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3 3 Innovation

4 This book is dedicated to the thousands of 3M employees who have made 3M a strong, vibrant, growing, diversified technology company with innovative products and services in markets throughout the world. About the cover: Shortly after the Century of Innovation began, 3M introduced Wetordry sandpaper, shown in the background, giving the company its first entry into the important automotive market. Inventor Francis Okie often scribbled notes on scraps of the sandpaper as he worked. Today, 3M optical films, shown in the foreground, are among the company’s newest products. These innovative films enhance the performance of electronic displays from the smallest hand held devices, such as cell phones, to large liquid crystal display monitors and televisions. © 2002, 3M Company. All rights reserved. First Edition: 2002 International Standard Book Number ISBN 0-9722302-0-3 (cloth) ISBN 0-9722302-1-1 (paper)

5 from the CEO . . . It is exciting to celebrate 3M’s first Century of Innovation with the extended 3M family. There are many reasons for 3M’s hundred years of progress: the unique ability to create new-to-the-world product categories, market leadership achieved by serving customers better than anyone else and a global network of unequalled international resources. The primary reason for 3M’s success, however, is the people of 3M. This company has been blessed with generations of imagina- tive, industrious employees in all parts of the enterprise, all around the world. I hope you’ll join us in celebrating not only a Century of Innovation but also a century of talented and innovative individuals. W. James McNerney, Jr. Chairman of the Board and Chief Executive Officer

6 Contents 1 1 Early Struggles Plant the Seeds of Innovation  in the little town 3M opened for business as Minnesota Mining and Manufacturing in of Two Harbors, hoping to capitalize on a mineral used for grinding wheels. Nothing is easy for the optimistic founders, but their persistence pays off and they begin manufacturing sandpaper. 2 A ‘Tolerance for Tinkerers’ 13 3M Innovation — 3M welcomes innovative people who are creative, committed and often eccentric. The “architects” of innovation, Richard Carlton, Dick Drew and Francis Okie, create a climate that turns 3M into a new product powerhouse. Researchers explain valuable lab lessons and provide a glimpse into the fabled, highly productive Pro-Fab Lab. 3M Innovation — 3 29 How It Flourished Sustaining innovation in a growing company is a massive challenge. 3M walks the innovation “high wire” and invests mightily in Research and Development. 3M people share ideas and solve customer problems across oceans and continents. The highest potential product ideas attract company champions and are rewarded with additional capital. 4 Ingenuity Leads to Breakthroughs 49 The most important innovations respond to unarticulated needs. 3M calls work in this arena “the fuzzy front-end,” and it can lead to significant breakthroughs. That’s what happens in nonwovens, fluorochemicals, optical lighting film and microreplication — technologies that spawn a wide array of products and new “technology platforms” for 3M. 5 No One Succeeds Alone 67 While 3M people must take personal initiative to build rewarding careers, they are rarely “lone rangers.” 3M people naturally gravitate toward being champions, sponsors and mentors even before these were popular business buzzwords. 6 — ‘Patient Money’ 77 No Risk, No Reward For most of the century, 3M demonstrates its bias toward growth through diversification. Follow three business ventures where long-term investments, known as “patient money,” pay off in multiples. These include: reflective technology; 3M Health Care, which today has more  ,  products; and 3M Pharmaceuticals, developer of innovative drugs. than 7 The Power of Patents 95 Intellectual property is imbedded in 3M’s “DNA.” Protecting the company’s unique tech- nology, products and processes has been a priority for years. Because innovation is the  gro wth engine at 3M, intellectual property has more currency than cold cash. 3M defends its patents — at home and abroad. 8 Look ‘Behind the Smokestacks’ 109 When  -year-old William McKnight becomes the company’s sales manager, he develops an enduring philosophy — the best way to find business is to “look behind the smokestacks.” Move beyond the purchasing office and find out what your real customers need.

7 3M Timeline: A Century of Innovation 126 Going Global — 137 9 The Formative Years  tordry sandpaper is 3M’s ticket to Europe in the s. William McKnight recognizes the We potential of global business and joins the game early. The pioneers of 3M International chron- years icle their first an era demanding resourcefulness and gumption from its leaders.  — Capitalizing on a Global Presence 155 10  With characteristic fervor and entrepreneurial ambition, 3M launches new international companies during the s,  s and  s. Managing directors explain the joys and  frustrations of their first overseas assignments as 3M International becomes a new source of innovation and soon accounts for more than percent of the company’s revenues.  11 Divide and Grow — F ollow the Technology 169 In  , William McKnight has a revolutionary idea uncommon to American business. He creates divisions that divide as they grow so new businesses get a running start. By following a proven technology into uncharted waters, some of these businesses achieve astounding results. Defining Moments Strengthen 3M’s Culture 12 185 When times are tough, “doing the right thing” defines the company’s character. This philoso-  when 3M people are killed in an explosion. It echoes through the  s phy is present in  s when the company handles environmental issues and apartheid in South Africa. and And, it guides decisions in the  s when the Asia Pacific region faces a drastic economic downturn. 13 A Culture of Change 199 Long before “reinvention” was common in American business, change already was a central part of 3M’s corporate culture. Follow the rise and fall of 3M’s copying business, the trans- formation of magnetic media from being a pioneer to selling a commodity. Understand 3M’s spin-off of some of its businesses, creating a new, independent company called Imation. 14 3M Leaders — The Right Choice at the Right Time 215 The top leaders of 3M have been largely Midwestern hard workers. Most came to 3M with technical training, and all, except the most recent, built their careers at the company. Review their individual contributions and styles. Acknowledgments 236 3M Trademarks 236

8 Beginnings in Two Harbors Perseverance and the survival spirit

9 r o l e m 1 o d e Early Struggles Plant l o the Seeds of Innovation f In today’s business world, innovation is the mantra of i success. For companies large and small, the big winners n are those that match new, marketable ideas with customers n before anyone else can. It takes flexibility and creativity o and a willingness to risk. One hundred years ago, ● when 3M was founded as Minnesota Mining and v Manufacturing, the formula for business success was a the same. But for 3M, perseverance mattered even t crises that rocked 3M a century more. The multiple i o ago could have easily destroy ed a young company n st century. Imagine, for example, that  in the

10 Chapter 1 2 your “big idea” for a new product has properties that discovered in the region and prospectors hoped to get will leave your competition in the dust. You attract ven- rich with new mineral claims, including the possibility ture capital, invest in production facilities, and set your of finding gold. sales force loose to beat the market leaders. Then — as ev — now erything is riding on a marketable innovation Incorporate First, Investigate Later > with immense promise. Leaps of faith were common in those days, as one But instead of soaring revenues and customer observer noted: “Like so many others who organized orders, your big idea fails. Your  mining ventures in the early s . . . 3M apparently product is flawed. Your major incorporated first and investigated later.” The company investors have given you all the sold shares and made plans to start mining before they funding they can. This is pre- were even certain they had customers. Finally, Hermon cisely what happened when five Cable, a 3M co-founder and successful Two Harbors northern Minnesota entrepre- meat market owner, traveled to Chicago and Detroit neurs extracted a mineral to test samples of 3M’s corundum with potential cus- from the shores of Lake tomers. Though Cable came home describing only Superior. The optimistic part- “fairly satisfactory” results, he encouraged his four ners believed their “Crystal Bay” partners — w ho all seemed infected with Cable’s enthu- mineral was corundum, almost as tough to move ahead. — siasm as diamonds and an ideal substitute for It was almost two years after 3M’s founding that garnet, the mineral abrasive found in the company sold its first batch of minerals, one ton grinding wheels used by furniture makers. of Crystal Bay corundum, in March . Fortunately,  The founders of 3M were banking on success when based on the founders’ own solid reputations, the local 1 the company was born in . Each man contributed  bank had no qualms about loaning the company oper- in start-up funds in exchange for  ,  shares. ,   ating capital until more sales revenues materialized. They started their venture in Two Harbors, a booming frontier village on the North Shore of Lake Superior, where the winds of entrepreneurship were as strong as Alberta Clippers blowing across the lake. Iron ore had been 2 Chapter opening photos Prospective stockholders were offered a free boat trip from Two Harbors to the 3M Crystal Bay plant to inspect 3M’s corundum; 3M company letter- head; Original 3M plant on North Shore of Lake Superior at Crystal Bay, Minnesota, 1903; Label on back of Crystal Bay corundum paper.

11 Early Struggles Plant the Seeds of Innovation 3 But a long dry spell followed because 3M’s product president and never drew a paycheck. To scrape along was actually anorthosite, a soft mineral that is inferior in those years, Cable also worked without pay and to garnet. 3M’s partners voted to cut their salaries and so did Dwan. Decades later, William McKnight, con- then abolished them altogether. Meanwhile, impatient sidered the “architect” of 3M growth, credited Dwan, y, and 3M owed its own suppliers wanted their mone Ober and Cable with “remarkable faith and tenacity.” employees back pay. (Each of the partners contributed They also shared a strong work ethic and Midwestern roots, a background that worked in their favor during difficult times. The first key issue the company faced was With no revenues in sight and the treasury bare, failing to make quality sandpaper. They could 3M’s founders tried another approach in . If grind-  have given up and gone under. It’s incredible ing wheel manufacturers aren’t buying our corundum to make their wheels, let’s make the wheels ourselves, that they persisted and looked beyond a short- they reasoned. Deciding to become a manufacturer of term vision of success. r > Dick Lidstad etired vice president, Human Resources You have an idea, you take this idea and you pull all the things that need to come together money to cover the payroll.) 3M had little success sell- and it’s called ‘believing.’ Innovation boils down ing its stock to raise operating capital, and the company was racing head-long for disaster. Only two investors to conceive it, believe it, achieve it. > Leon Royer stepped forward — Edgar Ober, a St. Paul railroad man, retired executive director, 3M Leadership Development Center, and John Dwan, a Two Harbors lawyer and co-founder Human Resources, formerly a technical director of 3M, who had a reputation for smart investments. Ober came from modest means. After graduating from high school in St. Paul, he became a clerk at the finished goods, rather than merely a supplier of raw Chicago, St. Paul, Minneapolis and Omaha Railroad. materials, set 3M on a new, stronger course, but it didn’t The hardworking Ober was promoted often, but his seem so at the time. The partners had no knowledge ambitions soared beyond his job. That’s when Ober of the grinding wheel business. They also didn’t know   took a chance and bought shares in 3M. He had , that an ambitious New York inventor named Edward of high aspirations and faith in the venture. In  Acheson had discovered how to make an artificial abra- the early, touch-and-go years of 3M, Ober served as sive combining carbon and silicon at high temperatures. 3 1 Anorthosite, mistaken for corundum, was mined at 3M’s Crystal Bay property. 2 Articles of Incorporation, signed on June 13, 1902, by the five founders (Henry Bryan, Hermon Cable, Dr. J. Danley Budd, John Dwan and John Dwan William McGonagle.) 3 in his law office, where the company had its headquarters until 1916, when 3M moved to St. Paul.

12 Chapter 1 4 Acheson’s “carborundum” was taking off on the East Coast, especially with grind- ing wheel manufacturers. Searching for other options to k eep the company afloat, the founders jettisoned the grinding wheel idea a year later and chose to focus on manufacturing sandpa- , another business they knew noth- per ing about. To get started, the company , needed about  to pay its debts  and finance a sandpaper plant. Who would be the financial supporter this time? Ober called his younger friend, Lucius Ordway, Ober had a clear vision that 3M could be built on manufacturing abrasives when the United States was becoming an industrial nation. If he hadn’t been bold and courageous, 3M wouldn’t exist today . > Roger Appeldorn retired corporate scientist 1 co-owner of Crane and Ordway, a plumbing supply , after gradu-  Ordway migrated to St. Paul, at age firm in St. Paul and a man of means who liked to take ating from Brown University. He married into St. Paul  on the assurance that ,  risks. Ordway invested society, promoted new business development in the he wouldn’t need to be involved in the day-to-day city, sailed the waters of White Bear Lake as his yacht affairs of 3M. club’s first commodore, and pursued his own company’s 3 2 Letter from John Dwan 1 to Edgar Ober, July 13, 1906, questioning the future of 3M. Sheets 2 of unsuccessful Crystal Bay corundum paper. Early 3M sandpaper 3 tory, in a converted fac flour mill in Duluth. Its location on the water- front made it easily accessible to Lake Superior boats.

13 Early Struggles Plant the Seeds of Innovation 5 wth. By the time Ober appealed to his friend for gro of New York and both mines were dominated by larger an investment in 3M, Ordway was already worth nearly sandpaper manufacturers.  million. 3M had no domestic source of raw materials, no After Ordway had invested  , the founders  , ready cash and no pr oduct. This might have been a logi- came back for more money. Within two years, Ordway cal time to admit defeat. Instead, the company moved ,   had invested in the fledgling enterprise. Even to Duluth in and found a source of Spanish garnet.  though sales had begun to pick up, 3M still needed .  It received its first shipment in more cash. Breaking his own rules about daily involve- At just about the same time, 3M’s first and only ment, Ordway became 3M’s president and personally “angel,” Ordway, introduced the concept of patient approved every purchase and every check issued. In money — a term that is still used today at 3M to repre- the back of his mind, Ordway considered getting out, sent long-term investment in an idea, technology or but he couldn’t think of anyone else who was a likely prospect to buy his majority share of 3M. If you look at 3M technologies and the strongest A survival spirit dominated the little company and, programs we have today, they’ve been long- thankfully, a modicum of good sense. Even though there was talk of large copper deposits at Carlton Peak term. It’s not the money that’s patient, it’s the in northern Minnesota, Ordway argued that 3M could people supporting the new idea that are patient. go broke using all its resources trying to find the pre- > Leon Royer cious metal. Ordway also refused to engage in price fixing when two other abrasives companies suggested that life would be ever so much better  to 3M in product that shows promise, even when others argue if all three just “cooperated on prices.” otherwise. The angel in Ordway resurfaced again in when he acquired property to move 3M from  Duluth to St. Paul. The first step was construction of Perseverance and a Spirit of Survival > a new sandpaper plant. It was a big gamble, given 3M’s About that time, 3M’s partners learned that their Crystal ragged history. In fact, McKnight said years later that Bay corundum wasn’t corundum at all, but a low-grade without Ordway’s investment of patient money, 3M anorthosite that was useless for abrasive work. If the .  would have disappeared before company was going to make sandpaper, it needed a The company seemed star-crossed. First, a worthless source of garnet and only two deposits existed in the mineral, then virtually no sales, poor product quality United States. Both were in the Adirondack Mountains 5 4 rkers taking a Wo 4 break during construction of 3M’s original St. Paul Harriet building. 5 (Hattie) Swailes, 3M’s first female employee, began as a “general office girl” in 1903. Later she transferred to St. Paul as secretary to McKnight and retired in 1923.

14 Chapter 1 6 Background: Imperial Wetordry sandpaper and formidable competition. All the founders had to “Much to my surprise,” McKnight recalled keep them going was perseverance, a spirit of survival years later, “Mr. Ober appointed me sales and optimism. What would happen next? It was the manager to succeed Mr. Pearce and to fall heir equivalent of the sky falling, only at ground level. 3M to his troubles.” McKnight knew nothing about -foot  built its new plant, a two-story,  -foot by sales or quality assurance, but he experienced a dimension of 3M’s young culture that has become a key strength for  years. It was to The founders had unshakable faith in the future provide promising people with new opportuni- of 3M. Even though they almost went bankrupt, ties, support them and give them time to learn and thrive. That is precisely what happened. When they kept pouring money in. You succeed if you McKnight proved he could take initiative, be cre- have faith. etired vice president, Marketing > Walter Meyers r ative and produce, Ober promoted him to general , ahead of two men who were older  manager in structure with a basement. It wasn’t the best construction, and more experienced. but it was all the budget allowed. When raw materials arrived from Duluth and were stacked on the first floor, 3M recognized the importance of quality one Saturday, the weight tested the timbers and the — timbers lost. The floor of the new plant collapsed and assurance and technology excellence sooner every carton, bag and container landed in a heap in the than most companies. The builders of 3M basement. knew that if their company was to be a leader, With the plant finally restored, 3M faced quality they had to identify and solve problems. ,  in  , problems. The company had sales of  but disgruntled customers were sending its inferior etired executive vice president, r > Ken Schoen sandpaper back. To make matters worse, 3M had no Information and Imaging Technologies Sector lab or technical expertise to figure out what was wrong with its sandpaper or how to fix it. 3M’s naturally ambi- tious sales manager, John Pearce, grew dispirited and quit. For a solution, Ober turned to 3M’s young office manager. 1 1 Letter to 3M Secretary John Dwan from an early stock- holder, 1910.

15 New Recruits Taste 3M’s Evolving Culture erals to make abrasives for sand- Walter Meyers Lou Weyand paper in a six- oor b uilding was a market- got a taste of nicknamed ‘six oor s of fun and student at ing 3M’s work ethic frolic,’ ” Heltzer said. The Benz Wa yne State and frugal tem- building was physically isolated University in perament early from 3M headquarters and had 1935 when he in his career. a reputation for creativity and came up with a unique idea to Wey and joined the company in freedom to experiment. promote a new product. 3M had 1915 as an of ce c lerk in the Heltzer applied for work and introduced a blockbuster prod- company’s ve-per son national became a $12-per-week factory uct, Scotch cellophane tape, sales of ce , based in downtown wo rker unloading boxcars, as ve y ears earlier in 1930, the Chicago. When a price changed most newcomers did. About the year after the U.S. stock market or a special order came in, it was time Heltzer moved to 3M’s min- crashed. “I got to thinking about not unusual for Sales Manager erals department lab, a customer new ways to use the tape; one Archibald Bush to work with asked Sales Manager George was putting up posters in gro- and and a shipping clerk Wey Halpin why 3M couldn’t use cery stores to advertise specials,” until midnight, packing products, its mineral expertise to make Meyers recalled. “3M didn’t know labeling and preparing them for re ective glass beads to impr ove their tape turned dark brown and shipping. Because he was away highway markings. Young and stained windows when it was most of the week making sales inexperienced as he was, Heltzer exposed to sun. I wrote them calls, Bush worked Saturdays got to use his education and had a letter about this problem.” and often Sundays with Weyand the chance to “fool around with Even though the country to catch up on paper work. the challenge.” was deep in the Depression and and’s wife frequently volun- Wey “One of the things that has 3M wasn’t hiring, Meyers’ letter teered as a stenographer and always been important at 3M is landed him a job unloading box- the trio warmed themselves with giving people a chance to branch cars for $75 and $10 in stock a a kerosene stove in the drafty out and spend some time on month. But Meyers’ rst assign- 3M of ce . projects that excite them,” said ment wasn’t the loading dock. When Weyand, who later Heltzer. “I was intrigued with how It was a trip to St. Paul to meet retired as executive vice presi- to make glass beads. My r st privately with Bush. If there was dent and director, Sales, began ones involved melting glass in something the company could selling four years later and a crucible about the size of a cup learn from an 18-year-old, Bush, covered six states, he said, and pouring it out of the sixth who by then was general sales “Mr. Bush nall y condescended oor of the Benz Building. When manager, wanted to know it. to provide a Dodge sedan which you melt glass and pour it in a Meyers spent his entire career relieved me of a lot of foot travel, thin stream, it breaks into parti- at 3M and eventually became buses and trains.”The bargain cles that turn into bubbles. I’d run vice president, Marketing. vehicle had only a rear bumper, down the six oor s and sweep but that didn’t concern the frugal up what I had.” Those early exper- Harry When Bush. He told Weyand that he iments led to 3M’s Scotchlite gradu- Heltzer was responsible for watching re ective pr oducts and the ated from the carefully and not hitting any- chance for a young man to try University of thing. Weyand wasn’t allowed his ideas: “Mr. McKnight and the Minnesota in a spare tire either, only tire people around him recognized 1933 with his patches. Traveling salesmen the value of gambling on people metallurgical engineering degree, couldn’t charge laundry costs instead of things,” he said. Forty he remembered a class eld trip to the company and, if there was years later, Heltzer became 3M to 3M’s minerals processing a choice of restaurants for meals, airman of the board and chief ch department. “I was intrigued with they were expected to go to a executive of cer (CEO). how they crushed and sized min- coffee shop and sit on a stool.

16 Chapter 1 8 It was McKnight who went straight to customers’ Retracing the route of the Spanish garnet shipment, factories to find out why 3M’s sandpaper was failing. 3M discovered that its sacks of garnet had crossed And, it was McKnight who told Ober with all due — a stormy Atlantic Ocean with an olive oil shipment. respect — 3M would never succeed unless its general When the ship pitched and rolled, a couple of casks manager supervised both sales and manufacturing. broke and oil soaked into the garnet bound for St. Paul. The one-two punch in that hit 3M  and   tons of oily garnet and a 3M was left with might have been the end of this start-up story, but once pack of angry customers. Fortunately, Orson Hull, 3M’s again, perseverance prevailed. Once the plant was resourceful and determined factory superintendent, restored, McKnight dealt with what he called “an finally found a solution after many experiments. He epidemic of complaints” that spread like a nasty virus “cooked” the garnet and roasted the oil away. That incident led to 3M’s first quality program. But, regaining the trust of customers would take much longer and that ‘We want you to inspect everything,’ Mr. McKnight task fell to a young up-and-comer, Archibald Bush. told me. He outlined what he wanted me to do Like McKnight, Bush was raised on a Midwestern and I said, ‘I don’t know how long it’s going to far m, paid his way through business school in Duluth, then joined 3M as a bookkeeper. But, the extroverted, take.’ He said, ‘All your life if you like; we’ve got ambitious and energetic Bush seemed far better suited to get a good product.’ > Bill Vievering 3M’s first quality to sales. It was Bush who is credited with building a assurance employee and a Carlton Society member strong sales culture at 3M in the company’s early years. He later held leadership positions on 3M’s Executive among customers and “what little reputation we had . . . Committee. was badly impaired.” In the daily mail, every complaint The second punch in the one-two punch came on was the same . . . pieces of bare, rumpled sandpaper. the heels of 3M’s first real success. When the large and Quite simply, the crushed garnet fell off when the cus- established Carborundum Company of Niagara Falls, tomers tried to use 3M’s product. New York, introduced a cloth coated with an artificial After weeks of frantic study, a worker noticed some abrasive as a substitute for emery cloth used in the auto crushed garnet left from manufacturing that had been industry, scrappy little 3M responded in kind. “We very tossed in a water pail. The water’s surface was oily. quickly made arrangements to obtain a competing arti- If the garnet had been contaminated with oil, it would ficial mineral produced by the Norton Company of resist glue and never stick to the sandpaper backing. Worcester, Massachusetts, and we made ‘Three-M-ite 1 1 Archibald G. Bush, sales manager in the national sales office in Chicago, circa 1919, seated at a desk received in payment from a craftsman who owed 2 William L. McKnight 3M $16.84. as a young man. 3 McKnight pictured in 1939, inspecting the cornerstone of Building 21, which would serve as company headquarters until 1962. 4 McKnight in the 1950s. It was rare to find him working in his shirtsleeves. Background: 3M aluminum oxide sandpaper

17 McKnight: Always Ahead of His Time McKnight knew risk was nec- ven though he started his 4 essary to achieve success. “The business career as an assis- E best and hardest work is done,” tant bookkeeper, in 1907, and he said, “in the spirit of adven- never graduated from Duluth ture and challenge . . . Mistakes Business University, William L. will be made.” McKnight put his McKnight developed a personal faith in the good judgment of business philosophy that was 3M employees. He warned profoundly progressive. In fact, ag ainst micromanagement and what McKnight espoused 75 the chilling effect that accom- years ago is echoed in today’s panies intolerance of failure. best-selling business books. “Management that is destruc- these progressive ideas? tively critical when mistakes are 2 McKnight’s Scottish parents made can kill initiative,” he said. were pioneering settlers on the “It’s essential that we have many Midwestern prairie. From Joseph people with initiative if we are and Cordelia McKnight, the boy to continue to grow.” learned about risk-taking, self- McKnight knew that others determination and personal could rise to leadership. “As our ambition. Growing up in an era business grows,” McKnight said when farmers were plagued by in 1944, “it becomes increasingly drought and grasshoppers, he necessary to delegate responsi- learned about interdependence. bility and to encourage men and Watching his father struggle to women to exercise their initia- McKnight broke into business sustain and build the family farm tive.” For a man who liked to at a time when a U.S. business- from season to season taught control most aspects of his life, man was often a larger-than-life McKnight the rudiments of entre- McKnight demonstrated a rare economic hero who ruled his preneurship. Cordelia McKnight’s ability to see beyond his own enterprise with an autocratic faith in the goodness of people needs. Delegating responsibility hand. Workers should be seen gave her son an enduring ideal- and authority, he said, “requires and not heard. If a breakthrough ism. Joseph McKnight’s activism considerable tolerance because idea surfaced, it would surely on behalf of struggling fellow good people . . . are going to want come from the top. farmers taught his son to stand to do their jobs in their own way.” McKnight saw business and for hi s ideals. Born in a sod-covered house the workplace differently. He When William broke the news in South Dakota and raised work- understood interdependence to his parents that he would ing on his father’s farm, where as well as the importance of per- not be a farmer, one parent said and how did McKnight develop sonal freedom. “It is proper to to the other: “Let him have his emphasize how much we depend dreams.” From that simple on each other,” McKnight said 3 response, McKnight learned how on his 60th anniversary with 3M. the support of personal freedom In business, he said, “the r st can set creativity free. principle is the promotion of entrepreneurship and insistence upon freedom in the workplace to pursue innovative ideas.”

18 Chapter 1 10 cloth,’ ” McKnight recalled years later. But, it was no instant success. While Carborundum’s product was very flexible, Three-M-ite cloth was stiff and brittle. Like roasting oil from garnet, solving this problem required creativity and a little luck. Three-M-ite cloth became 3M’s first profitable product, long years after its  founding in  . The start-up company in Minnesota was thrilled to challenge a New — York behemoth that is, until the letter arrived. The Carborundum Company charged 3M with patent infringement and demanded that they stop making Three-M-ite cloth. Goliath was on the offensive. Bush, 3M’s sales manager, suggested that the company hire Paul Carpenter, a tough Chicago lawyer who knew patent law cold and was noted for standing his ground in the face of formidable odds. 3M did not back down and Carpenter did his home- Beginnings are slow. Beginnings are hard. Somewhere along 1920, it began to ease up. > Bill Vievering work. Ultimately, Carpenter argued that Carborundum’s patent was invalid: his argument was so strong 3M pre- vailed. This was 3M’s first experience with the power of patents, and the positive outcome saved the company from a terminal case of red ink. It also educated the 1 2 Record of early 1 dividends paid out on December 18, 1916. Early view of sand- 2 paper production. Before machinery like this, sandpaper had to be coated by hand.

19 Early Struggles Plant the Seeds of Innovation 11 young company about the importance of patents, a phi- and John Dwan gathered to share the good news, Ober losophy that endures today. was jubilant: “Gentlemen,” he said, “this is the day Thanks to Three-M-ite cloth and a boost in business ’ve been waiting for. Some of us wondered if it we from World War I, 3M finally posted substantial profits would ever come. We’re out of debt and the future looks cents per share in and declared its first dividend of  good. Business has more than doubled in the past two the last quarter of  . The dividend totaled  ,  years; and, for the first time, we’ll have enough left after on  ,  shares outstanding. When Edgar Ober, expenses to pay a dividend . . . There are a lot of people William McKnight, Samuel Ordway (son of Lucius) who thought we’d never make it.” combined with creativity — ● Conceive, believe, achieve. Persistence — and faith is still the best formula for long-term success. ● Don’t let one approach or solution blind you to better options. ● Struggle is a necessary component of success. “Patient money” and patient people help the big ideas germinate. ● — Ask your customers what quality is ● then never let the standard slip. ● Give good people opportunities, support them and watch them thrive. time-tested truths ● Respect the “power of patents.”

20 Early architects of innovation The famed Pro-Fab lab Mining a mountain: George Swenson Lab lessons

21 r o l e m 2 o d e 3M Innovation — l o A‘T olerance for Tinkerers’ f In the same year a baseball game was broadcast on U.S. i radio for the first time and French scientists developed a n vaccine to combat tuberculosis, 3M welcomed three men n who turned the company into an innovation powerhouse o and analysis — that would attract admiration — for  years to come. ● . The early architects The year was  v of innovation were Richard Carlton, Dick Drew and a Francis Okie. Looking back, observers might call this t one of the most “harmonic convergences” in the i o annals of business. n

22 Chapter 2 14 With his company in the black and annual sales wrote to McKnight asking for samples of every sand- million, President William McKnight knew  exceeding paper grit size 3M made, McKnight responded. Okie it was time to hire a strong technical person to lead and was a young printing ink manufacturer who had an idea coordinate 3M’s research, manufacturing and engineer- far removed from his own business. 3M didn’t sell bulk -year-old  ing activities. Carlton was an affable, quick, materials to anyone, but McKnight was curious about engineering graduate from the University of Minnesota Okie’s unusual request typed on sky blue stationery. McKnight dispatched his East Coast sales manager, Robert Skillman, to check out Okie. Sitting at a worn We’ve made a lot of mistakes. And we’ve oak desk (that Okie used to test his sandpaper), he told been very lucky at times. Some of our products Skillman he hadn’t planned to share his idea with any- one, but he had been unable to find a reliable supply of are things you might say we’ve just stumbled on. But, you can’t stumble if you’re not in motion. Okie created quite a stir among the workers, > Richard Carlton quoted in “The 3M Way to Innovation: for he was the first live inventor they had Balancing People and Profit,” Kodansha International Ltd., 2000 ever met. Like William McKnight, he was quiet, with experience in drafting and electrical contracting. soft-spoken and unaffected. But he said he The only trouble was that McKnight could pay Carlton hated ‘to be confined to the specific.’  less than one-third of what he was a month only — > Mildred Houghton Comfort author, “William L. McKnight, already making. No problem, the ambitious Carlton answered, “Your company can’t get along without a Industrialist” .” technically trained man like me. I’ll take  Carlton became the first member of the lab staff with a college raw materials. Furthermore, his financial backers had degree and made the first steps toward turning 3M into cold feet. Here was a young entrepreneur with a great a well-oiled innovation machine. idea and no way to bring it to market. Could 3M help? Okie agreed to sell his patented waterproof sandpaper, later called Wetordry, to 3M. He moved to St. Paul, Probing the Impossible > joining 3M in .  More than a few people in the industry had turned Okie Okie made his first Wetordry experimental batches down when he asked for samples of sandpaper grit. They in a washtub until someone suggested he could make thought Okie was a wild-eyed inventor. But when he 1 1 Chapter opening Richard Carlton (top Rolls of Scotch photos row, far right) and Francis Okie (holding trophy) masking tape; The 3M tape lab where Scotch re members of the we 3M bowling team. brand pressure-sensitive William McKnight and 2 tapes were developed in the 1920s; A prolific Okie traded telegrams writer, Francis Okie in 1920 concerning 3M’s scratched notes on any- request to experiment with Okie’s sandpaper thing, even the back of 3 Dick binding agent. 3M sandpaper; Samples of Wetordry Tri-M-Ite Drew’s letter in 1921 sandpaper. was in response to a 3M employment ad.

23 15 smaller ones in a bowl. He often forgot to record ingredi- ent amounts. When he had a particularly good batch, Okie didn’t know why. In later years, 3 the absent-minded and research- focused Okie frequently forgot where he had parked his car in the Drew spent his first two years at 3M checking raw 3M lot and an accommodating colleague took him materials and running tests on sandpaper. Next, he was home. On the next day, Okie often drove another car assigned to make “handspreads” of Okie’s revolutionary to work, then forgot where it was. Another colleague tordry waterproof sandpaper and take them to a local We drove him home. auto-body paint shop for testing. (This product gave 3M an important entry into the automotive marketplace.) While waiting for the test results on the sandpaper, Drew > The ‘Irresistible Force’ At , Drew was an engineering school dropout who  made his living playing the banjo for dance bands while Dick Drew had an instinct that compelled him studying mechanical engineering through correspon- to push beyond reasonable limits and . . . in dence school. There was a job open in 3M’s tiny research some cases . . . unreasonable limits. He was an lab. “I have not as yet been employed in commercial work and am eager to get started,” he wrote Bill irresistible force drawn toward any immovable Vievering, 3M’s first quality assurance expert. “I realize object. r > Lew Lehr etired 3M chairman of the board that my services would not be worth much until a certain and chief executive officer (CEO) amount of practical experience is gained, and I would be glad to start with any salary you see fit to give . . . I am accustomed to physical labor, if this be required, as I — or hear couldn’t help but notice drove a tractor and did general farm work . . . ” the problems people had paint- — about ing cars in the popular , two-tone style of the day. Either the paint came off when painters tried to remove the plaster tape they used, or the tape’s 2

24 16 Chapter 2 adhesive — softened by lacquer solvent — remained on facturing and sales objectives. Looking back, he was the car’s surface. Profanity peppered the air. a visionary when he wrote in a manual he published Not knowing how he would do it, the irrepressible in :  Drew promised he could produce a better, nondrying The time to get closest control of your product is ● adhesive tape and solve their sticky problems even — during your manufacturing process. What you do after though, after weeks of experimentation, McKnight this is just history, except in isolated cases. ordered him to quit his work and get back to improving There is no room for a thin-skinned man in this ● Okie’s Wetordry sandpaper. Drew’s “contraband” Scotch organization. Carelessness cannot exist. The future masking tape debuted two years later in 1925. is in building even more exacting requirements so refinements on machinery can be designed to meet the demand. The ‘Dream Team’ > shared characteristics The trio that joined 3M in  The technical phase has passed from the laboratory ● to the production department. A free exchange of data that set the tone for 3M’s innovative climate. Carlton was an optimist, go-getter, calculated risk-taker and and ideas, we hope, will always be our policy and creed. a leader. Drew shared Carlton’s optimism. He was also ● The laboratory of the modern industrial plant must unconventional, innately curious, a rule-breaker and have something more than the men and equipment to a leader who had his own distinctive style. Okie was do control work. It must be a two-fisted department the consummate inventor: open to new ideas, resisting generating and testing ideas. This work, dressed in its limits, probing the impossible. He might have been a best Sunday clothes, is termed “research.” misfit in a more traditional organization, but at 3M, — No plant can rest on its laurels ● either it develops he was very successful. and improves or loses ground. Carlton set the tone for 3M’s innovative future ● Every idea evolved should have a and echoed McKnight’s chance to prove its worth. operating philosophy This is true for two when he blended reasons: 1. If it is research, manu- good, we want it; 1 Soft-spoken Francis Okie, pictured in 1 1963, was 3M’s first authentic inventor. He was brilliant, but absent-minded — there often were eight to 10 hats on the hat tree in his office because he forgot to wear them home at night. 2 Richard Carlton was lauded for his ability to inspire creativity. 3 The first Central Research Lab was established in 1937 to spur new product development.

25 17 A ‘Tolerance for Tinkerers’ — 3M Innovation 2. If it is not good, we will have purchased our insur- every dollar invested in research and development ance and peace of mind when we have proved it imprac- (R&D) from s had a strong  to the early  tical. Research in business pays.  “multiplier effect.” Each dollar invested returned in gross sales. Even so, Carlton said, there were broader research horizons to explore. What about pure research During the dark days of the Depression, when that focused on products not even imagined yet? money was almost nonexistent, Carlton fought Thanks to Carlton’s sponsorship, 3M created its first Central Research Laboratory in with a twofold  tooth and nail to keep the laboratories in purpose: to supplement activities of 3M’s division labs existence and to keep the people from being that worked on product refinements and to explore inde- hurt. I have never known a man more kind, pendent, long-range scientific problems beyond the ken more considerate, more companionable or of any division. The Carlton Society, which even today recognizes 3M technical employees for career achieve- more inspirational than him. > Clarence Sampair ments, is named after Richard Carlton. retired president, International Division Innovation has more to do with inventing who later succeeded — Like McKnight, Carlton the future than with redesigning the past. was a “management by — McKnight as 3M’s president > Alex Cirillo Jr. division vice president, Commercial walking around” leader who didn’t stay at his desk. He Graphics Division could blend the talents of the nontechnical, the college- trained and the “idea” people who operated on the fringes of policy and practice. Strong, annual investment in research was a finan-  years, 3M’s definition of research was For its first cial imperative for McKnight. He wanted his company “product development” not   to aim for a percent increase in sales annually, a “pure” or “fundamental”  percent of sales plowed back percent profit target and research as research scien- into R&D every year. It was a sum above the average tists define it. To the leaders for U.S. companies at the time. of 3M, research meant growth Looking back, 3M people agree that this early and and, according to early consistent commitment to R&D was crucial. By the company records, to  percent  s, the annual investment averaged  2 3

26 Chapter 2 18 of sales. “It was one of the most important decisions Say What? ever made,” said Ray Richelsen, retired executive vice president, Transportation, Graphics and Safety Markets. Almost 50 years after 3M’s founding, Bob Adams, “Every business we’re in today is based on having then senior vice president, Research and Develop- ment, and Les Krogh hosted two University of Illinois invented something new to the world and taking that professors at 3M. One guest was John Bardeen, co- invention to customers around the world. 3M has spent inventor of the transistor and 1956 Nobel Prize winner. a lot of time, money and effort to create a culture of After the visiting professors gave technical presenta- invention.” tions at 3M, they piled into Krogh’s van to head for a local golf course. Among Cinders . . . Creativity > “We were driving down 35E in St. Paul and passed The first Central Research Laboratory location was the Benz Building,” Krogh, who later became senior hardly conducive to creativity it was located below — vice president, Research and Development, recalled. , in space that Les  an adhesive maker in Building # “I pointed at it and said, quite proudly, ‘That’s where Krogh, retired senior vice president, Research and Central Research got its start.’ ” Development, called “too bad to describe.” Before long, The car was silent. From the seat beside Krogh however, Central Research moved to the Benz Building came a hesitant question, “You don’t use the building on Grove Street in St. Paul. any more do you?” Bardeen asked. Beauty is in the eyes of the beholder. “I was proud of the Benz Building heritage,” said Krogh, — Annual investment in R&D in good years “and all they saw was an old, run-down factory and bad — is a cornerstone of the company. building. The fact is, we were still doing experiments The consistency in the bad years is especially through the 1990s.” important. vice president, Marketing > David Powell “I heard the building had been a candy factory and a whiskey warehouse,” said Krogh, who started work there in  . “It was extremely well-built, but it had large factory windows. We were right next to a railroad switching yard with a steam locomotive that spouted cinders. Standard operating procedure Background: Post-it note 1 The Benz Building 1 housed Central Research until the An early 2 mid-1950s. lab notebook used to record experiments.

27 3M Innovation — A ‘Tolerance for Tinkerers’ 19 every morning was to dust cinders off your desk before bered Carlton calling his lab staff the “shock troops,” air conditioning, it was hot. One starting work. With no after the members of a university football team who degrees Fahrenheit  day, I remember a reading of played the role of the team’s next opponent and bumped in the building. It was hard to conduct experiments.” heads with the first string players. “Dick’s idea was to Even 3M technical directors might be spotted visit- have a group of us handle the dicey problems that 3M’s ing the lab in their sandals, shorts and short-sleeved product labs didn’t have time for,” Hendricks said. shirts. In spite of the heat and grit, however, Krogh said, it was one of the most productive labs he’d ever seen Thomas Edison believed that a small group of in his long career. “A plaque at the entrance names the people with varied backgrounds could be the discoveries that led to major products,” said Krogh, “including magnetic tape, printing products, modern most inventive. That’s what I found when I joined pressure-sensitive adhesives, acrylate adhesives (provid- Central Research. I could talk to an analytical ing the basis for medical tapes), Thermo-Fax copying, chemist, a physicist, people working in biology and organic chemistry — people in all the sciences. 3M has a tolerance for tinkerers and a pattern They were all within 50 yards. > Spencer Silver of experimentation that led to our broadly based, retired corporate scientist, Office Supplies Division diversified company today. To borrow a line from ‘Finian’s Rainbow,’ you might say we learned People in Central Research were on their honor when to ‘follow the fellow who follows a dream.’ it came to working hours, said Krogh. If a guy decided > Gordon Engdahl r etired vice president, Human Resources to go fishing on a weekday, Carlton knew the time would be made up. If he decided to work independently fluorochemicals that led to Scotchgard fabric protector, — on his own product idea, he had the freedom to do it reflective sheeting and Scotch black vinyl electrical tape. even if the boss said otherwise. From the early days of Carlton set the tone for the lab. He was an idea man and 3M, “bootlegging” was a time-honored practice. The he had a huge tolerance for experimentation.” leaders of 3M understood that no one should stand in Jim Hendricks, who spent  years in the Central the way of a creative person with passion because that Research Laboratory during its formative years and was person might invent the next product or manufacturing a founding member of the 3M Technical Forum, remem- breakthrough. 2

28 illiam McKnight’s desire for diversi cation some- W times led to surprising results and a motherlode of innovative thinking. About the time the United States stock market crashed in 1929, McKnight 2 learned that 3M’s only Midwest competitor, Wausau Abrasives Company of Wausau, Wisconsin, ni cantl y, thanks to the work of that practical considerations lim- was on the block. For $260,000, a young newcomer to the 3M ited the amount of coating used McKnight made his r st acqui- minerals department, Cliff Jewett, on roo ng materials to onl y a sition for 3M. He picked up 3M manufactured more and more fraction of an ordinary coat of one roadster, three trucks, two tons for less cost. Even in its r st paint. Normally, paints last ve — plants and one mountain. — producing 18,000 tons year — years, at best, but roofs were McKnight called his entire man- 3M managed to run in the black. expected to survive 20 years. ag ement and laboratory force Its product was decidedly better Swenson experimented together and asked, “What can than the competition’s, in part, by mixing powdered ceramic you do to make a mountain of Swenson said, because 3M had glazes with paint and ring that silica quartz pro tab le?” strong cooperative relationships mixture at nearly 2,000 degrees George Swenson was one with the labs at the roo ng com- Fahrenheit. He and his team cre- of the research chemists in the panies. In about four years, how- ated a little rotary pot furnace to room. He remembered H. Colby ever, calamity struck. test the approach. They mounted Rowell, a specialty salesman for “It’s not unusual in new prod- a o wer pot on a spindle that 3M, telling the group that a huge ucts,” Swenson recalled. “Our rotated on a 45-degree angle. market existed if 3M could make First You Find a Flower Pot . . . quartz granules were losing The heat came from an open gas colored minerals for the roo ng their adhesion and falling off the ame . During the ring, the paint industry. Consumers were tired roofs.” Like the olive oil incident burned off and the glaze fused in the earlier years, this product with the roo ng material. Voila — 1 failure threatened to put 3M out it worked and 3M delivered its of a booming business where it r st 200 pounds of colored roof- could charge premium prices, ing granules to Bird & Son of even during the Great Chicago in 1932. The company Depression. was so impressed that it asked Swenson and his colleagues — 80 tons — for two carloads went to work as sleuths. “There in six weeks. Because speed was was a real feeling of camaraderie important (even in those days), on our team. Everybody was 3M acquired a small enamel young and full of energy,” said smelting furnace, installed it in Swenson. “I didn’t see people the 3M minerals building, lled of their dull gray and brown who were thinking r st about the order and began manufactur- roofs. But early versions of col- ‘What will this do for my ing between 40 and 80 tons in ored roofs faded much too soon. career?’ ” With persistence and multiple colors every week by Because he had some experi- no small amount of creativity, operating all day, every day. ence with resins and coatings, — they found the problem. Light With major improvements in Swenson, at age 24, was told to and damaging ultraviolet manufacturing that cut costs sig- gure out ho w to make the gran- light — was passing through the ules fade-proof. Here was the big challenge: Swenson discovered

29 3M Innovation — A ‘Tolerance for Tinkerers’ 21 roo ng gran ules and causing the Drew was an early icon for bootlegging. Krogh and asphalt underneath to lose its adhe- others agreed that Drew’s response to McKnight led sive properties. How would they solve  to what is known today as the percent rule at 3M. the problem? Make the granules Regardless of their assignment, 3M technical employees more opaque to let in less light? Would they have to nd a ne w mate- Entrepreneurship, in my definition, is a spirit — rial altogether? a quality — that believes so strongly in an idea Meanwhile, consumers were a color 3M — asking for blue roofs that it risks the security of the present for the didn’t offer. Richard Carlton inspired reward of the future. > Gordon Engdahl the team when their spirits waned. “On many occasions, we’d try every  percent of their work- are encouraged to devote up to approach to a problem without ing hours to independent projects. With the develop- success, and we were feeling pretty down,” Swenson said. “Five or 10 ment of Scotch masking tape, McKnight and Carlton minutes with Mr. Carlton would often saw what Drew could do by saying, “Management, bring out some avenues we hadn’t you’re wrong. I’m right and I’m going to prove it.” After explored, and I’d leave his of ce read y that, McKnight and Carlton both supported the idea to take up the ght a gain.” When that technical people could disagree with management, things looked their worst, luck experiment, and do some fooling around on their own. intervened. “I was only with 3M a couple years,” said Roger “All these problems descended Appeldorn, retired corporate scientist, “when we were upon us at once,” Swenson said. Jack Brown, 3M geologist, went in search of other minerals with more opacity I started working as a ‘lab flunkie.’ It dawned and luckily found a large deposit of on me that, even without formal education, greystone rock about ve miles a way from 3M’s Wausau plant. “Without this a guy could use his brains and further himself. extreme good fortune,” Swenson You weren’t paid to do the job: you were paid said, “we probably would have dis- to think. etired vice president, Reflective r > Don Douglas continued the business.” 3M wound up making all of its colored roo ng Products Division granules using this base rock and quickly patented the manufacturing processes. 3 Because of its long-term success, the roo ng gran ules business became the r st separate division 1 3M’s Wausau Plant supplied Mid- western roofing manufacturers with created at 3M with its own manage- 2 quartz roofing granules. A trend in ment team — a pattern that would brightly colored rooftops began with be replicated many times as the the introduction of 3M Colorquartz roof- company grew. And, after 39 years, ing granules. 3 The roofing granule Swenson ended his career as vice business fit well with 3M’s strategy to president of the division. diversify. Background: 3M algae block copper roofing granule system

30 22 Chapter 2 in a staff meeting and someone asked, ‘I have a new > Incubating the ‘Birth Rate’ idea that could be useful to 3M, but it’s not related to Innovation isn’t complete until an idea explored in the the business I’m working in right now. Am I allowed to and that prod- — laboratory is transformed into a product work on it?’ The vice president of Research and Devel- uct goes to market. 3M’s most successful stories revolve opment answered, ‘The facilities we have here the lab — around innovative products that solved problems and are for you to use. If you want — and all the equipment met customer needs. In the best cases, these products to work on those programs on your own time, you’re changed the basis of competition by introducing a never- welcome to do it.’ ” before-seen idea to the marketplace. But, that wasn’t . happening fast enough to satisfy McKnight in  The 15 percent rule is unique to 3M. Most One Saturday morning, McKnight analyzed the “birth rate” of 3M products. He ticked them off: Wetordry of the inventions that 3M depends upon today , Scotch masking tape waterproof sandpaper in  came out of that kind of individual initiative . . .  in  , Colorquartz , Scotch transparent tape in You don’t make a difference by just following  . roofing granules in and rubber cement in  orders. etired senior vice president, r > Bill Coyne Then there was a six-year dry spell. Although Scotchlite , the rewards of  reflective sheeting was created in Research and Development that new product had not yet been recognized. During his years as senior vice president, Research “While these dates are only approximate and are percent rule was  and Development, Krogh said the really predicated on when the product commenced to often greeted with skepticism by technical people from yield some profit, it indicates rather a long period of other large companies. “They couldn’t understand how hunger . . . nothing appears to have been developed percent of their time to do  could allow people we since the rubber cement birthday,” McKnight wrote what they wanted and still meet important deadlines. Carlton. He urged Carlton to push some of the ideas in It was inconceivable that we would permit so much development stage to marketable products generating freedom,” said Krogh. “Here was my answer. If 3Mers revenue or “to move on to other fields.” have to get something done, they’ll do it. They’ll take In his memo to Carlton, McKnight said, “I do not percent on Saturdays or Sundays, if their  think there is anything we can do about it immedi-  need be. The percent philosophy flies in ately.” In spite of his own comments, later that same the face of standard management ideas day, McKnight took action. After thinking about about control.” the innovation dilemma and talking with 1 1 The equivalent of two daily coffee breaks plus lunch time gave inventors “15 percent time” for their own projects. Dick Drew (right) set 2 the company’s standard for perseverance and encouraged his lab team to follow their instincts.

