Rev: Aug, 2012 POSTECH Strategic Management of Information and Technology Laboratory (POSMIT: Dept. of Industrial & Management Engineering POSTECH 3M Optical Systems: Managing Corporate Entrepreneurship Christopher A. Bartlett and Afroze Mohammed From Burgelman et al, Strategic Management of Technology Innovation

Contents 1Introduction of 3M 2History of Optical System (OS) Business Unit 3Organizing New Innovative Team 4Failures and Strategies to Overcome

3 Introduction of 3M ■3M (Minnesota Mining and Manufacturing Company) –100 years of history –About 30,000 products –Weight of R&D: Double of average of manufacturing companies in America ■Vision –To be the most innovative enterprise and the preferred supplier in the markets we serve ■3M at a Glance (Year-end 2011) –Global sales: $30 billion –Operations in more than 65 countries –3M products sold in nearly 200 countries –84,000 employees globally ■Company Culture –Respecting Idea: Many ideas lead to successful products –15% Rule: Every employee spend 15% of office hours researching independent fields –25% Rule: Products launched in four years occupies 25% of total sales –Generosity to Failure: “There is freedom to fail in 3m”

4 New free-standing OS unit History of Optical System (OS) Business Unit ■OS Track Record ( ) –3M’s microlouver technology Started from developing light control film in 1979 Functions of Light control film: Privacy viewing, Sunlight readability, Light directing –New Business Ventures Division (NBVD) Guiding technology to find a market in various application fields –Lost between 3 to 5 million dollars per year No major product family Minimal products such as TV projection lens, micro film lens, and bike gauge Low reliability in OS & Low morale in 3M Visual Products Division - Effective - Not beyond Projector Film - Effective - Not beyond Projector Film - Application for Technology Microlouver technology

5 Organizing New Innovative Team (1/2) ■Organizing New Innovative Team by employing talents –Andy Wong (Manager), Paul Guehler (Vice President), Rob Noirjean (Marketer) ■Andy Wong (Joining in 1984) –Organizational culture emphasizing invention of new products  Making the organization concentrate on the light control film –Distributed product types  Scouting a new marketer and finding target market –Low sales volume  Developing production strategies: Guarantee of price, quality, deadline, etc.

6 Organizing New Innovative Team (2/2) ■Paul Guehler (Joining in 1990) –Setting Standards and goals Suggesting organization’s objectives and vision with 3M’s mission –Implementing “Give and Take” strategy Supporting, but forcing members to meet financial objectives –Empowering managers Encouraging manages to find opportunity in markets and develop it –Support and coaching the organization Supporting members to have confidence and improve their abilities ■Rob Noirjean (Joining in 1990) –Emphasizing the importance of market to products –Identifying marketing strategies for microlouvere technology Finding 11 available markets where the technology can be applied –Setting privacy viewing market as the target market ATM, Computers in public places –Receiving feedback from customers Unclear display, Dazzle problem, etc. Regarding privacy as a sensitive issue

7 Failures and Strategies to Overcome (1/2) ■First Launching (Failed) –Producing films in various sizes –Number of monitor size in the market: over 100ea  High purchase price ($140 for retail) –Sale: About $10,000/Month ■Second Launching (Failed) –Producing films with standard monitor size frame –Dazzle problem –Sale: About $20,000/Month

8 Failures and Strategies to Overcome (2/2) ■Third Launching (Proceeded or NOT?) –Rob Noirjean (Marketer): Suggesting the product with privacy viewing and anti-dazzle functions (Reposition) –Andy Wong (Manager): Organizing a tem with experts in 3M (Product, quality, and technology engineers) –Paul Guehler (Vice President): Suggesting development process Phase I: Developing Product Concept - Developing product with privacy viewing and anti-dazzle functions - Releasing the product through distribution channels in 3M Phase II: Feasibility Study - Finding out technological feasibility whether the product can meet the goal price Phase III: Constructing Business Plan - Price: $70 (Retail: $175) - Forecasting sales - Analyzing risk (existing competitors, failure in demand forecasting, etc.) –Internal/External Environment Domination of existing competitors such as OCLI, ACCO, FELLOWES, and POLAROID Opposition of the operation division to the distribution plan using the 3M channels Need to get investment of $750,000 to launch the product

9 Discussion Question (1/2) ■What could be the driving force for 3M Optical systems to launch a successful product despite of a series of failures?

10 Discussion Question (2/2) ■In this case, 3M launched the product successfully with an entrepreneurial spirit after two failures. Discuss about another case in which a firm successes by demonstrating an entrepreneurial spirit.