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1.0 Introduction
Entrepreneurship is all about creating opportunities as well as identifying them.
Entrepreneurship is not sitting back and responding and reacting to opportunities others
have created or discovered. Corporate entrepreneurship is the twin sibling of innovation
for firms. Corporate entrepreneurship allows firms to create and discover new business
ventures, new products, services; processes while revamping and refreshing business
strategies and competitiveness. It is the totality of a companys innovation and business
ventures.
3M embodies corporate entrepreneurship through their longstanding history of
innovative products and unique internal innovation and cooperative strategies. 3M
Corporation, founded in 1902, the Minnesota Mining & Manufacturing Corporation (3M)
reported sales revenues of $16.7 billion during the year 2000. The company made more
than 60,000 products that year. Nearly 35 percent of its total sales, or about $5.6 billion,
came from products that had been introduced during the prior four
years, and another $1.5 billion came from products introduced during 2000.
These revenues stemmed from 3Ms six business segments: industrial (tapes,
abrasives, and adhesives); transportation, graphics and safety; healthcare (including
medical and surgical supplies and closures for disposable diapers); consumer and office;
electro and communications; and specialty materials. All six business segments wereprofitable in 2000. Asia Pacific, Europe, and Latin America achieved double-digit
volume growth. Non-U.S. business represented 53 percent of total net sales and 63
percent of total operating income.
3M had identified 21 established and new strategic brands. Some of its best-
known brands were Scotch tapes, Scotch-Brite cleaning products, and Post-it
repositionable products. Newer brands included Vikuiti display enhancement,
Volition fiber optic network solutions, Command adhesive, and Nexcare firstaid
products. More than 75,000 3M employees worked to create more than 500 new products
every year. 3M had institutionalized a corporate culture that promoted intrapreneurship.
The company was recognized for its vertical organizational structure, with
businesses established by technologies and markets. Between 1985 and 2000, 3Ms gross
profit margin averaged over 48 percent. During this same 15-year time period, return on
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equity for the company averaged 22.2 percent. In Fortune magazines annual survey
of Americas Most Admired Corporations, 3M earned a top-10 ranking in 10 of
the last 15 years.
2.0 Types of Innovation
According to Brassington and Pettitt (2000), product innovation involves an
organisation breaking into totally new ground, where previous consumer experience
cannot be utilised. Product innovation is a risky process as the organisation will have to
overcome ignorance, suspicion and scepticism. Brassington and Pettitt (2000) believe that
product innovation is normally a result of technological breakthroughs. Whilst the
Cambridge MIT institute (2004) explains that product innovation is very important to
organisations in todays market because of this hyper-competitive business climate.
Kuratko danHodgetts, 2004, states are four types of innovation:
2.1 Invention a new product which has not been produce before such as
telephone by Graham Bell.
3MTM Three-M-iteTM Abrasive Cloth became 3Ms first
exclusive product, 12 long years after 3Ms founding in 1902. Thanks to
Three-M-ite cloth and a boost in business from World War I, 3M finally
posted substantial profits and declared its first dividend of 6 cents per share in
the last quarter of 1916. The dividend totaled $13,497 on 224,596 shares
outstanding.
2.2 Extension improvement or additional features added to the existing product
such as the iPhone and Ipad.
In 1930s Richard Drew of 3M saw another customer need. Cellophanewas popular, but there was no attractive way to seal the clear material. He
coated samples of cellophane with 3M adhesive. Scotch Cellophane Tape
was born, and soon hundreds of practical uses were discovered. Coating the
cellophane with 3M adhesive was an improvement to its usage. As the decade
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ended, 3M had five diverse and flourishing businesses: abrasives, masking
tape, cellophane tape, roofing granules and adhesives.
2.3 Duplication is a replication process towards the existing product or services.
However it is not 100% duplication, with improvements on the product or
services. For example a handphone with Wi-Fi technology.
Microreplication technology made microscopic changes to the surface of
materials which changed how these materials worked. Borne out of
overhead projectors, microreplication-based products are used in highly
reflective highway signs, laptop computer screens and even 3M's first product
abrasives. A team of 3M scientists developed a new water-based version of
Scotchgard Fabric Protector that contains no solvents. The team leader was
the son of one of the original Scotchgard fabric protector inventors and a
member of 3M's new generation of innovators.
2.4 Synthesis is a combining process of other pats to produce a product or
application such as computer and internet surfing.
In 1995, 3M announced it would launch its printing and publishing, data
storage and imaging systems businesses as an independent, publicly owned
company. At the same time, 3M began realigning into market-centered groups
to focus on building customer loyalty by providing superior quality, value and
service. The innovation products of data storage and imaging system
businesses are synthesis from the computer edge.