31 Background: Scotch masking tape Carlton and others, McKnight created 3M’s first New Everything I Learned in Products Department that Saturday afternoon. In a a Lab, I Learned From . . . , McKnight second memo dated October  ,  described his plan. Much of what Paul E. Hansen, who retired as technical “3M is spending a substantial and an increasing director, Nonwoven Technical Center, learned about amount on research every year,” McKnight said. “It’s working successfully in a lab, he learned from Dick time to create a department to cooperate with all inter- Drew. They are timeless lessons: ested parties in studying the commercial value of each Anything worth doing is worth doing before it ● research project upon which money is being spent.” is perfected. Don’t wait to try to do everything exactly on your r st attempts in an experiment. If you knew The goal was to recommend to management whether how to “do it right the r st time,” you would, but in or not work should continue on a project. McKnight most r st attempts, you don’t. gave Joe Duke, who later retired as executive vice presi- ● Be a jack of all trades and a master of one. It is dent, Sales Administration, the responsibility of leading good to know how to do a lot of things but also good the effort. He told Duke to keep him informed on all to be an authority in a speci c area. new development work in research at 3M; learn about ● Put things in a nutshell. It is good to take a the large new markets with product needs; conduct mar- broader approach to things and look for a simple ket surveys to identify the potential size and profitability de nition of the task or pr oblem. Always update these of a market; supervise product quality; design a sales objectives because the task can constantly evolve. and distribution network; and — — most importantly ● It is easier to ask forgiveness than permission. decide which research projects lived or died. With a sincere attitude toward one’s work, the chances s genius. He helped introduce Duke was a  of doing real damage or harm are small. Consequences We tordry sandpaper to the automotive industry; from bad calls, in the long run, do not outweigh the time waiting to get everyone’s blessing. If you can do the task today, don’t wait for tomor- ● A quick and marginally successful experiment row. will fuel thought that evening for your next attempt. ● Keep the ball in the other person’s court. With everyone doing their job responsibly and promptly, tasks stay current and fresh and move quickly to an end. Don’t keep blinders on all the time. It’s good to ● have de ned goals, but don’t get so engrossed that you miss other opportunities that may spawn from your efforts. 2 ● Most people aren’t stubborn enough. Too many people quit easily at the r st sign of failure. The reward for persistence is internal. The person ● who is persistent and eventually succeeds is usually only recognized for accomplishing the feat. Seldom does anyone appreciate all that went into making the success a reality. ● Follow your instincts. Your instincts are actually your total experience in practice.

32 24 Chapter 2 Background: Scotchlite Diamond Grade reflective sheeting orld War II called for a quickly became Eastern division sales manager; and special kind of innovation W was sales manager of 3M’s entire Abrasives Division at 3M. When the war broke out, when McKnight tapped him to lead the New Products the company was making its Department. Scotch transparent tape using To succeed, McKnight said, Duke “should be a natural rubber adhesives. But, free-lancer in our organization” and interact with sales, the United States government manufacturing, engineering and research. Anticipating cut off the supply for commercial the obvious, McKnight said that when “differences of applications in order to stockpile opinion” became serious enough, the 3M management rubber for the war effort. “The big group would have the final vote on a product’s future. push to develop substitutes for Eight years later, the New Products Department became rubber that could make a reason- a division and its most productive years continued able adhesive started,” said John 3M Goes to War through  . In about  years, the division produced Pearson, retired vice president, Development, who created a new new business that represented percent of company  percent of 3M’s profits. sales and  There was more than one way to identify and launch new products and 3M still was learning. McKnight cre- ated a second option in the early s. He was a good  — judge of people and he noticed that young Drew the inventor of Scotch masking tape and the even-more- as stuck. Stalled. w — popular Scotch cellophane tape  Unhappy. “Here was Dick Drew at age , a successful inventor. 3M was busy developing many more tapes,” said Paul E. Hansen, retired technical director, Non- wov en Technical Center, and a member of the Carlton Society. “However, Dick was not a happy fit in this thriving business where his maverick, free-wheeling style didn’t fit the company’s organized, technical 1 approach to product development and line extensions.” Seeing this, McKnight took Drew aside, encouraged device to test the adhesion of various resins. “Synthetic resins became the next frontier, and the 1 Among 3M products that had direct applications during WWII were Safety-Walk treads on ship decks, big advance was acrylate that and 3M adhesives were used in ever ything from planes we discovered during the rubber 2 Intended for 3M men in the service, ‘Tape- to artillery. crisis. It was a whole new plat- Up Girls’ — pretty, young 3M employees — w ere featured form, to use today’s language.” on the back covers of the Megaphone during the war. Work in the lab in those years 3 Lou Spiess, pictured in 1942, held one of the $5 could occur at any hour. “Lab money orders the 3M Club sent to 3M servicemen people would work at all hours at Christmas. of the day or night,” said Pearson,

33 visor. “She was the one who was later named a Carlton who told us, ‘Double Society member. “There was a your quotas! We’ll win limited amount of equipment the war and bring the available and, if you wanted boys home,’ ” Mulvaney to use it, it might mean com- said. “The girls worked ing in at midnight to get it.” like heck. We were going Another research to win that war. What scientist, Don Douglas, camaraderie we had in a experimented with melting crisis. It felt like we were old inner tubes to make doing something with our adhesive for Scotch elec- hearts, souls and guts. trical tape. “One night I “Most of us lived in snapped a rubber band. apartments within walking It fell on a hot plate,” he distance of 3M and we were said. “I wiped the plate bounced off the machines off with a paper towel when the heroes came and the rubber impreg- home. Nobody said we were nated the towel. When I told my 2 heroes . . . and most of us lab mates, they said, ‘But we 3M chairman of the board and married them.” can’t get any rubber,’ and I said, chief executive of cer (CEO), In fact, the women ‘If a rubber band works, I’ll take with 18 patents to his name. were heroes. They inner tubes.’ Too bad the smell “Our success hinged on creating doubled the peace was so bad when I melted a re ectoriz ed products for the time plant productiv- whole box car of inner tubes that Air Force, Army, Navy and Trans- ity quota during their the neighbors complained. That portation Corps.” war time assignment, marked the end of my idea of Lou Spiess was chair of the and everyone on using that substitute.” 3M Club during the war. He took the plant oor who 3M products had direct appli- up a collection for 3M’s ghting followed them knew it. cations to the war effort. Safety- men in 1942. The club managed to Walk general purpose tread, a send each soldier about $5 with 3M product used in industry to a special holiday message. keep people from slipping on wet The gifts reached most of surfaces, was a natural for ship the men, but remarkably, decks. Many 3M adhesives were six letters were returned used in manufacturing airplanes to 3M in 1997 after moving and ships as well as the equip- around the world for 55 years ment in them. Scotch masking 3 in search of their recipients. tape was essential in painting By 1945, more than 2,000 ships, planes and tanks. Scotch- 3M employees were on military lite re ective sheeting marked leave. While the 3M men were airports, runways and life rafts aw ghting in the war , 3M ay for downed airmen in the ocean. women stepped in. Virginia It also marked road signs during Mulvaney was 17 in 1942 and bombing blackouts. she got a job working in sand- “It was hard to keep Scotchlite paper manufacturing. Mulvaney re ective sheeting alive during was part of a 19-person plant the war,” said Bert Cross, retired crew, dominated by women and led by a “matron” plant super-

34 Chapter 2 26 him to hire a few co-workers and return to his greatest in 3M. Drew saw something in them — something valu- strength: inventing. able and creative. Drew started the Products Fabrication Laboratory,  “I was lucky enough to get hired in into Drew’s known as the Pro-Fab Lab, a group that —  years lab,” said Hansen. “We were in an old dairy building — has garnered admiration that far exceeds its own later on Seventh Street in downtown St. Paul, away from tenure as a lab. In many ways, the Pro-Fab Lab of the 3M headquarters. Dick created an environment where  s was a precursor to 3M’s Technical Centers today. people were always encouraged. He had passion but also was easy going. He was a great mentor but proba- bly not a strong manager. He created a greenhouse Dick Drew took a bunch of misfits people who — here we could do any- environment — a skunkworks — w wouldn’t fly in formation — and he put together thing, try anything. When you’re an oddball in a per- missive environment, very often things turn out well.” a lab that created technologies that account for 20 percent of 3M’s sales in 2000. > Art Fry Four of us were the original inhabitants of the retired corporate scientist, Office Supplies Division Al Boese, Ralph Oase, Warren — Pro-Fab Lab Hurd and me. I could purchase stuff and build Because the tape business was thriving in the  s, Drew’s Pro-Fab Lab focused on creating better backings things, and the engineering department agreed and coating processes. During its -year lifetime, the  to a hands-off policy. There was complete free- lab was known for product breakthroughs that led to dom to build and do. retired vice > John Pearson Scotchlite reflective sheeting, Micropore surgical tape, president, Development, and Carlton Society member foam tape, decorative ribbon, face masks and respira- tors. In addition, the lab experimented with adhesives led to development — almost four decades later that — “Dick never turned anyone away from his office, of the blockbuster product, Post-it notes. even though they came in with the strangest ideas,” said The environment of the Pro-Fab Lab and Drew’s Ray Hunder, who experimented with an edge-adhesive leadership is remembered most. Drew kept his lab coated memo pad in the Pro-Fab Lab  years ago, a  group small, about people. Like Drew, they were predecessor to the Post-it note. “He never discouraged considered corporate “misfits” — the people who, by people. He thought of himself as a bit of an underdog their own admission, didn’t seem to fit anywhere else and he had compassion for others like him. He allowed 1 Hulda Meissner 1 performed tests in the Pro-Fab lab, which was known for product breakthroughs.

35 27 A ‘Tolerance for Tinkerers’ — 3M Innovation his lab team to freely follow their instincts. Dick much education risked making people too rigid and encouraged people to be themselves. He’d say, ‘Hey, reduced their ability to “think outside the box.” your idea’s as good as anybody else’s.’ When people Some members of senior management made jokes can be themselves, they use their gifts and talents to about the Pro-Fab Lab, on occasion calling it the “funny the fullest.” farm .” Although that lab was the target of humor, it Drew advocated the power of serendipity, said attracted considerable resources and some of the most Hunder. “He called it the gift of finding something creative people in 3M’s early years. Drew never seemed valuable in something not even sought out.” to have trouble funding projects, said Hunder. It helped Hunder said Drew’s highest priority was new prod- to have a champion in McKnight. ucts. In fact, he never gave up trying to find a replace- years after 3M created its first Central More than  ment for cellophane tape, his own creation. Drew liked Research Lab and the legendary Pro-Fab Lab, innova- people who were good with their hands, as well as  , 3M was issued  tion is still the hallmark. In their heads. He was leery of too many college degrees, patents and filed for   .  more. It invested billion although he hired people with extensive technical train- in property, plants and equipment. To target even greater ing. “What I really want is a creative person,” Hunder returns on 3M’s investment in research and develop- recalled Drew saying. “You can always hire a Ph.D. to ment, the company sharpened its focus on growth areas take care of the details.” Drew was concerned that too that had the greatest return for investors. Innovation flourishes in diverse, small groups of committed people. ● ● Innovation occurs when invention meets commercialization. ● Be open to ideas from unexpected quarters. ● Consistent, long-term investment in R&D is crucial to innovation success. ● Innovation comes from individual initiative not just following orders. time-tested truths

36 New recruits meet the ‘culture of innovation’ Sharing ideas; being a mentor Problem-solving and blockbuster ideas Sustaining 3M’s innovative spirit

37 r o l e m 3 o d e — 3M Innovation l o How It Flourished f What did a native of the Deep South know about the i “culture of innovation” at a Yankee company in Minnesota? n -year-old ceramic engineering gradu- Joe Bailey was a  n ate of South Carolina’s Clemson University when he o  joined 3M in . Thirty-seven years later, Bailey would become vice president, Research and Development, v responsible for Adhesives, Advanced Materials, Cor- a porate Analytical and Science Research Technology t Centers. Bailey worked for American Lava, a 3M ● i o subsidiary based in Chattanooga, Tennessee, and n he made quarterly trips to 3M’s Central Research

38 30 Chapter 3  lab in St. Paul during the s. The environment Systems Division. It produces products as diverse as was unmistakable. “I discovered that the technologies repositionable systems for Post-it notes to high-perform- belonged to the company not the business units,” ance tapes that replace rivets, bolts and screws on air- Bailey said. Rather than protecting what they knew, planes, cars and trucks. In late 2001, he was named staff 3M employees shared knowledge. “I saw openness vice president, International Technical Operations. and a spirit of immense cooperation that helped people get things done,” he said. “I soon learned that the most > An Electric Atmosphere successful people at 3M were good at getting out of  years at 3M, Moe When he looks back on his their offices, meeting people, interacting and knowing Nozari, executive vice president, Consumer and Office where to find the expertise they needed.” Markets, said he will remember most and miss the The young engineer also learned the difference particularly those he encoun- — innovators that he met between invention and innovation. “Invention isn’t inno- tered during his first week in Central Research, Building vation until you’ve delivered something to the market- . There was Cliff Jewett, inventor of the pre-sensi-  place,” said Bailey. “The engine that drives innovation tized printing plate. “The last guy before Cliff who is technology, but understanding what people need and brought significant innovation to the printing industry delivering the right product at the right price is equally was Guttenberg,” Nozari said with a laugh. “There I important.”  was, at years old, meeting him and shaking hands. Next, a guy across the hall walked into my lab and said, ‘You know, I’ve just made this adhesive. Look how > Tell Your Story interesting it is. It sticks to paper, but I can lift it off and Although he held an advanced degree in chemistry, it doesn’t tear the paper.’ His name was Spence Silver, Manley Johnston didn’t want to put down roots in an and he was showing me the adhesive that made Post-it isolated lab. He wanted to be close to the marketplace. notes. Spence and colleague, Bob Olivera, took that “3M was diverse and entrepreneurial,” said Johnston, adhesive to the Commercial Tape Division and the rest, who joined the company right out of college, in  . “I as they say, is history.” wanted to work on things that would be commercialized Nozari met Harry Heltzer, then chairman and quickly. I was drawn to the business side of innovation. CEO of 3M, and discovered that Heltzer had invented I learned that if you have a good story to tell in this com- reflective sheeting. Next, Nozari was introduced to — and if you have the guts to tell it — people will lis- pany Ray Herzog, then president of 3M, who championed years in 3M labs around ten and support you.” After  office copying products, an innovation that produced the world, Johnston became technical director, Bonding 1 Sumita Mitra, a 3M Chapter opening photos 1 corporate scientist, 3M multilayer optical film, one of 3M’s serves as a mentor to new, innovative products with multiple young scientists by applications, was developed using introducing them to the funding from two Genesis Grants; 2 3M recently entered the touch-screen 3M culture. Cheryl market, which simplifies computer Moore, also a 3M corpo- usage, by making two acquisitions; rate scientist, benefited 3M Pharmaceuticals continues investi- from the experience of an older mentor and now gating a newly developed, proprietary has become an informal family of drugs that stimulates the mentor to three other immune response system to fight disease. scientists.

39 Background: O-Cel-O sponge s. “I had percent of the company’s sales in the   Scientists as Mentors never seen this much diversity in research and applied science in one building. The atmosphere was electric. Sumita Mitra of 3M ESPE (formerly Dental Products What we knew we shared, because technology at 3M Division) is a corporate scientist and a member of the doesn’t have owners.” Carlton Society. She joined 3M right out of college, in 1978. “The climate of sharing and openness is unusual Early in his career, Nozari discovered a catalyst that here. I discovered that in talking to colleagues in other could be used to create urethane, a component in many companies,” she said. “As a young person, I took it 3M products, including sponge brushes for surgeons, for granted. Now I realize that it’s something I have Tar tan Track surfacing material for running and race- a responsibility to foster.” Among many accomplish- tracks, and Tartan Turf surfacing material designed for ments, Mitra invented light-cure glass ionomer tech- stadiums. “I went to my boss, George Allen, who later nology, which is considered one of the signi cant retired as senior vice president, Research and Develop- breakthroughs in dental materials. When she is asked — ment, and said, ‘I’ve finished this. What do I do now.’ how to make a mark at 3M in the tech- as she often is — His answer was, ‘No, you’re not finished. Now you nical area, Mitra’s answer is pragmatic. “I tell my go to every division in this company and show them younger peers that they must meet two criteria : there what you’ve done and work with them to incorporate must be a market need, whether articulated or unartic- your invention into their product lines.’ That was the ulated, and there must be a feasible technical pathway best professional growth opportunity for me, because for getting there. That’s when things come together.” While there is no formal mentoring program, Mitra, I learned about the company and the wide range of who has approximately 30 patents to her name, is fre- skills and responsibilities that 3M people have.” quently asked to advise younger scientists and intro- duce them to the 3M culture. We > Can Be Anything We Want To Be Cheryl Moore, 3M corporate scientist, Specialty  when he joined 3M as a senior Paul Guehler was Materials Manufacturing Division, and Carlton Society chemist in Central Research. “They told us to identify, member, started her career at 3M as a technician develop and commercialize new products. Every new and took advantage of 3M’s Tuition Refund Program, product had to have a  percent operating income earning her chemistry degree in her off-hours. Her with specific growth targets. There was an attitude of development and application of acrylate pressure- ‘just do it, seize the opportunity.’ It was a way of life. sensitive adhesive technology led to new products The administrative systems existed to support the work. that generated nearly $1 billion in sales for 3M. “I had — and to succeed.” There was a will to grow a chance to work with technical giants, and my men- tor, Francis Brown, still comes into our lab,” Moore said. “I’d be lost without people like Fran, because he has so many years of experience and knowledge that aren’t recorded. Fran and other 3M ‘veterans’ are also willing to say, ‘Give it a try; what have you got 2 to lose?’ ” Like Brown, Moore has become an informal mentor to three scientists. “They want feedback and they’re eager to learn about what happened in the past,” said Moore. “Sometimes they want to know if they should take a risk and how to go about it. Mentoring our newest recruits is very important to 3M’s future.”

40 Chapter 3 32 , when Guehler suc-  Thirty-five years later, in development efforts annually with up to seven cents of every sales dollar. ceeded Bill Coyne as senior vice president, Research Many have wondered how 3M could create and and Development, his belief was unchanged. “We’ll sustain a culture of innovation, especially as the continue to emphasize new technologies, new products our ability to use them to build new and — especially — company grew and reached global proportions. Some businesses,” Guehler said. “I want to make sure that our and its inevitable, creeping observers have said that size — — stifles creativity and innovation. Others bureaucracy technologies are converted into commercialized prod- heartily disagree by pointing out that 3M’s magnitude ucts.” And, in the characteristic “can-do” spirit of a man — who made his career at 3M, he added, “We can be any- human, financial and tech- and considerable resources nological — thing we want to be.” actually make the company better equipped to innovate more and faster. People who know the company best point to four Walking the Innovation ‘High Wire’ > key ingredients that foster a culture of innovation at When asked to describe his company in one sentence, 3M: attracting and retaining imaginative and productive  book titled “Innovation: Coyne was succinct. In a people; creating a challenging environment; designing Breakthrough Thinking at 3M, DuPont, GE, Pfizer and an organization that doesn’t get in people’s way; and Rubbermaid,” Coyne said, “At 3M, we live by our wits. offering rewards that nourish both self-esteem and per- Innovation may be an important element of other corpo- sonal bank accounts. rate strategies; but for us, innovation is our strategy.” For decades, Coyne said, 3M has been balancing on “the innovation high wire” and funding research and > A Forum for Honesty and Thorny Problems Innovation has thrived at 3M because people talk. They strike up lively conversations in hallways, cafeterias When I joined 3M in 1962 as an organic and labs. They talk across departments and divisions. chemist, some of us called 3M ‘the big red They meet to share ideas in brainstorming sessions and sandbox.’ Product innovation is our magic and forums. While more traditional organizations have kept researchers and engineers within their own areas or our soul. Today, 3M is the best and biggest divisions, where their loyalties were strongest, 3M has sandbox to play in. r > Leon Royer etired executive instead fostered a strong sense of attachment to the director, Leadership Development Center, formerly technical director, company as a whole. The “granddaddy” of that concept  was the Technical Forum, which had its start in — Commercial Office Supply Division 1

41 33 3M Innovation: How It Flourished  the same year that the company formed the International , it was combined with the Engi- technologies. In neering Information Exchange and is now known as the Division. While the latter merited a press conference, the Tech Forum’s birth was quiet and just people were  Technical Information Exchange. at the inaugural meeting. The Tech Forum sponsored specialty subgroups or “chapters.” Each of these chapters focuses on a scientific discipline, such as polymer chemistry or coating pro- We share ideas at their earliest stages, before cesses. Scientists in each discipline gather to compare have an idea of a product. We talk about we notes and share their technical expertise and prowess. “Think of the power of that concept,” said Marlyce our problems, our failures. That takes a lot of courage and trust. r etired corporate scientist, > Art Fry Office Supplies Division The forum built morale and respect among y colleagues. It got people talking — oung with Tech Forum’s first chair, James Hendricks, retired senior, basic scientist with applied technologist, manager, Tape Research, a tall man with a professorial experienced or famous with people new to the — in all — style, invited every technical person at 3M  company. Pride in being a 3M technical person to join the forum. An organization in which participation was purely voluntary, its original goals were to foster often began right there. etired r > Roger Evans idea sharing, discussion and inquiry among members of research scientist the 3M technical community, while educating technical employees. To accomplish that, the Tech Forum brought in Nobel Laureates and other luminaries to address the Paulson, now retired, who coordinated Tech Forum group. The Tech Forum sponsored problem-solving  activities from . “3M has lots of polymer to  sessions at which businesses presented their most recent chemists. They may be in tape; they may be in medical technical nightmares with the hope that their colleagues or several other divisions. The forum pulls them from would help them find answers. For innovators who had across 3M to share what they know. It is a simple but newly issued patents in their name, the forum began the amazingly effective way to bring like minds together.” annual Inventor Recognition Program. Illustrating its forward-thinking nature, the Tech The forum also launched an annual event at which For um sponsored a meeting to review the “computing each 3M division put up a booth to show off its latest  . It machines” at the University of Minnesota in 2 1 In 1951, all 3M technical people were encouraged to join the newly organized 3M Technical Forum, which promoted the sharing of ideas. Pictured is an early event where 3M scientists demonstrated their inventions and asked for advice. 2 Scientist Francis Okie, one of 3M’s earliest inventors, credited with Wetordry sandpaper, was inducted into the Carlton Society and given the same bust of Richard Carlton that is presented to new members today.

42 34 Chapter 3 math. To enrich 3M’s relationships with the schools, was followed by a series of lectures on the industrial uses of computers. Two years later, believing that sci- the forum began a 3M Visiting Wizards program in  ence education in the schools was crucial, the forum to the “oohs” and “ahs” of children. 3M volunteers visit elementary schools and perform eye-popping science sponsored its first science fair for Minnesota high  demonstrations that rival magic tricks — another way to school students. By , the Tech Forum had its first inspire the next generation of innovators.   , 3M’s Tech Forum had grown to  By , The forum has not been bound by any set of members in eight U.S. locations and countries.  rules but has been allowed to develop naturally. The Rule That Isn’t > etired manager, Tape Research, and r > James Hendricks Percent Rule, inspired by 3M inventor Dick  The first chair, 3M Technology Forum Drew decades earlier in 3M’s life, lost none of its power as the company matured. In fact, the stories told and female chair. Julianne Prager, who retired as executive re-told inside 3M have “institutionalized” this so-called director, Corporate Technical Planning, was then a percent  rule. It encourages technical people to devote member of the Central Research technical staff. In an of their time to projects of their own choosing. effort to encourage young women to pursue careers in science and technology, the Tech Forum started its The beauty of 3M’s 15 percent rule is that Visiting Technical Women program in St. Paul area it’s not a rule at all: it’s permission. Most big  s. schools during the businesses are run like grade schools. 3M During that same decade, recognizing the significant global reach of 3M, the Tech Forum “cloned itself,” is college. > Dale Dauten newspaper columnist, nationally establishing Tech Forums in Harlow, England, and syndicated Corporate Curmudgeon St. Marys, Australia. More Tech Forum outreach con- s: Teachers Working in Science and  tinued in the Technology (TWIST) introduced teachers to science > A Wild Idea With No Home in industry through summer internships, and STEP Ted “Flipper” Buchholtz, retired research scientist, (Science Training Encouragement Program) combined never saw himself as an inventor. He just liked to do education and work experience to give a boost to a diverse things that no one else had done. He resisted reading group of high school students interested in science and instructions; he wanted to solve puzzles on his own. 1 Julianne Prager, retired executive 1 director, Corporate Technical Planning, was the first woman to head the Tech For um. 2 Ted Buchholtz (left), retired research scientist, and Don Bemlott, retired senior lab technician with the Pro-Fab Lab, laid out a 110-foot-long strip of Tartan Track surfacing material in 1959. They tested a portable runway for use at a track and field competition in the Los Angeles Colliseum.

43 3M Innovation: How It Flourished 35 When Buchholtz joined 3M in the could solve a thorny problem. William McKnight, an avid owner s, he was a young native early  of race and harness horses, had of Canada with street seen one of his horses injured on smarts but no high school diploma. After a defective running track. Could hearing about a “little 3M come up with a better, safer surface, George Rabacheck and gadget” that Buchholtz Harvey Anderson of Central devised while working at a local car dealership, Drew Research asked? “I don’t think they wanted to be involved in “drafted” him for 3M’s led and eccentric ProFab such a crazy idea that had so fab little chance of success,” said lab. “Dick didn’t care about Buchholtz. “It was a wild idea an individual’s education,” and wild men had to work on Buchholtz said. “He felt that wild ideas. When Drew asked even if you flunked kindergarten, for a volunteer, I raised my hand.” if you stayed in motion, you’d get The goal, Buchholtz said, was things done.” Buchholtz had his to invent a soft, resilient and durable own internal momentum. On his own, Buchholtz began material that was shock absorbent and had the look 3 experimenting with ways to make of grass — the kind that could be used for race tracks urethane foam, adding colors and making designs and athletic fields. with it to explore how that foam might be used. His first After much experimentation, the first test turf was 3M patent, shared with colleague Doug Campbell, was made with clay pipe sealant, a kind of urethane, and the chair rail, which used the foam to protect walls from was still too rigid. Unwilling to give up, Buchholtz chairs bumping into them. Continuing to explore more pressed on and, at one point, he brought a rented horse ys to use that foam, Buchholtz put adhesive on both wa to the ProFab lab to test the prototype. “We went out- sides of it, calling it double-coated foam tape. This side on a -foot sheet of the synthetic track and   -by- discovery was the precursor to 3M’s successful Scotch we ran the horse back and forth,” said Buchholtz. By mounting tape. Buchholtz faced his greatest challenge , the new track surface had its first real test at New  when two researchers asked the ProFab staff if they Yo rk’s Belmont Park where it fared well in rain, mud, 4 2 3 The Meadows near Pittsburgh, Pennsylvania, billed itself as the first racetrack to use Tartan Tr ack synthetic surface, developed by 3M. 4 A model of a race track was used to display Ta r tan Track surfacing material at a Technical Fo rum meeting.

44 Chapter 3 36 heat and cold. McKnight told Buchholtz he was the one ‘Give Me a Problem to Solve’ > to sell the new product to the 3M Board of Directors. Roman Schoenherr, retired corporate engineer, was a “‘Te d, it’s your project; if you don’t sell it, it’s going when he had his first brush with  novice engineer in to fail,’ he told me,” Buchholtz said. “I was scared.” innovation at the Decatur, Alabama, plant where poly- In spite of that, the young researcher, who had never ester film backing was produced for Scotch magnetic seen the inside of a corporate board room before, was  inches wide at tape. “The plant was producing film  convincing enough to get ,  approved to pursue about pounds per hour and they needed to increase  product commercialization. , pounds an hour. Without changing the output to   Tar tan Track and Tartan Turf synthetic surfaces were fundamental process, the production lines would have the first in the world. Sports Illustrated magazine hailed to have been four times larger, a very costly proposition,” the breakthrough in  and virtually all the major Schoenherr said. He searched for an innovative manu- horse racing tracks used Tartan Track surfacing material. facturing solution and found it using computer simula- Tar tan Turf surfacing material was used at a majority tions to test different ways to produce the film. “My job of high school, college and professional sports arenas was to understand what was happening so we could and stadiums. Tartan Track surfacing material was used design the proper size equipment to do the job.” for the track and field events at the Olympic games held Retired Corporate Engineer Bob Vytlacil thought in Mexico City in  . Even with the introduction he had invented a better idea for slitting 3M tape prod- of competing Astro Turf, 3M held its market lead. But, . “It started with a  ucts during manufacturing in when the company’s patents began to expire in the s,  young engineer writing a letter,” Vytlacil said. “He knew the days for Tartan Turf surfaces were numbered. “The what he wanted to accomplish, but he didn’t know what market was saturated with our product,” Buchholtz said, the mechanism would look like.” A few months later, “and there was little or no replacement business. The Vytlacil was cleaning his garage and ran across an old surfacing material wasn’t like so many 3M products; it fishing reel. “I played with it for a few minutes, then I wasn’t disposable. People didn’t use it up and buy more.” tossed it out,” he said. “That night, I was staring at the Tar tan surfacing materials were innovative, but their ceiling and the idea hit me between the eyes. That’s it! market life was short. “It was a big let-down,” said “I didn’t have any money to pursue the idea, but Buchholtz, “but then you grab yourself by your boot- Frank Vikingstad, then manager, Engineering, Science straps and start a new project. And you get excited all and Technology lab, who later retired as staff vice presi- over again. I was excited a lot in my career at 3M.” dent, Engineering, did. He told me I could use his little lab machine shop and he gave me a couple bucks to 1 1 The University of Minnesota’s Memorial Football Stadium was one of many to use Tartan Turf surfacing 2 Len Volin used Tinkertoys to material. fashion his first prototype of a machine to improve adhesive tape manufacturing. Volin received the Engineering Achieve- ment Award for the project. He estimates that each of the seven machines installed at various 3M plants around the globe saves the company $1 million each year.

45 3M Innovation: How It Flourished 37 make the crudest prototype you ever saw,” Vytlacil we could save a lot of time and money if we slit the said. “Next, I got permission to canvass the divisions tape as it was made.” at 3M that I thought could use this new device, and Volin fashioned his first prototype using his child’s for my project. I called it I ended up raising  ,  Tinkertoys. “That just illustrated the idea, but it didn’t CAMITE because those were the initials of the divisions confirm that the concept could work,” said Volin. “We (Commercial Products, Abrasives, Medical, Industrial didn’t have a lot of lab space available in our engineer- Minerals, Tape and Electrical Products) that chipped ing department, but I had what I needed at home. I was in money. I built a better prototype with a hand crank, building a house and that’s where I also built the first like the old fishing reel but larger, and I put together functioning prototype. My ‘lab’ was a couple of saw- a little slide show.” horses in the hallway leading to the garage in my unfin- By this time, Vytlacil’s work was becoming more ished house. When I needed a vacuum source, I used visible inside 3M and, despite being told by his boss to home shop vac.” Two years passed from the initial my turn his energies to other, more promising assignments idea to construction of the first production machine in or “lose my job,” he persevered in classic 3M style. It created with his . Volin’s invention   percent — when Vytlacil got his big break at a  was about had multiple patents. — time gathering of specialist engineers. “I invited every vice Today, there are seven president I could think of to come and see my prototype of these machines and try it out personally,” Vytlacil said. “People really liked it.” Later, at an engineering research meeting at which Vytlacil was testing the waters in hopes of raising ,  to see his project through, Joe Ramey, then  group vice president, Commercial Markets Group, now retired, spoke up. “Joe said, ‘If this thing can do a lot of good, then somebody should pick it up . . . and I will.’ ” John Pearson, retired vice president, Development, and a Carlton Society member, served as a mentor to many young 3M engineers. He said Vytlacil had admir- able staying power. “The development of that tape slit- ter didn’t go like clockwork,” he said. “It was a very difficult project.” Ultimately, Vytlacil’s manufacturing innovation was heralded as one of the most significant in the company’s manufacturing history. > There’s No Place Like Home Like Vytlacil, Len Volin, associate corporate engineer, Bonding Systems Division, was searching for a more efficient way to make 3M adhesive tape. “Traditionally, we started with tape backing, then we applied adhesive and wound the finished tape on a big roll called a ‘jumbo,’ ” Volin said. “The jumbo was stored and later slit into individual rolls of tape. We thought 2

46 Chapter 3 38 used around the globe, and Volin reception wasn’t stellar. In other estimates that each machine saves companies, this might have million  the company about been discouraging enough annually. to scrap the idea, but Silver For their innovative didn’t give up. efforts, all three men, ears after Silver’s initial Five y Schoenherr, Vytlacil and Volin, discovery, Art Fry was warming his received the prestigious Engineering vocal chords while sitting in the choir Achievement Award, the engi- loft at his church. Frustration rose with neering equivalent of member- ship in 3M’s Carlton Society. At 3M we’re a bunch of ideas. We never throw an idea away because > The Beginning of a Blockbuster Idea you never know when someone Spencer Silver, retired corporate else may need it. > Art Fry scientist, Office Supplies Division, was a senior scientist studying adhe- his scales as Fry turned to a hymn and sives in the Central Research lab in his scrap paper bookmark fell to the floor.  when he discovered an adhesive “My mind began to wander during the that didn’t act like any others. Instead sermon,” Fry confessed. “I thought about of forming a film, this adhesive turned Spence’s adhesive. If I could coat it on paper, into clear spheres that, according to Silver, that would be just the ticket for a better bookmark.” “kind of sparkled in the light.” Silver spent Fry went to work the next day, ordered a sample the next few years shopping his new adhesive of the adhesive and began coating it on paper. He only around 3M to find a product use for it, but the coated the edge of the paper so the part protruding from his hymnal wouldn’t be sticky. “When I used these ‘book- My discovery was a solution waiting for marks’ to write messages to my boss, I came across the a problem to solve. > Spencer Silver etired r heart of the idea. It wasn’t a bookmark at all, but a note,” said Fry. “Spence’s adhesive was most useful for making corporate scientist, Office Supplies Division 1 1 Art Fry used an adhesive developed earlier by Spencer Silver to create one of 3M’s most famous products, Post-it notes. The idea came to him as he sang in a church choir. 2 Today, there are more than 400 Post-it products sold in more than 100 countries around the ld. wor

47 39 3M Innovation: How It Flourished paper adhere to paper and a whole lot of other surfaces. It would be years before the Post-it notes adhesive Yet, it wasn’t so sticky that it would damage those sur- was perfected, prototypes created and the manufactur- ing process developed. All the while, Fry busily handed faces when it was pulled off. This was the insight. It was out product samples and Geoff Nicholson, then Fry’s a whole new concept in pressure-sensitive adhesives. technical director, made sure that secretaries of 3M sen- It was like moving from the outer ring of the target to the bull’s eye.” ior executives got them. Before long, their bosses were borrowing the little yellow pads. Everyone who tried them wanted more. conducted a direct-mail program to the We , with a host of product literature in tow, In  secretaries of CEOs of Fortune 100 companies, 3M conducted market tests in four major cities. But, and we got letters back from the likes of Lee consumers were lukewarm at best. Ramey was a new Iacoca, Chrysler’s chairman and CEO, and the division vice president when Post-it notes tested so poorly. Seeing how many 3Mers truly believed in the CEO of Phillip Morris telling us how much they product, Ramey decided to figure out why the notes loved our product [Post-it notes] and asking how weren’t faring well. He and Nicholson traveled to a test they could get more! etired marketing > Jack Wilkins r market and met with people, only to discover that advertising and brochures weren’t good enough. What director, Commercial Office Supplies Division consumers really wanted was the prod- Fry encountered serious technical problems very Sampling, uct itself. early and his boss, Bob Molenda, encouraged him to however, was an takes things one step at a time. First, there was the prob- lem of getting the adhesive to stay in place on the note instead of transferring to other surfaces. And, although 3M was known for its coating expertise, the com- pany didn’t have coating equipment that could be precise on an imprecise backing such as paper. It was difficult to maintain a consistent range of adhesion. “All of these things bothered our production people,” Fry said, “but I was delighted by the problems. If there is any- thing that 3M loves, it’s to create a product that is easy for the customer to use but hard for competitors to make.” Fry used percent time to find manu-  his facturing and technical solu- tions over about  months, and Molenda helped Fry find the time and money to dedicate to his pet project. 2

48 40 Chapter 3 — especially for a product with expensive proposition ucts that quickly increased sales. Lehr championed a questionable future. Ramey bypassed the traditional aggressive “stretch goals” for the company at the start approval channels and went straight to Chairman of of the new decade and employees delivered. Five years the Board and CEO Lew Lehr to fund the Post-it note   , 3M had inaugurated Challenge ’ earlier, in , sampling.  a program aimed at achieving percent of all sales  In , 3Mers descended on Boise, Idaho, with from products less than five years on the market. By samples for what would later be called the “Boise Blitz.”  s, that stretch goal was raised to  the percent not too big, not too The town was a perfect venue — and the total years reduced to less than four. small and remote enough to truly be able to measure -member Innovation Task Lehr also created a  results accurately. Sample upon sample were handed Force led by Gary Pint, now retired group vice presi- out, and 3M discovered that more than  percent of the Products Group, to take a candid look dent, Electrical people who tried them would buy them. With success inside the company. “We wanted people in 3M to under- in Boise, 3M was convinced that the market potential stand that management, starting with Lehr, was sure , Post-it  for the yellow note was enormous and, in that the environment for innovation at 3M hasn’t deteri- notes were introduced nationally. orated,” Pint said. “Or if it had, that the commitment For their efforts, the Post-it note team was awarded and means were available to get it back to where it was. the Golden Step Award, the highly coveted internal ’ve been successful because of innovators in the past We ard recognizing teams that develop significant prof- aw and we wanted to continue to make sure that innovators, itable products generating major new sales for 3M. the people who have that flair for making things happen, By meeting this criteria twice, the team won the award feel like they’re working in a supportive environment.” .  and  two years in a row, The task force goal was to not only stimulate innova- tion in technical areas of 3M but at all levels and in every kind of job at 3M. And, to gain a clearer picture Innovation: How Do We Sustain It? > of 3M’s climate of innovation, the group hired Gifford Even with public kudos from business observers, as Pinchot III, a management consultant and author who  3M entered the s, Lehr wanted to ensure that his had coined a new term in his successful business book, company’s growth curve could be sustained in a global “Intrapreneuring: Why You Don’t Have to Leave the economy where the innovation rate was accelerating Corporation to Become an Entrepreneur.” Pinchot con- and competition had multiplied. Perhaps on the heels of ducted a four-month “innovation audit” for 3M aimed the blockbuster Post-it note, some 3Mers wondered how at better understanding the delicate “climate.” the company could produce more revolutionary prod- 1 2 1 Cathy Arsenault, product development specialist, Software, Electronics and Mechanical Systems Lab, uses computer aided design and analysis to help improve the Pharmaceutical Division’s metered dose inhalers.

