Rev: Aug, 2012 POSTECH Strategic Management of Information and Technology Laboratory (POSMIT: http :// posmit.postech.

1. 3M Optical Systems:Managing Corporate Entrepreneurship • Christopher A. Bartlett and Afroze Mohammed • From Burgelman et al, Strategic Management of Technology Innovation Rev: Aug, 2012 POSTECH Strategic Management of Information and Technology Laboratory (POSMIT: http://posmit.postech.ac.kr) Dept. of Industrial & Management EngineeringPOSTECH

2. Contents

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. History of Optical System (OS) Business Unit Microlouver technology • Visual Products Division • New free-standing OS unit • - Application for Technology • - Effective • - Not beyond Projector Film • OS Track Record (1979-1990) • 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

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.