3 Innovation Impact
Product innovation is important to organisations because as described by
Brassington and Pettitt (2000), it gives them an opportunity to educate the market and
to a certain extent dictate demand. Brassington and Pettitt (2000) illustrate that the
underlying reason why product innovation is considered by many organisations to be
important is because if a product is successful, a company will achieve high levels of
respect and a great reputation as a market leader. Further, successful product
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innovation could lead to the organisation gaining a better relationship with its
shareholders and further there is scope and potential for the company to achieve
better and larger investment proposals. Also, it is more likely that successful product
innovation will enable a company to employee the best possible staff and thus
continue to be successfully innovative. So, innovation can provide companies with a
competitive edge but an organisation must ensure that innovation is likely to be
successful.
At 3M, building and sustaining innovation is a better thing to do, or a batter way
to do it, that increases an organizations ability to achieve its goals. This does not
mean change for changes sake. Innovation has also been defined as Creativity +
Change. To qualify as an innovation, a change must be visible to others and must
offer a lasting impact. Innovation can occur and should be encouraged at all levels
within a company from top level executives to lower level managers and individual
contributors. Thus an innovation may be a product, a process, a method or a system,
but it is more than an idea. It has to be converted from idea into action.
In the continuously and rapidly changing world of business, innovation is a key to
success. In 3M, they learn more about what stimulates and drives it, and how to
manage it, that how they are able to deliver more and better innovation. Sustaining
Innovation requires approaches that have structural impact-deliberately creating an
environment in which Innovation is integrated into every process and developed
within every individual.
Generally, there are two levels at which innovation needs to be managed, the
organizational level and the operational level. At the organizational level, 3M has
ensured that there is a culture that passionately embraces innovation; there exist
strategic alignment of innovation initiatives with business goals, policies and
processes; and that there is an organization wide focus on the customer and markets.
At the operational level of managing innovation, 3M has recognised the risk
acceptance and an understanding that inevitable mistakes and even failures are often
the basis for future success; an emphasis on, and tangible support for, exploratory
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thinking; solid interpersonal relationships and internal teamwork, with a climate of
mutual commitment and support; and finally a cross-functional, cross-discipline
communication, collaboration and teamingwithin the organization and with
external partners. In our paper we would like to lay down the path to incorporate
innovation into the strategy development, as well as day to day operations in a
growing organization.
Level of Impact
Product or service innovation: refer to innovations that relate directly to the needs
of customers. Products or services that cater to customers developing needs can be
considered as innovations. This is the type of innovation that captures the most the
popular imagination. The 3MTM Three-M-iteTM Abrasive Cloth is a good example.
Process innovation: represent process or production improvements that lead to
greater efficiency and lower cost. In the late 80s and early 90s, process innovation
was all the rage. The ongoing emphasis at 3M was on quality continuous
improvement in every aspect of its businesses, focusing on customer requirements.
This is when a 3M scientist used an adhesive that didn't stick to create "temporarily
permanent" book markers and a whole new product category. Post-it Notes
became a worldwide best seller.
Business Model innovation: refer to innovations that relate directly to the design of
operations to respond to customer needs. This type of innovation was very popular
during the late 90s with the advent of the Internet. Several different business model
innovations were introduced based on the new capabilities of the Internet. This type
of innovation is strongly advocated by Hamel (2000). A typical example is in 3M is
its printing and publishing, data storage and imaging systems businesses as an
independent, publicly owned company. At the same time, 3M began realigning into
market-centered groups to focus on building customer loyalty by providing superior
quality, value and service.
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Product (or service), process and business model innovations are not competing
notions but rather complementary in that they interact one with the other and are
essential to each other. What is meant here is that an entity using a new business
model to deliver existing products or services to customers can deliver product or
services innovations that will further enhance the business model.
In summary, process improvements in 3M are commonly driven by new product
demands or new business models, while new business models can arise out of new
product or process developments.
Impacts of Organizations on Innovation
The different types of innovation presented in the previous section expose the double-
edged nature of innovation. Although innovation can be a critical force for a
companys high level of performance (and survival), it is at the same time sowing the
seeds of the potential annihilation for its creator. The shortening of product life
cycles, the ever increasing efficiency of processes and growing originality of business
models that are being generated are contributing to what Emery and Trist (1965)
labeled as turbulent fields. As Emery and Trist farsightedly discussed in the Causal
Texture of Organizational Environments, the actions of organizations are both
persistent and strong enough to induce autochthonous processes in the environment,
deepening interdependence between economic and the other facets if the society,
increasing reliance on R&D to achieve the capacity to meet competitive challenge
Traditional Innovation 3M ways in 1990
Product team comprise technical individuals, involve process engineers ensure the
particular product under development could be efficiently
made provided feedback about 3Ms manufacturing capabilities Face no risk if
an idea turned to failure and go on to other project
o Allowed for technical employees to take matters in their own hands.
