dr. K. S. S. (2013). Creating an entrepreneurial culture in a large organization. SSRN Electronic Journal. https://doi.org/10.2139/

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This case traces the development of 3M’s innovative and global culture from its early days through 2018. The main focus of the case is on the evolution of culture at 3M, and how this culture drove their global strategy through a continual stream of product innovations that have taken the company into a large number of different industries.

Driving Global Innovation- The Evolution of 3Ms Culture and Strategy

The case also looks at how management deliberately institutionalized the emerging culture at 3M by creating rules and procedures that provided opportunities for, and rewarded, innovative risk-taking.
Refer to the attached document for assignment details and grading rubric.