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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
Management of Technology & InnovationBUSI 46073M Optical Systems:Managing Corporate EntrepreneurshipMarch 3, 2008John Callahan
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
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
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
The issue • Should 3M Optical Systems (OS) business unit deploy the new computer privacy screen despite two previous marketing failures? Kirkham
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
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
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
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
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
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