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o Marketing input traditionally came from current customers and
sales representatives.
o Product developers focus on finding new angles or twists on the early trends.
Not only the change in the environment is causing organization to adopt new trends,
such as increased spending in R&D, to be able to meet the competitive imperative,
but these trends also contribute to an increase in the uncertainty. From a systemic
perspective, the consequences of these actions can be amplified beyond expectations
by the interrelatedness of the elements leading to the conclusions that the very
consequences of organizational actions are increasingly unpredictable.
This apparent paradox (double edged word) of innovation is usually a typical
indicator of complex systems at work. In this case, the use of innovation to enhance
the chances of survival of the firm such as 3M, by attempting to control its
environment, ends up exacerbating further the environment rendering it more chaotic.
This increased uncertainty leads to multilevel (economic, social, technological, etc.)
instability with direct consequences: both new threats and new opportunities for
companies.
Increasing the turbulence in an environment does not mean inducing change in all
dimensions continuously at the same time. Environments usually change continuously
in some dimensions, haphazardly in other dimensions and remain stable in others.
These changes in the environment can be perceived as uncertainties for some
organizations and hence create threats. However, these changes can also be planned
to bring opportunities for the organizations that created them. As Mintzberg (1994)
delightfully summarizes it - turbulence may often be no more than serious
competition from organizations in full control of the marketplace. This is what
Morgan (1983), calls the challenge of the theory of autopsies, to understand how
organizations change and transform themselves while at the same time changing and
transforming their environment, and to devise tools to encourage organizations in
this quest of open ended evolution.
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4 ConclusionInnovation is not just about having good ideas; it is about managing new ideas,
improving old ideas, understanding and anticipating markets and technologies. This is
reinforced by a quote from Gerbeau, Professor of the Open University that Innovation is
risky, but in business you need to take risks to survive. Research and development takes a
lot of time and money, but without innovation a company will not have much of a long-
term future. This quote gives an underlying reason as to why product innovation is so
important to organisations.
A Century of Innovation is a celebration of the values and innovative thinking
that makes 3M unique. Perseverance, ingenuity and creativity have made 3M's first
100 years a century of success. For years, people around the world have looked to 3M
for products and ideas that solve problems and make their lives easier and better. Ourachievements are the foundation of a proud past and the bright future of many
innovations to come.
3M has a history of investing in the communities in which they operate by
providing jobs for local residents and supporting education, the environment, and
social and economic development. 3M also is recognized as a leader in environmental
protection and a pioneer in pollution prevention. Much of 3M's rich culture comes
from the principles that William L. McKnight, former President and Chairman of the
Board, set forth. McKnight believed "management that is destructively critical when
mistakes are made kills initiative. It's essential that 3M have many people with
initiative if we are to continue to grow." It is this growth that continues to make 3M a
leader in the 21st century.
(Source: http://solutions.3m.com/wps/portal/3M/en_WW/History/3M/Company/century-
innovation/)
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References
1.0 Couger, D., Higgens, L.F. and S.C. McIntyre (1990)
Differentiating Creativity, Innovation, Entrepreneurship, Intrapreneurship,
Copyright and Patenting for IS Products/Processes. Proceedings of the Twenty- Third
Annual Hawaii International Conference on System Sciences. pp. 370-379.
2.0 A Century of Innovation: The 3M Story, St. Paul, Minn.: 3M Company, 2002
3.0 The Cambridge MIT Institute. (2004) Managing Innovation Strategically.
(Internet), Available at http://asp2.miuk.com/cmilive/documents/Managing
%20Innovation%20Strategically%202004.pdf, cited 25/10/2011
4.0 http://solutions.3m.com/wps/portal/3M/en_WW/History/3M/Company/century-
innovation/
5.0 Gladwell, Malcolm (2000) The Tipping Point: How Little Things Can Make a Big
Diference, Little Brown
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http://ieeexplore.ieee.org/xpl/freeabs_all.jsp?arnumber=205281http://ieeexplore.ieee.org/xpl/freeabs_all.jsp?arnumber=205281http://solutions.3m.com/wps/portal/3M/en_WW/History/3M/Company/century-innovation/http://solutions.3m.com/wps/portal/3M/en_WW/History/3M/Company/century-innovation/http://ieeexplore.ieee.org/xpl/freeabs_all.jsp?arnumber=205281http://ieeexplore.ieee.org/xpl/freeabs_all.jsp?arnumber=205281http://solutions.3m.com/wps/portal/3M/en_WW/History/3M/Company/century-innovation/http://solutions.3m.com/wps/portal/3M/en_WW/History/3M/Company/century-innovation/ -
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Appendix
Years of Innovation at 3M
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