49 41 3M Innovation: How It Flourished focus on innovation. “Genesis is all about optimizing During their inquiry, Pint’s task force made some discov- the innovative spirit at 3M,” Abere said. The parameters are simple. The grant encourages technical entrepre- eries that ratified long-held ideas within 3M. For example, neurship by funding research projects that have not yet innovative people are motivated qualified for 3M budget support through regular chan- nels. In the first year, proposals came in a flood not when they have freedom, support and encouragement. 3M intra- a trickle, even though people had less than two months preneurs also have a way to develop proposals and win lab management support for it. “Two days before the deadline, we had entries of making middle man-  and I thought that was good,” said Prager. “Two days agers and supervisors  with still more coming in.” uncomfortable. later we had “Innovation,” Pint Genesis struck a chord. “We’re telling people who affirmed, “is gener- work here that all the positive changes in 3M’s future 3 weren’t going to come from management,” said Prager. ally an untidy process.” A major- “We told them that they are the innovators.” Other grant ity of new ideas fail, but people shouldn’t fear for their percent jobs when that happens. “We estimate that and recognition programs to spark creativity would later  be added to time-honored programs of our formal, new product programs never make it,” such as the Carlton Society and the Lehr said. “When this happens, the important thing is Engineering Achievement Award not to punish the people involved.” of Excellence. Alpha Grants for innovation in administrative, > ‘Give Us the Attention and Support We Need’ marketing and other nontechnical One key outcome of the task force study was the confir- areas were made available in mation that innovation thrives on personal recognition . The Technical Circle of  matched with financial and moral support. Coinciden- Excellence and Innovation honors tally, a brand new project to support innovation surfaced technical people for exercising  in . The Genesis Program was spearheaded by Joe innovation and creativity to pro- Abere, a highly respected corporate scientist, with full duce a significant impact on 3M’s support from 3M’s technical leaders, Bob Adams and products, processes or programs. Les Krogh. The idea had been percolating for some These efforts ultimately lead to time, but Abere said it fit beautifully with 3M’s renewed 5 4 Scott Iverson, senior design engineer, in the same 2 lab, works on the design of a new piece of equipment which will help evaluate inkjet inks. 3 The Engineering Achievement Award of Excellence, established in 1973, is awarded for engineering innovation, proficiency and contributions to 3M’s growth. 4 Diane North, senior process development engineer, Polymer Processing Laboratory, Engineering Systems and Technology, investigates new techniques for measuring the thick- ness of film. 5 The Technical Circle of Excellence and Innovation Award.

50 Chapter 3 42 measurable business or technical success and allow reflection based on the angle between transmitted and reflected light. 3M to change the basis of competition. To largely rec-  s ognize manufacturing breakthroughs, 3M created the Research into multilayer film began in the Corporate Quality Achievement and the Process when the Central Research Process Technology Lab Technology awards. (CRPTL) explored how a multilayer film could be used as a relatively inexpensive backing on tapes. But, as sci- entists began combining those layers, said John Stephan, Charge of the Light Brigade > technical director, Traffic Control Materials Division, One of the recipients of Genesis funding was a team “the whole was greater than the sum of the parts.” While that developed a whole new technology platform based multilayer film was first used for tape backings, 3M on multilayer film. It was not only strong and durable, it scientists later found it useful in products that required also possessed never-before-seen optical properties. It puncture and tear resistance, such as substrates for signs and in safety films for window glass. 3M doesn’t have the structural boundaries s when The next breakthrough occurred in the  of other companies. It’s perfectly OK to call 3M researchers Andy Ouderkirk and Jim Jonza attended the annual Technical Forum science fair highlighting someone anywhere in the company and offer new technologies. Ouderkirk, then a researcher in help or ask for help. We’re a good example. CRPTL, had been experimenting with “flash-lamp” Jim was looking for applications; I was looking treatments of films to prepare them for adhesion by for a way to know if this was a useable tech- applying a sudden burst of energy to a film surface, micron. Ouderkirk noticed a  melting it to a depth of . nology; and Mike wanted to solve the problem. difference in light refraction between the melted surface corporate scientist, Film and Light > Andy Ouderkirk and the rest of the film. He told Jonza, a researcher in Management Technology Center Safety and Security Systems Division, that even more variations could be created by combining several film layers that had different refractive properties. “And, percent was a film that could create a mirror that was  if you could put together layer after layer of film,” layers with ,   reflective, could be combined in up to Ouderkirk speculated, “you could make a very interest- a total thickness of to the surprise — nanometers, and  ing reflective polarizer.” To Ouderkirk’s delight, Jonza —  -year-old Brewster’s of many experts it broke the answered quickly, “We can do that.” Law of Physics, which defines the characteristics of 1 1-2 Material made from multilayered optical film is amazingly reflective and 3 versatile. Andy Ouderkirk, corporate scientist, 3M Film and Light Management Technology Center, works with three different multilayered optical films, each of which reflects light differently.

51 3M Innovation: How It Flourished 43 The two men went to work. Jonza had a special co- tilayer ball and turn it any way you want. It never loses polymer made and demonstrated the feasibility of the its reflectivity. No one has been able to do that before first reflective polarizer. Ouderkirk demonstrated the with a film.” That property has value in more serious brightness enhancement this film provided to applications such as computer displays, win- a liquid crystal display. Mike Weber, a dow reflectors, light piping products and senior specialist in specialty materi- the reflective liners in light fixtures als, Film and Light Management and signs. There are other applica- Technical Center, provided optical tions for the auto industry, marine calculations. The trio received supplies, commercial graphics, two Genesis Grants to fund products and next-gen- security additional research and began eration projectors and displays. pilot production. Several groups The multilayer film project within 3M helped sponsor devel- has been a passion, particularly opment of the technology, includ- for Ouderkirk, Jonza and Weber, ing the Optical Systems Division. whose time and energy have been “Our multilayer film mirrors are consumed by the technology. Now, significantly more reflective and versa- a significant number of patents protect tile than competing products,” Stephan said, multilayer film, and its commercializa- 3M’s “and we can do so many other things with this billion in annual rev- tion is expected to generate  2 technology. Right now, we’re looking for the best enues for the company. here we should focus our investment w — applications — and we’re in the steepest part of the learning curve.” > It’s Imperative . . . When Ouderkirk explains how the potential applica- It was the early s when Chairman of the Board  tions embody “new-to-the-world physics,” with a nod to and CEO Allen Jacobson asked Ron Mitsch, then group expanding Brewster’s Law of Physics, it’s clear that he’s vice president, Traffic and Personal Safety Products not playing around. Group, to take six months off from his position at that “Take this standard glitter ball,” Ouderkirk, now a time and examine how to take innovation to the next corporate scientist in the Film and Light Management level at 3M. From that work came a set of “R&D Technical Center, said, “and turn it slightly away from Imperatives” that heavily influenced new product devel- the light. The reflectivity washes out. Now take the mul-  s. “We have a great track record; we opment in the 4 3 Ouderkirk was a 4 leader in the develop- ment team that broke what was once consid- ered a basic law of physics by creating the 3M high efficiency mirror. It uses 3M film technol- ogy to create a surface that is 99 percent reflec- tive at all angles.

52 During the 1970s, 3M was aking a page out of the ized in assembly and automation hnical Forum history, making major investments in Tec within 3M from 1982 until his T its manufacturing facilities and Gerry Mueller, director, Engineer- retirement. “We had about 24 ing, in the early 1970s, encour- the advice of the newly formed people who were dedicated to ag “minichapters” was invaluable. automated assembly technology ed the company’s engineers “We used them as expert con- to organize and share their ideas and we served any 3M division worldwide that assembled a sultants to critique what was and brainpower. These are the being planned,” said John product,” Shafer said. people who — o ver decades in have designed the life of 3M — Pearson, retired vice president, Shafer said that 3M’s engi- neering minichapters are ideal manufacturing equipment and Development, “and they per- mechanisms for promoting infor- formed a tremendous service.” processes that ultimately pro- duce the products that 3M sells. mation sharing and education. For the specialist engineers, “We had two one-hour sessions the minichapters were a shot in “There were engineering special- some the arm, personally and profes- — ists in each 3M division every Friday morning involving of them following the same tech- our engineers with expertise sionally, said Roman Schoenherr, retired corporate engineer. “I saw in automation,” Shafer said. nology — b ut we never met and “Because of their broad experi- exc hanged ideas until Gerry got people suddenly rise up and get involved,” he said. “They became us together,” said Bob Vytlacil, ence, they could handle just retired corporate engineer. Soon engaged with the whole corpora- about any question. It was infor- afterward, the group broke into mal. We saw people from the tion, rather than sitting back in labs and product development minichapters, each with a spe- their corners just doing their Getting Their Hands Dirty areas of the company come to ci c f ocus. “We recognized that jobs.” our sessions. The minichapter we had shared expertise and As time passed, the engineer- — common experience, so the mini- likes having a chance to offer ing group added education and suggestions early in product chapters began actively consult- mentoring to its program and, development, rather than down ing within 3M,” Vytlacil said. in recent years, more consulting Vytlacil believed that these the line when the product is more with 3M divisions. “Some of our fully formed and we discover that minichapters schedule regular consultants couldn’t be effective manufacturing is dif cult or too consulting sessions as often without getting their hands dirty. “You can’t just give advice as twice weekly,” said Len Volin, costly or both.” associate corporate engineer, and not be responsible for the Bonding Systems. “Our automa- results,” he said. “Someone in tion minichapter has done this the Consumer Products Division so that when somebody has a called and said, ‘We’d like you 3M Engineers question, they don’t have to wait to go to our Prairie du Chien, too long for the answer.” In recent Wisconsin, plant. The plant is yours for three days. We’re not years, the minichapters have going to tell you what to do. The begun exploring how they can employees can answer all your supply consultations across questions. After three days, oceans, making use of fast com- we’re going to meet here in a munications now available via conference room and we want the Internet. you to tell us the two biggest Dean Shafer, retired manager, things that need to be x ed.”The Engineering, worked with 3M’s specialist engineers came back automation minichapter for 10 with answers and saved the divi- years, serving as the group’s sion, in Vytlacil’s words, “a lot of sponsor, to help clear roadblocks, secure funding or offer organiza- money and our advice was free.” tional guidance. Shafer special-

53 45 3M Innovation: How It Flourished product development  Initially, the list included have a great culture and the way we operate is fine,” programs, according to Coyne, although it eventually Mitsch said in his team’s recommendations. “But, at . “The product development  to include nearly grew the same time, we believe we can move to a new level programs that had been selected received additional cor- of performance by taking the best practices in the com- porate resources,” Coyne said, “and by the end of two pany and spreading them company-wide.” years,  percent of the company’s R&D expenditures The first imperative was to implement the national were directed at those product development programs. Baldrige Quality Award criteria that called for meeting “Narrowing the number down was significantly customer expectations combined with a need for “time more effective in speeding product development,” compression” — moving products faster from concept Coyne explained. “Because the numbers were smaller, through development and to the market. 3M called that it was also easier for international companies to address new quality process Q  s. the programs effectively, so that these new products The second imperative was Pacing Programs. could be brought to market on a global basis.” Among Each of the company’s sectors was asked to select product development programs that could really make a difference in achieving profitable, global Pacing Plus focused on ‘leapfrog technologies,’ wth. Because as many as gro  programs were revolutionary ideas that changed the basis selected by individual sectors, the programs had limited success. of competition and introduced whole new However, the concept was a good one. To technology platforms. > John Pearson retired vice channel limited research dollars into the most president, Development important product development efforts, the .  Pacing Plus Program was developed in the successful programs were those in optics (brightness That program asked businesses to select enhancement film and dual brightness enhancement a small number of programs for considera- film), microelectronics, pharmaceuticals (immune tion, but the company’s top executives response modifiers) and fluorochemical fluids. made the final decision on which prod- Other imperatives called for an increase in 3M’s R&D ucts won support. The selected pro- investments yearly, a technical plan for growth in every grams received additional corporate division, a global R&D strategy and the creation of tech- resources so they could be brought nology centers and more international labs. to market more quickly. 1 1 One of the successful projects selected for Pacing Plus Program status is the CFC-free metered dose inhaler for asthma patients. Background: Vikuiti light management film

54 > Technology for ‘Winners’ ‘We’re the Audit Team . . .  technology centers actually evolved from 3M’s and We’re Here to Help You’ “sector labs” that were created initially to serve the company’s large business “sectors” that were identified Tec hnical audits have been a valuable form of feed- in a company-wide reorganization during the early back at 3M. They’ve been around since about 1960  s. As time passed, those labs evolved into today’s when Chuck Walton, senior vice president, Research technical centers that focus on specific technology plat- and Development (R&D), at that time, decided he forms and serve the entire company. “Their charge is or — needed to know more about what was working simple,” said Bailey. “They develop new technologies — not working in the company’s labs. Realizing that that they transfer into divisions to create products that personal visits to each lab were too time-consuming for one man, Walton asked his colleague Les Krogh, will be the next winners. People in those centers are now retired senior vice president, Research and judged based on their ability to invent and share their Development, to invent a peer review process. knowledge. The question I usually ask is ‘Who’s using Julianne Prager continued the tradition in 1980 when what you developed?’ A tech center will get ahead when she became executive director, Corporate Technical it’s recognized for making contributions.” Similarly, Planning, as did Dave Sorensen who followed her. said Bailey, successful 3M divisions are those that seek “The idea has been to provide internal appraisals ideas from tech centers and staff their product teams of major R&D programs in the company’s many labs,” with tech center scientists. Prager said. “The audit team, composed of about 10 to The centers are diverse, focusing on adhesives, non- 15 business and technical people including technical wov ens, manufacturing engineering, microreplication, directors and senior scientists from other laborato- ceramics, fiber optics and “advanced materials” such ries, conducts the ‘exam’ and does the analysis. They as technology for use on new generations of computer look at program strengths, weaknesses and probabili- chips. “I know of no other company that has taken this — ties of success both technical and business.”The team makes recommendations, but they’re not bind- technology center approach,” said Bailey. “In most ing. “Even so, people in management take them seri- companies, R&D is located in a major business unit. ously,” Prager said. Our next step will be to set up satellite tech centers for “From the start, the goal was to be positive,” said some of our large labs overseas.” Prager. “The audit team focused on what was good The evolution of 3M’s labs outside the United about a project and areas that needed improvement. States followed its business growth. Nicholson, retired Some people have used them to get support for more staff vice president, Corporate Technical Planning and resources. If the audit team said, ‘This is a terri c pr oj- ect, but terribly underfunded,’ management would usu- ally pay attention.’ ” Conversely, when a project didn’t “score” well with the audit team, it was often a motivator, said Prager. “I’ve seen it happen. We’ve said, ‘We’d love it if you can prove that our rating is wrong.’ And, the response has often been, ‘I’m going to go out and make this project work, if it’s the last thing I do.’ “3M has done a good job of combining the best of both — the small, e xible and unorthodox attributes of a small company, combined with the large technology, manufacturing and nancial base of a lar ge company,” Prager said. “As 3M grew and the divisional structure continued to prove its worth, tech audits have helped institutionalize that ‘small company’ ethic of sharing.” Background: Imperial Wetordry sandpaper

55 3M Innovation: How It Flourished 47 traveled the world working with 3M labs and customers, International Technical Operations, said, “As 3M devel- has a strong message. “3M has a ‘candy store’ full of oped businesses around the world, the companies needed technologies,” he said. “Take a look and help yourself. technical support and service to customers.” Back in the My job was to stimulate people to imagine how these s, labs were usually part of 3M manu-  s and  technologies could be used in their countries. They’re facturing and their key role was to check the quality of likely to come up with new applications and products local raw materials. By , 3M had created full service  that could be of value to all of us. I love music, so I like labs in Japan, Germany, Italy and the United Kingdom, to think of our technologies as notes on a piano, and and by the s, technical service labs were estab-  every day, people are inventing new tunes with them.” lished in every company that 3M operated outside the By the millennium, 3M had world-class expertise in United States. about  technologies and excellent grounding in about “Technical people at 3M work very hard at being  more. By operating in dozens of markets and believ- a community around the world,” said Nicholson. “They ing in the importance of sharing these technologies, feel a strong need to share both their knowledge and 3M has a competitive advantage that few other compa- their problems. There’s a lot of synergism. This is one nies enjoy. of the key ingredients for innovation.” Nicholson, who ● The most successful innovators network, interact and share their knowledge — and problems. ● Get your hands dirty in the innovation process; it’s meant to be messy. ● It’s not up to 3M’s customers to ask for products they need; it’s up to the company to anticipate the needs customers don’t even know they have and develop product solutions. Listen, when your heart says, “Don’t stop.” ● time-tested truths ● Use the tools at your disposal to support and give protection to embryonic ideas with great promise. ● Be a mentor; you’ll never regret it.

56 Nonwovens from the ground up Gambling on fluorochemicals The making of microreplication Lighting the way with pipes

57 r o l e m 4 o d e Ingenuity Leads l o to Breakthroughs f -year-old native of Toronto, Canada, Bill Coyne was a  i .  when he joined 3M’s Central Research Laboratory in n Trained in pharmaceutical chemistry, Coyne was soon n — drawn to exploring cardiovascular drugs. That event o early in Coyne’s career — w as his introduction to what he would later call the “fuzzy front-end” of innovation. v 3M was discovering the potential of a fledgling ● a health care business in the  s, with utilitarian t products like adhesive surgical drapes, when Coyne i o was named a research chemist. Drugs were only n a hazy outline on the corporate skyline.

58 Chapter 4 50 “My boss told me that On the eve of his retire- 3M was interested in ment in  as senior vice pres- pharmaceuticals and ident, Research and Development, he said, ‘Why don’t you Coyne addressed the American start working on it,’ ” Coyne Association for the Advancement of remembered. “What I liked was Science annual meeting in Washington, that he didn’t tell me what to do. He just D.C. He was asked to dissect the nature 1 said, ‘Have at it.’ ” Ultimately, Coyne’s of innovation at 3M. “In our experience,” early fuzzy front-end ex ploration led Coyne said, “the most important innova- to 3M’s introduction of a major heart anti- — tions respond to an unarticulated need arrhythmic drug called Tambocor (flecainide not as a response to an identified cus- years later in  .  acetate), tomer need. In other words, the fuzzy For  years, 3M employees — in and should — front-end is inherently fuzzy have been — virtually every job assignment be. This is true for every voyage of discovery. told, “Have at it.” Many of the company’s most We go out looking for the Spice Islands. Some- significant product breakthroughs have emerged — and then it takes us years times, we find a new world because 3M employees were open and patient enough to figure out how big it is and what to do with it.” to let the fuzzy front-end sharpen. “There are always random events good and bad — — > Al’s Lonely Voyage that affect an innovation,” Coyne said. “The mix of  Al Boese’s voyage of discovery began in when randomness and chaos is always part of the pattern.” his boss in 3M’s tape lab, Dick Drew, suggested that he might not be cut out for technical work. Perhaps, Drew counseled, Boese should take time off to find a Horace Walpole coined the word ‘serendipity.’ different job. Boese hung around the lab anyway. One It came from a tale about three princes from day, Drew off handedly mentioned that 3M specifica- tions called for an inexpensive, noncorrosive backing Serendip, Sri Lanka. They were always that was fibrous, but not woven, for its popular electri- discovering things they weren’t in search of. cal tape. The only noncorrosive backing anyone knew The key is: You must recognize it as a discovery. of was synthetic acetate cloth, clearly not covered by a 3M patent. re > Spencer Silver tired corporate scientist, Office Supplies Division 2 Close-up of Scotchgard Chapter opening photos fabric protector; Multilayer film more accurately senses daylight in electronic devices, such as cell phones, com- puters or pagers, and improves battery life; Close-up of Thinsulate insulation fibers; 3M mirror film reflects all parts of the color spectrum. 1 The National Medal of Technology was awarded to 3M in 1995, recognizing the company’s nine decades of innovation. 2 Lab technicians assessed abrasives Al Boese, pictured in 1947, quality in the early 1900s. 3 with the nonwoven materials he invented. 4 Mistlon plastic ribbons were developed to be wilt-proof, water- proof and flame-resistant.

59 51 Ingenuity Leads to Breakthroughs Rather than hunt for a new job, Boese found the best advice and visited North Star Woolen Mills where he library on fibers at the University of Minnesota’s Home learned what a carding machine was. “I discovered Economics Department, and he spent the summer there. that what I was trying to develop had been invented — who started his career at 3M as a mail boy Boese  -inch years before,” Boese said. “I got a little  without a high school diploma had begun exploring — machine, carded out the fibers to form a web, and the fuzzy front-end of nonwoven science. When he applied heat and pressure to bond them. The next thing years later as a corporate scientist and Carlton retired  was to keep making it and find markets for it.” Boese Society member, his willingness to tackle this uncharted and the cohorts he attracted to his project named their territory had led to a dizzying array of never-before- group the Carfab Lab (for carded nonwoven fabrica- seen nonwoven products including ribbon; cleaning tion) because they were an off-shoot of the eccentric, pads; surgical tapes, drapes and masks; fasteners; but highly productive, Pro-Fab Lab. floppy disk liners; absorbent material to combat oil slicks; “metered” paint rollers > ‘You Have to Take Chances . . . ’ for home improvements; and sound dead- Boese’s new process didn’t produce a bet- eners in cars. ter backing for electrical tape, but gazing studying  All alone, Boese spent at a department store window one day in fibers, writing reports for Drew, conduct- s, he had an idea. Maybe, the mid-  ing modest experiments and, in his words, if the new nonwoven material was dyed “building half a dozen little machines with and sprinkled with color flecks, it could — utter ineptness” hoping to discover how be used in decorative displays. Or, why to bind a mass of fibers together without not slit the material into strips and make weaving them. “One day I was walking ribbon for decorating gifts? Boese’s early the rubber colander in the tape lab,” by attempts at ribbon were modest, at best. Boese said. “I stuck a little tuft of acetate The product, Mistlon ribbon (originally fiber in the colander. It heated the sur- developed as a lint free lens cleaning face of the fibers and bonded them tissue), was structurally weak for wrap- together. That was the opening to make ping packages and it wasn’t very nonwovens. Heat and pressure.” attractive. Knowing nothing about textile “It was obvious to everybody that equipment, Boese took a colleague’s we had a product failure,” Boese said. 4 3

60 Chapter 4 52 3M management gave him three years to improve the  store to sell his new, improved ribbon at cents a roll. ribbon and still there was no solution. The ribbon “Bush said in no uncertain terms, ‘No kid in the lab is brought in about  in revenues, Boese recalled,  , going to set prices for ‘the Mining.’ ” . “That was,” he ,  but the losses totaled about  The new product, 3M Sasheen decorative ribbon, have Mr. McKnight sit in on said, “enough money to , along with was a hit when it was introduced in  the meeting.” Boese drew a deep breath and said his a companion product, Lacelon ribbon. “3M developed le ribbon in three months. team could produce a saleab the gift wrapping business with ribbon and then the Management gave him the time. paper companies came in with paper patterns in the  -  -cent store and got a “I went over to Beske’s s,” Boese said. “We not only created a prod-  early cent comb,” he said. “I knew enough about handling yarn uct, but a new market. Pursuing the nonwoven business to know that they pulled it through combs as it went into was like being thrown up on shore when your ship gets the looms. We needed bobbins to wind the yarn so we wrecked. You don’t know what you’re going to do and .  from Singer Sewing Machine Company for  bought you wind up doing what you never expected.” We got a cone of acetate yarn from American Viscose, wound the fiber on bobbins and pulled it through the Nonwoven ‘Progeny’ > comb. We built a little set of hot drums and put the rib- From ribbon, 3M “married” nonwovens to abrasives in bon on the bottom and laid the yarn shoulder to shoulder the s to produce Scotch-Brite scrubbing and pol-  on top. It worked like a dream. We had sheen, we had ishing pads, floor maintenance supplies and industrial   strength.” In less than a year, 3M sold , yards of polishing materials. A decade later, new dampening the ribbon. “I found out one thing,” Boese said. “You sleeves from 3M’s nonwoven materials made offset have to take chances. You printing much more economical. Nonwoven, disposable have to fight. Nonwovens surgical face masks and Micropore surgical tape opened never would have been the door to other nonwoven medical products. successful if I hadn’t Still another nonwoven breakthrough product, called pushed a little.” 3M oil sorbents, helped reduce the damage of oil spills. That is precisely  By the s, government-approved industrial respira- what Boese remembered tors made with nonwovens helped reduce certain work- when Archibald Bush, head place inhalation dangers to safe levels. Nonwoven tech- of 3M sales, chastised him for mak- nology led to the development of Buf-Puf cleansing ing a deal with a local St. Paul department sponges and Thinsulate thermal insulation, the product 1 1 In 1946, laboratory personnel worked on early development of nonwoven fabrics. 2 Industrial respirators, made with nonwovens, help reduce workplace inhalation. 3 Products incorporating non- wov en technology sold today include: 3M oil sorbents, Filtrete furnace filters and the Scotch- Brite wave-shaped scrub sponge.

61 Ingenuity Leads to Breakthroughs 53 that revolutionized cold rushed back to the lab. weather apparel. By the “Here,” Carey said, hand- s, Filtrete furnace filters  ing the curved prototype for home heating and air to his co-workers. “Try conditioning represented breathing through it.” That another application of this bizarre demonstration led versatile technology. In to applying nonwoven tech- most cases, 3M was first nology to the development to the market. of maintenance-free respira- There were some tors and surgical masks. 3 disappointments along the way, too. Nonwovens had become 3M never successfully developed non- a part of so many 3M products ens for book covers, draperies and wov that a Nonwoven Technology window displays. A novel product Center was created in  to called Skimmit was heralded as the offer technical knowledge and easy way to skim oil off liquids like expertise across the company. By soups, but consumers never thought so. Early percent of 3M’s  this time, about attempts at creating comfortable shoulder  business, or nearly billion in sales divisions, represented from about  some form of nonwoven application One of the imponderables of 3M is the in products ranging from diapers to multiplicity of interactions it’s not explain- — diskettes. By the late  s, that percentage had grown to approximately  percent overall and . able and it’s not orderly > Morgan Tamsky  sales of about billion. technical director, Adhesives Technology Center > Gambling on the Unknown pads for clothing fizzled. Another nonwoven prototype  In , William McKnight approved the acquisition of seemed destined for failure, until Pat Carey, a project the rights to a process for creating fluorochemical com- team member, had a bright idea. Walking through a local pounds from Professor Joseph Simons of Penn State store, Carey noticed a display of Halloween masks. He University. No one knew how to use the compound. 2

62 Chapter 4 54 Finding uses for this new technology was not easy. one at a time. His  talk with — people on the project About a decade earlier, 3M had begun exploring sili- question was simple: Should 3M continue to pursue cone, thinking that the new material would help make fluorochemicals? Imbedded in that question was another: 3M’s tape products even better. However, three major said  Will fluorochemicals make us money? When companies, including General Electric, had a head start “yes,” the project had new life. on silicone experimentation and, by the time World Patsy Sherman joined 3M as a lab technician in  War II broke out, these competitors had already filed armed with degrees in math and chemistry. She had dab- patents for silicone applications. The patents were bled in science as a young girl with her doting father — “frozen” during the war, but as the fighting wound that is, until a failed experiment coated the kitchen down, they were approved. Believing that the competi- ceiling and her mother called a halt to their embryonic tion had beaten them, 3M asked the scientists at Penn “research.” As Sherman became acquainted with Central State University what else they had in their inventory Research, she saw tests being done on a new kind of of new ideas. rubber made with fluorochemicals, alongside natural Fluorochemicals held promise, although marketable rubber and other synthetic versions. The fluorochemical products were elusive. At first, 3M’s lab people could rubber could stand up to any solvent it faced in a test only make low-boiling and inert fluorocarbon liquids. tube and Sherman was fascinated. “It wasn’t bothered and the materials — Even so, the concept was so new by any solvents,” she said. “It was truly unique and I that the technology aroused great — produced so unusual liked that. I asked for the assignment.” Sherman was excitement. But, this was a costly venture. Only a few given a temporary task to find out if fluorochemical good ideas surfaced and none led to practical applica- rubber could withstand exposure to a new jet fuel that tions. Equally disturbing, these “products” were called Wright Patterson Air Force Base was testing. It did, but insiders, “the most expensive organic chemicals by it failed in the bitter cold of the stratosphere.  a pound. known to man,” costing about , as many as By  people were  ‘Tennis Shoes Don’t Fly’ > — focused on the promise of fluorochemicals With her lab job disappearing before her eyes and with the largest research project ever undertaken, an inquiring mind open to the fuzzy front-end of experi- up to that time, by 3M. McKnight wondered mentation, Sherman dabbled more with fluoro- if the gamble would ever pay off, so he chemicals in . She cooked up a brew  asked his vice president of research of rubber particles suspended in water and engineering, Dick Carlton, to that looked like milky latex and handed 1 1 The Chemical Products Group, organized in 1955, was charged with coordinating specialized chemical research and production.

63 Ingenuity Leads to Breakthroughs 55 the sample to a younger colleague, Joan Mullin, after “Our product had to be compatible with all the asking her to run a test. But, the glass bottle slipped equipment used by textile mills,” said Smith. “That from Mullin’s hands, crashed to the floor and sprayed meant learning a great deal about the industry and rely- the milky brew on the assistant’s new tennis shoes. No ing on our marketing people to canvass the field. Our amount of water, soap or other solvents weakened the first product could tolerate dry cleaning, but not stubborn mixture. “Joan was bemoaning the loss of her laundering. We knew we had to find a way to new shoes to her boss, George Rathmann,” Sherman treat nylon and cotton, make it stand up in said. “He said, ‘Well, tennis shoes don’t fly, so it’s of washing, and make the treatment cheaper no use to Wright Patterson, but maybe we should put than our original version.” some of this stuff on fabric and see what happens.’ ” Along the way, two well-respected Sherman and Rathmann applied the sample to fabric, experts in fluorochemicals told dried it and held it under a faucet. “Water splashed on Sherman and Smith that the fabric,” Sherman said, “and it took off  degrees it would be “thermo- the other way. So did solvent. That’s when we thought, dynamically impossible” ‘There’s something here.’ ” to combine a stain repellent and a soil release component Patsy was a gifted experimentalist. She was in the same prod- capable of doing very painstaking experiments. uct. The fluoro- > Sam Smith retired research scientist chemical treatment for fabric made it Sherman collaborated with her boss and mentor, water repellent, so Sam Smith, on the project, and Scotchgard fabric and how could it permit  upholstery protector was introduced in . “It took the removal of oily, ground- three years to introduce Scotchgard protector to the tex- in soil in laundering? “That challenge,” tile industry and we had absolutely disastrous results,” said Sherman, “was like waving a red flag in front said Sherman. “Our first product worked only on wool, of two bulls.” and it took many more years and many more discoveries In her percent time, Sherman went to the 3M  to make a product with all the right properties and the library looking for a solution and found a new type right cost to make it affordable for textiles.” of graft copolymer produced by a colleague, John 2 3 2 Patsy Sherman, who joined 3M as a chemical researcher, played an important role in the development of Scotch- gard fabric protectors. Years later, she was the first woman named to the Carlton Society. An early demonstra- 3 tion of Scotchgard stain repellent.

64 56 Chapter 4 Erickson. “I asked him how he created it,” Sherman Since its introduction in  , Scotchgard products said, “and he shipped a sample over to me.” Sherman have been reformulated many times, always with an went to work experimenting and Smith challenged her eye on improving the product. When 3M discovered to keep trying. “I was working on a new process and environmental issues related to Scotchgard protectors asked Sam if he could tell me why my idea wouldn’t s, the company developed a substitute  in the late work,” Sherman said. The next morning, Smith said he formulation at considerable cost. By  , the popular had an answer, but he was too late. “I said, ‘Sam, I ran  Scotchgard line had grown to commercially applied  the process last night and I got a percent perfect and six consumer applied protectors and cleaners. yield. It works great.’ ” years have passed since McKnight More than  put money on the fuzzy front-end of fluorochemical technology. “As recently as  , we were making new If you take the aggregate character of the fluorine molecules and putting them in a catalogue and company, I believe it’s one in which we think we sending the catalogue around to people and saying, can do anything. That’s what I look for in some- ‘Can you use this?’ ” said Craig Burton, research man- ager, Fluorochemical Process and Technology Center. one who runs a business. I want people who know they can run through walls. > Harold Wiens 3M’s fluorochemical technology has managed executive vice president, Industrial Markets to avoid maturity. It continues to generate In all, the fuzzy front-end experimentation that new materials and new products at an started with creating a viable fabric protector took about impressive rate. > 3M Technology Platforms, 1996 seven years. When Scotchgard carpet and upholstery , sales protector was introduced to consumers in  annually (largely to   jumped from about , “Now we can design molecules for specific applications. million in the first year.  Australian wool producers) to We w ork with the divisions to see what applications “3M invested two decades in fluorine research and they have and then build a molecule we think will work.” it took years to realize our first profits,” said Smith. ro-electric liquid crystals are a good example of this Fer “This is a virtue of our company — having the patience approach. They were created in the mid-  s for flat to stand behind a good idea. That’s where leapfrog tech- panel and desktop displays and other electronic devices, nologies and a lot of new business comes from.” to give the screens higher resolution. 1 2

65 Ingenuity Leads to Breakthroughs 57 Fluorochemicals, and later, hydrofluoroethers Appeldorn’s mentor and boss, Emil Grieshaber, chal- (HFEs), have replaced ozone damaging chlorofluoro- lenged him to find a use for the transparencies used in carbons (CFCs) used in cleaning circuit boards and copying colored images. “3M was marketing a Thermo- other electronic components. They are used to cool Fax copier that reproduced colored images on white supercomputers and are key ingredients in extra durable paper,” said Appeldorn, but it was a two-step process rubber and plastic seals, O-rings and gaskets for hostile and the intermediate step involved a transparency with environments. Versatile fluoropolymers are used in no other use. We tried to project an image from the chemical processing, pollution control equipment and transparency on a screen using an old Bessler Vu-Graph oil exploration. They even protect food from machine, but the image was dim and brown.” contamination. Appeldorn said he then found a Beyond their value as distinct process that created a better image products, small amounts of fluoro- that led to 3M’s first marketable chemicals allow 3M to manufac- transparency film. “One of our ture extra thin films, and they help early, large customers was the make 3M’s tapes peel off their Strategic Air Command base in rolls more easily. “We receive Omaha,” Appeldorn said. “They about patents a year based on  used about   sheets of film , fluorochemical technology and each month in their war room.”  in  our high was said ,” Up to that time, 3M had been Burton, now laboratory manager, selling an overhead projector, Fluoromaterials Research Group in the manufactured by an outside supplier. Advanced Materials Technology Center. Appeldorn said 3M then decided to make “We’re a long way from reaching the its own projector to complement the new 3 limits of this technology.” transparency film. The “improved” equipment turned out to be too costly, bulky, heavy, hot and noisy to be a big seller. Later adaptations improved the projector, > Through a Lens Dimly but, said Appeldorn, “We were pushing for a lower cost, Roger Appeldorn, a young physicist, was working in the even lighter version. When we polled people, they said Thermo-Fax (Copying Products) Laboratory in the late they wanted one as small as a briefcase; it had to unfold s when he encountered the early fuzzy front-end of  and light up automatically.” “incremental optics” later known as microreplication. 4 1 Novec specialty fluids perform as well as chlorofluorocarbons, but do not deplete the earth’s ozone layer. 2 3M’s specialty fluids clean printed circuit boards during manufacturing. 3 Fresnel lenses in overhead projectors are made with structured-surface plastic, which replaces expensive, hand-cut glass lenses. 4 Roger Appeldorn was an early leader in the development of microreplication technology.

66 Chapter 4 58 Appeldorn and his team of five colleagues met these ‘We Started Having Fun . . . ’ > criteria, but the prototype was so expensive that the That’s when the fuzzy front-end reappeared for project was killed. When Appeldorn’s team appealed arted having fun with the idea,” he Appeldorn. “We st to Bert Auger, manager of special projects, Auger gave said. “I’m a physicist. I was considering the science. My  them days to produce a product that cost less. They colleagues and I looked at the very fine pattern on the did. It was  . plastic fresnel lens and wondered, what else could we do On January ,  , Appeldorn’s team demon-  with structured surfaces?” These could be surfaces with strated the first overhead projector with a new fresnel hundreds or even millions of structures per square inch lens made with a structured-surface plastic that was repeated continuously and invisible to the naked eye. superior to other plastic lenses and far less expensive “We soon renamed what we were experimenting than a cut glass lens. “We showed it to Ray Herzog, with,” said Appeldorn. “We called them ‘structured sur- faces.’ 3M management was particularly enamored with the potential for replicating these surfaces, so we started We didn’t sit down and say, ‘Microreplication is to call it ‘microreplication’ in the early  s.” At first, the next thing to do; let’s go do it.’ It doesn’t work Appeldorn and his boss, Ron Mitsch, who later retired as vice chairman and executive vice president, resisted that way. It evolved. It reached a critical mass not because it wasn’t accu- — the “microreplication” term and it suddenly proliferated. > Roger Appeldorn rate, but because it might signal too much to the compe- retired corporate scientist and Carlton Society member where tition. That’s why the Optics Technology Center — microreplication was the motherlode of technology — later named chairman of the board and CEO, and Auger,” , when it was officially renamed kept its name until  said Appeldorn. “We said the projector could be manu- the Microreplication Technology Center. factured at a fraction of the cost of previous models. The next application, after that initial breakthrough They told us to be ready to go into production in August  in the s, was a 3M fresnel lens imbedded in a traffic and sales went through the roof the first year.” Schools signal light that gave U.S. drivers in the left lane a visible wanted them. Businesses needed them; so did govern- cue to turn. 3M also began producing lenses for LED ment agencies. The product became the basis for the watches and microfilm reader-printers. By the early Visual Products Division within a few years. —  s, there were enough opportunities particularly — in the automotive industry to warrant a new business initiative called the Industrial Optics Project. One of 1 1 A 3M overhead projector in a North St. Paul high school classroom in 1960. 2 Scotchlite Diamond Grade sheeting, widely used for traffic signs today, required a decade of development before its introduction in 1989. Scotchlite Diamond Grade fluorescent 3 sheeting makes directional signs more visible day or night.

67 Ingenuity Leads to Breakthroughs 59  the more advanced applications came with the said Charles Kiester, retired senior vice in  ,” acquisition of Polacoat, a company with the technologi- president, Engineering, Quality and Manufacturing cal know-how to make liquid crystal displays (LCDs). Services. “Diamond Grade sheeting was the mother “Our idea was to make LCDs that would combine with of all microreplication.” It would be another  years our overhead projectors to display electronic images,” .  before the product was formally introduced in Appeldorn said. The idea was ahead of its time. “The lab started working on Diamond Grade sheet- Management didn’t like it. ing more than a decade before that introduction,” said s, Appeldorn was torn between  By the mid- Robert Finocchiaro, former technical director, 3M putting his energy into making better fresnel lenses for Microreplication Technology Center, now technical the rapidly expanding overhead projector market, while director, Engineered Adhesives Division. “It was a also trying to respond to others in 3M who saw the challenging project because it involved creating several value of structured surfaces — in abrasives, in magnetic thousand identical retroreflective prisms in a square recording, in traffic control materials, in new frontiers inch using plastic that could stand a wide range of on the fuzzy front-end. Appeldorn went to Mitsch and conditions weather and otherwise. 3M — suggested that Industrial Optics should stand alone as was the only company with this new a business. Moreover, an Optics Technology Center application.” could be created to nurture, expand and develop all the Since the late  s, possibilities that structured surface science offered. there have been About  percent of all products sold by 3M were rooted numerous itera- in optics technology when Appeldorn became the first tions combining director of the center in .  durable and flexible fluorescent materials and retroreflective A Highway Gem > surfaces erything — ev More promise for microreplication emerged when from daytime traffic signs 3M tooled its manufacturing to make the first run of that are fluorescent to flexi- Scotchlite Diamond Grade reflective sheeting, a product ble, fluorescent signs used that would revolutionize highway signs and vehicle on cones in the work zone markings many years later. “I was working in Traffic and on canvas sidings on Control Materials when we put in the first small trucks in Europe. Diamond Grade maker in Menomonie, Wisconsin, 2 3

68 60 Chapter 4 Background: Vikuiti optical lighting film in a light pipe application Scotchlite Diamond Grade sheeting has helped reduce pursuits that don’t qualify for other financial support, traffic accidents, and the U.S. National Highway Traffic and the work accelerated. The result was a reflective film. Safety Administration now requires all new trailers It looked ordinary on casual inspection, but a closer and truck tractors to use what’s called “conspicuity look revealed one smooth side and one structured side markings.” Other countries are instituting the same with tiny prismatic grooves. Rolled into a tube, the requirements. film was capable of “piping” light evenly throughout its length. It offered intriguing possibilities for street lights, traffic signals, manufacturing facilities, hospital Film Futures > operating rooms, airplane cabins, railroad cars and In the same year Scotchlite Diamond truck beds. “That film led to creating our Vikuiti bright- Grade sheeting was introduced, 3M ness enhancement film (BEF) for laptop computers and also launched internal reflecting cell phones,” said Finocchiaro. “BEF is basically film, another new use of micro- optical lighting film with a finer pitch. replication. Later renamed 3M We w ere able to get into the market optical lighting film, the product as fast as we did, in the early  s, had its start with research conducted because the technology had already Lorne Whitehead at the University by been developed. The manufacturing of British Columbia in Vancouver, processes were in place. 3M could Canada, a decade earlier. Whitehead offer a unique approach to solv- had experimented with lining up ing an unarticulated customer prisms running the length of an acrylic need — namely, enhancing the sheet, then shaping that sheet into a brightness of backlit flat panel square tube and transporting light, via displays and extending the life the prisms, from one end to the other. of batteries. We were able He called it “total internal reflection.” percent  to deliver to  Building on that concept, Appeldorn more light to a display and Sandy Cobb focused on how 1 using our film.” microreplication could be used to pro- Appeldorn described duce micro-prismatic structures on much of this work as “still a large scale. The team received a 3M embryonic,” even in the late Genesis Grant, designed to fund technical 3 2 Vikuiti brightness 1 enhancement films (BEF) deliver brighter, sharper readouts on computer screens, pagers, cellular phones and other electronic Extended displays. 2-3 battery life is an added value of the brightness enhancement films (BEF).

