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Management of Technology & Innovation BUSI 4607 3M Optical Systems: Managing Corporate Entrepreneurship March 3, 2008 John Callahan PowerPoint PPT Presentation


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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

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Management of Technology & Innovation BUSI 4607 3M Optical Systems: Managing Corporate Entrepreneurship March 3, 2008 John Callahan

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Management of Technology & InnovationBUSI 46073M Optical Systems:Managing Corporate EntrepreneurshipMarch 3, 2008John Callahan


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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

Kirkham


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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

Kirkham


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New privacy screen

  • Combined features of competitor’s 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

Kirkham


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The issue

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

Kirkham


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Wong’s options

Go for “Authority to Proceed

Learning from two previous launches

Met rigorous three-phase process

Team closest to market, competition, technology (trust them, don’t second-guess)

Committed team (motivational impact)

Last chance for OS

Wong must be the champion

Postpone/Cancel

Poor market research

Poor product concept

Price too high

Unrealistic market share forecasts

Unrealistic risk assessment

Needs more data, further study

Other Options

Self fund

Mentor’s support

Outsource

Kirkham


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Guehler’s options

Approve

Project passed three-phase review (Shouldn’t second-guess now)

Cost relatively low ($750K)

OS unit believes, is committed

Don’t want to kill OS unit

(Big project in pipeline, needs 30% new products

Reject/Send Back

Recognize as “well intentional failure”

Has other high-profile “Pacing Projects”

Problems with product, price, marketing strategy

Lacks internal support

Kirkham


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Roles of Wong and Guehler

Wong

Attracting good people

(e.g., Noirjean, Melby)

Developing/motivating his team, building unit’s capabilities

Creating, pursuing growth opportunities

Keeping management “in the boat”

Guehler

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

Kirkham


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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

Kirkham


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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 individual’s innovation within the workforce (“15% rule”)

Kirkham


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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”

Kirkham


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References

Kirkham


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