69 Necessity is the Guide to Invention one materialized with almost he pressure was on. After equally good lighting properties. selling 3M optical lighting T By 1999, the light piping team lm to companies ar ound the was sure it could make their world for more than a decade, product in any size or shape, 3M decided to produce the end- almost any length, for virtually product, a light pipe. The kind of any application, but they’d been light pipe that illuminates 900 set back about a year. With no miles of highway tunnels in Italy. real business yet, the focus was A light pipe for sports arenas deciding which market segments that eliminates blinding light on held the greatest potential for footballs or basketballs with a 3M. “We weren’t going to make high arc or annoying re ection 100 feet of light piping for some- from the oor . A light pipe for one,” said Radke. “We wanted to greenhouses, museums, assem- sell hundreds of thousands of bly halls, large manufacturing meters and feet of this product.” some jigs in our home work- facilities, distribution centers, This was the commercialization shops. We invented as we went. railway stations, indoor swim- stage where the target buyers We were committed and, what- ming pools and unique architec- were identi ed, the manufactur- ever it took, we did it.” tural designs. ing processes were re ned and “3M had the r st really big Ken Kneipp, technical man- the price/value equation was change in lighting technology at ag er, 3M Consumer Safety and de ned. By the end of 1999, 3M that Hannover show,” said Pojar, Light Management Department, was scheduled to ship and install who had joined the company in is credited with the idea of not about 1,000 3M light piping units 1986 with a B.A. in physics. Show just selling the optical lm, but for customers, ranging from as visitors wanted to place orders the end product that uses the small as 10 inches in diameter and even buy the prototypes. lm, as well. “We decided to to as long as 65 feet. Several were lighting designers introduce our new product in Pojar and Radke said they and one was particularly keen 1996 at the Hannover, Germany, put their “heart, soul and emo- on the prototypes. — light show a huge event that tions” into the 3M light piping Tw o months later, 3M was showcases new industrial program and there are still many gearing up to manufacture the and consumer lighting,” said unknowns. They agree that sup- r st order and, by September, DuWayne Radke, project manu- port from management is crucial about a mile of piping was facturing manager, who joined in seeing an embryonic business shipped to Hill Air Force Base the light piping team after spend- to reality. “You need a committed in Salt Lake City, Utah. ing 22 years in engineering. “We team, funding and a general Anyone observing the market had about six weeks to design direction,” said Radke. “We were reception to 3M light piping and fabricate our prototypes, wo rking in a brand new area would have assumed the busi- then ship them to Germany. Ken, where we didn’t have the details ness was about to take off like Steve Pojar, technical specialist, worked out. We had no idea a rocket. But, it didn’t. As it turns and I worked on them virtually what light piping was going to out, the company supplying nonstop until we were done. We look like. We just starting work- 3M with a superior, microwave- said, ‘O.K., we have a few weeks ing and necessity was our guide powered light source about the to do this,’ so we just sat down to invention. We needed the size of a golf ball had to remove and gured it out. We got a local freedom . . . and we had it.” its product from the market. extrusion house to build us a 3M was left with light pipes and die and do some extruding. We no light. gured out ho w we were going The scramble began to nd to assemble the piping. We built an alternative light source and

70 Chapter 4 62  s, and he told a journalist, with obvious satisfac- There was no team and no formal project  years ago, tion, “Our learning curve, which began designation . . . Mucci and Pieper were actively is now trending sharply upward.” bootlegging, borrowing equipment and expertise It was clear to Appeldorn that, if microreplication was to be a commercial success, 3M had to make prod- from CRPTL . . . Everyone involved was ucts through a continuous process, “by the yard, not experimenting . . . > 3M Today employee magazine, the inch” in Appeldorn’s words. Process research efforts 1997 “Reinventing 3M’s Oldest Business” started in earnest because microreplication required a sophisticated, complicated set of steps including extru- sion, casting, coating and molding. available for personnel and equipment. A retired manu- — facturing line from Traffic Control Materials Division became a testing — called the “blue monster” A Revolutionary Product and Process > ground and accelerated the process and When microreplication “met” coated abra- product development work. Micro- s, the result was new-  sives in the replication experts from the Optics to-the-world products. But, it would Technology Center became key years before 3M Trizact abra-  be advisors. Even Scott Culler, scien-  sives debuted in . The fuzzy tist, Dental Products Division, who front-end of “str uctured abrasives” knew nothing about sandpaper — required percent time; boot-  but a lot about light curing joined — legging; collaboration among nine the team. labs at 3M; and an ardent sponsor, As it turned out, a major, early In Sun Hong, then technical director, hurdle was figuring out how to coat Abrasive Systems Laboratory. and cure a mixture of mineral and resin (a “slurry”) onto a backing, such as cloth, to form 1 Innovation tells us where to go; precise microscopic pyramids. Light curing became a key factor in making it work. “In  , we were lucky don’t tell innovation where to go. we if we could make one sample a week before things etired chairman of the board and r > L.D. DeSimone started going wrong,” said Stan Collins, who led the chief executive officer (CEO) project’s technical team. “For a management review at the end of the year, we were making product at feet  a minute and we were proud of that.” Mike Mucci was a technical service senior specialist -foot  Once the project team was able to create s.  in the Abrasive Systems Division during the mid- belts of the prototype, there were weeks and months He was looking for ways to make aircraft more fuel of testing. Day after day, Mucci used the prototypes to efficient by sanding grooves into airplane wings. Mean- sand golf club heads and plumbing fixtures. He became while, Jon Pieper, process engineer, Abrasive Systems, known as the single, most notorious, source of noise was exploring how light curing could eliminate the use in his building. of solvents and heating by oven in the production of With an effective prototype, the focus turned to coated abrasives. Both Mucci and Pieper knew scientists boosting speed and quality in manufacturing so that in the Central Research Process Technology Laboratory 3M Trizact abrasives could be produced for a commer- (CRPTL) who were examining how to link microrepli- cial market. Dave Quast, division engineer, Abrasive cation to abrasives. Systems, then technical director, Abrasive Systems When this informal, though intensive, effort won Lab, designed all the equipment upgrades for the blue a Genesis Grant, there were newly dedicated dollars

71 Ingenuity Leads to Breakthroughs 63 monster, so the team could run small test batches. conductors and reduces the margin of error in the Hong was a relentless advocate and, through his process. This product and application are in an industry efforts, Trizact abrasives became a Corporate Pacing . 3M hopes that it billion by   expected to reach Plus Program. That designation guaranteed them three   . “This will generate million in new sales by years of funding to accelerate product development product is highly dependent on process,” said Chuck and commercialization. Kummeth, business director, Chemical Mechanical  The real breakthrough came in September , Planarization Programs. “That’s why we’re partnering when Culler field tested the new product for a manu- with the world’s leaders, Rodel and Applied Material. facturer of titanium jet turbine blades. “That was the It’s an extremely challenging technology, but as elec- litmus test,” Culler said. “We had a customer saying, tronic devices get smaller, there is even more growth ‘You guys have something really unique here.’ From potential.” that point on, it was ‘Turn the crank and let’s get scaled up and get this out as fast as we can.’ ” Partners in Microreplication > on With new technologies in electronics emerging — average — in two years or less, 3M decided to exploit > Today Golf Clubs, Tomorrow Semiconductors its microreplication technology platform in the  s In  , when 3M Trizact abrasive belts were formally introduced, 3M changed the basis of competition in the abrasives industry and there were significant sales As the semiconductor industry shifts to making  by . Hong called the structured abrasive discovery semiconductor wafers that can process more “a process revolution and a product revolution.” and more information, they’re looking to 3M to “When we first started,” he said, “we didn’t see the full scope of the product. There are still many appli- make the transition less costly. With our special- cations that have not yet been thought of and many ized abrasives, we can help a customer cut the other market areas where we can change the basis of number of process steps by as much as half. competition.” > Harold Wiens One of the most exciting prospects is semiconductor wafer polishing, called “planarization,” a high-tech .  application that became a Pacing Plus Program in finding worldwide manufacturing partners. In this by Put simply, planarization is sophisticated sanding that wa y, new applications could reach the marketplace cuts the time required to make wafers used in semi- sooner. Finocchiaro traveled to Sumitomo 3M in Japan 3 2 Close-up of structured 1 surface using micro- replication technology. 2 Structured abrasives, employing microreplica- tion technology, offer superior performance for finishing metal products from golf clubs to medical Smoothing the 3 implants. surface of semiconductor ers is faster using waf structured abrasives.

72 Chapter 4 64 and called on companies including Hitachi, 3M’s stake in plasma display panel man- Sony, Fujitsu, Seiko-Epson and Canon. ufacturing is the rear panel of glass, called a The objective was to introduce 3M’s micro- “barrier rib,” that has vertical channels less than replication expertise and find partner-  microns apart, five times smaller than ships that would be mutual and strong. “I the width of a human hair. Plasma, in reviewed our capabilities,” said Finocchiaro. the form of phosphors giving off color, “I said we’re able to produce some of the is trapped in these narrow channels, then most precise microstructures available ignited to produce colored light that pro- and we can manufacture them into products duces an image. 1 in large volumes and on a large scale.” “The most expensive part of manufacturing These exploratory discussions led to the plasma display panel was producing that confidential agreements with manufacturers barrier rib,” said Finocchiaro. “The glass of plasma display panels in Japan and Korea. was sandblasted under high pressure; it was a slow, messy and expensive process, taking about  minutes for each barrier rib. But, Technologies have a shelf life. Micro- have expertise in making structured surfaces. we replication has a life of perhaps 15 years. Not only could we make the structures, we also developed a manufacturing process to do it.” need to get as much out of the plat- We Rather than make the barrier rib panels and form in the time that we can. Then, we’ll acturers, 3M chose to license its sell them to manuf migrate to something else. > Robert Finocchiaro gy to manufacturers, saving them time process technolo technical director, Engineered Adhesives Division and money and ensuring high-quality production. “Our — Japanese customer, Fujitsu, has told us of all the While relatively new to consumers, plasma displays — options they know of today our solution has the poten- are common in business, for example, serving as airline tial to be the lowest cost in producing the barrier rib,” arrival and departure displays. The displays can be as large as  feet (on a diagonal measurement) and yet Like a conspiracy in an Oliver Stone film,  inches thick. A hot gas, or plasma, they are only about microreplication is suddenly everywhere in 3M. is ignited in these panels to give off light, much like fluorescent gas illuminates a fluorescent lamp. > Fortune magazine, February 5, 1996 2 1 A model of a strand of 2 Senior research DNA. biologist Anila Prabhu, in the Biomaterials Technology Center, studied a gel used to analyze DNA. Micro- replication allows researchers to conduct thousands of tests on one protein at one time.

73 Ingenuity Leads to Breakthroughs 65 application for our technology,” said Finocchiaro. “In The barrier rib project is what we call ‘white the human genome program, for example, researchers space’ at 3M. Acceleration programs, like are decoding the genetic makeup of humans. To accom- this one, address very large opportunities and — plish that, they must analyze hundreds of millions of protein samples. By using micro- if not billions — markets. But there are other opportunities that replication, we can create thousands of tiny channels shouldn’t ignore. ‘White space’ projects we on plastic so that researchers can conduct thousands bring diversity to 3M’s technology portfolio of tests on one protein at the same time. This approach and that’s what will keep us profitable. brings about huge improvements in efficiency while simultaneously enabling miniaturization of the process. > Raymond C. Chiu product development specialist, I expect this will bring tremendous value in the market- 3M Microreplication Technology Center place.” , 3M products using microreplication tech-  By said Finocchiaro. This new application could cut the cost billion in revenue after nology generated more than  of in-home entertainment centers with plasma display peaking at about  million annually only a decade panels from  ,  to  ,  in a matter of a few years. before. By  , 3M estimated that microreplication Yet another white space for microreplication would be an integral part of one-fourth to one-third of involves biomedical uses. “This would be a brand new all its products. ● Have the patience and persistence to let the fuzzy front-end sharpen. Randomness and chaos are both part of innovation. ● ● The most important innovations respond to an unarticulated need. ● Innovation may take you to uncharted territory beyond your scope of expertise. ● Be open to every possible application or combination of core technologies. will die without sponsors — even the best ones — Embryonic ideas ● time-tested truths and champions. Collaborate early and often. ●

74 Top leaders had support 3M legends What it takes

75 r o l e m 5 o d e l No One Succeeds Alone o f The myth was demystified decades ago at 3M. Very few i people succeed in business on their own. The self-made n man or woman is more folklore than fact. While people n — must take personal initiative to realize their dreams o they are usually — and even buck the system at times not “lone rangers.” Even before there were popular v buzzwords to name what they were doing, 3M people a naturally gravitated toward being champions, spon- t sors and mentors for others. ● Sponsors, mentors i o and champions. 3M people can be one or all three. n

76 Chapter 5 68 Kay Grenz became vice president, Human Resources, Guthrie was clear about how he wanted to coach but  years before she was a novice HR coordinator Grenz but, she said, “I didn’t know it was mentoring in her first job at 3M. “I moved into manufacturing engi- at the time and, if you asked him, I don’t think he neering and met Don Guthrie, now retired vice presi- even though he’d been doing it — would have either dent, Engineering and Manufacturing,” Grenz  years. for said. “I didn’t walk into his office one “Don’s counsel was extraordinarily day and say, ‘Don, will you be my objective and yet personalized,” mentor?’ Instead, when I had an Grenz said. “He could help issue to solve, we’d discuss a person find the answers, the situation, talk about instead of giving them the answers.” Steve Buckingham, It started with Lucius intellectual property Ordway. 3M needed counsel, explained his a sponsor who said, role as a mentor. “My goal is to teach people ‘I believe in your about the culture of 3M company, I’m going and the unwritten rules to put money into it live by here.” we and I’m going to stay for Dick Drew was the classic the long haul.’ > Leon Royer mentor. He always encour- retired executive director, Leadership aged his people to pursue ideas . . . Development Center, Human Resources 1 He said, ‘If it’s a dumb idea, you’ll find out. what steps could be taken, examine how the approach You’ll smack right into that brick wall, then you’ll fit 3M’s decision-making process, and then we’d identify stagger back and see another opportunity that a solution. He took a personal interest in helping me you wouldn’t have seen otherwise.’ > Art Fry understand the culture of the company and its strengths. It was an early version of knowledge transfer.” retired corporate scientist, Office Supplies Division 2 Chapter opening photos (From left) A.G. Bush, William McKnight and Richard Carlton were congratu- lated in 1949 as they took their new posts as chairman of the Executive Committee, chairman of the board, and president, respectively; Successful mentoring at 3M is contact and good informal and flourishes with personal encompassing — rapport; The transfer of knowledge both technical expertise and an understanding of 3M’s lies at the heart of the mentoring — culture relationship.

77 No One Succeeds Alone 69 agement. The other thing he gave me was trust. I had ‘Go South, Young Man’ > a lot of freedom.” L.D. DeSimone became an engineer at 3M Canada, in When 3M needed a new Scotch-Brite manufacturing his native country. But, when an opportunity surfaced plant in Brazil, DeSimone found a champion in John to leave London, Ontario, and tackle a new assignment, Whitcomb, group vice president, Abrasives, Adhesives, DeSimone, who retired as 3M chairman and CEO, was Building Services and Chemicals. 3M Brazil’s business reluctant. “I wasn’t keen on going anywhere. I was happy was growing at an astronomical rate in the early s  and DeSimone needed more production capacity. From when Don Guthrie I was 20 years old in 1957 ... experience, however, 3M had learned not to concentrate came in and talked with me. Having a person all of its manufacturing at one site, so Chairman Harry Heltzer and President Ray Herzog told DeSimone to who was that interested in a young man’s find a new location on which to build a manufacturing wo as a real confidence builder. I think it’s rk w plant for Scotch-Brite products. “We had a very skinny impossible to go from joining 3M to having staff,” DeSimone said, “and building a whole new loca- tion would have been tough.” In the meantime, however, a great career without some mentoring. It’s part of the learning experience. > L.D. DeSimone retired chairman of the board and chief executive officer Mentoring is an established part of the fabric of 3M and one of the key reasons why the culture with what I was doing,” he said. “But Jim Mingle, who has been sustained for so long. > Kay Grenz hired me, said ‘You know, Desi, you ought to go.’ If vice president, Human Resources he hadn’t given me this advice, I’d still be in Canada.” DeSimone would not have become managing direc- DeSimone managed to get the OK to build the Scotch- tor of 3M Brazil without the mentoring and sponsorship Brite plant next to the existing facility. “We started of M.J. Monteiro (Em to his colleagues), who became building in a hurry,” he said, “because we needed the executive vice president, International Operations. “He plant so badly.” Soon afterward, however, Monteiro helped me make the transition from being an engineer wired DeSimone telling him to stop all work and come with a technical orientation to becoming a business per- to St. Paul. 3M’s international head of manufacturing son,” said DeSimone. “As I worked for him, Em taught didn’t support the plan. “We had a hell of an argument,” me the business and financial considerations of man- 3 1 In the 1940s, the Cost Accounting Department, housed in Building 21 on the east side of St. Paul, instituted an early mentoring program: new employees learned how things were Don Guthrie, done from an “old timer.” 2 pictured in 1959, mentored many 3M 3 3M scientists encouraged employees. students’ interest in science on a Twin Cities WMIN-TV television program in 1955.

78 Similarly, as 3M’s technical on Guthrie, vice president, 2 infrastructure grew, the com- Engineering and Manufac- D “ pany’s corporate scientists turing; Bob Adams, head of looked for ways to serve as Research and Development; sponsors or mentors to often and Lew Lehr, chairman of the younger colleagues on other board and chief executive of cer , continents. In 1996, a pilot pro- were all mentors, sponsors and gram started with Sumitomo champions in their careers,” 3M in Japan involving four cor- said Kay Grenz, vice president, porate scientists, from corporate Human Resources. What do headquarters in St. Paul, who these roles mean? spent several weeks there. “In Mentoring is probably the Japan, they accept mentorship a sponge. He showed me that best understood. It is a one-on- as a natural function; it’s a funda- you could do basic chemistry one relationship and often infor- mental part of their culture,” research in an industrial environ- mal. People typically “self select” said Steve Heilmann, one of the still ment. Even in his 70s, he each other and they are usually four mentors. “Our goal was to lives, eats and sleeps research. in the same profession or eld. establish closer ties with the sci- His laboratory is a museum. The mentor is a good listener, entists and engineers in Japan. George ‘adopts’ people and helps teacher and guide. Relationships We wanted them to feel comfort- them immensely. He’s as close may be short and episodic or able contacting us if they had to the real dictionary mentor as last for years through multiple technical problems or questions I can imagine.” careers. Mentors typically say that about their careers. Later visits An individual sponsor is — if not more — they gain as much to Japan involved staff and divi- someone who may have a formal from the relationship as they sion scientists who served as responsibility to assure that an give. Successful people in busi- mentors. Authentic mentoring,” employee’s career is on the ness can always cite at least one Listeners, Teachers and Guides Heilmann said, “requires a lot xample, if a 3M right track. For e mentor and often more who of personal contact and rapport employee goes overseas, he helped them. that builds over years.” or she is assigned a “re-entry It is not surprising that people sponsor.” When employees 1 in leadership roles are expected return to St. Paul or 3M Austin to serve in supporting roles. “One Center in Texas, on home leave of the criteria used in assessing from an international assign- a technical career is whether that ment, they meet with their spon- person engaged in mentoring,” sors. “It’s a formal relationship said Heilmann, whose own mem- and people take it seriously,” orable mentor was lab mate said Grenz, a re-entry sponsor Wa yne Larson. “I saw how suc- herself. The sponsor wants to cessful he was in getting his make sure that the person in the research out into the commercial overseas assignment is making arena,” said Heilmann. “That the most of that opportunity and, Spencer Silver, corporate — not just takes so much skill after the individual returns, the scientist and creator of the Post- technical talent, but people skills.” sponsor helps steer the person it note repositionable adhesive, Now retired, Larson is a consult- to the best opportunities state- said George Van Dykes Tiers ant to 3M and he has worked with side. The program was created left an indelible impression on Lockwood Carlson, another 3M in the early 1980s when interna- him. “George was one of 3M’s corporate scientist, who organ- tional employees said they felt r st corporate scientists and his ized a mentoring program involv- disconnected from 3M’s United mind soaked up knowledge like States operations. Background: 3M aluminum oxide sandpaper

79 ing retired 3M corporate scien- tists and current staff. “A sponsor is someone who gives you advice as you go through life,” said Les Krogh, retired senior vice president, Research and Development. “It’s someone who talks to you about your future, who’s there when you have a question. Sponsors say to others, ‘Take a good look at this person.’ I’ve sponsored a lot of people in my life; it’s an important part of being a manager.” Project sponsors “adopt” and promote projects and not neces- sarily speci c people . The people may change, but the project is the focus. Projects that sponsors choose to nurture and support are usually in their own business or organizational area. Champions may come from unrelated business areas. They have strong credibility within 3M and they are persuasive “lobbyists” for company invest- ments in new ideas or products. “Al Huber, retired executive vice president, Commercial and Consumer Sector, was the mar- keting champion in the company, even though he had sector responsibility and served as managing director, 3M Germany,” said Grenz. “Ernie Moffet, retired group vice president, Consumer Group, was the consumer cham- pion when 3M still thought of 3 itself as strictly an industrial company. High rank is not man- datory for a champion, but the Spencer Silver, the corporate scientist credited 1 ability to listen, persuade and with inventing the microsphere adhesive used in in uence is. ” Post-it notes. 2 Kay Grenz, mentored as a new 3M employee, was named vice president, Human Resources in 1998. 3 3M’s sales initiative and summer internship programs give students tips on building a successful sales career at 3M.

80 Chapter 5 72 DeSimone recalled. “The talks went on for almost encouraged me to be the first technical director at 3M three days. Finally, the decision went to Whitcomb. We to leave a division lab and return to Central Research. repeated the arguments in front of Mr. Whitcomb and The divisions were growing and they rarely hired  minutes. I was very he listened to our wrangling for Ph.D.s. Central Research did hire Ph.D.s and, soon, aggressive and so was the other guy.” many became technical directors. Eventually, Central Finally Whitcomb put an end to the battle and Research became a hiring pool for the divisions.” DeSimone has never forgotten the outcome. “Whitcomb said, ‘These guys in Brazil have the best business of all > The Mentor and Motivator our businesses outside of the United States. Why don’t Jim Klein, retired, who held a variety of financial you leave them alone and let them do what they want -year 3M career, remembers  assignments during his to do?’ ” End of discussion. the powerful role William McKnight played as a spon- sor and mentor. “Tim Raymond, retired research scien- tist, had been working on a porous rubber sheeting for Sponsors with Vision and Pluck > hospital beds,” said Klein, who sat in on many manage- “Tom Reid was one of my first sponsors and mentors ment reviews of new products. “Tim called it Porcel at 3M,” said Les Krogh, retired senior vice president, rubber sheeting and he worked on it for years. Every Research and Development. “I worked for him in the six months, the product team reported to the Manage-  summer of . He talked to me about fluorochemi- ment Committee on their progress, expenses and pro- cals and how they could carry 3M into agricultural jected costs. Tim knew, from the tone of one meeting, chemicals and pharmaceuticals. I learned about vision that the project was going to be killed.” from Tom.” Mathew Miller, manager, 3M Abrasives Raymond had a huge emotional investment in the , told his colleagues to look seriously at that  Lab in project and, as the meeting progressed, Klein remem- young guy, Krogh. “Matt taught me how to run a lab bered him saying, “You know, I’ve worked seven years in one of the toughest situations — a division that was of my life on this. You’re not listening to me. You’re going to kill this project.” Tears ran down Raymond’s William McKnight established fundamental cheeks. It was then, Klein said, that McKnight stepped operating principles for 3M including belief in in, “Wait a minute, Tim. What I want to tell you is we people, trust in people and a willingness to let people try new things. etired chairman r > Lew Lehr of the board and chief executive officer losing market share,” said Krogh. “The first thing he did was start Central Research Lab projects that exam- ined the properties of adhesives. He hired me to work in a three-man research group to explore future abrasive backings. Because of those efforts, our lab knew so much about the function of abrasive structures that when our competition brought out a new product, we could analyze and duplicate it in two weeks flat.” Cecil March and Guthrie were champions who looked at the “big- ger picture,” said Krogh, who holds 1 a Ph.D. in organic chemistry. “They

81 No One Succeeds Alone 73 have a project involving resin bond disks that is more ll see if this is as good as you say it is.’ ” Six months We ’ important and we need you for that one. It’s worth mil- later, 3M had two customers, the United States Air lions of dollars to 3M. Porcel sheeting is a good product, Force and the University of Minnesota. “We told them but we can’t afford to have you focused on it right now.” we were going out of business and they said, ‘No, you’re Klein said Raymond went from fighting tears to not,’ ” Lehr recalled. “That’s how the medical business “walking five feet off the ground because McKnight got reinstated at 3M. It was Tierney, a 3M champion, said, ‘I’ve got a project for you; you’re the best man who had the faith to keep the program going. You could in the company for this job.’ ” say he ‘sat on the eggs and helped them hatch.’ ” The Titan of Tape and TQM > A champion has to have faith and the support Hugh Tierney, retired vice president, Reinforced Plastics of people at the top who have confidence in Division, championed 3M’s tape technology in the early him. A champion also has to attract and retain years, Lew Lehr, retired chairman and CEO, said. “He forced the company to move from cellophane tape a cadre of very capable, committed and loyal to acetate tape because cellophane crinkles and turns people, because no one accomplishes anything yellow. Acetate was a brand new concept in the market- at 3M alone. > Lew Lehr place. He pushed to develop a tape dispenser that was easy to use, load and unload. Even though he’d never been a salesman or marketer, he had a sense of what John Pearson, retired vice president, Development, customers needed. All the new tape developments that and Carlton Society member, also credits Tierney with emerged when he was head of technical operations focusing on manufacturing process improvement decades were personally pushed by Tierney.” before “total quality management” (TQM) became the In , when Lehr’s embryonic medical products  mantra of American business. “Hugh was head of the business spent more on advertising than it generated Tape Division in the late  s. He recognized that as in sales, Lehr thought his project was doomed. “If you’re competition grew, we had to get our manufacturing eco- an executive vice president, the logical thing to say is, nomics in line by understanding the processes we used to ‘It’s dying. Kill it.’ But we worked for Tierney and he make our products,” said Pearson, who led the tape devel- said, ‘Yeah, we’ll stop, but let’s make six months’ inven- opment engineering group at the time. “He took a risk tory of our surgical drapes before we turn the equipment and supported that work, even though it didn’t generate off. Then, you’ll have to go out and sell the inventory. any new products and was an expense item on his budget.” 2 Acetate fibre tape, from the early 1 1950s. Hugh Tierney (right), pictured 2 in 1949, was a champion for 3M’s fledgling medical products business and for manufacturing improvements long before total quality management was fashionable.

82 Chapter 5 74 The Boise, Idaho, blitz a few months later confirmed > The Persistence of Champions the fact that once consumers tried this product, they Lehr said Jim Thwaits was the original champion of wanted more. Post-it notes when he led 3M’s Tape Group while Art Fry, Clarence Sampair, Maynard Patterson, M.J. Monteiro retired corporate scientist, Office Supplies Division, pur- and Thwaits, all long retired from leadership positions sued a lonely cause: trying to sell people on the value in International Operations, were the “international of a pad of yellow memo paper with impermanent adhe- champions” who made 3M a global enterprise, as early sive. “Thwaits was the one who kept pushing and saying, s, when other American companies were  as the ‘This might be a product,’ ” Lehr said. Lehr’s executive focused largely on domestic growth. “Establishing and assistant, Shirley Tholander, was also a champion of expanding 3M’s international operations was remark- Post-it notes. At the request of 3M marketers, she sent able,” said Lehr. “They had indomitable spirit. They a letter to her executive secretary peers at Fortune  were able to wear dirty shirts out of suitcases they’d companies and enclosed a product sample. “All of a been carrying around for three weeks. With little experi- sudden, those little yellow things were coming from the ence to guide them, Sampair and Patterson had uncanny, companies,” said Lehr. “The next  CEO’s offices in accurate instincts for international business.” They, in question was, ‘Where can I get more?’ ” turn, were mentors to Thwaits who followed them. After Post-it notes failed in a five-city test, Joe Ramey, who retired as group vice president, Commercial Markets Group, and Geoff Nicholson, who retired as > The Champion of Shared Knowledge staff vice president, Corporate Technical Planning and Bob Bringer, retired staff vice president, Environmental International Technical Operations, were two champi- Technology and Services, and former chair of 3M’s ons who packed a pickup and trailer with samples and Technical Council, said Bob Adams was the champion drove to one of those cities, Richmond, Virginia, to give of technology sharing within 3M. “Bob, who retired the product one last try. “They traveled from one end as vice president, Research and Development, formed of town to the other,” said Jerry Chernivec, intellectual 3M’s Technical Council,” said Bringer. “He saw it as property counsel, who wrote the first Post-it note an open forum for technical leaders from all the labora- patent and has defended the product from competitive tories in the company to share information about new infringement around the world. “They gave Post-it notes technologies. This was the first time that peers got a to every potential customer and said, ‘We’ll be back in chance to meet together for three or four days. Creating three weeks to see what you think.’ When people actu- the council solidified the idea that technology belongs ally had a chance to try them, Post-it notes were a hit.” to the company.” 1 1 Bob Adams, pictured in 1949, created 3M’s Technical Council for technical leaders from all the company’s laboratories.

83 No One Succeeds Alone 75 As the champion of knowledge transfer, Adams also ideas that were completely apart from new things — advocated a strong market orientation, said Bringer. our normal lab assignments. He’d often walk in and ask “He started at 3M as a salesman with a Ph.D. in chem- ‘What’s new?’ — and he’d expect an answer.” ical engineering. He encouraged all of us to think more On most Friday afternoons, Grieshaber gathered about markets rather than just about technology.” his team for what he called, “show and tell.” “He’d buy Mentors, sponsors and champions often have long coffee and doughnuts and we’d all sit around and dis- lasting impact. Roger Appeldorn, retired corporate sci- cuss the personal lab projects we were working on,” entist, remembers Emil Grieshaber, technical director, Appeldorn said. “One idea sparked another. I can Visual Products Division, the nattily dressed individual- remember people from other divisions attending,  ist who arrived at work wearing a bow tie and a flower including some from Visual Products Division, the group in his lapel. Appeldorn was taking additional courses working on overhead transparencies and later the over- en he went  at the University of Minnesota in wh head projector.” Those early, casual meetings planted to work for Grieshaber in the Thermo-Fax laboratory. the seeds for 3M’s microreplication technology plat- “3M didn’t have an education policy at the time, so years later, Appeldorn form. Even today, more than  Emil covered for me when I attended day classes,” said said Grieshaber’s impact was pivotal. “He was my first Appeldorn. “He was a taskmaster; he expected people major mentor. He influenced me more than anyone else to work hard. We all had projects that were important in technical work and technical management.” to the division, but he also encouraged us to think about ● It’s difficult to succeed alone; building a career at 3M requires the support of others. The most successful mentoring at 3M is informal; it flourishes ● with personal contact and good rapport. Sponsors help advance a person’s career and keep it on track. ● ● Champions have strong credibility; they are persuasive “lobbyists” for new ideas and products at 3M; their willingness to take risks is more important than their titles. time-tested truths ● The most successful 3M leaders have been mentors, sponsors, champions — or all three. ● Those who are successfully mentored often later successfully mentor others.

84 The beginnings of Scotchlite reflective sheeting 3M Medical: patience under pressure 3M Pharmaceuticals — Riker Labs, Tambocor and Aldara

85 r o l e m 6 o d e — No Risk, No Reward l o ‘Patient Money’ f Tw elve years after its founding, 3M finally made money on i its sandpaper. Eight long, dry years plagued the company n before 3M Scotchlite reflective technology produced a n minimal profit. When 3M entered the health care business o  with surgical drapes, it was an inexperienced in newcomer with anemic product revenues taking on giant v Johnson & Johnson. In pharmaceuticals, 3M invested a in  years of research before Tambocor, a drug to t  treat heart arrhythmia, was introduced. It took i o years before Minitran, a transdermal nitroglycerin n

86 78 Chapter 6 drug delivery system, and  years before 3M has a tradition of applying patient money Aldara, an immune response modifier, and patient support to ideas that ultimately can made it to market. change the basis of competition. Baukol calls them For a century, 3M has demonstrated a bias the “holy grail” of 3M. “You just know that some toward growth through diversification. On many things are going to be worth working on and that occasions, these new directions have involved requires technological patience,” said Baukol. considerable risk and long-term investment known ou don’t put too much money into the “Y as “patient money.” This investment has often investigation, but you keep one to led to leapfrog technologies with far  five people working on it for reaching applications. “We have to years, if you have to. You do it because you know that, once you crack the code, it’s going to be big.” Scotchlite sheeting didn’t show Creating a reflective road striping material much profit for nearly 10 years. The same was that is durable and replaces paint is an example 2 true for fluorochemicals and duplicating products. of a “holy grail” product. Developing a dental It takes ‘patient money’ to make some ideas In the early stages of a new product or technol- succeed. > Philip Palmquist retired technical director, ogy, it shouldn’t be overly managed. If we start Reflective Products Division, and Carlton Society member asking for business plans too early and insist on bring in new technologies that will enable 3M to win tight financial evaluations, we’ll kill an idea or in the future, along with focusing on what we already surely slow it down. > Harry Hammerly retired executive do best,” said Ron Baukol, retired executive vice presi- vice president, International Operations, formerly vice president, Finance dent, International Operations, who started his career at 3M in  as a new product development engineer in Medical Products. “I learned early on that the key filling material that adheres directly to the natural tooth to good product development is to ‘iterate’ as fast as structure is another. An adhesive bandage that sticks you can. Make one model, give it a try, then try another. to wet skin is still another. And, in pharmaceuticals, The more iterations you can make, the better, rather a major breakthrough would be a “smart medicine” or than trying to perfect one; it’s probably flawed anyway.” drug delivery system that sends medications straight to Chapter opening 1 Team leaders pictured from the 1975 1 Many years photos 2 Golden Step Awards. The award pro- of anti-viral research gram, which began in 1972, recognizes led to Aldara, 3M’s first teams of people who develop successful immune response The Scotchlite breakthrough products. 3 modifier drug; Close- project team in 1943 included, from left: up of reflective glass Donald Douglas, Edward Davis, Bert beads used in Scotchlite Cross, Robert Ackerberg, Paul Magoon, products; Scotch micro- Philip Palmquist and Harry Heltzer. porous surgical tape, 4 From the beginning, researchers introduced in the 1950s; realized that glass beads were a key 3M is a world leader in component to any future reflective reflective sheeting. sheeting or pavement marking product.

87 No Risk, No Reward — 79 ‘Patient Money’ the place in the human body that needs them. “That’s whether you’re successful or not. If you’re successful, y 3M’s metered-dose inhaler is such a strong product, wh you’re called persistent; if you aren’t, you’re stubborn. because it delivers drugs for asthma directly to the But, while you’re doing it, nobody can tell the differ- lungs,” said Baukol. ence.’ ” Baukol said. “We have to have a lot of patience The challenge, of course, is to discern these holy with our stubborn people.” grail product ideas from what Baukol calls the “ever- — greens” products that demand years of attention and Stubborn at First, Successful at Last > A young research chemist named Phil Palmquist and rookie engineer Heltzer were probably considered stub- The willingness to bet on embryonic born when they wouldn’t give up on the “Glass Beads is the key to — and fund them businesses — Project,” a product development team started in .  3M’s future. Fortunately for 3M Health Care, Assigned to develop durable roadway striping, the team coated a plastic adhesive tape with small glass beads, there was considerable patient money around but it wasn’t as reflective as it needed to be. 30 years ago. r etired executive > Jerry Robertson One year later, after 3M’s senior management had vice president, Life Sciences Sector told the team to stop work, Heltzer and Palmquist perse- vered. Working after hours, Palmquist managed to create investment but never blossom. “You have to have  a product  times brighter than white paint and patience with some ideas, but not with everything you’re times better than earlier reflective prototypes. But, the working on,” he said. stripes weren’t tough enough to stand up to frost and Golden Step Awards were created in at 3M  heavy traffic; they peeled away from the road surface to recognize teams of people who develop break- and waved in the breeze. Passing motorists dubbed the through, profitable products and demonstrate persistence, or 4 stubbornness, to see their efforts through. “I remember our former chairman of the board, Harry Heltzer, once sa ying, ‘The dif- ference between persistence and stubbornness is, fundamentally, 3

88 Chapter 6 80 product “3M’s friendly tape.” Undaunted, the team Scotchlite sheeting on the side-arm stop signal of school scrambled to improve the stripes before winter arrived buses, but when the temperature dropped, so did the using asphalt to stick them to the pavement. Eight by sheeting. Reflective “Go For Safety” emblems were dis- volunteers from several 3M departments helped lay a tributed far and wide to car owners, but they became three-quarter-mile-long stripe on busy Highway  near brittle in the cold and fell off the cars. Rain significantly the company’s plant on the east side of St. Paul. cut the visibility of the reflective signs and dirt quickly lodged between the glass beads, making them look unsightly in daytime. Working with other technical peo- had a machine to dispense the asphalt, We ple, Palmquist, who eventually retired as technical direc- but we had no way to keep it hot enough to go tor, Reflective Products Division, improved the sheeting with a smooth topcoat that protected the glass beads though the dispenser. Harry Heltzer volunteered from dirt and weather. In addition, the new Scotchlite to bring buckets of hot asphalt from the plant. engineer-grade, flattop sheeting made it possible to apply That’s when he got into trouble. On his third trip, words and other design elements with weather-resistant inks. That breakthrough meant that Scotchlite sheeting a St. Paul policeman stopped him for speeding. could also be used in graphics and advertising. > A Scotchlite project volunteer Necessity: A Powerful Motivator > While the experimental reflective stripe survived World War II could have killed the reflective line the weather, it wasn’t bright enough for highway engi- altogether because 3M’s supply of two essential raw neers to accept the product’s higher cost. It looked materials, natural rubber and resin, was cut off during like the company’s patience was running out. But, the war. That meant the lab had to start over and thanks to the suggestion of their internal “champion,” develop an entirely new process if it wanted to stay Richard Carlton, then vice president, Research and in business. As it turned out, necessity was a powerful Development, the embryonic reflective product was motivator and, along with developing the new process, modified from a horizontal road strip to a reflective the product team increased the reflective power of the sheet for road signs. sheeting and perfected more sheeting colors. The U.S. Working out the technical kinks in the new product government became such a big customer during the and selling it to highway engineers was a long, uphill war that the Reflective Department was elevated to battle. Cold was the worst enemy. One manufacturer put division status in  . 1 1 A 1940s advertisement recommended using Scotchlite reflective material on billboards like this one for Sweet- heart bread. 2 Scotchlite reflective sheeting made taxi cabs in England more visible at night. 3 A 1948 advertisement for Scotchlite reflective fabrics.

89 ‘Patient Money’ — No Risk, No Reward 81 The division didn’t actually earn its own way until but nobody could produce it yard after yard and have . Bert Cross, the company’s new products manager  the optical properties, the durability and the handling (and later CEO), became the next champion of reflec- properties of Scotchlite products.” tive products when he envisioned multiple markets and Over the decades, the original reflective technology applications. By fiscal year  , the division grossed has become more and more sophisticated and its uses  million. about have multiplied. According to a two-year study funded by the National Highway Traffic Safety administration in the  s, Scotchlite 3M was a driving force in advocating Diamond Grade sheeting on truck trac- a universal, international traffic tors and trailers has helped reduce  accidents by percent. Diamond sign system in the 1960s. When Grade reflective sheeting also that agreement was successful, makes construction zones and the we went on to be — — by far pedestrian crossings safer. Scotchlite leading supplier of signing materials reflective fabric retains its reflectivity after repeated industrial washing. Reflective fabrics around the world. > Donn Osmon r etired group and yarns for shoes and clothing answer a safety vice president, Traffic and Personal Safety Products Group 3M has a tradition of pursuing uninhibited s, the halting start of reflective  By the late research for uninhabited markets. The origin sheeting four decades earlier had spawned one of 3M’s largest product groups, including four units related and development of our reflective products is — to reflective technology Traffic Control Materials a perfect demonstration of that. > Hal Kosanke Division, Safety Systems Division, Decorative Products retired director, Civic Affairs Division and the Traffic Control Devices Department. Looking back, Heltzer said, “I don’t think we fully appreciated that Scotchlite products represented such need for a massive market. “The only thing on the road a high level of technology until after the basic patent that isn’t legally required to have lights or reflectors is ran out. In the early days, others were able to make a human being,” said Donn Osmon, retired group vice sw atches of reflective material that looked pretty good, president, Traffic and Personal Safety Products Group. 3 2

90 Chapter 6 82 “When 3M moved into the highway “ : A Space Odyssey” and  safety business with Scotchlite sheeting, “Barbarella.” American film artists that was a high growth area,” said Art called it “a major advancement in the de St. Aubin, retired executive director, motion picture industry.” Automotive Industry Center. “Our strong, early involvement made us one > 3M Medical: Patience Under Pressure of the world leaders in safety products.” Workers building the Chunnel, Emergency medical care during World linking England and France, in the War II led physicians to think about s, wore clothing with  early making surgical conditions more sterile Scotchlite brand high-visibility  s, the best a in peacetime. In the material while they labored  surgical team could do was sterilize feet beneath the channel seabed. a cloth towel and position it around Thousands of signs covered with the operation site, attaching it with Scotchlite reflective sheeting pinchers to the patient’s skin. guided workers through the huge, But, the material got wet underground construction maze. and the danger of bacteria 3M’s reflective technology migrating into the open also became part of an anti- wound was high. counterfeit system to ferret “Three physicians out fake records, audio and from the Euclid Clinic in videotapes. Reflective tech- Cleveland (Ohio) came nology even won 3M and to 3M after the war with Palmquist an Oscar when an idea,” said Lew Lehr, Scotchlite sheeting was used retired chairman of the in a new reflex projection board and CEO. “Their idea was system for composite to make a plastic sheet with adhe- photography that greatly sive on it that could stick to the enhanced film quality in skin right up to the wound edge popular movies, including and prevent contamination. They 2 3 1

91 No Risk, No Reward — ‘Patient Money’ 83 knew about Scotch brand tapes from 3M; that’s why Lou Weyand, who later retired as executive vice they came to us.” president and director, Sales, told Lehr, Auger and their The physicians sought a licensing agreement with ho later retired as vice president, boss, Hugh Tierney, w 3M to produce the surgical sheets, but Vice President Reinforced Plastics Division, to halt production. “But, of Research and Development Richard Carlton sug- Hugh said, ‘You guys sa y you have something. Before gested collaboration instead. After all, he reasoned, 3M we stop, why don’t you make enough so you’ll have a had experience with developing new products and the six-month inventory to sell off and then go out and sell physicians didn’t. Carlton assigned the project to 3M’s it,’ ” Lehr recalled. tape lab where Lehr and Burt Auger, who later retired as staff vice president, Program Development, went to People were telling Lew Lehr, ‘What the hell work. “It was a Rube Goldberg project; we were making are you doing getting into health care?’ He kept plugging away and he created a hugely We began marketing and we had about six successful business. > Bill McLellan retired staff sales people. After six months, we’d spent more vice president, Corporate Services, Austin, Texas, and former on advertising and marketing than we sold . . . division vice president, Orthopedic Products Division That wasn’t the way 3M did things. > Lew Lehr retired chairman of the board and CEO It was during this time that Lehr and Auger also converted 3M’s masking tape into an “autoclave tape” it up as we went along,” said Lehr. The prototype com- that could be used to bundle hospital supplies for bined polyvinyl chloride (plastic) with a very soft syn- sterilization rather than using conventional thetic adhesive (an acrylic) and a treated paper liner string. The product was an easy conversion and to protect the adhesive. Starch or talcum powder kept modest revenues, but not it started generating the drape from sticking to itself. The package was enough. Management was insistent. Shut folded, double wrapped in parchment paper, the business down. placed inside a foil bag and steam sterilized. The new surgical drape was introduced in to the American College of Surgeons  in Cleveland. 4 3M reflective materials are used 1 on pedestrian crosswalks to enhance visibility. 2 Throughout the world, countries rely on 3M reflective license 3 plates. Phil Palmquist won an Oscar in 1969 for developing a front projection screen using Scotchlite retroreflective technology. 4 Surgical drapes gave birth to an entire line of 3M health care products.

92 Chapter 6 84 “We offered to buy the business from 3M,” Lehr said. We took our top tape salesmen and tried to have “People in management probably said, ‘Those young them sell surgical drapes to hospitals. They didn’t punks want to buy it; they must know more about the know the chief surgeon from the intern or the venture than we do. Let’s let them go ahead for a while.’ We w ere serious, but we didn’t have any money to buy it.” purchasing agent from anybody else. It was very As fortune would have it, a branch of the U.S. Air slow getting started. retired research > Frank Copeland Force and the University of Minnesota surgical depart- scientist, Medical Products Division ment both decided to buy large quantities of 3M’s new surgical drape. “At the end of six months, we told them we were going out of the business,” Lehr recalled, “and our surgical tape. Our consultant had to fly out and tell our new customers said, ‘No, you can’t!’ ” Lehr and the fellow at the FDA that tapes aren’t put on by the Tierney appealed to management and won a reprieve. spoonful or in capsule form.” , 3M had a lab staff of five people trying to By  develop new products. The team began using the com- > A High-Risk Proposition pany’s new synthetic adhesive technology to develop 3M funded a pilot plant to supply its new medical cus- tapes that could be applied to human skin because 3M’s tomers and, by  , Lehr had convinced management new adhesives were much less irritating than the com- to fund more research. Medical products was a tough mon zinc oxide adhesive tapes used at the time. From arena for 3M and others. “No industrial company had this work came the introduction of Scotch plastic surgi- successfully entered health care,” Lehr said. “The two s, cal tape, in the late  or three others that tried, failed.” Success required sig- and a “breathable” nificantly more investment in research; long, painstak- tape, Scotch micro- ing and expensive clinical studies before going to mar- porous surgical tape, ket; and selling physicians on new products. In addition, later renamed there was the threat of serious liability should a product fail. It was a new, risky world for 3M. Only ambitious people and patient money had a chance of success. “We were ignorant about dealing with the U.S. Food and Drug Administration (FDA),” said Lehr. “Our first drug application was refused because we had failed to specify a dosage for 1 The early 3M surgical 1 tapes carried the Scotch brand name. Micropore surgical 2 tape was advertised in medical journals in the 1960s as the first tape product to protect wounds while promising painless removal.

93 — No Risk, No Reward ‘Patient Money’ 85 Micropore surgical tape in  . The two products McKnight, who was retired from day-to-day 3M opera- became the leaders in reducing skin irritation.  -year pro- tions and living in Florida. “We laid out a “Johnson & Johnson was already selling an adhesive gram of product development, sales and marketing,” surgical tape, so we had to have something completely  Lehr said. “We projected sales and profits years out. different,” said Frank Copeland, retired 3M research McKnight was very enthusiastic and wondered out loud scientist, a key developer of Micropore surgical tape. “Lew Lehr suggested that we look at nonwoven tech- When Lew Lehr was manager of the $5 million nology, which was in its infancy at 3M.” health care business, he was offered a higher ranking job in another 3M business. He turned If you think about it, 3M’s tape-type medical it down because he wanted to build health care. products fit the company’s philosophy of ‘make > Harry Hammerly it by the mile and sell it by the inch,’ which has served 3M well. > Frank Copeland wh y we hadn’t done this years before. When we looked into the records, we discovered that a researcher had Soon after the introduction of Micropore tape, an proposed marketing a masking tape for medical use inventive doctor snipped the tape into pieces and used in the mid- s, but it went nowhere. McKnight was  it in place of stitches to close a wound. The opportunity eager to take on Johnson & Johnson.” -inch to ½ -inch was obvious. 3M cut the tape in ⅛ McKnight; Chuck Walton, senior vice president, widths, sterilized it, packaged it and Research and Development; and Clarence ound closures introduced Steri-Strip w “Sam” Sampair, the architect of 3M to the marketplace in  . After International, all became champions a few product improvements, the of 3M’s fledgling business. This is product became the best answer probably why Medical Products to closing a wound simply and was named a division in  painlessly. even though it fell short of 3M’s About this time, Lehr and stringent revenue requirements. Frank Scully, a research scien-  After years, the actual tist, paid a visit to William numbers for the Medical 2

94 Chapter 6 86 Products Division exceeded even Lehr’s projections. );  mask, later called the Aseptex surgical mask ( percent of our forecast,  “Our cumulative sales were  ), created to reduce bed sores; Reston foam pads ( and our cumulative profit was even though — percent  ), a nonirritating, trans-  Transpore surgical tape ( percent of the products we projected were only about  parent, easy-to-use tape that caught on quickly around actually developed,” Lehr said. the world; Durapore surgical tape (  ), made of Lehr assigned a young chemist, Jerry Robertson, strong cloth; soft, stretchy Microfoam surgical tape who later retired as executive vice president, Life Sciences Sector, to manage a new Surgical Products You have the freedom at 3M to maneuver things million in  Department. “We were small, probably to your benefit if you want to take advantage sales,” Robertson said, “but we grew it over about eight of it. Some things won’t work, so you fail once years with a compound annual rate that I don’t think has been equaled. We had to change the way surgeons in a while, but that’s a lot better than the cost practiced medicine, one surgeon at a time. We had to of a missed opportunity. > Les Krogh retired senior vice president, Research and Development It takes the right group of people to get involved and really push a new idea. The more these (  ); and ); Tegaderm transparent dressing (  DuraPrep substantive iodine prep (  ). In the  s, stories are told, the more they will give people 3M introduced two advanced stethoscopes capable confidence that they can do it, too. > Lew Lehr of detecting low- and high-frequency sounds; the 3M universal electrosurgical pad; a higher adhesion teach them about the advantages of tape to close wounds, Micropore tape called Micropore II; and, for consumers, the benefits of a molded mask over a flat mask and Nexcare Active strips, comfort strips and waterproof wh y plastic surgical drapes worked so well. These were bandages, as well as the popular Nexcare Tattoo band- ‘concept sells’ and we had our own sales force of ages for the younger crowd. knowledgeable, driven people.” , 3M’s health care business had grown so  By With more support and patient much that the Life Sciences Sector was divided into money still flowing, a string of new two strategic business groups, hospital products and medical products began to emerge pharmaceutical and dental products. Annual global  s: a molded from the  s to the sales were nearly  , those revenues billion. By  1 2

95 ‘Patient Money’ 87 — No Risk, No Reward exploded to  .  billion, representing nearly  percent Patience was necessary from the start. “I remember of the company’s total business worldwide. Health Care the first technical audit the Biochemical Research Lab Markets became one of 3M’s strategic market centers had in about om Reid, then the lab’s manager, ,” T   in . said. “Our audit was combined with the Medical Products Division because we had so little to talk about. They had all these projects and all we had were wishes. Pharmaceutical research is not for the weak It was a pretty embarrassing review and some of the of heart. The stakes are high: years of devel- auditors weren’t impressed.” Even so, Lehr took an active interest in the team’s work because he knew it opment and testing and millions of dollars of was a logical extension for medical products. So did investment . . . then it still has to succeed in the McKnight and Cross, McKnight’s successor as chair- marketplace. Given all that, wouldn’t it be easier man of the board and CEO in .  and more rewarding to invest in lottery tickets? About six years earlier, McKnight had struck up a merger conversation with his Florida neighbor, the > 3M Technology Platforms, 1996 chairman of Warner-Lambert Company. Though that idea fell through, it set the stage for 3M considering gro wth in pharmaceuticals through a strategic acquisi- > 3M Pharmaceuticals: ‘All We Had Were Wishes’ tion. “We knew we either would have to build the busi- Investing in fluorine chemistry back in the  s may ness ourselves or acquire it,” Lehr said. “It was becom- have been much like buying a lottery ticket because ing more and more obvious that this would require a 3M had no specific product in mind. But, even as early different mentality than selling sandpaper. Along with , 3M’s annual report mentioned using fluoro- as  a different mentality, we needed a sales force familiar , however, chemicals to make drugs. It wasn’t until  with the market.” that 3M created a Biochemical Research Group Labo- Cross knew Justin Dart, chairman, Dart Industries, ratory inside Central Research. Robertson was hired the parent company of Riker Laboratories, a Los as the company’s first experienced biochemist. Don Angeles-based pharmaceutical company. Riker had Kvan, the first pharmacologist, and Bob Nelson, the by  made its mark in introducing Veriloid, a break- first veterinarian/toxicologist, made up the rest of the through drug for high blood pressure. But, Dart was team. They started investigating drugs for the heart, reluctant to sell. “3M doesn’t have enough money to central nervous system and high blood pressure. They buy Riker,” Dart challenged Cross. “Try us,” was Cross’ even dabbled in agricultural herbicides. 3 1 Superior acoustics make Littmann stethoscopes popular with health care professionals. 2 Nexcare waterproof and Tattoo bandages are recent additions to the 3M Health Care product line. 3 Central Research was home to the Biochemical Research Group Laboratory in 1968.

96 Chapter 6 88 reply. Within two months, the two companies had a panies worked through the agonizing intricacies of deal and Riker — with its  ,  employees worldwide — integration, while learning from each other. officially became a subsidiary of 3M on January ,  “I was predicting that 3M would move toward the  . Many observers later said that Riker was 3M’s pharmaceutical model as Riker moved toward 3M,” most successful acquisition because it grew — by a said Baukol, who was named general manager of Riker —  factor of after becoming part of 3M. “It moved . “I said we couldn’t go it alone in  that Riker was — from a little understood, peripheral activity of 3M to a not going to succeed as a stand-alone pharmaceutical business area recognized as a major contributor,” said company, maybe not even survive. The competitive W. George Meredith, who became executive vice presi- dent, Life Sciences Sector, and retired as executive 3M’s acquisition of Riker signaled the real start vice president, Corporate Services and Supply Chain of our drug discovery era. > Richard Miller Management. corporate scientist, Pharmaceuticals Division Along with a strong portfolio of products and a solid reputation with the Food and Drug Administration, Riker -person global sales and marketing staff. It also  had a advantage we had was 3M, its image, infrastructure, brought, according to Robertson, a “loose confederacy technology, reputation and people.” On January  , , Riker Laboratories ceased to  be a subsidiary and was fully merged into the com- 3M realized that it couldn’t grow everything pany as 3M Pharmaceuticals Division. The integration was difficult, said Robertson, who was the first 3M from within. The Riker acquisition gave us person to lead Riker worldwide. “Nearly everyone at a new direction. etired vice president r > Arlo Levi 3M thinks their business is different from the rest of and corporate secretary the company, but pharmaceuticals truly is different,” he said. “Management took a long time to get used to it.” Even so, Robertson said in retrospect, 3M handled of fiefdoms” that ran Riker’s international business, not the assimilation better than most nonmedical companies. unlike 3M’s own highly independent managing directors in its evolving global businesses. Robertson later said that Riker’s savvy, successful international managers Tambocor: A Long-Term Investment > sustained 3M’s pharmaceutical business while it strug- The invention of Tambocor (flecainide acetate), a drug gled to gain a toehold in the U.S. market. The two com- designed to control irregular heart beats, was Riker’s 1 2 1 3M’s acquisition of Riker Laboratories in 1970 expanded the com- pany’s health care busi- ness. 2 Riker brought a strong portfolio of pharmaceutical products and a solid reputation with the U.S. Food and Drug Administration. 3 Elden Banitt was one of the creators of Tambocor.

97 No Risk, No Reward — 89 ‘Patient Money’ “window to becoming a modern pharmaceutical com- The compound was the “lead” molecule in the team’s pany,” Robertson said, but it was a long, difficult and search for a drug to treat the heart, but it had a “tight costly project that required extraordinary patience. therapeutic index,” meaning that the margin between When Tambocor finally was introduced to the U.S. an effective dose and a toxic one was too narrow. So,  market in January  , 3M had invested years and the team continued looking. million in Tambocor. Some observers say  at least the cost was considerably higher than that estimate. The process is really slow. It was a matter — one of the first of a class The story of Tambocor of continually going back to the chalkboard started in — of drugs for treating irregular heartbeats and redesigning. > Bill Bronn research scientist,  when 3M’s Biomedical Group began exploring Pharmaceuticals Division new applications for its proprietary fluorochemical technology. They succeeded in making a compound which was the forerunner to flecainide acetate. About compounds in  The team tested more than the same time, Dr. Jack Schmid, who had done his hope of finding a molecule that was effective, non- Ph.D. work in cardiopulmonary research at the Univer- toxic and wouldn’t cause serious side effects. “In this sity of Arkansas, arrived at 3M. It was Schmid who kind of work, you have to take the long view,” Banitt said. “There were serious dead ends and a lot of frustra- tion. We’d spend weeks synthesizing a compound and It’s tremendously thrilling to make something in minutes, we’d discover it was completely inactive.  useful, like Tambocor, that’s never been made eren’t shooting blindly though; we had a lead. It We w before. r esearch scientist, > Elden Banitt was an orderly process; we saw step-by-step improve- Pharmaceuticals Division ments.” While some compounds were inactive, some were so potent they could stop a heart. saw the link between the compound and controlling It is also a characteristic of the drug discovery irregular heartbeats. process that scientists don’t know when to stop looking. Schmid assembled a research team including a young The team found flecainide acetate before they reached research chemist, Elden Banitt, fresh from a research the halfway point in their work. “You go along until you fellowship at the University of California-Berkeley, finally discover that you’re not making anything better and Bill Bronn, a pre-med student at the University of . Banitt  than you already have,” Banitt said. It was Minnesota. and Bronn looked at the brown bottle of white powder 3

98 90 Chapter 6 — in treating at least on paper — that showed great promise The Story Continues > heart arrhythmias. Still, questions persisted. It would  By , the U.S. Food a nd Drug Administration (FDA) still take clinical trials to prove that Tambocor could be decided that Tambocor was a significant enough drug effective in humans. that it received higher priority in the review process. By , 3M was betting on the compound in the  The next year, Tambocor was sold in West Germany brown bottle. Trials with healthy human volunteers where the national drug approval process is shorter. began two years later. 3M applied for patents on Determining which patients would benefit most Tambocor in that same year, knowing that years of from Tambocor without side effects was challenging. At one point, Grentzkow had to halt testing. A few days later, Grentzkow had to face his peers at an American There were many people who felt this was Heart Association Annual Meeting. “I can remember not an area for 3M to get into. It was far away so vividly people coming up to me on the convention floor and saying flecainide would never make it to mar- from the company’s usual line of businesses. ket,” he said. > Elden Banitt But instead of giving up, 3M quickly started more , the test results showed  testing. By November testing leading up to FDA approval would erode its that Tambocor could be used safely. The company’s -year patent and competitors would quickly jump  , when the  , ultimate triumph came on October  in with nearly identical compounds. Testing on healthy FDA gave 3M approval to sell Tambocor. humans lasted for three years before the drug was given . While 3M and Riker had other  to ill patients in Aldara: ‘It’s Not Over ’Til It’s Over’ > drugs in testing (an anti-inflammatory for arthritis and The bomb dropped at a morning team meeting an analgesic for control of postsurgical pain), the com- ,  . The anti-viral research on January  pany put those on the back burner in  and focused project, headed by Richard Miller, was a its resources on Tambocor. “We leapfrogged over casualty of Tambocor. 3M had decided to two or three competitors who were ahead of us in the put his team’s work, and others, on hold research process,” said Dr. Gary Grentzkow, retired in order to focus resources director, medical affairs, Pharmaceuticals Division. 3M on the promising heart w drug application for the set a goal of preparing its ne arrhythmia drug. “It was FDA in about half the time it normally took. like getting punched in Tambocor, a drug designed to control 1 irregular heartbeats, was introduced in the U.S. in January 1986, after it won FDA approval. 2 Aldara (imiquimod) 5% cream, 3M’s first approved immune response modifier drug, is sold worldwide. This packaging is for Greece. 1

99 ‘Patient Money’ — No Risk, No Reward 91 the stomach,” Miller remembered, “but pharmaceuticals “He asked if it was hopeless,” Miller’s former needed a success, and Tambocor had been the first prod- supervisor, Ed Erickson recalled. “I said, ‘Well, uct to come out of our drug discovery program. We you’re still here. And, it’s not over until it’s over.’ ” needed to get it to market as fast as possible and having > Minneapolis Star Tribune more money would speed that up.” Miller and the biologists who reported to him were put on 3M’s “unassigned list.” It was time to find another job in the company, his colleagues advised, and do it quickly. “Our management set up meetings with all of us to talk about networking to find new positions,” Miller said. But, Miller was either too stubborn or persistent to walk ay from his promising project. aw Miller, then a research scientist, had joined 3M in  to lead a team with John Gerster that was exploring how drugs might fight off viruses in 2 the human body. Miller had focused his doctoral and postdoctoral study on viruses, before anti-viral drugs even existed. He was excited about this new we had something totally new and different. We discov- frontier, and the work consumed him. ered later that our drugs stimulated the immune system to fight off a virus.” After being put on the unassigned list, Miller looked The development time for pharmaceuticals for a new position within 3M, but his heart wasn’t in it. is 10 to 15 years from discovery to FDA approval “I didn’t do a very good job in my interviews,” he said. and it can cost as much as $300 million. Only “When they’d ask what I wanted most to be doing, I’d say, ‘Go back and work on anti-viral drugs.’ ” one compound out of every 10,000 makes it to the market. > Elden Banitt Some people felt it wasn’t possible to create a drug that would inhibit a virus and not be toxic The research team’s first challenge was to create a to cells. I didn’t agree. > Richard Miller compound that would poison a virus without destroying healthy human cells. “Gerster made new compounds based on precursors for DNA or RNA,” Miller said. And, so he did. New opportunities weren’t knocking “He made a novel combination that wasn’t found in at Miller’s door, so he went to his manager, Ed Erickson, nature and we hoped it would selectively inhibit virus and asked if he could continue working on the research production. My lab tested the drugs that John made.” project, at least until an offer came through. “Our team In  , Miller studied a promising compound sup- was paid as long as we were on the unassigned list,” plied by Gerster and he decided to test it. “From the Miller said. “We just didn’t have jobs. I told the team, first experiment, we were excited about the results,” very ‘It’s going to be a while before we have jobs; in the Miller said. “We repeated our experiments, and we knew meantime, let’s continue the experiments.’ Ed was very

100 Chapter 6 92 supportive and encouraged us to keep working; Gerster, , tinued through and imiquimod cream was shown who was a Ph.D. chemist, continued making compounds to be effective in treating genital warts. Meanwhile, the for us to test.” challenges posed in manufacturing the drug on a large For six months, the team continued its experiments scale were significant, said Eric Jensen, manufacturing and the results were consistently good. Miller “shopped” technical manager, Pharmaceuticals Division. “It was a the project around 3M looking for a permanent home for different product for 3M and even for our Pharma- very the research, but his desire was to remain in pharmaceu- ceuticals Division,” he said. “The drug itself has very ticals. The team brought in a nationally respected expert complicated chemistry. It’s produced in a cream that, in anti-viral drugs to review the results. This expert con- in itself, is difficult to make. We made the drug in firmed that no other compound of its kind existed.  By July , Miller and team members who hadn’t Here was a brilliant scientist who knew that gone on to other jobs were reinstated as a full-fledged this drug had value. He wasn’t going to let it die research team. “It was great like having a big weight — and he found a way to push it forward. Richard lifted,” Miller said. “By the end of the year, we selected the drug for development: imiquimod. By the end of Miller embodies the entrepreneurial spirit of 3M: a person with passion who won’t be stopped. It’s really important to keep management > John Benson executive vice president, Health Care Markets informed. Today, if I had a result like we had France and the cream in the U.K. and, to accomplish in 1982, I’d be at my manager’s door insisting, that, we had to create a whole new center of manufac- ‘Look at this!’ > Richard Miller turing excellence. On top of that the cream had to be packaged in exact, small amounts in sachets made with  , the team recommended the next steps — developing a multilayer laminate, foil, paper and polyethylene. It — before formulas for testing, analysis and toxicology took us nearly five years to get really good at the manu- human clinical trials could begin in  . We were fortu- facturing process.” nate to have a number of people in 3M management who  , 3M submitted its new drug applica- By mid- had come through our division and supported our work, tion to the FDA and, in February  , the drug was including Robertson, Baukol, Meredith and Erickson.” approved for sale. Sold by prescription, Aldara cream Three phases of clinical testing with humans con-  weeks applications cost about  a week for up to 1 1 Aldara, a highly effective treatment for genital warts, also shows promise in treating other viral infections and some for ms of skin cancer.

101 ‘Patient Money’ No Risk, No Reward — 93 of treatment. By contrast, surgery for genital warts costs system that you need to get rid of virus infections and hundreds of dollars and causes pain and scarring. tumors. We think we have made a very important addi- Miller’s persistence over  years paid off and his tion to the drugs doctors have to use.” interest in the subject has not waned. “Understanding Asked by a reporter if he would still be working on the body’s immune system is an exploding area of the drug years after approval of its initial introduction, research,” he said. “We’re learning more about how Miller said, “It could take me to retirement. Physicians to enhance immunity with drugs. Back in  , we call and say they want to thank me. That’s very satisfying. knew about interferon and interlukin, but today there Most people in pharmaceuticals want to do research to different proteins that can affect the  are as many as create drugs that help people.” immune system. We hope to produce several genera- After the success of Aldara, 3M allocated an extra tions of immune response modifiers.”  million in corporate funding to the Pharmaceu- Topically applied, Aldara also has shown promise ticals Division in  to accelerate research into the in treating other viral infections and some forms of drug’s other applications. Aldara’s success required skin cancer, including basal cell carcinoma and actinic patience and persistence and, at times, stubborn people. keratosis, a precancerous condition caused by too much Over time, the development of Aldara is the largest, exposure to sunlight. “Our drug enhances cellular single investment made in a pharmaceutical product immunity,” Miller, now corporate scientist, Pharma- in 3M’s history. ceuticals Division, said. “That’s the part of the immune Product ideas that can change the basis of competition merit ● “patient money” and patient support from internal sponsors. The early stages of a new product or technology shouldn’t be ● “over managed.” Products that require years of attention and investment but will never ● blossom need to be “weeded” out as early as possible. ● Success separates the persistent from the simply stubborn. ● Ideas with the highest potential often require people to take time-tested truths the long view. ● Uninhibited research for uninhabited markets is a 3M tradition.

102 McKnight and Carpenter: patent advocates Defending patents — at home and abroad 3M’s winning ways Leveraging ‘IP’

103 r o l e m 7 o d e l The Power of Patents o f Intellectual property (IP) is imbedded in 3M’s “DNA.” i Protecting the company’s unique products and processes n has been a priority for years. In a company in which  n innovation is the growth engine and new products replace o their predecessors at a surprisingly rapid rate, intellectual property has more currency than cold cash. ● In the v  U.S. patents and ,  s alone, 3M received  a ranked in the top  international companies based t on the total number of U.S. patents awarded. In its i o —  — 3M ranked  th best year of that decade n among international companies and sixth among

104 Chapter 7 96 U.S. companies receiving patents. These rank- McKnight was visiting his boyhood home in ings put 3M in a league with other patent Brookings, South Dakota, when the news of the powerhouses such as IBM, NEC, Canon, potential Carborundum lawsuit broke. When the Motorola, Toshiba, Mitsubishi and Hitachi. troubled general manager told his parents, Joseph and Cordelia, his father offered practical advice. “William’s right smart, Mother, but he doesn’t > ‘William’s right smart, but . . . ’ know anything about patents, and it would be a William McKnight’s introduction to the waste of time for him to become a patent expert power of patents came early — and painfully. in time to handle this. Get a good lawyer, son.” After years without producing a really  The singularly memorable lawyer, Paul profitable product, 3M finally introduced Carpenter of Chicago, who was eventually hired by 3M, was a precursor to a staff of about  Vigorous defense of our patents and  intellectual property lawyers at 3M in . In trademarks was crucial in 3M’s early addition, today 3M also has numerous other out- years. They were our franchises side counsel. Working to gether, they obtain and 1 company’s patents, trademarks and defend the around the world: our capital. product brand names. etired vice president, > Audun Fredriksen r In this instance, Carpenter notified Carbor- 3M Health Care Division undum that 3M would continue production, and the struggling company never heard from its competitor again. In fact, revenues generated by the flexible abrasive  to the relief of its Three-M-ite abrasive cloth in everyone with a stake in the struggling company. The product sales took off as the United States’ need for All the time Paul Carpenter was checking Army vehicles, airplanes and munitions increased. The patents, he wrote voluminous letters to Ober flexible cloth was superior, particularly for workers who hand sanded around moldings and curved metal and McKnight . . . briefing them in the intricacies surfaces. Then bad news came in a sternly worded and value of patents . . . The Three-M-ite incident letter from 3M’s rival, Carborundum Company, saying gave 3M its first real patent consciousness. that 3M had infringed on Carborundum’s patent for its abrasive, “Aloxite.” author, “Brand of the Tartan” > Virginia Huck 3 2 Chapter opening photos 3M’s patent staff works diligently to protect the company’s intellectual property; McKnight’s patent for Hand Block for Abrasives was filed in 1922 and approved in 1925; Scotch-Brite floor pads , 1962; Colorful Scotchcast Plus casting tape.

105 The Power of Patents 97  in  to more than cloth grew from about > Bulldog with a Law Degree  , . McKnight’s education in patents by   ,  tall and slim, bordering — Carpenter was a character made him a fierce defender of 3M’s unique knowledge, on gaunt, and outspoken. “You never knew what he and his philosophy guided the company’s approach to was going to do or say,” McKnight recalled. “We were st century.  patent and trademark defense into the having this struggle with Johnson & Johnson (J&J) in a patent infringement. They had eight lawyers and one of them got up and preached a whole sermon. Carpenter 3M’s success was built on unique products — finally got up and said, ‘Do we have to listen to this products that were protected by patents. crap?’ Then we all walked out, leaving them > Carolyn Bates 3M intellectual property counsel sitting there.” McKnight was convinced that patent protection was crucial because 3M’s competitive advantage lay in the unique nature of its products. He was sure that the most effective patents would bolster a business objective. Though cash settlements could be lucrative and prove 3M was in the right, McKnight reasoned it was even better to use patent protection to keep com- petitors at bay and preserve the company’s market share and profit margin. 4 1 This statue of McKnight shows him holding his own first patent for Hand Block for Abrasives. 2 Elek-Tro-Cut Three-M-Ite abrasive cloth was the company’s first successful 3 product. Paul Carpenter, 3M’s first patent attorney, became one of the company’s most important counselors. 4 A 1925 Francis Okie patent application for an adhesive binder for sandpaper, with his handwritten comments.

106 Chapter 7 98 McKnight soon hired Carpenter full time and moved president, International Operations, “He gave us pres- him to St. Paul, reasoning that, in his words, “He tige in the sandpaper community. Before that, we were charged so much, we thought we could get him cheaper a poor third cousin of Carborundum and other big com- s, 3M’s inter- if we hired him.” Even as late as the  panies. Carpenter’s patent group made all the people nal patent counsel still had its own separate name — in 3M patent-minded.” Alexander, Sell, Steldt and DeLaHunt. Getting Tough, Standing Firm > When 3M’s unique Scotch brand cellophane tape was The Wetordry patent helped us get distribution  introduced in , Americans found multiple uses in the automotive market. We had the top quality from mending torn book pages, ceiling plaster — for it and sheet music to patching cracked turkey eggs on product and set the standard in the marketplace. the farm. “Infringers were eager to get a share of the > John F. Whitcomb etired group vice president, r market,” said Bob Wolfe, retired director and senior Coated Abrasives Group vice president, Engineering and Manufacturing. “William McKnight made one of the most significant But it wasn’t just economics that moved McKnight decisions of his tenure when he insisted on defending to corner Carpenter’s time. The patent attorney was Dick Drew’s patent for cellophane tape.” an astute legal bulldog who was highly productive and The decision took nerve, Hugh Tierney, retired shunned wasted time. “He had lots of statues in his vice president, Reinforced Plastics Division, agreed. office,” said Bob Tucker, retired vice president, Legal “Col. Johnson of Johnson & Johnson reared up and told Affairs. “When he thought you had been there long and his father before him Mr. McKnight that his father enough, he’d reach for his big feather duster and start had coated pressure-sensitive adhesive on any backing dusting the statues. That was your signal to get out.” McKnight wasn’t going to they cared to put it on and When Carpenter wrote and defended 3M’s Wetordry ou do,’ McKnight said, ‘and tell them they couldn’t. ‘Y abrasives patent, said Clarence “Sam” Sampair, retired you’ll be in a lawsuit.’ Mr. McKnight made it stick.” Drew’s original cellophane tape patent application was called “the grandfather application,” Tierney said, because it contained broad claims of new and novel fea- tures. “We fought nine lawsuits in nine years, and those more  novel features gave us patent extensions for 1 2

107 The Power of Patents 99 years. Because of patent protection, 3M had time to Congress in the s and they stifled all the  learn to make its tape better than anybody else in the patent coverage they could influence,” he said. country.” “Some courts said the only patents that were With degrees in chemistry and library science, Harold valid were the ones they hadn’t gotten their Hughesdon was drawn to technical information and hands on yet.” McKnight wanted to protect patent work in the s. “My job was to walk around  every idea or technology that could be the 3M labs, be a sounding board and listen to people patented. “He didn’t want anybody who thought they had inventions,” said Hughesdon, who stealing anything that we had,” Lauder retired as director, Technical Contracts, International said. But, that didn’t stop competi- Lab Operations. He corralled all the experimental work tors from trying. available, talked to the inventors and patent lawyers, and identified what further experiments had to be done > A Crimp in a Competitor’s Plans before a patent was filed. “McKnight’s philosophy was clear,” Hughesdon said. “I remember a Business Week On the same day in  that 3M magazine cover story on 3M in the  s. It said our  -inch circular introduced its new strategy was to get strong patents and charge what the floor pad for industrial cleaning, traffic would bear. When I describe 3M in a nutshell, a customer of a major rival, Norton I use three P’s: patents, profits and paternalism.” Company, shipped samples to Norton’s In the United States, when 3M puts a new product lab for analysis. “Every company of any -month “grace period” to  on the market, there is a size keeps track of its competitors, but apply for the patent. In most other countries, there is when you go to the other guy’s back- no such allowance. “It was an uphill battle to try to yard and pick up a product and ana- convince 3M people there was more to patent protection lyze it, that’s meaningful,” said Stan than just in the United States,” Hughesdon said. By the DeLaHunt, who was part of the  s, however, 3M was taking no chances with its U.S. 3M team that defended the patent and international patents. They were filed before a new for  years. When Norton product was disclosed outside the company. introduced a similar product a 4 Even so, securing and defending a patent decades few months later, it claimed ago was tough, said Charlie Lauder, retired 3M patent that 3M’s Scotch-Brite floor counsel. “The antitrust supporters had taken over pad couldn’t be patented 3 1 A legal document produced for a 1945 cellophane tape patent case. Law depositions in an early 1940s 2 cellophane tape patent case. 3 An October 1958 article in Business Week magazine reported that 3M operated under the belief that “strong patents are the surest way to profits.” 4 By 1960, Scotch-Brite floor pads were available to consumers for home use.

108 100 Chapter 7 a combination of information — because of “prior art” Affairs and General Counsel. “The Danville case (so and drawings of similar inventions that already had called because the court was in Danville, Illinois) caused been published. Any person with reasonable imagina- us to pay attention to the practical limits of exploiting tion and skill could have come up with the same idea, intellectual property,” he said. “As a result, 3M devel- Norton argued. oped a strong compliance program that is the best of any 3M brought patent infringement suits against com- company in the world. That serious attention to compli- petitors in France, Germany, the United Kingdom and ance evolved into a strong corporate value. Integrity and Australia, among others. Millions of dollars of sales reputation have always been important to 3M.” were at stake, said DeLaHunt, not to mention a pivotal legal battle with Norton. 3M had successes in its for- Without the patent system, 3M innovation would eign suits and DeLaHunt said this aggressive approach come to a screeching halt. > Carolyn Bates was crucial to 3M. “Our successes outside the United States put a crimp in our competitors’ plans,” he said. When Gary Griswold, president and chief intel- lectual property counsel, 3M Innovative Properties The Justice Department Calls > Company, joined 3M in the early  s, 3M’s patent  s, and 3M Antitrust issues made headlines in the  staff was one-third the size it was by . By the s not untouched. This was a decade of rapid growth wa  s, the term intellectual property was in vogue. for 3M, and the U.S. Justice Department argued that the It was first used to describe that broad category of including — company was monopolizing key businesses ideas, inventions, technologies and brands protected pressure-sensitive tape, magnetic tape and presensitized patent, trademark, copyright and trade-secret law. by — beyond the scope of 3M’s aluminum printing plates from an “anti- Griswold watched a shift occur — patents. 3M didn’t contest the charges and entered into patent” attitude in government and the courts charac- a consent decree in a companion civil case. — teristic of earlier decades to an environment in the But, the outcome of that loss was long lasting and s where patents were more highly valued and  positive, said John Ursu, senior vice president, Legal protected. Traditionally, appeals in patent cases were heard in various circuit courts of appeal around the country. There was little uniformity in the decisions, Griswold said, and some of these courts consistently found patents invalid 1 2

109 101 The Power of Patents or not infringed. In  , however, the U.S. Congress physician dipped established a Court of Appeals for the Federal Circuit the material in that would hear all patent appeals from across the coun- water and wrapped try. The outcome was more uniformity and a more it around the broken “patent-friendly” environment for patent owners. bone, shaping it to fit. s and  In the s, the number of patent appli-  When the tape dried to a hard cations mushroomed as emerging high-tech companies — — much faster than plaster cast multiplied in computer and software, medical devices, it was stronger, lighter and far more pharmaceutical, and telecommunications industries comfortable than plaster. And, it breathed, allow- and “dot-coms” born of the World Wide Web. Not sur- ing the skin underneath to stay dry. J&J was at risk prisingly, the number of patent infringement and piracy of losing its domination of a  million market in issues increased dramatically as the global economy the United States alone. defined itself and enjoyed robust years. o years after 3M introduced Scotchcast casting Tw At 3M, three major intellectual property cases in tape, J&J unveiled a look-alike product called Delta  the s underscored the company’s historically strong Lite casting tape. 3M offered to license its technology defense of its products and technologies. One case led to J&J, said Carolyn Bates, intellectual property coun- to the largest cash settlement in 3M history. Another  , the sel, but the company rejected the offer. In defended 3M’s leadership in a business born decades same year 3M was issued its Scotchcast patent, the earlier and the third case protected a new idea from a company sued J&J for patent infringement. “With each rush of “me-too” product copies. successive Scotchcast improvement, J&J copied us,” said Bates. “We kept applying for new patents on these improvements then suing J&J for patent infringement > The Cast Worth $129 Million when their products showed the same improvements. By the s, J&J had cornered the casting market  It helped us build an even stronger case.” , 3M with its plaster-of-paris bandage roll, but in   When the patent case was decided in , the upstaged J&J with a superior alternative called Scotch- U.S. District Court in Minneapolis agreed that J&J had cast orthopedic casting tape. For years, people with committed patent infringement and misappropriation broken bones wore the heavy plaster casts that had to of trade secrets. J&J was ordered to take the infringing be kept dry (or the plaster would disintegrate) and casting products off the market. Ultimately, Bates wouldn’t allow the skin to breathe. Scotchcast tape was said, damages and interest collected by 3M totaled polyurethane, but it could be used just like plaster. The 3 1 In response to the Danville case, 3M developed a strong compliance program. 2 As late as the 1970s, 3M’s patent counsel operated under its own name — Alexander, Sell, Steldt and DeLaHunt. Pictured clockwise from lower left: Stanley DeLaHunt, Donald Sell, Cruzan Alexander and Frank Steldt. 3 About 60 intellectual property lawyers at 3M work to obtain and defend the company’s patents, trademarks and brands.

110 102 Chapter 7 times J&J’s  million, representing more than  United States. They must have known that 3M would profits on the offending products and nearly twice as call “foul.” When the case went to trial in February much as their total sales for those products. For 3M, , the International Trade Commission decided in  it was the largest recovery in the company’s history fav or of 3M and U.S. customs officials were told to and, at that time, the fourth-largest patent infringement refuse to let in Seibu’s product. ard in the United States. “3M has been very aggres- aw There was much at stake, said Roger Tamte, 3M intel- sive in enforcing its patent rights,” Bates said. “We lectual property counsel. “High-intensity sheeting was believe in respecting the intellectual property rights a mainstay of our Traffic Control Materials Division. of others and this case reinforced the importance of An earlier product had been subjected to tough pricing that 3M policy.” competition by Seibu and others,” Tamte said. “3M was For Bates, personally, who began her career at 3M concerned that Seibu would drive down the price of this in a lab, this was a legal assignment of a lifetime. “This new product in the effort to sell their own product.” case was a patent attorney’s dream,” Bates, who earned Ray Richelsen, who retired as executive vice presi-  , said. “It was a fantastic learning her law degree in dent, Transportation, Graphics and Safety Markets, experience.” was the division’s vice president at the time. He made Since resolving this case, 3M has worked closely the decision to defend the patent in the United States with J&J and has developed some strong business rela- and abroad. “Patent enforcement is expensive,” said tionships with the company. Tamte. “You try to judge your chances of success. It was a gutsy move because the cost of litigation shows up on the division’s bottom line, and it can cost mil- > Keeping Infringers at Bay lions.” From , when 3M’s U.S. patent  until  About  , 3M introduced a new and improved version expired, the company had no competition in the United of its Scotchlite high-intensity reflective sheeting, a prod- States for Scotchlite high-intensity reflective sheeting, uct with its “roots” in a material invented by Eugene and 3M’s successful enforcement of its patents in other McKenzie in the early  s. The new product was cov- countries limited competitors’ sales around in the world. ered by a patent issued to a young 3M scientist, Joe McGrath. A few years after the introduction, Seibu, a Japanese company, began selling a competitive product Protecting the Canary Yellow Notes > and insisted that their Seibulite Ultralite sheeting did not When 3M introduced its revolutionary Post-it notes in infringe 3M’s patent. After long negotiations that led to  , the little yellow notes changed the basis of com- no resolution, Seibu began exporting its product to the petition and quickly became the highest value-added 1 1 Scotchcast Plus casting tape offers cast wearers colorful options.

111 103 The Power of Patents product the paper industry had seen. but protecting Post-it notes from tough “Naturally, there were a lot of com- competition in the product’s infancy was panies looking for an adhesive to do crucial. 3M won its patent case, and Mead the same thing,” said Jerry Chernivec, and 3M negotiated a settlement. Most impor- 3M intellectual property counsel. At the tantly, Mead got out of the repositionable notes time, the Post-it note adhesive was business, Chernivec said: “That put teeth in our patented only in the United patents. Other competitors took a strong look States and, although at whether they should do anything that offshore competition might infringe on our patent coverage.” had access to the pub- , the U.S. Patent and Trademark  In lished patent information, a Office registered 3M’s famous canary yellow strong competitor did not surface. color trademark for Post-it notes. Soon afterward, 3M “We had some competitors in Japan,” also registered the color blue used on its premium Chernivec said, “but their adhesive aged, making it quality Scotch painters’ tapes and 3M is pursuing the difficult to pull a note off the pad. Then we ran into color purple for some of its sandpaper. “All three colors American Pad and Paper (AMPAD) in Massachusetts.” are clearly associated with 3M,” said Robert Hoke, AMPAD was a mature company with less than stellar 3M intellectual property counsel. “We’re not trying to gro wth whose major product was yellow legal pads. exclude competition, but we’re making sure that our “They tried to structure an adhesive that would provide competitors play fairly.” the same characteristics as those in Post-it notes but wouldn’t infringe on our patent,” Chernivec said. When Where’s the BEF? Defending a Market > AMPAD introduced its product in the mid- s, 3M  Protecting a strategic business with huge potential for decided AMPAD had, in fact, crossed the line.  wth was crucial to 3M in the gro s when the com-  3M sued AMPAD and the case went to trial in . pany introduced Vikuiti brightness enhancement film — a 3M Tw o years before the trial, Mead Corporation customer acquired AMPAD. “Mead was a good friend — of 3M,” Chernivec said. “They bought our products, and we bought from them.” Involving a customer in litigation was not what 3M wanted to do 2 The September 1980 issue of The Office magazine featured newly introduced Post-it notes that changed communications forever. 2

112 104 Chapter 7 develop a template for conduct- n intellectual property (IP) 1 ing intellectual property assess- audit is like an insurance A ments at 3M that can be used in policy or an annual physical. connection with every important When 3M develops a new prod- technology. uct or technology that has strong And, it’s not just lawyers who market potential, the company find these IP Audits fascinating. needs to make sure that all One 3M scientist became so patent and trademark protection interested in patent protection is in place. IP counsel reviews that he took an intensive course the claims and looks for any gaps in patent law in Washington, in patent coverage before a com- D.C. His intellectual curiosity petitor can nd a weak spot. surfaced in the most unlikely ment identi ed gaps in the 3Mers examined about 1,700 places. marketplace. “Everybody was patents related to reclosable fas- “We both joined the same making hooks out of polypropy- — tening methods ranging from 3M-sponsored bowling league,” lene and polyethylene, but they screws, buttons and clips to the said a 3M IP counsel. “We were couldn’t stand up to high temp- well-known Velcro reclosable fas- at the alley and he came over eratures, like the heat of a car teners. As a result of this assess- and took me aside, looking puz- engine,” Sipinen said. 3M’s ment, 3M realized that it had the zled. He said, ‘We’re studying Corporate Process Technology technological heft to move from section 102G of patent law and Center began exploring how being a second-string player to What’s Your IP Quotient? I don’t quite understand this to make a high temperature- a star in the reclosable fastener point . . .’ ” There was a brief, resistant hook. business, said Al Sipinen, senior though educational, delay in The assessment also identi- specialist, intellectual property league play that night. ed areas where 3M had no liaison. Sipinen and his team competition. “We realized there identi ed three fastening tec h- was one type of hook that we nologies that 3M should shore produce for disposable diapers up and build upon. “Without this that no one else has. That moved examination, we wouldn’t have 3M to strengthen its patents in known how strong or weak we that arena,” Sipinen said. Sipinen were compared to our competi- and a 3M team were asked to tion,” Sipinen said. The assess-

113 105 The Power of Patents (BEF). The unique surface material with tiny “micro- Those companies then sold their backlighting modules replicated” structures was designed to enhance bright- turn, made liquid crys- to display manufacturers who, in ness and conserve battery power in computers, cellular tal displays for computer manufacturers. 3M had pend- phones and other devices that rely on liquid crystal ing patent applications in Japan, but issued patents in displays (LCDs). the patents on our film were the United States. “As far as “3M got into this market at precisely the right time, concerned,” Buckingham said, “our competitors didn’t when the sale of laptop computers was exploding in the infringe on our U.S. patents until the assembled products early s,” said Steve Buckingham, 3M intellectual  were imported into the United States by major computer property counsel. “By that time, the size, weight and price of laptops were dropping. Our film made the The power of our patents is the reason for LCD screens brighter and the batteries last longer.” the success of every division of our company. At first, 3M commanded the entire market, but within Patent protection gave 3M the time to develop markets that weren’t developed and change In intellectual property law, our strategy is to the basis of competition. map out and protect a key competitive product > Ron Mitsch area. 3M has invested in the research to develop retired vice chairman and executive vice president a new technology and the company needs manufacturers. to obtain a solid return on that investment. Those same > Gary Griswold president and chief intellectual property counsel, companies were 3M Innovative Properties Company also buying 3M products.” including — a few years, several Japanese companies “The question Sekisui Chemical, Dai Nippon Printing and Mitsubishi was, would we sue introduced competitive products. 3M saw its — Rayon customers who were  and drop signifi- market share decline through important to us,” cantly by  . Buckingham said. 3M sold its brightness enhancement film to a number “The answer was ‘yes,’ of backlighting manufacturers, primarily based in Japan. but it was not an easy 2 2 By recycling light, Because of techno- 1 Vikuiti brightness logical expertise, 3M enhancement film became the leader in produces the brightest closures for disposable computer screens with diapers. Using the the best image quality Scotchmate hook-and- available in the world. loop fastening system, diaper closures hold securely even when lotions, oils and powders have been applied.

114 Chapter 7 106 decision. If it hadn’t been for our patents and our will- even more,” Mitsch said. Six months later, Mitsch came ingness to assert them, our competitors would have been back with a set of recommendations that he called willing to sell their films at a price we simply couldn’t the “Research and Development (R&D) Imperatives.” afford to match; they would have taken the market away key strategies, one focused on 3M’s knowl- Among  from us.” edge base. “It was an unequivocal endorsement of intel- and gave two of its 3M took action in late  lectual property,” he said. “It stressed the importance most important customers an early warning. After about of an intellectual property training program in the com- four months of negotiations, both companies agreed gy based on being the ‘first to file,’ pany, a patent strate not to purchase products from film manufacturers that infringed on 3M’s patents. Since then, 3M’s patents on it either No company can rest on its laurels — Vikuiti film have been respected, and 3M expects the develops and improves or loses ground. Our  film to continue to be an important product in the st century. company has adopted the policy ‘Research in tunately, and perhaps surprisingly, 3M’s relation- For business pays.’ r > Richard Carlton etired 3M president ship with its two customers became stronger, Bucking- ham said. “The experience opened up communication between us and the companies’ design teams in Japan, for and an IP audit of our major technology programs.” example,” he said. “3M came to understand better what That greater emphasis kicked off an increase in patent they were looking for and what was important to them.”  s. rough the applications that continued th As part of those R&D imperatives, 3M developed a new Corporate Intellectual Property Policy in  > Leveraging 3M’s Intellectual Property that asked every business unit and research and devel- s sparked an even greater emphasis on making The  opment group in the company to develop worldwide the most of 3M’s storehouse of discoveries, processes on, IP strategies and implementation plans. From  and technologies. technical people were expected to become familiar  In , 3M’s Chairman of the Board and CEO with the patent and nonpatent literature related to their Allen Jacobson asked Ron Mitsch to leave his position areas. The policy further said that 3M would continue as group vice president temporarily and focus on how the company could accelerate its innovation rate. “I went through all of our technical audit reports, talked to a lot of people and listened 1 A 1959 Technical 1 um course on patents For gave 3M’s technical community a better understanding of their importance.

115 107 The Power of Patents to “protect its substantial investment in research and 3M’s innovative culture and our intellectual development by obtaining, maintaining and enforcing” property are like motherhood and the American patents and copyrights and by protecting trade secret flag around here. > Gary Griswold rights. In addition, 3M underscored the importance of respecting the IP rights of others and committed to defending its “global brand assets,” such as the 3M, “We shifted our focus from solely protecting our Scotch and Post-it brands, in order to enhance the com- businesses to trying to get more leverage out of our pany’s reputation and leverage product marketing. intellectual property,” said Griswold. For example, 3M now has a Strategic Intellectual Asset Management (SIAM) group that is exploring ways to generate value > A Company Within a Company from unused or underutilized intellectual property 3M took this focus on intellectual property to a new level within the company. in April  , when it created 3M Innovative Properties In some cases, when a 3M technology has more Company (3M IPC), a wholly owned subsidiary respon- applications within the company than anyone first sible for protecting and leveraging 3M’s IP assets around imagined, 3M IPC helps identify new matches that can many companies the world. While not a novel idea — ultimately produce unique and marketable products. including Lucent Technologies, DuPont and Toys “R” Us this development was new to 3M. have done it — ● Aggressive protection of 3M’s intellectual property has always been a key factor in 3M’s growth. Intellectual property protects 3M’s R&D investments. ● ● 3M owns the patents; 3M divisions own the products. ● 3M competes with unique products. The most effective intellectual property defense serves ● a business objective. Understanding and protecting 3M’s intellectual property isn’t ● time-tested truths just the responsibility of lawyers.

116 How automotive grew Building consumer and office markets The seed of ergonomics

117 r o l e m 8 o d e Look ‘Behind l o the Smokestacks’ f It was a risky decision. With the sales manager’s position i , Edgar B. Ober, 3M’s president, chose  to fill in n  William McKnight, the -year-old bookkeeper whose n only exposure to sales was when he had time left over o from his work as office manager in Chicago. McKnight hadn’t visited many factories and he knew little about v the technical uses of sandpaper. Even so, he had the a spunk and new ideas that Ober thought would serve t 3M well. ● McKnight studied how 3M’s big i o competitors sold sandpaper. They carried a product n catalogue and simply walked into the company’s front office, asking for the purchasing agent.

118 110 Chapter 8 If they were lucky, they got an order. But, McKnight had office “gatekeeper” let McKnight into the factory’s a bold idea that took more initiative. It could have easily inner sanctum and men on the production line told him backfired, too. what they thought, including how sub-par some 3M McKnight knew that 3M’s products were probably products they had tried actually were. Not only did no better than its competitors’, but he was ambitious McKnight have to insist on better quality back at enough to try his unconventional approach by calling home in St. Paul, Minnesota, but he faced a price war. on Rockford, Illinois, furniture manufacturers in a  McKnight and Ober agreed that 3M could win with bet- single day. Those companies were the most important ter quality, but they wouldn’t be victors on price alone. During this era, McKnight expanded his philosophy of looking “behind the smokestacks,” going right to the His plan was to get into the back shop of a firm, factory floor. As he rose in the company, he insisted that talk with the workmen to learn whether or not new salesmen go into the back shop of a factory, just they were satisfied with the product they were as he had done. They must talk to workers and find out their problems, he said. On the spot, they must identify using. And, if they were willing, he demonstrated the abrasives the workers needed. They must demon- his own product from 3M right on the spot . strate 3M products and follow up by bringing samples author of “William F. McKnight, > Mildred Houghton Comfort to the companies’ factories. To ensure that 3M products Industrialist” were consistently of good quality, McKnight wrote to Ober suggesting that a general manager coordinate 3M sandpaper buyers, but they were a tough sell. The tall, factory output and field experience. Ober agreed and thin young man with red hair asked if he could step gave McKnight the job. into the back shop to talk to workers. The usual front office answer was, “What for?” When they asked the name of McKnight’s company, most people had never heard of 3M. “We’re new,” he said, “that’s why we’re anxious to learn what you need.” Grudgingly, the front 1 Scotch masking tape Chapter opening photos used in auto body shops in the 1920s; A carriage and auto painter praised Wetordry sandpaper in 1923; Wetordry sandpaper sample booklet; 3M worked closely with doctors and hospital staff to develop products for the health care industry. A sketch from an early Megaphone newsletter for 1 employees showed A.G. Bush delivering his instructions to salespeople: “Follow the trail of smokestacks to new customers.” 2 People on production lines often know far more about a plant’s needs than those in the front office.

119 111 Look ‘Behind the Smokestacks’ Health Care Markets, said, “I remember hearing that Sparks, Sawdust and Inspiration > if you were to succeed as a sales rep in abrasives at 3M, While the product was created well before Richard you had to go to the back of the shop and throw sparks. McGrath’s time, he remembers Stikit sanding discs It meant putting a new belt on the equipment, picking with glue on the back so they could be easily attached up a piece of metal, grinding it and throwing sparks. to a sanding tool. “Before Stikit discs, people had disc If it was a woodworking customer, it meant making saw- adhesive that they applied to the sandpaper backing dust. The idea was to get out with the customers; live with a little brush, then they waited for it to dry before with them; see what they see.”  On Benson’s first day at 3M in , he saw this I recall coming across historical records from principle in action. “Ron Baukol (then working in the abrasives that described McKnight’s first sales health care area of 3M, now retired executive vice presi- meeting in the early 1920s. He said, ‘Go and dent, International Operations) hired me,” Benson said. “He wanted me to work with anesthesiologists to under- find out what the customers want . . . and stand their needs. 3M had never worked come back and tell us what it is.’ That was the with them before, but it founding philosophy of 3M. From that came seemed that some of huge advances . . . from our understanding of the marketplace we served. > Richard McGrath retired vice president, Industrial Markets starting their work,” McGrath, retired vice president, Industrial Markets, said. “Initially, Stikit discs were created for automotive body shops. We understood the market well enough to see the customer’s need. We cap- tured market share like gangbusters and eliminated our biggest competition, Norton.” Though not often men- tioned as a groundbreaking product, McGrath said Stikit discs represented an early and successful combination of two of 3M’s core technologies, abrasives and adhesives, in a never-before-seen product that changed the basis of competition and spawned many product offspring. McKnight’s philosophy of looking behind the smoke- stacks has been a key factor in 3M’s major product developments. John Benson, executive vice president, 3M has to look big to our competitors and to our investors. It has to look small, nimble and fast to our customers. Those two things are not dichotomous; they can play together. > W. James McNerney, Jr. chairman of the board and chief 2 executive officer

120 112 Chapter 8 our products ought to be useful.” Baukol and Benson  technologies could be of value to them. Since , set off for Northwestern Hospital in Minneapolis (now 3M has collaborated with United Hospitals in St. Paul part of Abbot-Northwestern) that same day. “We were in a program called Partnership in Patient Care in which sitting in the surgeons’ lounge. The anesthesiologist 3M employees meet with medical staff to gather feed- tried to describe his work and he finally said, ‘Look, I back on existing products and prototypes in conferences can’t do it here. You’ve got to come into the operating and focus group panels. Originally created as a way for room and see it firsthand.’ ” 3M technical employees to gain a closer understanding of the customer’s environment, the program has been expanded to include anyone in the division. The goal is I used to define innovation as something that to understand medical staff and patient needs by learn- happened in the lab, but our customers don’t see ing together, sharing information about 3M technolo- it that way. We’re innovative when we help them. gies, and developing personal working relationships with staff. We’ re innovative when we give them solutions. In a similar partnership with Woodwinds Health communications manager, 3M Public Relations > Katja Finger Campus in Woodbury, Minnesota, 3M developed a new and Communications, Latin America and Africa medical tape by asking nurses to test the tape and offer feedback. At the Mayo Clinic in Rochester, Minnesota, Benson was invited to witness an open-heart proce- 3M is working with the world renowned medical center  dure the next morning at a.m. “I didn’t sleep a wink.” to learn more about the issue of preventing infection Benson said. “I was excited and scared. The experience during hospital stays. drove the point home. I think our very best ideas come When Gary Pint participated in the start up of 3M’s from people who spend time with our customers on Telecom Business Unit in , the team’s role was to  their turf.” build the business from an embryonic idea to a leading, Lew Lehr, the “father” of 3M’s medical business and worldwide business group. The smokestack lesson was later chairman of the board and chief executive officer, part of their strategic thinking. “To start and build the went on grand rounds in the early  s Telecom business, we had to listen with local doctors, especially surgeons, carefully to customers and be to understand how 3M products and as responsive as possible,” said Pint. “We followed Mr. McKnight’s philosophy 1

121 Look ‘Behind the Smokestacks’ 113 Henry Ford’s unique mass production methods caught on and a legion of car manufacturers produced more cars, faster, with diverse brand names such as Locomobile, Crestmobile, Pierce Arrow, Packard, Cadillac and Buick. of looking behind the smokestacks. Every car maker needed miles of That was crucial to developing our sandpaper to smooth wooden and metal domestic business and expanding it to the parts and to refine body finishes. world.” Pint retired from 3M as group vice  Seven years later, in , 3M introduced another . By then,  president, Telecom Systems Group, in innovation when Eastern salesman Joe Duke called the business had grown from virtually zero sales to on Philadelphia auto painting shops to demonstrate several hundred million dollars. We tordry sandpaper, the first waterproof sandpaper. After overcoming some skepticism from painters accustomed to using pumice, Duke knew he had an call it being ‘customer intimate.’ If we’re We unqualified success in his product satchel. Wetordry going to develop new and better products to sandpaper reduced the excess heat caused by dry help improve the practice of medicine and sanding; it produced a smoother finish; and it worked well with fast-drying lacquer, a superior coating advance human health, we better be out there compared to slow-drying varnish. When car makers the doctors, the nurses, — with the practitioners discovered that 3M’s waterproof sandpaper dulled the anesthesiologists. executive > John Benson — the natural shine of the lacquer surface, Francis Okie — the creator of Wetordry sandpaper quickly concocted vice president, Health Care Markets Retsul (luster spelled backward) polish. While it never rivaled > Eons in Automotive Ve ry -year rela-  few companies can claim a nearly tionship with the same customers, but this is how long 3M has served the automotive industry. It began in  , when 3M’s Three-M-ite abrasive cloth proved to be the superior product for finishing metal; just as 2 1 Disposable surgical drapes were the first product in the 3M Health Care product line. 2 Wetordry sandpaper found success in both automotive manu- facturing and repair shops. It provided a smoother finish and worked faster than competitors’ products.

122 114 Chapter 8 Simoniz polish, Retsul — polish the more successful “General Motors and Chrysler from re-claimed rubber. — sold with Wetordry sandpaper demonstrated 3M’s were big customers in Detroit and so was Briggs, an eagerness to solve customers’ problems, while preserv- auto body manufacturer,” said Jim Hendricks, founder ing the market for Wetordry sandpaper. and first chairman of 3M’s Technical Forum, who spent Dick Drew, the affable, maverick inventor, followed  years in Central Research and served as manager, McKnight’s advice to get onto the factory floor and Tape Research. talk to the production people. He had exceptional  “I moved to Detroit right after joining 3M in results. Drew’s innovative Scotch masking tape, intro- to work with our auto customers,” Hendricks explained. duced in , gave automobile painters razor sharp  “Our adhesive was better than the competition’s because separations in two-tone paint jobs and made Drew a it was flexible and it wouldn’t harden in lower tempera- legend around 3M. tures.” 3M’s spray adhesive sales grew quickly and soon demand exceeded supply. The company financed a special plant devoted to the new adhesive, rather than When I was a kid, I remember a Christmas settling for an improvised wagon shed-turned-manufac- package from 3M. My dad was an engineer turing-plant where the product’s raw materials were at Cadillac in Detroit and he later became stored in converted horse stalls. When 3M introduced Scotchlite reflective sheeting president of General Motors. I especially , automotive uses again  for highway markings in remember the sandpaper. Dad always used surfaced quickly with applications for cars and semi- it in his shop. director, Office of the Study > David Cole  s, however, masking trailer trucks. Until the early of Automotive Transportation, University of Michigan tape and abrasives were 3M’s entree into the auto indus- try. With the acquisition of Dynoc Company, a maker When all-steel cars emerged in the  s, manu- of decorative wood grain for cars, a new product line facturers needed adhesives to attach upholstery, trim emerged; 3M created the first vinyl film that replaced and sound-deadening materials to soften the noise of paint for automotive graphics in . This break-  reverberating steel bouncing over rough roads and through gave 3M a major boost in its automotive busi- potholes. 3M’s solution was a spray ness and manufacturers had more colorful and elaborate rubber adhesive, also graphics to attract consumers. 3M’s glass bead technol- called rubber ogy used in reflective products made these graphics cement, made even more sophisticated. 2 1

123 Look ‘Behind the Smokestacks’ 115 The  Ford Mustang cushioned the converter was the first car to sport 3M inside its metal hous- Scotchcal film graphics, fol- ing. It held the con- lowed by a majority of American ver ter in place and  “muscle cars,” popular in the s prevented excess 3 s. Screen printing soon replaced  and heat from escaping notably those — vinyl and more intricate designs into the car. on the Pontiac Firebird  became the ultimate — example of customized graphics. The Tape That Binds > But, it was when a major 3M breakthrough trans-  formed car manufacturing. Art de St. Aubin, then a By the late 1960s, when the Decorative Products 3M marketer, led a new project that ultimately evolved Division was formed, those products became into the Industrial Specialties Division with global the cornerstone of our automotive business. It implications. The innovation driving this new business was double-coated foam tape, a first in the industry. meant we were dealing with materials that were It replaced mechanical attachment of body side mold- going on the finished car versus only materials ings and weatherstrips. This revolutionary product used in the production of cars. > David Brown changed the basis of competition. With taped instead — business director, Automotive Division of mechanical attachments on cars, there were no more — unnecessary holes, fewer screws or bolts and less rust, s, 3M introduced fluoroelas-  Also in the late the byproduct of punching holes in metal. tomers, compounds that could tolerate wide temperature De St. Aubin, who retired as executive director, 3M ranges and exposure to fluids like fuel, gear lubricants, Automotive Center, credits Joe Abere, a 3M corporate engine oils and rust inhibitors, making them ideal for elopment of the improved technology, scientist, with dev automotive gaskets, seals and tubing. Scotchgard fabric and Gordon Engdahl, then division vice president,  protectors, first used by Ford in , helped interior with the support needed Industrial Specialties Division, cloth seats, door panels and carpets resist oil, water and to see the project through. They called it Isotak tape in soil. 3M Interam mount, designed for catalytic convert-  , but it had its start nearly years earlier with the   ers in , solved multiple problems for car manufac- original two-sided neoprene tape developed by Scientist turers. Interam mount looked like a felt blanket that Ed Lavigne. Neoprene tape had the durability to per- Grit samples of Wetordry Tri-M-ite 1 sandpaper in the 1920s. 2 Wetordry sandpaper was also sold to consumers in the 1920s. People found many 4 uses for the paper in their homes. Scotchcal high performance graphic 3 films, developed in the 1960s, were used extensively on the “muscle cars” of the 1970s. 4 3M dimensional graphics used on a Toyota Supra.

124 Chapter 8 116 form on the outside of a car, and it gave 3M the chance It was a defining moment for 3M Automotive when to demonstrate how it could attach moldings and orna- Brown and Joe Jones visited the GM production facility mentation for Ford, Chrysler and later General Motors. Monte Carlo.  that made flexible bumpers for the Neoprene tape was generating approximately  million “When we arrived, we found thousands of moldings on  in sales by the late s, but the tape’s holding power the floor,” Brown said. “None of them adhered. It was wasn’t consistent. It worked with car moldings that were breathtaking. Why 3M’s tape failed was, at first, a mys- engineered to accommodate tape instead of screws and tery. 3M later learned that General Motors’ supplier of rivets. But, moldings that weren’t designed for tape often — in preparation for a potential union car moldings ted dropping off cars. failed. Parts star “We had the chance to develop products for bonding We operated more like commandos than a big trim to the new, flexible bumpers that were coming out army. I think a lot of the small projects that got  on the Monte Carlo,” said David Brown, business started at 3M operated like that. It was hard to director, 3M Automotive, “but General Motors’ body side moldings attached with neoprene tape weren’t draw the line between marketing, sales and holding. That drove us to find something new that could technical. Everybody did a little bit of everything. outperform neoprene tape, even though the performance re > Art de St. Aubin tired executive director, Automotive requirements were still not clear.” Innovation Center We m ust understand the requirements of had shipped two months’ of inven- strike in its plant — 3M products better than our customers do. tory to GM in the hot summer months. As the moldings > David Brown sat stored in semitrailer trucks, the heat caused an oily material called a “plasticizer” to migrate from the moldings and seep into 3M’s neoprene. As a result, the tape couldn’t do what it was designed to do. “General Motors didn’t know that we ’d developed Isotak acrylic foam tape because it was still in testing. But, General Motors needed a solution, fast,” 1 CIFERAL, a bus man- ufacturer in Brazil, used 3M VHB (very high bond) tape to attach aluminum exterior side panels to the vehicles’ frames. 1

125 Look ‘Behind the Smokestacks’ 117 Brown said. “We flew in Gordy became 3M chairman later Engdahl, our vice president, and we and CEO, cut the product presented the product. We promised development team slack. to ship the new tape within a week. “He told me I hadn’t “Gordy believed in the people who filled out any new-product forms worked for him and he gave us opportu- in six months. He said, ‘I don’t want nities,” said Brown. “He knew about the you to stop what you’re doing, but Isotak technology and he supported investments once in a while, fill out some of the forms.’ ” 2 in our pilot work. He was a strong advocate of “We simply called our new product ‘two-sided technical innovation.” sophisticated,” Abere very sticky tapes,’ but they were said. “We could see their immediate application in auto- motive but also in general industry, for example, in When you’re dedicated to the success of a office furniture. We devoted all our time to developing project, you can’t get it out of your head. that technology.” It isn’t a six- or eight-hour job. It has to involve your psyche . . . It’s a ‘practical obsession.’ 3M took initiative in understanding the potential 3M corporate scientist > Joseph Abere of creating a high-performance tape that was capable of providing fastening without drilling > Adversity is the Mother of Invention holes. Others tried it, but 3M was the best at it.  The Isotak tape that set an industry standard in > David Cole at the time — was was based on a 3M technology that — earmarked for extinction because it couldn’t meet “Adversity led us to develop this new generation of extraordinarily high cold weather specifications. “But, tape products,” said Brown, “including acrylic foam tape ept working to prove that our product was suitable we k and what is known today as VHB (very high bond) tape.” for the automotive environment,” said de St. Aubin. About the same time 3M introduced the new double- The project had its start in the middle of a national coated tape, others in the auto industry were replacing economic recession. “We went to Allen Jacobson, who metal moldings with plastic. As plastic became a more was then vice president, Tape Group, and Allied Products acceptable alternative, de St. Aubin said, “We started and he supported us,” said de St. Aubin. Jacobson, who 3 2 VHB tapes have added benefits of vibration dampening and reduced corrosion. 3 VHB tapes have replaced labor intensive riveting and reduced rusting in many applications, including trucks and cars.

126 automotive applica- more than half a dozen competi- ack in the mid-1980s, the tion. That’s why tors,” Aikins said. “3M’s involve- Ford Ranger had a prosaic B the interchange ment in changing the Ranger’s image. “It was a little work truck has been so image contributed to making and the most affordable of our valuable over it the leader. We began selling truck products,” said Robert the years.” about 300,000 Rangers in North Aikins, design executive, Ford Today, when America each year.” Motor Company. “It appealed to DaimlerChrysler When Ford explored replacing young people or those in their designers are structural steel with aluminum mid-40s who wanted a second, addressing to reduce the weight of its trucks utility vehicle.” ornamentation, and increase fuel ef cienc y, But, Ford wanted to alter graphics and 3M worked with Ford’s Research the little truck’s image. It could badging (the last and Vehicle Technology Lab in become a truck with a positive, phase of new vehi- the mid-1990s to invent a supe- — fun to drive upbeat “attitude” No ‘Lone Ranger’ cle design develop- rior “two component” adhesive with a sense of style. “That’s ment), they send their to bond large, metal sections when we enlisted 3M,” said ideas to 3M’s Detroit- without welding. “3M’s lab people, Aikins. “We wanted to put more based Automotive application engineers, marketing excitement into the Ranger line, Center electronically. support in St. Paul and sales and 3M had long experience with “3M has the equipment people did an outstanding job of supplying Ford with decorative to receive our graphic inter- working with Ford and respond- stripes and ornamentation.” pretations and make proto- ing to their needs in a short 3M Automotive employees in types very, very quickly,” said — less than 14 months from time St. Paul and Detroit developed Herlitz. “That high-speed link is the idea to the production line,” several potential designs using all-important in our business.” said Kevin McKenna, director, many decorative tapes. “We 3M Ford key account. “Our job tried translucent tapes, tapes Problem Solving at GM is to look out to 2006 and match that allowed the body color of Whether a car is on the produc- Ford’s needs,” said McKenna. the truck to show through, high tion line or in development, 3M gloss tapes and metallics,” Aikins has proven to be an agile and Speed at DaimlerChrysler said. “It wasn’t enough to go with well-versed problem solver for John Herlitz was 21 when he standard colors. We needed new General Motors (GM). “Let’s say joined Chrysler as a product and unique ideas and 3M gave we have dif culty with a par t designer in 1964. Along with 3M’s us the innovative applications.” adhering to the car or some innovative re ective graphics Not only did the designs have to dif cult adhesive condition, ” said and r st-to-market acrylic tapes, look good, they also had to pass Ray Bierzynski, director, func- Herlitz remembered being a wide- Ford’s rigorous climate testing. tional vehicle design. “We call 3M eyed, young designer visiting the After developing design and ask them to come here, or go 3M campus in St. Paul. “Seeing sketches using several options, to the plant, analyze the process the full range of 3M activities 3M built a mock-up of the Ranger and come up with ideas. That’s fascinated me because they were to illustrate how the applications when 3M’s responsiveness has active in so many elds other would look on a real truck. “That come in handy. Speed is crucial than automotive,” said Herlitz, helped us get nal appr oval,” because GM builds about 50 to senior vice president/product said Aikins. 75 cars an hour.” design, DaimlerChrysler Corp. “We went from being just A new design is likely “There was tremendous energy a player in the compact pickup to require more attention. generated between 3M’s creative business in 1987 to Ranger Bierzynski, for example, wrestled people and ours. We even saw becoming number one among with an intermittent water leak technologies that 3M people never thought could have an

127 Look ‘Behind the Smokestacks’ 119 coming through the center- attaching everything nameplates, moldings around — mounted brake light. “Even bumpers, the drip rail around doors with our new tape.” though it had nothing to Not only did the tape reduce manufacturing costs do with their adhesive eliminating metal holes and welding studs, it also by 3M helped us expertise , reduced rust, made it possible to use fewer parts in analyze the foam gasket assembly, shut out moisture and dust and helped vehi- material that caused the cles last well beyond warranty limits. leak. They even helped “At first, we had no competition,” said de St. Aubin. our supplier nd a better “It was a complicated application because the tape material.” had to perform in extreme variations of hot and cold Intense competition weather. The technology allowed us to expand and serve has led GM to rely more automakers around the world. By the  st century, 3M heavily on 3M and its had tape plants in Japan, Europe and the United States. other suppliers: “We have to use more ‘best It is a testimony to fulfilling a customer need and seeing practices’ and proven an opportunity for which we had high hopes.” methods,” said acrylic foam tapes used  “Japan has more than Bierzynski, “and — in their automotive market,” said Brown. “We have at the same time — in America. Europe has about  . Few are the same.  take mass and costs Because we can customize our products, we can be out of our processes. far more responsive to individual customer needs.” That means we have , sales of 3M’s line of acrylic foam tape  By to lean on our sources exceeded  billion around the world and it had been for new ideas, gener- used on more than  million vehicles. Innovation ated at a faster rate, and continues with the next generation of tape that will for applications that are provide even stronger bonding power. the most consistent and ef cient the y can be. “When I worked most 3M has helped us stay ahead of the game with closely with 3M people, to their ideas that push the design envelope. > Don Brown credit, I had the pager and phone numbers for every key person. national product planning manager, Toyota Motor Sales I always knew they’d get back to me right away.” In the new century, 3M is producing more than different automotive products for uses as broad , as bonding, acoustical insulation, fastening, air filtra- tion, decorative trim and graphics, fabric protectors, electrical and lighting components and security label- ing. 3M automotive customers can tap into more than  global automotive centers, dubbed “answer centers,” where the staff is focused on pinpointing solutions to specific customer needs. Background: Scotchcal paint protector film

128 120 Chapter 8 gave the business sharper focus, as well as more visi- > Pursuing a Plethora of New Customers bility and legitimacy in 3M’s internal world of product  It wasn’t until the early s that 3M looked beyond innovation and profit centers.” its traditional, industrial roots and explored the global A recession in the United States during the early potential for its consumer business. The impetus started  s actually worked in favor of building the consumer with Lehr, then chairman of the board and chief execu- business. Nozari put it this way: “When General Motors tive officer, who reorganized the company into business sells fewer cars, it needs fewer products from 3M, but “sectors” and carved out the consumer business to report consumers don’t stop eating or washing their dishes with directly to him. Scotch-Brite cleaning products. An economic downturn “Consumer had grown almost by sheer accident especially if the affects our consumer business less — until Lew Lehr’s decision,” said Moe Nozari, executive vice president, Consumer and Office Markets. “If we made sandpaper and tape for industrial customers, we Our goal is to give people a product that’s said, ‘Why not sell it in grocery or hardware stores?’ better than what they have today . . . or a brand We ’d start with a product, then go with it, wherever it fit. new product they didn’t know they needed. ’d find our way into new markets. We executive vice president, Consumer > Moe Nozari Lew’s decision to let con- sumer stand alone and Office Markets product is lower cost, like cleaning sponges, Scotch Magic tape, 3M mounting products with Command adhesive, sandpaper and Filtrete filters for furnaces. “When Ernie Moffet became group vice president, Consumer Group, some people felt it was a hollow title,” Nozari said. “He had only one division and a  s, how- small project reporting to him.” By the late Commercial — ever, that one division had grown to five Care, Construction and Home Improvement Markets, Home Care, Office Supplies, and Stationery Products generating nearly percent of the company’s divisions —  total revenues from about  ,  consumer products. Today, Consumer and Office Markets is one of the six 3M Market Centers. key success factor for Consumer and Office “A Markets has been our ability to outpace the industries we’ re in by creating new-to-the-world products and getting them established rapidly,” said Nozari. “In million in sales.  three years, Post-it flags grew to Command adhesives, which adhere to most flat surfaces, then release without damage when properly removed, will be to hammers and nails what the Post-it note was to scratch paper, paper clips and staples. “We want to be the first to make our own best prod- ucts obsolete; that way, it’s difficult for the competition 1 to catch up.”

129 Look ‘Behind the Smokestacks’ 121 sponges and stock only cellulose versions, You’re a Great > Company, But . . . including 3M’s O-Cel-O and Scotch-Brite brands. Megan Tucci, senior buyer, said, en alone, unique products aren’t Tak “3M was our best supplier with the most the only big factors in successful creative ideas and a willingness to invest customer relations. in the program. Walk into Target today “In the early s, our cus-  and we’re proud to say that we carry top tomers told us that 3M was a great brands and top quality.” Tucci said that 3M took the ini- company, it had wonderful products tiative to help Target enhance its business by suggesting and people,” said Ron Mitsch, retired vice chairman new, bonus pack promotions, as well as more effective of the board and executive vice president, “but they also product displays. “3M helped us design a new vertical  said we were difficult to do business with. We had display that made the sponges more visually appealing. to  divisions calling on the same customer. It wasn’t They also helped fund the effort and they showed us unusual to have a customer reach into his desk, pull out how to grow our business,” Tucci said. “Our sponge a stack of business cards and ask, with obvious frustra-  sales increased percent two years in a row.” tion, ‘Whom do I call?’ ” That’s when 3M inaugurated “integrated solutions.” Key account people are assigned to customers. “3M’s consumer and office businesses Lew Lehr wanted 3M to be a bigger player in were most successful,” said Mitsch. “In seven years the consumer market and it happened because , they grew from to  percent annually  to   of our key accounts focus. Now we have with their key account focus. It meant doing business in a different way and working across divisional lines. an ‘audience’ at the top of each company. It involved giving up some power if you were a general retired vice chairman and executive vice president > Ron Mitsch manager or group vice president.” Growing Market Share at Target > In the world of major discount stores, Target appeals  to upscale consumers, typically women in their s ,  s, with family incomes around  a year. and  Given this profile, it wasn’t surprising when Target chose to eliminate its lesser quality cleaning 3M Consumer and Office Markets 1 features some of the world’s best- known brands including Scotch, Post-it, Scotch-Brite, Command, Filtrete and O-Cel-O. The Scotch-Brite microfiber 2 cloth is a multipurpose, reusable clean- ing cloth designed for dusting and clean- ing mirrors and windows. 2

130 122 Chapter 8 We tomers access to the newest products. They’re not all Have This New Idea . . . > ‘home runs,’ but many are.” It was a win-win-win opportunity for Sam’s Club, Costco, a customer since  , gave 3M access Costco and 3M. The idea emerged at “top to top” meet- -store regions to test the new cleaning  to one of its ings in which executives from each company met with cloth. “We put together customer focus groups to find their 3M peers to share ideas and mutual marketing out what they liked about the wipes,” Banholzer said. strategies. 3M had a new cleaning product informally “Our market research is valuable to Costco and Sam’s called “wipes” that had just emerged from a company because they don’t always lab in October . “We said,  have the time to do it. From ‘We’ve got this material, it’s that research, we developed unique and here’s what it can a display for Costco that was do,” said Bill Banholzer, direc- highly visible and displayed tor of club trade at 3M. “We’d the product’s benefits.” like to see if your members are “3M works hard at listening attracted to it and, at the same to us, creating better product time, bring value to you.” presentations in our clubs, Brad Feagans, vice presi- and offering attractive, value- dent and divisional merchan- added promotional ideas,” dise manager for Sam’s  said Steve Messmer, discount retail clubs in the assistant general manager, United States, suggested Costco Wholesale. introducing the cloth in 3M’s “They’ll include a Post-it own “backyard” in Minnesota. note holder in a pack of Less than eight weeks  -inch Post-it notes or  - by after that initial discussion,  a dispenser, valued at , to  the new Scotch-Brite with six rolls of packaging tape. microfiber cleaning cloth We w ork diligently with 3M to create was stocked in five Sam’s stores. packages that display well in our clubs and new product needs awareness and “A 1 cost less to produce so we can pass those savings on.” sampling,” said Banholzer. “Within three weeks, had a success on our hands.” we “Next it was Florida,” Feagans said, “and once the We b uy the cream of the crop. We shop from the sales took off, we went to all of our stores.” In fact, in an top two to three vendors in a product category. annual event at which Sam’s executives each select a new product to promote, Jim Haworth, senior vice president With 3M, quality has never been an issue. of operations, singled out 3M’s new product. “The idea assistant general manager, Costco Wholesale > Steve Messmer is to promote that item and build sales,” said Feagans. ,  “3M’s wipes started the year generating about  a week in our stores and we aimed to double that.” Pennies saved matter a lot when the volume pur- “3M looks at what products are right for our custo- million yards  chased is so large. “We sell about mers,” said Feagans. “We’ve worked with 3M since clubs of 3M premium packaging tape a year at our  . They have a strong work ethic, they’re fair, honest  million sheets  in the United States,” said Messmer, “ and do what they say they’ll do. Our company cultures billion inches  - by   -inch size, and of Post-it notes, are similar. They bring us new product ideas and we can of Scotch Magic tape.” help test how successful they might be. It gives our cus-  Since , when Nozari developed the key accounts

131 123 Look ‘Behind the Smokestacks’ program for 3M consumer and office markets, the com-  including dropping the lighter repeatedly from feet pany’s business with the country’s major buying clubs off the ground and exposing it to cycles of extreme heat has doubled, said Banholzer. “We have a good under- and cold over eight hours.” standing of each other’s businesses,” he said. “We share But, that wasn’t the only production issue Zippo our corporate strategies. Our goals are the same — to grow faced. When the company exposed a lighter to an acid our businesses.” bath to stencil a customer logo on its product, the chance of that acid damaging other surfaces was high. percent  “There were times,” said Atherton, “when > Lifetime Lighters of the manufacturing run was scrap. The acid leaked — Zippo Manufacturing Company the largest manufac- and contaminated the rest of the lighter in the process. — turer of lighters in the world had a huge problem in This was at the end of our manufacturing process and . Of the more than million lighters the company   we were left with nothing. It cost us a lot of money.”  produced in a typical year, about million were losing 3M created a special “masking” tape that covers their custom emblems. “We were getting calls from the surface and won’t allow the acid to damage the customers,” said Fred Atherton, senior buyer for Zippo, surface. “It’s like a window frame that we place over based in Bradford, Pennsylvania. “People said, ‘Gee, the lighters and it allows only the exposed area to get your lighter works great, but our logo fell off. That’s the acid,” Atherton said. “That product reduced our where 3M came in. It took a lot of research and a cou- rejected lighters to virtually zero.” ple years to develop an adhesive that could withstand extreme humidity and temperature conditions as well as repeated shock.” > The Customer in the Next Cubicle the company, — Zippo couldn’t take any chances 3M’s new business in ergonomics had its start in no  , had a long tradition of offering lifetime founded in less than the chief executive officer’s office. “Desi (L.D. guarantees for its products. “Although Zippo doesn’t DeSimone) had always been extremely vocal about the guarantee the various finishes, we treated this problem importance of health and safety for employees,” said with the utmost urgency. We put on a full court press Claude Denais, now managing director, 3M Venezuela, to find a solution,” said Atherton. formerly business unit director, Office Supplies Division. 3M developed a very high bond (VHB) tape that is  , 3M examined the source of computer-related In  of an inch thick. “It was a long time in devel- only . injuries and illnesses, and found that nearly half were opment,” said Paul Smithmyer, senior product/process related to ergonomic issues. The study also indicated engineer for Zippo. “A lot of testing had to be done, that over a decade the average cost of all lost time inci- 2 1 Costco Wholesale alone sells about 10 billion inches of Scotch Magic tape a year. 2 3M’s line of ergonomic prod- ucts includes computer keyboards, wrist rests, mousepads, document holders, polarizing task lights, even office air cleaners.

132 124 Chapter 8 , dents at 3M were — at a minimum —  ,    to the products available,” Albin said, “either they didn’t do per person. what we thought they should do or they only addressed 3M focused first on muscular skeletal cases that a few ergonomic issues.” show up in plant activities. A training program reduced It was an unlikely new business for the then Com- the number of lost-time cases related to ergonomics by mercial Office Supply Division. “When Chuck Harstad, percent. Before long, attention expanded to the entire  now staff vice president, Corporate Marketing, was company, said Tom Albin, retired manager, Ergonomics division vice president,” said Denais, who ran 3M’s Services, Office Supplies Division. “The same injuries office and stationery businesses in France and later can occur in offices and industrial settings,” he said. managed the embryonic ergonomics business, “most “Someone doing data entry at a desk can develop wrist of the products in our division were sticky products — problems; someone in a plant who assembles a product Post-it notes and Post-it flags, for instance. Chuck wanted uses repetitive motion. Injuries related to ergonomics us to think outside the box. He said, ‘It doesn’t have to can also come from too much exertion or working in an stick to anything.’ ” aw kward position.” Denais’ team looked outside their division to find  ,  , there were about  By 3M people who 3M technologies. For example, the gel used in the wrist routinely used computers for as long as eight hours each rests was first developed by 3M Health Care for other workday. 3M’s corporate ergonomics group worked with medical needs. His team had built in “consumer focus engineering to develop a company-wide training pro- groups” of 3M employees who gave them feedback on gram, called Turbo Ergo. Albin and his colleague, Nancy their early product designs. The team even videotaped Larson, applied for a 3M Alpha Grant to develop educa- people at their work stations to understand how they tional materials focused on computer ergonomics for worked. “We noticed people massaging their wrists employees, including an informational Web site. without even thinking about it,” Denais said. “We had Ultimately, this focus on healthy environments for videoconferences with our peers in Europe, Canada 3M office and plant workers spawned the company’s and Japan to review our product concept drawings. It new line of specially designed gel-filled wrist rests for was important to have international involvement early.” computer keyboards and mouse platforms, document Harstad, the team’s sponsor, “sheltered us from the holders and stands, foot rests, polarizing task lights, skeptics” as the project evolved, Denais said. He pro- office air cleaners, safety mats, and computer filters to vided resources without expecting immediate, tangible reduce eye strain. It had become evident that a business results. “We were the equivalent of a small, start-up opportunity was ripe for picking. “When we looked at company. Our team had the imagination, creativity 1 1 Patented gel-filled wrist rests contain a compound originally developed for medical needs. 3M’s adjustable keyboard also helps reduce ergonomic injuries.

133 Look ‘Behind the Smokestacks’ 125 and speed of a new venture. Chuck protected us from tions — wherever people work, in offices, plants, at home, the bureaucracy that’s inevitable in a big company. We  in hotel rooms, on airplanes.” By , 3M’s ergonom- also had an advantage over our competition. We started  ics business had an annual growth rate of percent. with a clean sheet of paper, rather than trying to modify  “What we’re most proud of is that percent of our existing products to make them more ergonomic.” customers are outside the United States,” said Denais. After three years of work, beginning in , 3M  “People in Europe, Scandinavia, Canada, Australia and  a wrist — introduced its first four products in July New Zealand are very savvy about ergonomics.” And, rest, document holder, foot rest and air cleaner. “We in the categories in which 3M has ergonomic products, continued to add new products each year,” Denais said. that learned from its internal the little start-up business — “We want to be the leading provider of ergonomic solu- customers first now has significant worldwide sales. — ● Being “customer intimate” means getting out with your customers, “living” with them and seeing what they see. Know your market well enough to anticipate your customers’ ● wants and needs . . . even before they do. The best customer is a partner. ● 3M is innovative when it gives its customers solutions to ● their problems. Be the first to make your own best products obsolete. ● time-tested truths or one they — Give people a product that’s better than they have ● didn’t know they needed, until they tried it.

134 126 Timeline s 1910 s 1900 1902 1912 3M founded in Two 3M pioneers method of screening abrasive grit Harbors, Minn., on June 13 to maintain consistent size. when five founders sign Company profitable for first time. 1913 articles of incorporation. 1914 Oil soaked garnet produces flawed sandpaper; Harriet (Hattie) 1903 3M begins its first quality control program. Swailes, 3M’s first female employee, hired. 3M Events 3M Events Three-M-ite abrasive cloth introduced. 1904 3M has its first and First 3M laboratory 1916 only sale of Crystal Bay established; 3M headquarters corundum. moves to St. Paul. 3M moves to Duluth, Minn. 1905 — 3M pays its first dividend Lucius Ordway invests in the company. 6 cents a share on August 11. (3M has paid quarterly First sandpaper sale to South Bend Toy Co. totals $2. 1906 dividends on common stock without interruption since then.) 1907 William F. McKnight hired as assistant bookkeeper for $11.55 per week. Annual sales exceed 1919 $1 million. 1910 3M moves manufacturing operations to St. Paul; first factory built. Board approves 2-for-1 stock split. Building No. 1 in St. Paul Enrico Caruso makes 1902 San Francisco earth- 1906 Marie Curie is awarded 1911 1914 WW I begins. his first phonograph recording. quake kills 700; $400 million the Nobel Prize in chemistry. property loss. First transcontinental 1915 Henry Ford founds 1903 Woodrow Wilson wins 1912 telephone call between the Ford Motor Co. Robert Baden-Powell 1907 presidential election. U.S. Alexander Graham Bell in founds Boy Scout movement New York and Thomas 1904 Theodore Roosevelt in Great Britain. S.S. Titanic sinks on her A. Watson in San Francisco. wins U.S. presidential election. maiden voyage after colliding General Motors Corp. 1908 with an iceberg. 1916 Woodrow Wilson London Symphony Orchestra for med. is re-elected president. gives its first concert. Federal income tax 1913 World Events World Events Ford Motor Co. produces introduced in the United WW I Peace 1919 Albert Einstein formu- 1905 the first mass-produced car, States through the 16th Conference begins at lates his Theory of Relativity. the Model T. Amendment. Versailles.

135 127 A Century of Innovation 1920 s 1925 Scotch masking tape introduced. 1928 3M Engineering Department organized. McKnight succeeds 1929 Edgar Ober as president. 3M and eight other U.S. abrasives manufacturers form Durex, a joint venture holding company in England, to conduct European business. St. Paul office in 1926 Shareholders approve incorporation of 3M as a Delaware company; 3M stock first traded 1921 Wetordry waterproof sandpaper — over the counter. the world’s first water-resistant coated abrasive — patented and introduced. 3M buys Wausau Abrasives, its first Richard P. Carlton hired as a $65-a-month lab assistant. acquisition, for $260,000. 1922 Board approves 2-for-1 stock split. Robert Skillman makes 3M’s first business trip to Europe. First formal product research begins. 1924 U.S. Senate rejects 1920 Popular songs include 1923 1925 “The Great Gatsby,” Charles Lindbergh makes first League of Nations. George Gershwin’s authored by St. Paul native, solo nonstop flight across the “Rhapsody in Blue.” Atlantic Ocean. F. Scott Fitzgerald, published. 19th Amendment gives American women the right U.S. President Warren G. Herbert Hoover 1928 Madison Square Garden to vote. Harding dies in office; opens in New York City. elected U.S. president. Vice President Calvin mer President 1921 For Coolidge succeeds him. “Black Friday” as U.S. 1926 Kodak produces the 1929 William Howard Taft named first 16mm movie film. Stock Exchange collapses chief justice of the United Ford Motor Co. 1924 on Oct. 28. States. produces 10 millionth car. Holland Tunnel opens, 1927 linking New York and New Construction begins on 1922 Soviet states form J. Edgar Hoover named Jersey. Empire State Building. U.S.S .R. director of the FBI.

136 128 Timeline s 1930 1937 Central 1930 3M buys Baeder- Research Laboratory Adamson Co. established. Pension plan established First successful test for 3M employees. of reflective tape coated with glass beads. Scotch cellophane tape introduced. 3M Events 1938 Scotchlite reflective 1931 3M begins producing Colorquartz roofing granules. sheeting introduced commercially. 1932 3M “monkey business” ad campaign begins, created by British cartoonist Lawson Woods. Cornerstone laid for new 1939 St. Paul headquarters building (#21). 1935 3M’s first automotive under- seal coating products introduced. First traffic sign featuring Scotchlite reflective sheeting erected in Sandpaper packages featured Minneapolis. illustrations of Sandy Smooth. The name originated with 3M employees, who affectionately called McKnight “Sandy Smooth.” Adhesives Division 1936 established in Detroit; adhesives plant and laboratory opened. Sales hit $10 million. Company picnic in 1934 1930 South African micro- The Lambeth Bridge in London bus drivers strike. 1936 Roosevelt is re-elected biologist Max Theiler develops London and the Harbour president. U.S. a yellow fever vaccine. Bridge in Sydney open. 1938 President Roosevelt sends appeal to Hitler and Margaret Mitchell’s 1933 21st Amendment to 1931 “Star Spangled Mussolini to settle European “Gone With the Wind” wins Banner” becomes official Constitution repeals U.S. problems amicably. Pulitzer Prize. national anthem. U.S. prohibition. Lajos Biró of Hungary invents Henry Luce begins 1935 President Roosevelt Franklin D. Roosevelt 1932 the ballpoint pen. publication of Life magazine. wins U.S. presidential election signs U.S. Social Security Act. in Democratic landslide. First baseball game is 1939 1937 Amelia Earhart lost World Events “Porgy and Bess” opera televised in the United States. on solo Pacific flight. George Gershwin opens by The Lindbergh baby is in New York. kidnapped.

137 129 A Century of Innovation s 1940 1948 3M’s first nonwoven product — Inland Rubber Corp. acquired. 1942 decorative ribbon for gifts introduced. More than 2,000 3M employees 1945 3M organized along divisional lines. are on military leave. Sales top $100 million. Scotch vinyl electrical tape introduced. 3M debuts its first surgical drape. 3M listed on the New York 1946 Stock Exchange on Jan. 14. McKnight becomes chairman of the board; 1949 Carlton named president. Employee stock purchase plan introduced. Scotch magnetic audiotape 1947 Open house at the introduced. Hutchinson plant, 1948 3M acquires five companies, forms National Outdoor Advertising. New plants opened in Hutchinson, Minn. (tape); Los Angeles, Calif. (adhesives); and Little Rock, Ark. (roofing granules). For ty acres of 3M’s original Crystal Bay mine site are donated to the state of Minnesota for Tettagouche State Park. Winston Churchill 1940 United States drops 1942 Enrico Fermi of the Indian leader Mahatma 1948 becomes British prime atomic bombs on Hiroshima United States splits the atom. h i is assassinated. Gand minister. and on Nagasaki; Japan D-Day in WW II, 1944 surrenders; war ends. U.S. Congress passes the Roosevelt re-elected to third the Normandy Invasion. Marshall Plan Act providing term as U.S. president. 1946 U.N. General Assembly $17 billion in aid for Europe. President Roosevelt holds its first session in Japanese bomb Pearl 1941 London. re-elected to a fourth term. Harry Truman elected Harbor on December 7. U.S. president. Jackie Robinson 1947 1945 Roosevelt dies; Harry Joe DiMaggio successfully becomes first black to sign Tr uman becomes president. Apartheid begins 1949 hits in 56 consecutive games a major league baseball in South Africa. to establish record. WW II ends in Europe. contract.

138 130 Timeline s 1950 1954 RCA uses Scotch 1951 3M establishes its International magnetic tape to record Division, after the dissolution of Durex; TV programs for the first time. international sales reach $20 million in first year; new international The American Institute of Man- companies are created in agement names 3M one of the Australia, Brazil, Canada, five best managed companies in France, Germany, the United States and includes it Mexico and 3M Events among the top 12 growth stocks. the United Kingdom. ost Office fleet vehicles U.S. P carry Scotchlite reflective decals. Central Research Laboratory moves into the first 1955 research facility at 3M Center, the new corporate headquarters. The building, #201, is the first of many new lab buildings. 3M introduces Scotchgard fabric and 1956 upholstery protector to the textile industry. 1957 The city of St. Paul renames Explosion in minerals building kills 15 employees, injures 49. two streets after McKnight and Archibald G. Bush. 3M announces first 4-for-1 stock split. Scotch-Brite cleaning pads 1958 Thermo-Fax copier introduced. marketed for industrial use. 3M’s Technical Forum established. 1959 Wor ldwide results 1952 Guy Lombardo plays at 3M’s 50th anniversary are consolidated and sales celebration attended by 11,000 St. Paul employees and guests. exceed $500 million. Scotchlok electrical connectors and Scotchkote insulation introduced. Herb Buetow succeeds Carlton 1953 as president. 3M breaks ground for first new corporate headquarters (3M Center), building on a 325-acre site east of St. Paul. Queen Elizabeth II 1953 1954 European Common 1958 Dr. Jonas Salk 1950 Record crowd of crowned. develops polio vaccine. Market established. 199,854 attends World Cup soccer game in Rio de Janeiro. Governor Orval Faubus of Prince Rainier of 1956 Nobel Prize in literature Arkansas defies Supreme Monaco and Grace Kelley is awarded to Winston S. 1951 “I Love Lucy” TV Churchill. Court integration order by are married. comedy debuts. closing schools in Little Rock. U.S.S.R. launches Ben Hogan wins Masters, 1957 North Korean forces take Open and British Open United States establishes Sputnik I and II, the first U.S. Seoul and reject American satellites. golf championships. National Aeronautics and truce offers. Space Administration (NASA). World Events Edmund Hillary of New Mackinac Straits Bridge, Color television introduced. ld’s longest — wor Michigan Zealand becomes first man Fidel Castro becomes 1959 opens. — suspension bridge to climb Mount Everest. premier of Cuba.

139 A Century of Innovation 131 1960 s 3M’s first research lab Scotch Brand Magic transparent tape 1960 outside of the United introduced. States is completed in Harlow, England, Micropore surgical tape, the first hypoallergenic tape, near London. introduced. It is a key to success of 3M Health Care business. Sumitomo 3M joint venture created in Japan. The Carlton Society is created to honor career technical contributions. 3M announces 3-for-1 stock split. 3M acquires Ferrania S.p.A., an Italian manufacturer 1964 of photographic products for professional, industrial and 1961 3M subsidiaries consumer markets. established in Austria, Colombia, Denmark, 3M sales exceed $1 billion. 1965 Hong Kong and Norway. McKnight steps down 1966 International sales increase as board chair and nearly sevenfold in one decade: becomes honorary from $20 million in 1951 chairman after 60 to $136 million in 1961. years with 3M; Cross named Manufacturing plants established board chair- in 12 countries: Argentina, Australia, man and CEO. Brazil, Canada, Colombia, United Kingdom, France, Germany, Japan, 1967 3M develops South Africa, Spain and Mexico. the first disposable facemasks and Building 220, 1962 respiratory protection the first of 3M Center’s products. administration buildings, completed. 1969 3M products are used in the first Ta r tan Turf, the first moon walk on July 20, synthetic grass surface, 9 196 . Astronaut Neil introduced. Armstrong leaves a foot- print on lunar dust in boots 1963 Bert Cross made from Fluorel named 3M’s seventh synthetic rubber from 3M. president, succeeding Buetow. Photo courtesy of NASA 1961 John F. Kennedy inau- Dr. Michael DeBakey uses Indira Gandhi becomes 1966 Sen. Robert Kennedy gurated as 35th U.S. president; first artificial heart to take over prime minister of India. assassinated in Los Angeles. establishes Peace Corps. the circulation of a patient’s blood during heart surgery. Thurgood Marshall 1967 1969 Richard M. Nixon Yu ri Gagarin (U.S.S.R.) orbits appointed to the U.S. inaugurated as 37th U.S. the earth in 6-ton satellite. Martin Luther King Jr. 1964 Supreme Court. president. wins Nobel Peace Prize. Alan Shepard makes first U.S. Dr. Christiaan N. Barnard Golda Meir named prime space flight. Lyndon B. Johnson 1965 performs the world’s first minister of Israel. inaugurated as 36th president human heart transplant President Kennedy 1963 of the United States. Apollo 11 lands on the in South Africa. assassinated in Dallas, Tex.; moon’s surface on July 20; Lyndon B. Johnson becomes astronaut Edward White U.S. Martin Luther 1968 Neil Armstrong walks on president. completes first space walk. King is assassinated. the moon.

140 132 Timeline s 1970 1977 3M Consumer New products include Scotchban paper treatment 1970 Products Group established. to protect food packaging and 3M box sealing tapes. Red 3M logo 1978 Riker Laboratories acquired. introduced. Harry Heltzer succeeds Cross as chairman of the board McKnight, the architect and CEO. and builder of 3M, dies. 3M Events 1971 New medical products plant opens in Brookings, S.D.; decorative products plant opens in Nevada, Mo. 1979 Lew Lehr succeeds Herzog as CEO and becomes chairman of the board in 1980. Board of Directors recommends 1972 2-for-1 stock split. 3M annual sales top $5 billion. 1973 First 11 Golden Step team winners New products include Thinsulate thermal honored. insulation. McKnight retires from the Board of Directors, ending 66 years of service to 3M. 3M creates the first van- pooling program in the United States. 1974 Ray Herzog named CEO to succeed Heltzer. 1975 Pollution Prevention Pays (3P) program introduced. 3M Riker introduces Buf-Puf skin products. 1976 3M becomes one of 30 companies included in Dow Jones industrial average. 1971 The 26th Amendment 1974 Richard Nixon resigns; 1977 Massive blackout in 1979 The Shah of Iran to the U.S. Constitution, Vice President Gerald Ford New York City leaves 9 million is forced into exile and is allowing 18-year-olds to vote, becomes 38th U.S. president. people without electricity for replaced as Iranian leader is ratified. up to 25 hours. Ayatollah Khomeini; nearly by 1976 North and South 100 U.S. Embassy staff and Arab terrorists kill 1972 Vietnam are reunited as 1978 The first “test-tube Marines are taken hostage. two Israeli Olympic athletes one country after 22 years baby” is born in England. and nine other hostages in of separation, with Hanoi Conservative Margaret Munich. as its capital. U.S. President Carter, Israeli Thatcher becomes prime Premier Menachem Begin minister of Great Britain. In a tennis match billed 1973 Jimmy Carter is elected and Egyptian President Anwar World Events as the “battle of the sexes,” 39th U.S. president. Sadat agree on a Camp David Disaster is narrowly averted Billie Jean King defeats Bobby peace accord. at U.S. Three-Mile Island Riggs, 6-4, 6-3, 6-3. nuclear power plant.

141 A Century of Innovation 133 1980 s Lehr retires; Allen Jacobson succeeds 1986 1980 Post-it notes and Scotchcast him as chairman of the board and CEO. casting tape introduced. 3M ranks second on Fortune magazine’s list of the 3M reaches an agreement 1984 most admired U.S. companies. with China to establish a wholly owned company there. Scotchcal drag reduction tape, based on microreplication technology, helps the Stars & Stripes yacht win the 3M and NASA announce America’s Cup competition. joint research program exploring manufacturing in space. In 3M establishes six major technology centers in Europe November, first 3M research to meet the special needs of European customers. experiments are conducted on space shuttle Discovery. 1987 50 percent — M.J. Monteiro introduces 50/50 objective of total revenue generated by international sales. Plans for new administrative offices and laboratories in 3M announces a 2-for-1 stock split. Austin, Tex., announced. 3M acquires Unitek Corp., a worldwide supplier of Genesis program announced orthodontic products. to encourage technical entrepre- neurship in research and new product development. 3M is 1988 ldwide wor 1985 First refastenable diaper tapes introduced by 3M. sponsor of the Olympic Games. 3M and Harris Corp. form a joint venture for worldwide marketing, sales and service of copiers and facsimile 3M global sales top machines. $10 billion. Academy of Motion Picture Arts and Sciences gives 3M a Scientific Engineering Award for magnetic film that improves audio capabilities of movie sound tracks. 3M becomes the 14th U.S. company to have its stock listed on Tokyo Stock Exchange. The U.S. Food and Drug Administration approves the sale of 3M’s Tambocor, a drug that controls irregular heartbeats. The World Health 1980 Egyptian President Anwar 1984 A silicon microchip The U.S. space shuttle Organization formally Sadat is assassinated. that stores four times more Challenger explodes, killing announces the global data than previously possible all seven crew members. 1982 The Vietnam Veterans’ eradication of smallpox. is developed. War Memorial is dedicated in 1989 The Exxon Valdez Washington, D.C.; the names John Lennon is shot and President Ronald 1985 causes the world’s largest of more than 58,000 dead are killed in New York City. Reagan begins second term oil spill. inscribed. in office. Ronald Reagan is elected The Berlin Wall is opened by space shuttle U.S. 1983 the 40th U.S. president. The world’s worst 1986 East Germany and eventually Challenger is launched on its nuclear accident takes place torn down. maiden flight and completes 1981 Iran releases all when a reactor blows up at George Bush becomes the 41st three missions in 1983. hostages. Chernobyl power station, president of the United States. Kiev, U.S.S.R.

142 134 Timeline s 1990 1990 More than 30 percent of 3M’s sales come from Imation is launched as an 1995 products introduced within the last five years. independent, publicly owned company with Bill Monahan as CEO. 3M introduces Pacing Plus product development programs that receive priority funding to speed product development. U.S. 1991 District Court of Minnesota enters a judgment in favor of 3M for $129 million against Johnson & Johnson 3M Events for patent infringement of Scotchcast casting tape. 3M introduces Scotchshield — 3M receives the National Medal of Technology window film, shatter- the highest award bestowed by the U.S. president resistant, heat- and cold- for technological achievement. resistant window protection. 3M debuts an Internet site Sales in Japan top giving its customers links $1 billion. to thousands of pages of information on 3M programs, products Jacobson retires and and technologies. is succeeded by L.D. DeSimone as chairman of the board and CEO. 1992 For the first time, 50 percent of Junior Achievement 3M sales come from posthumously inducts international, reaching McKnight into its $7 billion. National Business Hall of Fame. 3M introduces the A toll free number, 1-800-3M HELPS, answers product 1993 first metered dose inquiries from customers and 3Mers in the United States. asthma inhaler, free of ozone depleting 1994 Post-it easel pads introduced. chlorofluorocarbons. 3M announces 2-for-1 stock split. 1990 The first edition President George Bush 1992 William Clinton 1993 A bomb explodes 1995 of Microsoft Windows 3.0 and Russian President Boris becomes the 42nd U.S. outside the Alfred P. Murrah software is shipped to Yeltsin proclaim a formal end president. Federal Building in Oklahoma consumers. to the Cold War. City, killing 168 people. A bomb explodes in the base- The Hubble space telescope The Mall of America, the ment garage of the World President Clinton 1996 is placed into orbit by the largest shopping complex Tr ade Center in New York City. appoints Madeline Albright U.S. space shuttle Discovery. in the United States, opens the first female secretary in Bloomington, Minn. Martin Luther King national of state. Operation Desert 1991 holiday is observed for the Storm begins in response Ten thousand cellular phones first time in all 50 states. AT&T introduces Internet World Events to the Iraqi army seizing sold in the United States. access service. of Kuwait.

143 135 A Century of Innovation 2000 1996 New products include 2000 For the first time, nearly flexible circuits for electronic 35 percent of sales come products and HFEs from products (hydroflouroethers), introduced in Michael replacing ozone the previous Johnson wins depleting chloro- four years. gold in the 2000 fluorocarbons. Olympics’ 400-meter 3M introduces the sprint wearing shoes 1997 Dental Vikuiti brand for light made from 24-carat Products Division management products gold Scotchlite fabric receives the that make electronic developed by 3M. Malcolm Baldrige displays easier to read. National Quality ard, the most Aw Restored 3M/Dwan Museum reopens coveted quality in Two Harbors, Minnesota. aw ard in American 2001 DeSimone retires; W. James McNerney, Jr. business. named new chairman of the board and CEO. National Ad Co., now Six Sigma quality improvement tools introduced at 3M. known as 3M Media, sold. 3M Acceleration Program introduced to generate greater Aldara (imiquimod) approved by returns from R&D; significant additional corporate resources the U.S. Food and Drug Administration. go to Pharmaceutical Division to speed research and development on immune response modifiers that have 1999 3M reorganizes into six business segments: Industrial; major market potential. Tr ansportation, Graphics and Safety; Health Care; Consumer and Office; Electro and Communications; and Specialty Material. 3M acquires the outstanding minority interest in Dyneon. In response to Sept. 11th attacks on America, 3M and its employees and retirees donate more than $2 million in cash and products. The Dow Jones 1998 1999 The Senate fails to Dot.com companies 2000 than 4,000. A fourth hijacked industrial average hits 9,000 convict President Clinton on proliferate, but the bubble plane crashes in a field in for the first time in a single two articles of impeachment. bursts in spring 2001. Pennsylvania. day’s trading. Scientists from the United U.S. George W. Bush wins the Congress approves The Associated Press States, Japan and England military action in retaliation U.S. presidential race after celebrates its 150th announce the first mapping a lengthy recount in Florida. for “acts of war” and nations anniversary. of an entire human genome, around the world join this part of the Human Genome 2001 Three hijacked “War on Terrorism.” President Clinton names Project. commercial jetliners destroy Eileen M. Collins the first ld Trade Center towers Wor 2002 12 European nations woman to lead a U.S. space in New York City and hit the start using the Euro, a common mission. U.S. P entagon, killing more unit of monetary exchange.

144 The building of 3M International The rise and fall of Durex Voices from the field The first outposts

145 r o l e m 9 o d e — Going Global l o The Formative Years f Wetordry sandpaper was William McKnight’s ticket to i Europe in the  s. Finally, his company had a hot n product that could compete with the best abroad. In those n  percent of 3M’s sales came from outside days, only o the United States, but the number was certain to grow. After all, in one country, human life was at stake. v England was desperate for an alternative to traditional a dry sanding because terrible evidence was accum- t ulating. Workers who dry-sanded paint finishes in i o multiple industries were dying of lead poisoning n caused by the paint they used. Wet sanding would keep the poisonous dust at bay.

146 Chapter 9 138 While Britain’s Parliament considered banning lead home country, not imported. Competition also was paint altogether, McKnight wrote to major companies ing. American companies wanted a piece of the grow suggesting the Wetordry sandpaper solution. Brimsdown global business and they formed an export venture to Lead Co. Ltd. of Brimsdown, Middlesex, contacted promote U.S. abrasives in Europe, Africa and South McKnight immediately and 3M shipped off samples. , 3M joined that association (called  America. In Meanwhile, McKnight also dispatched Robert Skillman, the American Surface Abrasive Export Corporation)  3M’s Eastern Division sales manager, to Europe in along with eight major competitors. to search for distributors who would handle 3M prod- But, McKnight had more ambitious plans than ucts, especially Wetordry sandpaper. Skillman’s efforts export trade alone. He believed that 3M’s global future — in one year, sales of 3M’s waterproof sandpa- paid off would be based on strong patents around the world, to more than  per in Britain jumped from less than strategic manufacturing sites chosen to serve interna-  with a majority of the orders coming from auto ,  tional markets, a global sales and marketing network manufacturers, wood workers and the railroads. 3M Research and Development labs entually — and ev — in many countries. William McKnight had a wide vision in the McKnight: All Business in France > 1930s. America was in a depression and to  McKnight made his first Atlantic crossing in Europe was in turmoil. It wasn’t a time when explore what it would take to secure foreign patents and begin manufacturing outside the United States, includ- a person would eagerly say, ‘Let’s go for it.’ ing acquiring other existing abrasives plants. Although But, he did. etired director, > John Marshall r  he was years old and on his first trip to Paris, the all- International Operations business McKnight took almost no time off to see the sights. When he finally convinced his boss to visit the Understanding the potential of global expansion, Louvre Museum, Skillman complained that McKnight McKnight made a compelling case to his board to minutes.  raced past miles of extraordinary art in budget for manufacturing plants “across the ,   After his first trip to Europe, McKnight decided to pond.” But, building a business in Europe wasn’t like learn at least one language before he returned, said expanding in the United States. 3M needed foreign ginia Huck, author of “The Brand of the Tartan” and Vir patents to cover its products. And, in several countries, 3M historian. “He asked his secretary, who spoke French products for sale could only be manufactured in the fluently, if she would give him a lesson each morning,” 1 The Chapter opening photos International Department staff in 1944 consisted of three Millies: left to right, Mildred Jacobson, Mildred Berg and Mildred Alvig; Flags representing early 3M international companies hang in the Innovation Center at corporate head- quarters in St. Paul; Language diction- aries served as a source of preparation for international recruits from St. Paul.

147 139 The Formative Years — Going Global Huck wrote. “McKnight’s spirit was willing, but his  . The U.S. Congress had — was formed in business tongue was inept. He gave up and decided to depend passed a law that allowed American companies to pool on interpreters.” their interests in order to compete in foreign trade. 3M and eight North American competitors created Durex, a holding company based in England, that could acquire As 3M expanded its international reach in the stock in foreign ventures and manufacture abrasives and 1950s, the company recognized that technology other patented products overseas. The partners also cre- wasn’t just being developed in the United States. ated Durex Abrasives Corporation, an organization that would sell a single line of coated abrasives all over the New businesses overseas needed technical world using one sales force, instead of nine, and one service support, just as 3M had always done brand, Durex, instead of many. In its first decade, how- in America. > Geoff Nicholson r etired staff vice president, ever, Durex lacked focus and momentum. Corporate Technical Planning and International Technical Operations After Armistice Day in  , McKnight stepped in and turned to Clarence Sampair, vice president, Manu- McKnight’s first attempts to acquire abrasives opera- facturing: “Mr. McKnight said, ‘Our foreign operations tions in France and Germany failed. His first try at man- are dying on the vine,’ ” Sampair recalled. “ ‘If we’re ufacturing Wetordry sandpaper in England, in a shared going to develop our overseas business, we’ve got to patent arrangement with two British companies, have people in the Durex operation to help develop new also failed when 3M’s major rival, Carborundum products and manufacturing ideas.’ ” Company, threatened to build its own manufactur- ing operation on British soil. They predicted that more American competitors would surely follow. . McKnight took a step The year was  back. He believed that the British market only could support one American abrasives opera- tion. If the Americans were going to gain a foothold in Europe, they would either swim together or sink separately. That’s — y Durex Corporation wh the company that ultimately propelled 3M into global 2 1 Robert Skillman, 3M’s Eastern Division sales manager (left), with William McKnight. He was the first 3Mer to investigate potential international sales. 2 Durex Abrasives Corporation was formed in 1929 by 3M and eight competitors to sell a single line of coated abrasives to international markets.

148 140 Chapter 9 The Demise of Durex > ‘Please Write Soon’ Sampair recruited 3M people to join Durex. They became plant managers or started new Durex operations Clarence Sampair bounced in Canada, Brazil and Australia. They became directors around Minnesota and South Dakota before he joined 3M of engineering and research: “We were well represented,” in 1927. Though he studied said Sampair, retired president, International Division. mechanical engineering for “That was important because 3M was supplying more two years, he graduated from new products to Durex than any of the other partners.” the University of Minnesota But, McKnight’s international ambition seemed with a liberal arts degree. “The inhibited by Durex, and the political winds from engineering school was pretty narrow in those days,” Washington suggested that antitrust and Durex were he said, “and I always liked English and history.” certain to collide in the courts. McKnight also wanted Sampair sold reference books to country school to secure a reliable source of raw materials. In  , teachers and then started his own business with three  3M bought more than percent of the materials it derelict trucks. “It was the era when some of the r st cement highways were built in Minnesota,” he said. “I drove one of the trucks, hauling gravel, and I had It had been operating as a guess and by-God a couple of drivers for the other two. We worked hard thing. By the time World War II came, Durex all day and I x ed the trucks by night. The longer the road crews worked, the more I thought I made. But, it hadn’t made much progress. > Clarence Sampair all went back into keeping the trucks repaired.” retired president, International Division By late summer 1927, Sampair’s trucks were ready for the junk heap. He didn’t have any other prospects, so he searched the help wanted ads and found this needed to make coated abrasives from other companies. one: “Technical man or man with some technical expe- The best solution was a merger with Carborundum rience wanted, please write soon.” Although he was a with 3M as the majority owner. St. Paul native, Sampair had never heard of Minnesota About the time that merger was announced, a bill Mining and Manufacturing Company. authored by Senator Estes Kefauver was passed by Sampair went to work for Richard Carlton. “We Congress and found its way to President Harry Truman’s haven’t had any real quality control in our factory,” Carlton told Sampair, “but we think we need some. I don’t know exactly what this job will turn out to be, but it’s 1 probably going to be whatever you make it.” And, make it, 3M’s St. Paul 1 Sampair did. During Commercial League his 43-year career at Golf team won the 3M, Sampair became championship in 1937. president, Manufacturing. The team included Seven years later, Herb Buetow (standing, McKnight chose him second from left) and to lead 3M into the global Clarence Sampair marketplace. Sampair (seated,right). retired as president, International Division. Background: 3M purple sanding belt

149 The Formative Years Going Global — 141 desk. This “anti-merger” bill took a rifle shot at merg- Adhesives, Building Services and Chemicals Group, ers and acquisitions that hinted of monopoly and 3M quipped that a portrait of Judge Charles Wyzanski, who scrapped a plan to merge with Carborundum. ordered Durex’s dissolution, should have been framed The U.S. Justice Department also took direct aim and hung in 3M’s boardroom to honor his “jump start” at Durex and argued that the holding company was in of 3M’s International Operations. violation of the Sherman Antitrust Act. “We weren’t too unhappy with the breakup of Durex. It left us free to Instead of participating in joint ventures and go our own way and Mr. McKnight had great intuition coalitions, 3M created one of the most significant, for international business,” said Sampair, “but we were very disappointed in losing Carborundum. It was a coin- competitive advantages in the world: a long- cidence that both events happened at the same time.” standing, strong, international presence. During the Durex years, 3M had invested about > John Ursu senior vice president, Legal Affairs and General Counsel  ,  in its foreign operations and the returns hadn’t met McKnight’s expectations. There were only four partners left in Durex when it But, the choice to pursue international growth was not was dissolved: 3M, Behr-Manning, Carborundum and s, most American com- an obvious one. In the early  Armour. When they divided up the company’s assets in panies were focused on domestic growth and few had  , 3M inherited a sandpaper plant in England, a small the international ambitions of McKnight and his entre- plant in France, an office in Germany and a tape factory preneurial sidekicks, Sampair and Maynard Patterson, in Brazil. They agreed that top managers from Durex who later retired as group vice president, International could choose where they wanted to go. “We got a good Division. There were few global trade models to follow cross section of the top people,” Sampair said. “In fact, so 3M, in characteristic fashion, invented its own. we probably got more than our share.” 3M’s total inter- “American companies had the advantage of an indus- national sales in its first year reached  million. trial and research base largely in place and a large home market in the United States, while Europe and Asia were rebuilding after the war,” said Harry Hammerly, retired > Frame that Judge! executive vice president, 3M International Operations. Fifty years later, people who experienced the breakup of 3M got a head start in developing its European busi- Durex and others — agree that — who only heard about it ness because Jack Davies, the former sales manager for it was one of the most important events in the life of 3M. percent of Durex’s  Durex, joined 3M and brought John Whitcomb, retired group vice president, Abrasives, 2 2 A 1955 meeting of 3M’s International managing directors, standing left to right: Bill Winslow, Brazil; Clarence Sampair, president of 3M International Division; Jack MacKenzie, England; Lou Spiess, Mexico; and Maynard Patterson, Canada. Seated left to right: Werner Herold, France; Dick Priebe, Australia; and Robert Scarlett, Germany.

150 European distributor network with him, as well as sales 35 Companies in 20 Years managers who were natives of Switzerland, the Nether- lands, France and Italy. Other people who made up 3M’s These 3M international companies began international “A team” included Bob Scarlett, Andy operations in the 1950s: Donaldson, Al Butz, Werner Herold, Cal Corwin, Bob 1951 Australia, Brazil, Canada, France, Young, Dick Priebe, Audun Fredriksen and Jim Thwaits. Germany, Mexico, United Kingdom 1952 Argentina > The Advantages of Building from Scratch 1953 South Africa Netherlands 1956 It took almost  years in England and eight years in Spain 1957 Brazil before 3M had the right combination of people Italy 1959 and operations, Sampair said. “The two we inherited These 3M international companies had their 3M was in the top 20 U.S. companies with start in the 1960s: international operations in the 1950s. We Japan (Sumitomo 3M), Puerto Rico 1960 1961 Austria, Colombia, Denmark, reached our goal of 25 percent of sales over- Hong Kong, Norway seas early and there weren’t many that did it. Belgium, Sweden, Zimbabwe 1962 ere ahead of the curve. We w > Maynard Patterson Peru, Switzerland-Zurich 1963 1964 Philippines retired group vice president, International Division Lebanon, Venezuela 1965 Panama, Portugal, Singapore 1966 from Durex took a long while to make over, but the Malaysia, Thailand 1967 businesses we built from scratch developed more rapidly. 1969 Finland, Switzerland-East, Taiwan I think our standards were higher and we were never satisfied with what we took over.” There were two notable exceptions, however: CETA in Paris and Carstens in Germany. “CETA gave us our first 1 Memo to 3M President 1 Dick Carlton confirming the opening of 3M France operations. A 1958 2 French television com- mercial for Sasheen and Scotch rib bon cellophane and gift wrap tapes. Background: Scotch Magic tape

151 Going Global — The Formative Years 143 home in France and an office and address we could be companies survive and thrive. “It was an adrenaline proud of — something we didn’t have before,” Sampair rush, day after day,” said Patterson. “My feet weren’t said. To help finance growth in that country, 3M also even touching the ground. We were dealing with big — borrowed against CETA’s valuable real estate an asset decisions and big numbers. I built a strong fence around that meant more to French bankers than sales and prof- International Division to keep most everybody out. If got caught up in all the red tape of a big corporation, we we were sure to drown. The timing was right. 3M got off to a fast start “Let’s say the Australia factory needed a new boiler at a time when world trade was expanding. house. We couldn’t afford to send  different people > Jim Thwaits etired president, International Operations r to Australia to build it.” Instead, Patterson had his own, small engineering team. They picked the brains of 3M its. 3M did the same in Germany in which the old and experts in St. Paul and used that reservoir of knowledge respected Carstens name matched with prime property to get the job done quickly. in Hamburg. It helped them avoid running to St. Paul for a cash infusion. Until the late 1960s, the International Division From the start of 3M’s international business, the was separate. Management basically said, company insisted that foreign ventures pay their own y. In addition, 3M’s international companies were wa ‘You guys go out there and see what you can do.’ expected to pay St. Paul a  percent roy- percent to  Then, all of a sudden, it was a big business. alty, first. “Our biggest problem was providing ourselves retired vice president, International Operations > Harry Hammerly with working capital because we were expanding so rapidly,” Sampair said. “Royalties had to be authorized the governments of the countries in which we oper- by To unburden new managing directors from well- ated, and we had to pay them promptly to St. Paul. meaning help offered by headquarters, Patterson pro- Our borrowing base in France and Germany gave us tected them. “I asked Em Monteiro to start a small com- a tremendous financial boost.” pany in Colombia,” Patterson said. “I told him to pick In its formative years, the International Division was the key person he wanted to take with him. ‘Go start a viewed by many in the company as an entrepreneurial company,’ I said, ‘and no one from St. Paul is going to venture run by a band of mavericks who had broad free- visit you unless you ask for them. We’ll stay out of your dom to do what they needed to help their embryonic y and if someone sticks his nose in your business, wa 2

152 Chapter 9 144 you call me.’ ” It was the same way Richard Carlton set up shop in about three days in Milan,” Sampair said. counseled Patterson when he joined 3M and took the  “The same thing happened in Switzerland.” By , assignment to start 3M Canada. “My job was to keep 3M had either acquired all of its European distributors all those helpful folks away,” said Patterson. or gone into business on its own. 3M’s international growth occurred in stages, said John McDevitt, retired 3M corporate economist. “We 3M’s strategy is global, but implementation started out exporting to a country and working through has to be local. > Giulio Agostini r etired senior vice president, Finance and Administrative Services 3M’s decision to establish wholly owned foreign companies after 1950 will prove to be the most Gaining a Strong Footing > As soon as possible, the International Division bought significant organizational step ever taken. out its distributors. “Distributors didn’t spend money etired chairman of the board and CEO > Lew Lehr r developing our new products,” Sampair said. “They saw it as a losing proposition, even though the new product sales subsidiaries. In that way, we began to understand might be a big money maker in future years.” Some dis- the country, the business community and the needs of tributors resisted being acquired and, when negotiations the marketplace.” After that step, 3M established ware- came to a standstill, 3M started new operations inde- house operations to stock goods and paid for those pendently. “In Italy, we gave our distributors notice and goods in local currency. “The next phase was converting products locally to the sizes that the market, custom and You can’t secure a great deal of foreign business culture dictated,” McDevitt said. “3M shipped jumbo sending a salesman out with a bag of samples by rolls of products from St. Paul of our 40,000 products and an order pad. to each country > Jim Thwaits 1 1 International ads from 1959 showed that the appeal of Scotch brand tapes translates into any language. By 1956, 2 Clarence Sampair (left) and Maynard Patterson were regular passengers on TWA flights.

153 145 The Formative Years — Going Global Background: 3M purple sanding belt where they were converted and packaged in the local The Bootstrap Kid language. The last stage was designing and building plants, buying machinery, and getting them up and run- The choice was easy for Maynard ning. It was a relatively low cost, affordable approach.” Patterson. When Durex disap- peared, he picked 3M. “They had more products,” he said, “and International: Creator of Champions > more diversity.” From the start of the International business, Sampair Patterson was a native of believed that overseas management was the training the Gaspe region of Quebec, ground for 3M’s future leaders, even though some Canada, whose family moved to viewed the assignment as a career-breaker. New Jersey when he was a boy. After graduating from Managing directors of international companies high school, Patterson found work as a messenger at ranked considerably lower than U.S. group vice presi- AT&T headquarters in New York. He became a “page” dents, even though Sampair believed they had equal or (a glori ed errand bo y) for the chairman of the company and the top man took an interest in the hard working teen-ager. Some of us still remember seeing the crate “What are you doing in a job like this?” he asked stamped ‘Reject, Ship to International’ Patterson. “ ‘I’ve got to work, Mr. Gifford,’ ” Patterson in 3M European warehouses in the 1960s. answered. “Ever thought of going to college?” the CEO asked. Patterson had no resources, so Gifford arranged Come to think of it, maybe that’s how I got a full scholarship through AT&T. The page became a into international . . . > Harry Hammerly metallurgical engineer at Lehigh University and enlisted in the U.S. Army only a few months after the bombing of Pearl Harbor. Patterson was assigned to a colonel even greater responsibility. “International is the place to who, in his civilian life, was a Durex executive. train future 3M presidents,” Sampair argued forcefully. In 1951, in his r st assignment for 3M, Patterson “If we give those jobs the recognition they deserve, we returned to his home country to organize the company’s could interest some of our new group vice presidents Canadian subsidiary in London, Ontario, with a check and they’d get a lot more education than they do in the for $5,000. United States. We should have ambitious people in “Although global expansion probably would have those leadership positions and they should occurred even if Canada wasn’t here, we are the grand- have staff people of their own to daddy of the international companies,” said Ian Service, senior specialist, Environmental & Regulatory Affairs, 3M Canada. “Many other international companies still come to 3M Canada to nd out ho w we get things done.” 2 In its r st nine months, 3M Canada generated $284,000 in revenues. Just ve y ears later, Clarence Sampair chose Patterson as his successor to run the International Division. With the help of Patterson’s lead- ership, 3M’s global sales rose from $54 million in 1956 to more than $675 million in 1970 with operations on six continents. By 2001, international sales would account for 53 percent of global sales.

154 Chapter 9 146 give them the counsel they need.” Time would prove whole year. Equally challenging, the plant didn’t have Sampair right. electrical power, so 3M shipped a big, second-hand “Sampair and Patterson established an environment diesel generator to Brazil from the United States. in which people in each country could grow,” said Jim The trouble was, Thwaits said, “It only worked Thwaits, retired president, International Operations. a couple days a week and no one knew how to fix or “They gathered together a lean and hungry team and maintain it.” Tariffs and stiff regulations made import- they pinned the rose of responsibility on the line man- ing engine parts to Brazil virtually impossible, so — agement in each country. They had the U.S. company Thwaits visited the — on a brief return to the States to draw from, but they didn’t have it trying to run every- thing around the world. They were flexible enough to When I began with 3M in 1954, I didn’t believe marry a solid business philosophy with local customs how that small beginning was the start of a and patterns. 3M was able to be first with the most in successful, multimillion-dollar company. There many places.” was a spirit of pitching in, being in a big family > Voices from the Field and working together to solve problems, no matter what your position was. > Bruce Chapman It wasn’t an easy assignment, ‘Trust Me, Please Accept’ retired managing director, 3M Australia but it wasn’t meant to be. Thwaits was chief engineer  when Sampair asked him to go of 3M Canada in diesel engine manufacturer. He spent a week studying to Brazil for three years and become chief engineer the engine, taking notes and drawing schematics. Then there. “Anyone who went to Brazil got a phrase book he found a small job shop in Rio de Janeiro that could and learned some sledgehammer Portuguese,” Thwaits make spare parts. said. “That was the preparation.” Communication, in those days, was terrible, Thwaits 3M’s young tape and abrasives plant in Brazil had said. “We’d wait for days to get a telephone call. Airmail some big challenges. The plant only ran two or three letters took a week and cable was fast, about three days, days a week. Why? There was no water. To solve that but very expensive.  fundamental problem, 3M purchased more than “We got the generator going, the plant running, and — enough for the acres of land south of Campinas, Brazil had water. I trained in the new engineer and I was we plant and a big reservoir on the property to catch water ready to go back to Canada,” said Thwaits. That is, during the rainy season. That “lake water” lasted the 1

155 Going Global — The Formative Years 147 until Sampair asked him to go to 3M England, instead. Brayshaw (Bob) Gilhespy, Gilhespy in the Eastern Bloc No way, thought Thwaits, and he said so. “But, you just a native of the United Kingdom, was part of the original don’t understand,” Sampair said in a return cable. “We team that founded Minnesota/Europa (later called 3M need you in England. I’ll guarantee that you’ll be back East) in Switzerland in the late  s with the aim of in North America in three years. We’ll send you over building business for 3M in the Eastern Bloc Communist first class with your family. We’ll take care of every- countries of Europe. The assignment required patience. thing. Trust me. Please accept.” Each country worked on a five-year plan and imbedded “I cabled back and said, ‘Mr. Sampair, I got the mes- in that plan were the clues about what 3M products sage. I trust you,’ ” Thwaits said. “3M expected every- would be most saleable. thing from you, but they wouldn’t shortchange you, if you didn’t shortchange them. Anyone who got the job In Belfast, I knew and worked with no one else done went on to another country.” but Irishmen. Then I came to New Zealand and joined 3M. Straight-away, I found I was Woody on the Fly W oody Woods started 3M South Africa in his Johannesburg home in  . “My wife was king in a real United Nations. There were 12 wor the typist on an old manual typewriter,” he said. “We ran different nationalities, not just in 3M as a whole, the company for two years like that.” Woods said 3M but in my department! tape factory > Ian Mackay soon outstripped its competitors and claimed a major production foreman, 3M United Kingdom share of the market. “We moved from importing tapes,  ,” and then abrasives, to manufacturing them around he said. “3M gave us the area not just in South Africa, “First, we’d have to get them interested,” Gilhespy but everywhere about  degrees north of the equator.” said, “then we’d have to show the governments how our Because communication was poor, Woods covered products fit their plans.” Fortunately, he said, the leaders his territory piloting a small plane on a circular route of 3M international businesses were successful in sell- from Kenya to Ethiopia, Ghana, Nigeria and the Congo. ing St. Paul on a long-term investment in Eastern “My wife kept things going while I was away,” he said. Europe. “We prepared five-year forecasts to show how “She had a thick book that described every 3M product the business would grow if 3M had a company, starting in detail and she booked appointments for clients on with sales, moving to converting, then manufacturing,” return several weeks later. She played a big part in my he said. “We tried to nail down all costs, all investments the growth of the company.” needed, price increases, whether the Communists would 2 1 A special international issue of the Megaphone, 3M’s employee publi- cation, in 1954. 2 Jim Thwaits (center) pictured in 1972 with Woody Woods, managing director, 3M South Africa, and Woods’ wife.

156 Background: 148 Chapter 9 Imperial Wetordry sandpaper n the early years of the still be in charge. If we could break even in three International Division, travel I years, the returns would rise sharply after that — was arduous, often unpredictable once we were established.” The projections were and life in global outposts solid and support came from St. Paul. Through its required e xibility. existence, Gilhespy said 3M East never lost money. Clarence Sampair estimated — “Some of our sales were bartered goods for that half of his international — involving two transactions and sometimes goods working time was spent com- three or four; we called those four-cornered shots,” muting from one country or city he said. Regardless of the goods, Gilhespy had to find to another by train or propeller the country that could pay cash. “Sometimes it would airplanes. One of those planes be scrap iron, paper, packaging products,” he said. carried William McKnight to “I distinctly remember  railway cars of scrap iron Sweden when a major distributor coming out of Bulgaria and we decided to check one. insisted on talking to the head man. “We got very concerned found a foot layer of stones below the iron. That We Other Travel Tales because Mr. McKnight wasn’t took a little discussion.” at the airport and we couldn’t Anyone who joined 3M East as a sales representa- get any word from the airline,” tive received a letter outlining dos and don’ts in the Sampair said. “He had been Eastern Bloc. “They included currency transactions, delayed almost 24 hours. While under-the-counter deals,” Gilhespy said, “and proper we comforted his wife, Maude, Losing Mr. McKnight and behavior.” Everyone had to sign, showing that they we started making long-distance understood. calls. The plane had left New York  percent of his time traveling in Gilhespy spent all right, but he never landed in the Eastern Bloc. In those days, Westerners were not Copenhagen.” allowed to live in the East and that meant thousands of passport stamps and checkpoints. 2 1 William McKnight’s briefcase 1 traveled the world on 3M Interna- tional business. 2 Georgette and Clarence Sampair (left) and Maude and William McKnight set sail on a Jeanette European trip in 1955. 3 Spiess (far right), with sons Duane (left) and Gerry and two stewards, sailed to Austr alia in 1946. 4 Em Monteiro and his wife, Maddie, were en route to Brazil in 1957 with their five children, left to right: Warren, Mark, Marguerite, Marilyn and John.

157 3 Australia and all of the Finally, Sampair, who retired Spiess family’s household as president, International goods were sent right back Division, learned that McKnight’s to America. The family plane had run into a storm over camped out, Lou Spiess said, the North Sea and the pilot had until their belongings made Danish village. landed in a remote the return trip. While Spiess McKnight spent a sleepless night supervised construction of in a tin y, country inn. “McKnight a Durex tape plant (that later was more than 70 years old at became 3M Australia), his the time. It was an unforgettable wife adjusted to boiling and us,” experience for him — clothes to clean them and said Sampair. language and, by shopping, she regular visits from a horsedrawn On another early occasion, mastered Brazilian currency. milk cart that deposited their McKnight, Sampair, Richard The pioneering families of 3M order in a Billy Can. Carlton and a few colleagues International were a fraternity. chartered a single engine biplane “The women were very resource- Madelyn (Maddie) Monteiro to visit 3M’s Gorseinon plant in ful and helpful,” Monteiro said. traveled to Campinas, Brazil, the United Kingdom. Carlton, “When I arrived, they showed me in 1957 when her husband, a former World War I pilot, was the ropes. They knew the doctors Manuel, took over operation of comfortable in the old planes, but and dentists because they raised 3M’s small plant while his prede- others were leery. “Don’t worry,” their children there. We always cessor spent a year at 3M in Carlton said, “this is an all metal had someone else to help out St. Paul. With their ve c hildren, plane. It’s one of the most stable.” and our friendships lasted for the Monteiros boarded a ship As it turned out, some of the years, long after our overseas traveling from New York to plane’s fuselage was actually assignments.” Em Monteiro even- Santos, Brazil, because there made of fabric. When they arrived tually retired as vice president, was no reliable airline connec- in Gorseinon, Wales, the pilot International Operations. tion. “We sailed for 17 days with gamely buzzed the landing strip Those years left lasting mem- two of our kids in diapers and a few times to clear the sheep off ories and a magnetic attraction no air conditioning,” she said. the grass runways. for some. In his adult life, one Children were expected to eat “I can’t imagine what it must member of the Monteiro family, separately from adults (who wore have been like for them to jump John Manuel, returned to Brazil formal dress in the evenings), on an airplane or a boat and be to teach history and anthropol- so the Monteiros took turns gone for 12 to 13 weeks,” said ogy in Campinas. escorting their children to meals. Ray Richelsen, retired executive The trip from Santos to vice president, Transportation, Campinas was 90 miles on rough Graphics and Safety Markets. 4 country roads. When Maddie “They didn’t have an infrastruc- Monteiro shopped at a nearby ture. They had nothing.” market, most food was fresh and little was canned, there was Jeanette Spiess moved to no prepared baby food and no Australia to join her husband, ground coffee. “It was like step- Lou, in 1946, with their two chil- ping back in time, but I’d grown dren, ages 6 and 9. The trio tra- up in the Depression and I versed half the world on a troop remembered similar days in ship converted to a passenger America,” she said. By writing vessel with nothing but sleeping grocery lists in Portuguese, bunks. When she arrived, long- Monteiro learned the local shoremen were striking in

158 Chapter 9 150 Audun Fredriksen Fredriksen: Relentless Pursuit relentless in our pursuit of higher quality and leading remembers 3M “inheriting the remnants” of Durex when edge products,” Fredriksen said. “We believed we could s to do research  he traveled to Europe in the early outperform our competitors at any time and we had an on a reflective sheeting. (He’d wind up becoming man- inventive campus back in St. Paul that supported us.” aging director, 3M Germany, five years later.) “Some of But, not always. 3M products made in America were the operations were up-to-date but, in other cases, they not one-size-fits-all. Because it had a different format, we re virtually nonexistent. Basically, we had to start for example, European letterhead was a different size from scratch. The drive and motivation to build Interna- so it couldn’t be used with 3M’s American overhead tional came only after 3M controlled its own future.” projectors. And, because electrical cables were larger in Europe than the United States, the American molds for making splicing products were useless overseas. I met a gentleman recently in 3M Thailand. “We had a tough time convincing headquarters that we He said, ‘Let me tell you what just happened. needed product adaptations,” Fredriksen said. “We just did it ourselves, but it wasn’t always approved. That My new neighbor introduced himself and asked was our version of bootlegging. Sampair and Patterson me where I worked. I said, ‘I work for 3M’ and covered our flanks back home.” he said, ‘That’s a very fine company.’ It made years Lou Spiess spent Spiess: South of the Border  me proud.’ We want our people to be proud in Mexico, later retiring as vice president, Manufactur- to be a part of 3M. > Ron Baukol retired executive years with 3M. His career  ing and Engineering, after vice president, International Operations when 3M rented an old tannery and began in  coating machine. “It may sound unbe- bought a ,   The opportunities, Fredriksen said, seemed limit- lievable, but we turned it into a nice plant that, inciden- less. “There were still enormous wounds and destruc- tally, had the lowest factory cost of any 3M international tion from World War II, but there was a terrific work company at the time,” Spiess said. “I was devoted to ethic in Europe because people were very grateful to 3M and I liked the challenges I was given. Everyone have a job.” 3M tapes, adhesives, Scotchlite reflective I worked with seemed to feel the same way. If 3M suc- sheeting and abrasives were the best selling products ceeded, we would too. and 3M had tough competition in abrasives from “We imported all our raw materials, and our biggest German and other American competitors. “We were product was masking tape because GM, Ford and 1 2

159 151 The Formative Years — Going Global Mexico plant was dedicated, it was customary to have it blessed by a local priest. And, when factory workers decided to plan a pilgrimage to the Catholic shrine of Guadelupe, Spiess accompanied them. “I 4 always believed that if I treated our employees with Chrysler were all assembling respect,” he said, “they would respect me in return.” cars in Mexico,” Spiess said. As good for- tune would have it, the government of Mexico closed When Vern Guion, a multi- Guion: Nix the Penthouse its borders to imported finished goods, so 3M Mexico lingual Minnesotan, joined the International Division dominated the tape market in its earliest years there. , the operation was called the Foreign Department in  Mexico also granted 3M a five-year tax exemption. and it was run by Mildred Jacobson and a handful of Spiess was a progressive manager. In the early  s, other women. “I had my desk right behind hers while I he hired a blind Mexican worker who helped plant pro- was working in the Tape Division,” he said. “She asked duction by unwinding defective rolls of product and me to translate letters in German, French and Spanish.” saving the tape cores. He hired buses to pick up people Guion was named vice president and managing director, 3M Mexico, in  . The downtown office of 3M Mexico had an elevator, I entered 3M when I was 15 years old, on a terrace and a penthouse. “I told management that I April 4, 1951. We lived happy lives and many felt guilty about the luxurious layout and they agreed it was not in good taste,” Guion said. “I made it my prior- marriages started here. I felt the company’s ity to get out of there. That’s how we generated more goals were like my own. production > Rita Alvarez profits, by cutting costs.” Community service was also line worker for 40 years, 3M Argentina a priority. “We sponsored a Little League baseball club, bought the uniforms, provided the dugouts and equip- and bring them to work. “They were lucky,” Spiess said, ment,” said Guion. “It was the first time, and maybe the “if they had a bicycle.” Spiess planned holiday parties only time, some of those kids had shoes on. for the plant staff. “We had a Santa Claus and a Christ- “We worked closely with the local police and safety mas tree, and we’d give gifts to all the kids,” Spiess said. officials and made our conference room and equipment “Most of our employees’ families were poor, but they available to them for meetings,” he said. “I even became brought their little girls in fancy dresses.” When the 3M an honorary lieutenant.” 3 1 An employee at 3M Mexico fabricated Scotchlite road signs in 2 Guion (left) 1958. Ver n with employees involved in a Little League club sponsored by 3M Mexico in 1962. 3 3M Mexico’s League club. Little Lou Spiess, who later 4 retired as vice president, Manufacturing and Engineering, spent 15 years in Mexico.

160 152 Chapter 9 The negotiations in Japan were Japan: A Frontier with High Potential > long and hard, but 3M was able to After World War II ended, 3M created a task   / craft a very unusual ownership force to examine the opportunities in Japan, but arrangement that was a first in 3M there was some resistance in St. Paul. Dennis Maher, who rose from a 3M office boy to manag- ing director, 3M Germany, was part of that task At most Japanese companies, you’re told force, which also included 3M’s future CEO, to do just as your superiors instruct. At Harry Heltzer: “We went back and forth to ,” Japan two or three times in and   Sumitomo 3M, within two months I was Maher said. “We explored markets for entrusted with my own customers and our product lines, laid out a strategy and put territory and encouraged to take responsibility together presentations to convince the Japanese that and make decisions on my own. At first it was we should be allowed in their country. That’s when I really became enamoured with International.” difficult, but I came to appreciate the freedom “There were still anti-Japanese feelings right after to think on my own. > Yoshiharu Maeda salesman, the war,” said Patterson, not to mention a touch of Industrial Tape Division, Sumitomo 3M American provincialism in St. Paul. But, Sampair backed Patterson and told him to get McKnight’s bless- ing, which he did. history. 3M had always insisted on percent owner-  “When Sumitomo 3M was established, Japanese ship of any international subsidiary, perhaps harkening companies were not very competitive,” said Hiroshi back to the Durex days when 3M was only one voice Kurosaki, technical service, Electrical Specialties and among many. “Sumitomo 3M Limited was formed in Electronic Products Divisions, Sumitomo 3M. “Even  ,” said Shigeru (“Lefty”) Sato, retired director, just importing U.S. products and selling them ‘as is’ was Public Relations and Government Affairs, a native of better than what Japanese manufacturers could offer. Osaka who joined Sumitomo Corp. after his college The very mention of 3M entering the Japanese market  graduation. “There were companies in the Sumitomo caused an uproar from local corporations and it was Group and the joint venture was designed to import, compounded because 3M was in a joint venture with manufacture and market 3M products to the Japanese. — powerful and well-known corporations very Sumitomo employees and sales of  The first year we only had Electric and NEC. It scared the competition.”  ,  .” about 1 Employees and their 1 families enjoyed a company picnic in 1961, just one year after Sumitomo 3M was established in Japan.

161 153 The Formative Years — Going Global  Today, Sumitomo 3M has about  employees , We speak the same language around the world. and the largest Research and Development lab outside Not the English language, but the language of scientists  of the United States, housing more than our company. > Giulio Agostini and technical people. “3M had a policy about going abroad and Japan was no exception,” said Sato, who  years with 3M. “3M believed that overseas spent That was long before people in business talked about it. companies should be run chiefly by local people who These two philosophies have been strong over the years.” understood the language, culture and business prac- 3M devoted  to organizing the International tices,” he said. “I think that philosophy goes right back Division and the resulting growth spurt started and to McKnight’s belief in respecting the individual and continued unabated. International revenues leaped from overseas employees  , trusting people. Out of   to  and finally  million in million in  from St. Paul in man-  today, there are only about million by the decade’s end, generated by   agement. The second important principle was being companies around the world. a good corporate citizen in every country 3M entered. ● Get a foot in the door early, build from there and consider international a long-term investment. ● Create a strong presence with manufacturing, sales and marketing, research and development, and aggressive patent protection worldwide. ● “Just do it” entrepreneurs who had freedom to act and the right support from St. Paul helped International thrive. ● Hire good, local people, give them responsibility and trust them. time-tested truths American products are not one-size-fits-all around the world; ● tailor products to meet local needs. ● 3M’s strategy is global, but its implementation is local. In all countries and cities of the world, be a good corporate citizen. ●

162 Growth through the ’70s, ’80s and ’90s Managing directors share what they learned 3M International: innovators help jump-start the revenue engine A single voice with many ‘accents’

163 r o l e m 10 o d e Capitalizing on a l o Global Presence f s were rivaled only For sheer international growth, the  i  the s in 3M’s five-decade global expansion. With by n characteristic fervor and entrepreneurial ambition, 3M n new international companies during the started   s, o years that were clouded with economic  in spite of recession. Jim Thwaits, retired president, International v Operations, had inherited what he called “a lean and a hungry team” chosen and coached by his two men- t tors, Clarence Sampair and Maynard Patterson, the i o earlier leaders of 3M’s international business. n the hands- — Thwaits had learned from the best off management philosophy shared by

164 Chapter 10 156 Sampair and Patterson fueled 3M’s international growth — and having the patience perhaps most importantly — from the  s onward. “It’s the troops who run the to wait for profitability. From the start, 3M’s approach business,” Thwaits said, “not the generals. You can’t took the long view. have people sitting in their jobs waiting for the com- The s’ challenge was to build market share  mand to come down from on high. All that top manage- a network that by the — in every international location ment can do is provide the climate for people in the  decade’s end grew to companies in as many countries business to run it in the best possible way.” which were sprinkled all over the world map. In most cases, it was expedient to exploit an existing product or technology in global locations, but by the end of No ‘Cookie Cutter’ Companies > s, 3M’s international companies were not only  the Thwaits believed in giving overall direction and then producing solid financial results, they were also innova- having faith in 3M people. “Outline the challenges and tors in marketing, product adaptations and operations. the tasks and ask them to set their eyes on the heights,” he said. “It’s important to be available for support and coun- tell them how to get the job done. — ever — sel, but never ere flexible enough to marry our business We w That’s up to them.” Thwaits defended the uniqueness philosophy with local customs and patterns; of 3M’s international business. “I made it quite clear,” he said, “that I did not expect them to be stamped out we we re able to be the first with the most in of the same ‘cookie cutter’ as 3M U.S.A. I wanted them many places. > Jim Thwaits r etired president, to have their own goals and ambitions. We had no right International Operations to stifle the creativity of our people in other countries.” By  , 3M’s international business had grown “These ideas have spilled over to other international  from virtually zero sales in  per- to a whopping companies as well as 3M U.S.A.,” Thwaits said. He cent of the company’s total revenues. Some observers believed that the international growth curve would be — wondered out loud if the early years had been easier steeper than its U.S. counterpart. This prediction was after all, the company was filling a marketplace vacuum. fueled by Thwaits’ own drive to succeed. “We have an While that was true, the challenging aspect of interna- — a duty — to do much better,” he said. absolute need tional growth had been entering those first  countries “We’re an elite company. Any limitations on our growth in the  s and  s; building sound companies that are strictly the limitations of our own imaginations. could sustain themselves; developing professional man- I personally feel we can always do better.” agement by finding, hiring and training local people; 1 A truck in Chapter opening photos Bruges, Belgium, uses Controltac fleet- marking film from 3M to advertise one of the company’s best known products, Post-it notes; As of 2002, 3M has operations in 64 countries around the ld; Antonio Mario Colombo packages wor products in Brazil; Scotchlite reflective sheeting is popular all over the world.

165 Background: Scotch painters’ tape Thwaits, the consummate “cheerleader,” helped 31 Companies in 30 Years International Operations prosper while riding through s. The keys two serious economic recessions in the  These 3M international companies were established were to step up marketing; introduce new products faster in the 1970s: around the world; and use those new products to increase Greece, Kenya 1970 market share, while weathering inevitable currency fluc- 1971 El Salvador, Guatemala, Jamaica tuations. In smaller economies, the strategy was simple — 1973 Costa Rica, New Zealand, Trinidad establish a presence and expand when the timing was Dominican Republic 1974 1975 Chile, Indonesia, Ireland, Nigeria right. “This was true for the three new companies in 1977 Ecuador, Korea Indonesia, Korea and Ecuador,” Thwaits said. “We had Uruguay 1979 the right people there, and we developed a nucleus of 3Mers from the country’s population.” In the so-called These 3M companies began operating in the 1980s: “Third World nations,” 3M looked for government poli- 3M Gulf (United Arab Emirates) 1981 cies that welcomed long-term foreign investment. China 1984 India, Turkey 1988 > Dismantling ‘Silos’  s that 3M’s U.S. and It became apparent in the These international companies began operating International Operations should work more closely in the 1990s: together. Given the size of its revenues, 3M International 1991 Czech Republic, Hungary, Poland had a right to shed what some called its “second-class Russia 1992 citizen” status. In addition, Thwaits and 3M CEOs Harry Pakistan 1993 Heltzer and his successor, Ray Herzog, were convinced Egypt, Sri Lanka, Vietnam 1994 that International would flourish even more if 3M’s 1995 Israel, Morocco domestic and global businesses were integrated as Romania 1997 equals. “The gates were open,” Thwaits said, “and there was a flow of people, information and assistance.” Group vice presidents began working with the international companies to refine their business strategies. Some of those companies started developing their own new prod- ucts. More international people were invited to St. Paul 2 1 In Bangkok, Thailand, a woman sells Scotch- Brite products from her sampan. 3M international companies find ways to marry their business to 2 3M local customs. Vietnam was established in 1994.

166 158 Chapter 10 Background: Nomad floor matting to participate in meetings on business strategy and new ing and distributing 3M products. But, in the words products. Because international sales and marketing peo- of retired Chairman of the Board and CEO Lew Lehr, ple needed more technical support, they called on 3M’s “The integration process could best be described as stateside technical community more frequently. Plans evolution, not a revolution.” were made to expand lab facilities around the world. > Overseas Innovation s, 3M was benefiting in tangible ways from  By the I came to 3M after toiling for six years to , to encourage  its Pathfinder Program, started in obtain a Ph.D. and nobody addressed me as new products and new business initiatives born outside the United States. By , winning Pathfinder teams  ‘Dr. Nicholson’ or even ‘Dr. Geoff.’ I was ‘Geoff’ million in new sales since the pro- had generated  and I quickly came to appreciate that informality. gram began. 3M Brazil invented a low cost, hot-melt It exemplified a climate of close, friendly and adhesive from local raw materials; an adhesive transfer encouraging cooperation. > Geoff Nicholson tape designed for local car manufacturers; and a low cost microfilm reader for their local market. To comple- retired staff vice president, Corporate Technical Planning and ment 3M’s line of audio and videotape products, 3M International Technical Operations Germany marketed compatible hardware purchased from outside 3M to serve the growing broadcast indus- Integrating U.S. and “OUS” (outside the U.S.) opera- try. 3M Germany also teamed up with Sumitomo 3M to tions, as it was called, wasn’t easy. “When we first started develop electronic connectors with new features for the to talk about manufacturing overseas, we got lip serv- worldwide electronics industry. 3M Philippines designed ice,” said Heltzer, 3M’s chairman of the board and CEO a Scotch-Brite cleaning pad shaped like a foot after in the early  s. “People went to meetings and said, learning that Filipinos polished floors with their feet. ‘Yes,’ and then did exactly as they pleased. Gradually, 3M Sweden discovered a new application for packaging they understood that because a plant was located in a tape when it persuaded the Swedish Postal Service to country, the managing director had responsibility for use the tape instead of sealing wax on registered mail. that plant, but he was also responsible to the head of Recognition formerly reserved only for Americans production in St. Paul. Over time, 3M managers began finally began including the accomplishments of interna- to think of management on a global basis.” They began tional employees, too. International researchers were to see the advantages of worldwide cooperation in sell- elected to the company’ s prestigious Circle of Technical 1 3M international 1 employee publica- tions from the mid- 1970s played a key role in developing companies that share 3M’s culture.

167 Lessons Learned their one-way ticket to Colombia, president, International, paid ost veterans of 3M Inter- Peru, Venezuela, Ecuador and him a visit and delivered “a national learned on the job, M I’d say, ‘Good luck. Build a good lecture.” “He talked for three and the lessons are still useful business and you’ll be success- hours, almost without stopping,” to employees heading to interna- ful.’ I remember Em Monteiro, Schoen, retired executive vice tional assignments. who later became executive vice president, Information and president, 3M International, Imaging Technologies Sector, Among many, heading off to Colombia, and said. “He told me Americans major assign- L.D. DeSimone, later 3M chair- in International have to change ments, Josef man of the board and CEO, as their mindset. They have to who , Kuhn a young engineer on his way understand there is more than joined 3M in to Brazil. What they all had in one way to get things done. 1952, became common was the desire to seize He talked about listening and managing director, Sumitomo an opportunity.” learning more before making 3M, in 1972 when its sales were decisions. He emphasized how about $300 million. “I learned When Fred important it was to appreciate a lot from the Japanese,” said Harris Jr. the local customs, to get to know Kuhn, who spent much of his became manag- the people. That’s the miracle career in manufacturing. “Back ing director, of International. We’ve blended in the early 1970s, they were 3M Thailand, many cultures with our 3M phi- already using methods that later in 1975, he was losophy of doing business. In the became world manufacturing glad to have an overseas assign- end, everyone around the world standards. One of them involved ment even though that region says, ‘I’m a 3Mer.’ ” employees in what were later was still unsettled after the called ‘quality circles.’ Groups Vietnam War. “There was no for- Vince Ruane of employees got together to mal coach,” said Harris, “Nobody was 22 years brainstorm how to improve plant in 3M who said, ‘I’m your Thailand old when he productivity and reduce costs.” expert.’ But, like a lot of new went to work Kuhn, retired senior vice experiences, sometimes the best in 3M’s export president, Engineering, Quality thing to do is just plunge in when of ce in Ne w and Manufacturing Services, also you hit the ground.” Harris had York. “Al Butz often came in from recalled learning patience and considerable independence, St. Paul on his way to Europe and negotiating discipline in Japan. which he preferred. “I was 10,000 he told us about the companies “In those long meetings,” he miles away,” he said. “The phones that were being established,” said, “we’d sit around the table wo rked, sometimes; and the said Ruane who, in 40 years with and the Japanese would remain Telex worked, sometimes. I had 3M, worked all over the world. silent. Meanwhile, Westerners to make most decisions on my “It was a great event when Al like me were uncomfortable with own.” Harris, whose 3M career visited, because it made me the silence and we’d talk too began in 1971, used the experi- understand, in a very personal soon and too much.” ence he gained in Thailand when way, what William McKnight was he became division vice presi- trying to do with our international Ken Schoen dent for several 3M businesses business.” Ruane trained young became manag- and, most recently, staff vice people in preparation for their ing director, president, Community Affairs overseas assignments. “They’d 3M Italy, in the and Workforce Diversity. come from good schools and 1970s when the we’d prepare them,” Ruane, business was retired division vice president, struggling. About three weeks 3M Traf c Contr ol Materials into Schoen’s assignment, Division, said. “We’d give them Maynard Patterson, then vice

168 160 Chapter 10 Excellence, among them Helmut Kar rasch at 3M’s elec- 3M in the United States each topped the other with trical lab in Hamburg, Germany, who developed a resin improvements to the Stickit coated abrasive disc. ucial submarine equipment that splicing system for cr s, lab operations outside the United By the  withstood high pressure underwater. The first two inter- States were also becoming notable contributors to national companies to receive Genesis grants to support corporate-wide product research and development. entrepreneurial product development were 3M Canada ,   More than technical employees worked on prod- and 3M Italy. Canada earned a grant for a bone growth uct and process development across the oceans. 3M’s stimulator program that delivers an electric current across Hamburg, Germany, lab focused on electrical innova- tion. Labs in Gorseinon, Wales, and Caserta, Italy, honed in on recording materials. 3M France explored The United States accounts for less than new tape applications and the Antwerp, Belgium, lab 5 percent of the world’s population, so the other studied specialty chemicals. The Sumitomo 3M lab 95 percent became our marketplace to pursue. worked hard to stay on top of rigid standards set by Japan’s high-tech manufacturers. 3M’s European com- Expanding globally was a business-driven panies as well as 3M Japan, Brazil and Colombia took decision. r > John McDevitt etired 3M corporate economist part in a global effort to accelerate automation in abra- sives manufacturing. Other international companies fractured bones to promote healing. Italy’s Ferrania studied ways to improve product packaging, make research lab used a grant to work on an X-ray dosimeter warehousing more efficient and conserve energy and program to measure radiation. reduce pollution — not just in their own locations, but Other new product innovations with broad, interna- with valuable implications for 3M worldwide. tional applications also began attracting stateside atten- Recognizing the intensity of global competition in tion. When a Canadian marketer, Robin Pitman, came the  s, Thwaits appealed to 3M to examine its mar- up with a product idea to clean ships underwater, he keting. “We have to approach this from a global per- was invited to St. Paul to work with 3M lab people. spective and not from a national perspective expanded From that collaboration came the Scotch-Brite marine globally,” he cautioned. “We must have accurate local cleaning disc. 3M Switzerland designed a smaller, intelligence about markets. With all of the variables hand-held dispenser for tape that other 3M companies, in market characteristics, manufacturing, distribution, including the United States, adopted. In several rounds communications and pricing, it can be bewildering. of friendly, intracompany competition, 3M U.K. and But, it can also be quite satisfying and profitable . . . 1 1 A scientist in the Telecom Lab at Sumitomo 3M works to adapt 3M tech- nology to meet the needs of Japanese 2 In 1997, 3M expanded customers. production at the tape manufacturing 3 plant in Itapetiniga, Brazil. The opera- tor of a film slitting machine in Hilden, Germany, separated waste for reuse. 4 Scotch-Brite sponges were among the most popular 3M products in emerg- ing markets in the mid-1990s.

169 Capitalizing on a Global Presence 161 as we know.” Thwaits said it was crucial to know the products that had the highest potential  3M’s  , difference between a 3M product with universal appeal for sales outside the United States. The top product versus one that needed modifications to fit a country’s areas, in keeping with Thwait’s worldwide marketing particular wants or needs. And, he said, as “call to arms,” developed global strategic some 3M products moved from propri- plans. In addition, under Jacobson’s lead- etary positions to commodity status, ership, 3M made dramatic gains in 3M marketers had to be creative plant efficiencies all over the world and successful in “distinguishing so that 3M had the wherewithal us from our competitors and to compete in any geographic making us unique in the eyes location on price. From  of our customers.” to , 3M cut the labor  With each new international needed to make its products by company created through the percent and the manufactur-   s, 3M made a modest percent. ing time required by  investment to get started, pro- moted basic products such as > Let’s Hear it for 50/50 reflective sheeting and scouring The impetus behind International pads to build a customer base, and then s Operation’s stretch goals in the  added products to build the business. “We came from Manuel (Em) Monteiro, who 4 don’t have a lot of brain surgeons,” Greg Lewis,  joined the company in as a cost analyst but department manager, Post-it flags and commercial spent virtually all of his career overseas. Monteiro The Wall print market, Office Supplies Division, told became executive vice president, International Opera- Street Journal. “We have well-rounded individuals ,  , working closely with Thwaits. By  tions, in who care about the business.” Allen Jacobson, when international revenues had been riveted at the who suc- same percent level for several years, he wasn’t satis-  ceeded Lehr as chairman of the board and CEO in the percent of the sales of 3M  fied. “I want us to reach s, told the  Journal that 3M keeps its approach mid- products worldwide, and I’m confident we can reach it elegantly simple. After all, it had worked well for more in the next five years,” Monteiro said. “To do it, inter-  years. There were some refinements in that sim- than national sales will need to nearly double the U.S.  s, however. Jacobson called on ple strategy in the wth rate.” gro leaders in 3M’s product groups to identify those among 2 3

170 Chapter 10 162 Background: Nextel flame shield Speaking from experience, Monteiro knew why this hallmarks has been our financial strength that enables goal could be achieved. “Considering that our penetra- us to take that long-term view,” Hammerly said and then tion overseas is typically half that of the United States,” smiled. “However, I like what Em Monteiro said, ‘We he said. “I know the opportunity is there.” Monteiro want to maximize the short-term results indefinitely.’ ” plan could be achieved by predicted that his  /  By the early  s, international business processes converting 3M technologies into unique, high-quality had changed dramatically. Market “windows” closed products faster, selling those products at a profit and sooner than ever. There would be shifts away from providing customers with value that they could find 3M’s methods of running international businesses. nowhere else. He set up management action teams on  Given its sheer size and scope —  countries by — each continent to develop growth strategies that the Hammerly said there would be a gradual move away teams coordinated with divisional global strategies and from country-by-country management to more regional local company plans. In  , International Operations management. That’s why the first European Business contributed  percent of the company’s total revenues  to manage 3M’s Center (EBC) was created in for the first time. chemical business across Europe. The EBC was charged with product development, manufacturing, sales and marketing, as well as paying attention to local country We’ve been through hyperinflation, we’ve requirements. EBCs for the Disposable Products busi- been through military governments, coups ness and Pharmaceuticals as well as other EBCs soon followed. But, even with broader, geographic manage- and tremendous political upheaval. 3M has like Thwaits emphasized that 3M — — ment, Hammerly a lot of staying power. > John McDevitt International would never be a “cookie cutter” organi- zation. Instead, it would continue to rely on informal organization. > Enter the ‘Transnational’ Company “We’re moving into a new kind of global manage- Just five days short of having years with 3M,  ment structure,” Hammerly said. “It’s called ‘transna- Monteiro retired with a statement that most people in 3M tional’ and, unlike more centralized organizations, International probably echo in their careers. “I’ll never a transnational corporation depends on an integrated like anything better than this,” he said in . “I’d like  network and teamwork. It’s driven by the needs of the to do it all over again.” Harry Hammerly, who succeeded marketplace and the need to be competitive. For each him, felt the same. Like Monteiro, Hammerly empha- business, we have to create the right mix of global, sized the long view for 3M International. “One of our 1 2 1 Em Monteiro served as vice president, International Operations, from 1981–1991. 2 He was succeeded by Harry Hammerly who held the same position from 1991–1995 until he was succeeded by Ron Baukol. 3 John Marshall, retired director, International Operations, shown near the Great Wall of China, met regularly with Chinese officials during the 1970s and early 1980s, encouraging them to allow 3M to open a company there. 4 By 1994, 10 years after 3M opened its Chinese company with a handful of employees, 3M was selling more than 2,000 products in 20 of 29 Chinese provinces.

171 163 Capitalizing on a Global Presence John Marshall The answers came a lot eas- ohn Marshall, retired director, 3 ier than the ultimate business International Operations, J deal. It took 12 long years of understands long-term invest- making contacts, strategizing, ment, perseverance and stretch selling, facing dead ends and goals. When he joined 3M in regrouping for 3M to open the 1968, the company was busy r st wholly owned foreign com- establishing more international pany in modern China. This companies than it ever had in a included four years of negoti- single decade, 23 in all. As early ating to win China’s approval as 1973, he traveled to China to to do business in the country. explore what it would mean to Finally, in November 1984, 3M do business there. — was granted a license to operate That was uncharted territory Moving into Uncharted Territory a business in China. The r st to answer four questions. for 3M and every other U.S. com- installation was an electrical “Should we be in China at all?” pany. “The Cultural Revolution tape converting plant. Marshall mused. “Yes,” he was in its nal sta ges, and most After that international answered himself, “because of Chinese didn’t want us there,” baptism of re , Marshall was the potential offered by a nation Marshall said. “The only point assigned to travel the world and of more than a billion people.” of contact was the Chinese look for places that 3M should How would 3M win 100 percent Export Commodities Fair, held be — and wasn’t. He had a hand ownership? The answer was to twice a year in Canton. Seventy in establishing 3M Russia in — local offer something of value percent of China’s foreign trade 1992, 3M Pakistan in 1993 and manufacturing, technology or was conducted at the fair.” 3M Vietnam in 1994. In each case, both. What products would 3M While Europeans had been visit- Marshall assuaged concerns in offer? Marshall narrowed the list ing China for years, he said, those countries about foreign to basic products that a develop- Americans were totally new to exploitation. Marshall could say, ing country needs for better elec- the vast country. with certainty, that 3M’s presence trical generation and distribution Through the 1970s, Marshall in their countries would create and improved telecommunica- developed contacts in China well-paid, safe jobs; enlarge the tions. Where would 3M locate its and acquired more knowledge. tax base; and contribute to local operation? Shanghai, right in the When Deng Xiaoping regained knowledge of environmental center of the geographic region power in 1978, he put a program protection, worker safety and that produced 70 percent of in place to make China a leading management skills. China’s gross national product. industrialized nation by 2000. “He knew he had to open doors to the West to achieve his goal,” 4 Marshall said, “and that’s when our real opportunity emerged.” Jim Thwaits, who later retired as president, International Operations, told Marshall to explore the details of starting a business in China with 100 percent ownership. Given the conventional 3M freedom to succeed or fail on your own, Marshall set out solo

172 164 Chapter 10 Background: O-Cel-O Stay-Fresh sponge and that mix will differ — regional and local components , the top five economies were the  changes. In business.” Eastern European nations were a good by United States, Japan, China, Germany and France, in . That’s where 3M would continue  case in point in that order. But, in , the economic map is expected  to use its FIDO strategy (First In Defeats Others) in the to shift dramatically. The top five will likely be China, Czech Republic, Hungary, Poland and Russia. the United States, Japan, India and Indonesia. , 3M International’s penetration of its mar-  By percent of U.S. levels and Baukol was kets was  A Single Voice with ‘Accents’ > convinced the percentage could increase by focusing on s progressed and 3M added even more  As the — the company’s three growth initiatives Supply Chain countries to its international roster, speaking in one Excellence, Earning Customer Loyalty and Pacing Plus voice, worldwide, became a high priority. That effort Programs. While they were expressed in capital letters, was linked directly to the company’s emphasis on a new these initiatives weren’t new or revolutionary to 3M. , that focused on identity strategy, introduced in  creating a consistent, positive image of 3M around the world. With so many products to sell, the company had In 1995, more than 70 percent of 3M’s total presented many “voices” to customers in the past and grow th was achieved outside the United States. research showed that 3M could be much better known. Applied on the international level, the company’s new We have tremendous opportunities open to us. voice would not have a single “accent,” however. Instead, > Ron Baukol retired executive vice president, the voice would have many accents to acknowledge the International Operations diversity of cultures, languages and customers it served. The continued potential for 3M International busi- ness was clear to Ron Baukol, who succeeded Hammerly They echoed what the architects of 3M International as executive vice president, International Operations, espoused five decades earlier: produce innovative prod- percent and retired in  . By  , more than  ucts that our customers need, do it quickly and efficiently, of the world’s gross domestic product (GDP) growth then deliver their orders complete and on time. By the occurred outside the United States. “We had better be  s, the pace had accelerated considerably and the there,” Baukol said, “and be a vital part of that growth.” stakes were higher for 3M. “In both developed and In its own analysis of how the world was swiftly chang- emerging countries, we need to be very nimble,” Baukol ing, the World Bank compared the top economies in said. “The pace of change is fast and dynamic. If you  to the year the year with some astonishing  can’t respond quickly, you miss many opportunities.” 1 The first global, corporate advertising 1 campaign in the mid-1990s was designed to remind customers and potential cus- tomers of 3M’s emphasis on innovation. The print advertisements were created for use in any culture and appeared in Europe, North America, Latin America and Asia. 2 A 3M Dominican Republic location where Rose Kopras served as the company’s first female managing director. 3 A friendly receptionist at 3M Philippines, where Rosa Miller was managing director.

173 ‘Lady, Do I Have a Job for You . . . ’ assignment to help was accustomed Rose Kopras 2 grow 3M’s hospital to r sts. She was the r st woman and dental businesses to become a production depart- in Latin America and ment superintendent at 3M. She Africa. was also 3M’s r st female plant Miller’s chance to manager. But, becoming the be a managing director company’s r st female managing surfaced in 1997. “The director of an international com- vice president of the pany was a big breakthrough in region asked me if I 1990. “Em Monteiro was deter- wanted to settle in one mined to see a woman leading place, the Philippines.” an international company before Miller wanted a location in which r sthand experience with the he retired,” said Kopras. The she could “make a difference” environmental challenges of run- manager of the Cynthiana, and the Philippines t her tar get. ning a manufacturing plant in a Kentucky, manufacturing plant “I started my job in January 1998, developing country, a perspec- said Monteiro called, and “he when Asia was in an economic tive that served her well when asked me to y to St. Paul the crisis. With monetary devalua- she became director, Corporate same day. I had no idea why, but tion, 3M Philippines’ sales had Safety, Environmental Technol- I was uneasy — what if we’d dropped from $100 million to $60 ogy and Safety Services and, shipped bad products to Japan?” million.” Miller focused on areas now, manufacturing director, When she arrived at the meeting, of growth potential, such as Occupational Health & Environ- Monteiro asked her to be manag- building the health care business mental Safety Division. Only a ing director, 3M Dominicana and in the country. She worked on few months after Kopras’ inter- Haiti. “He knew I had a lot to skill development for the sales national assignment, two other learn,” Kopras said, “so he picked staff and started a reward and men also were named to wo what he thought was a small, recognition program to improve managing directorships. safe, nice place.” employee morale. She was satis- Three months after Kopras — ed she had the challenging ,n eneral ow g Rosa Miller arrived at her new post in the assignment she had sought more manager, Surface Conditioning Caribbean, hyperin ation soc ked than 20 years earlier when she Division, says she was a “humble those countries and Haiti’s gov- called on that 3M vice president process engineer” at 3M when ernment dissolved. One year for career advice. His name was she talked with the vice president later, America was at war in the L.D. DeSimone, who became of 3M Latin America to nd out sian Gulf, limiting the amount Per 3M’s chairman of the board and how to pursue an international of raw materials Kopras could CEO before retiring in 2001. career. “I was in my 20s,” Miller import. Despite old equipment, said. “I told him I wanted to run old methods and old formulas, an international business some she could still produce and 3 day. He mapped out what I needed convert Scotch masking tape in to do. He probably doesn’t the little plant. “It was the best remember, but he had an incred- thing that ever happened to me,” ible in uence on me .” Following Kopras said. “I learned that you her “career map,” Miller became don’t necessarily need sophisti- a technical service representa- cated tools, but you do need a lot tive offering product and technol- of ingenuity. We made the com- ogy training for 3M Health Care pany stronger nanciall y than marketing and sales employees it had been, in spite of the eco- in Latin America, Africa and the nomic and political tumult around Asia Paci c. Next, she took an us.”The assignment gave Kopras

174 Chapter 10 166 Several factors led to the stepped-up pace. In some by the international laboratories, just as regional labora- countries, such as Brazil, economic barriers had fallen. tories provide technical support in the United States. The same was true in Eastern Europe. In other parts of “Technical innovation simply could not happen the world, new trade agreements had transformed the without active information sharing among the labs,” said economic landscape. And, in some emerging economies, Geoff Nicholson, retired staff vice president, Corporate industrialization was happening more quickly. “In the and Technical Planning and International Technical past,” Baukol said, “countries first developed by exploit- Operations. A high-strength adhesive tape used for ing their natural resources. Next, the national infrastruc- bonding baseplates designed to attach rearview mirrors ture was built, including roads and utilities. After that to auto windshields was created at Sumitomo 3M in came industry and technology and finally a full-blown Japan and first used in the United Kingdom. A pharma- consumer economy. All that took many years and 3M ceuticals lab in the United Kingdom developed a new could grow along with the economies. Now everything breath-activated aerosol device for asthma sufferers, but happens quickly and 3M has to be ready to do business they struggled with designing the mechanism. 3M’s lab immediately.” That was particularly true because other in Germany had the expertise in plastics and moldings. multinational companies were 3M’s key customers. “Together they developed an incredible product,” said As expectations of 3M International Operations Nicholson. “It’s up to us to create the kind of environ- grew , investment in research and development (R&D) ment that will make this collaboration happen all over kept pace. Of 3M’s scientists, approximately  ,  the world.”  ,  are now located outside the United States. On  . average, the company spends  cents of every sales > Community Impact and Turbulent Times dollar on R&D in operations around the world. 3M employees have reason to be proud of their com- Thirty-eight international companies have manufac- pany’s international impact. For each job 3M creates in  turing operations, while have laboratories to help a country of the world, three to  people are supported support 3M business plans. Their work includes techni- that job. 3M donates funds for local education, by cal service and support, manufacturing support and health, arts programs and disaster relief. Not only is product modifications. Full-service laboratories exist in 3M successful, it is well-respected. In a s survey  some of the international companies, such as Japan, the in Japan, for example, 3M was named the third most- United Kingdom, Belgium and Germany. All interna- respected company in that country. 3M has won kudos tional companies provide technical support to their cus- for its environmental work in several countries includ- tomers through local technical service engineers backed ing Korea, Taiwan and Germany. 1 2 Scientists in the United 1 Kingdom were among the 80 scientists from the U.K. and the United States who worked for seven years to develop the first CFC-free asthma inhaler. 3M telecom- 2 munications products helped Singapore build its fiber optics infrastruc- ture in the mid-1990s.

175 Capitalizing on a Global Presence 167 Countries of the Asia Pacific region especially they need; if we preserve our margins, balance sheet appreciated 3M’s historic “staying power” when a dra- and market share; if we continue to treat our employees matic economic downturn smacked the region in  well, we’ll be even more competitive going forward.” and . In the United States, Wall Street suggested  3M International weathered that difficult period and did that 3M should reduce its risk and step back from the better than just “holding its own.” In addition, 3M’s region. But Chairman of the Board and CEO DeSimone  gave the company a  countries by presence in stood firm. He was proven right. Referring to the tough strong foundation that could offset regional downturns. economic conditions at the time, Baukol observed, “People outside 3M frequently tell me how amazed “There’s an old adage that says ‘It’s better to be poor they are by our ability to deal with turbulence,” Baukol and healthy than rich and sick.’ Right now, we need to said. “It’s rewarding to hear that, but it’s not surprising. make sure we stay healthy. If we can continue to supply We are accustomed to our strengths, because we live our customers and give them the products and service with them every day.” ● 3M International Operations aren’t intended to be “cookie cutter” duplicates of 3M’s U.S. operations. ● 3M International flourished when it became an equal, integrated partner with 3M U.S.A. — ● A long-held, international growth credo often is still true FIDO (First In Defeats Others). ● 3M’s global growth was a business-driven decision fueled by the knowledge that 95 percent of the world’s population lives outside the United States. time-tested truths 3M’s long-standing financial strength has allowed the company ● to take the “long view” in international expansion, regardless of economic volatility and political uncertainty.

176 Divisions fuel 3M growth Thriving on renewal: Optical Systems, OH&ESD, Dental 3M Hutchinson, a plant with resolve Follow the technology wherever it leads

177 r o l e m 11 o d e — Divide and Grow l o Follow the Technology f William McKnight had a revolutionary idea in  . It was i an idea uncommon to American business, but one that would n ignite growth, diversification and innovation for decades n to come. McKnight restructured 3M by creating divisions — o individual profit centers that had the power, autonomy and resources to run independently. McKnight believed v that this divisional approach would keep 3M’s busi- a nesses closer and more responsive to customers while t being a strong motivator for employees. The timing i o was perfect. 3M had grown significantly during its n years. By the end of World War II, new  first

178 Chapter 11 170 demands for products, people and diversification had “Almost without exception, that new unit began set the stage for the company’s rapid growth. gro wing at a faster rate,” said Lew Lehr, retired 3M “Mr. McKnight wanted to keep the divisions small chairman of the board and CEO, and — earlier in his and focused on satisfying customers and giving people career — a beneficiary of this philosophy when he a chance to be entrepreneurial,” said Dick Lidstad, launched the embryonic medical products unit. retired vice president, Human Resources. “What we When the new business was separated, the estab- did was follow our technologies wherever they led us lished division had to find new products and markets to and leverage them into new businesses. Mr. McKnight meet its growth objectives to make up for contributions didn’t want bureaucracy to slow us down.” from the business that became independent. Observers McKnight vironment. But, it wasn’t a free-for-all en of the phenomenon called it “renewal.” As each small made sure that 3M remained strongly centralized in a program was successful, it progressed in ever increasing — few core functions engineering, research and develop- sizes to: a project, a department and then a division. ment, finance and human resources. A manager from Diversification accelerated. each of these three areas was assigned to a division’s The examples are legion. When Magnetic Recording operating committee to ensure consistent practices Materials was spun off from the Electrical Products throughout the company. In their book, “In Search of Division, it grew to become its own division and then Excellence,” authors Tom Peters and Robert Waterman spawned a spate of divisions. A copying machine project said 3M operated with simultaneous “loose-tight” for Thermo-Fax copiers grew to become the Office properties — loose when entrepreneurial action mattered Equipment Division. A new venture in printing products and tight when corporate consistency was the key. turned into several divisions that became the Graphic Arts Group. The Occupational Health and Environ- mental Safety Division was a spin-off from the Retail Count on Change > Tape Division. Personal Care Products stepped out from McKnight’s decision to organize the company into the Tape Group. 3M’s huge Reflective Products Division divisions crafted a climate of perpetual change. As a eventually was divided into four separate divisions. division grew, it reached a size where it tended to spend To create never-before-seen products for new too much of its time on established products and mar- markets, McKnight also established a New Products kets and less time on new products and businesses. and, although it had different names Department in  That’s when McKnight’s “divide and grow” philosophy over the decades including New Business Ventures, took over new businesses were spun off and given — it had essentially the same charter. More recently, 3M new management teams. The results were gratifying. 1 Dyneon, Chapter opening photos initially a joint venture, now a wholly owned 3M division, is the world’s second largest producer of fluoropolymers; Experiments with fluorochemicals began at 3M in the 1940s. Today, fluoropolymers are used in a wide range of prod- ucts; A scientist tests adhesive tapes in a 3M lab; Fiber optic cable is one of 3M’s many tele- communications products.

179 Follow the Technology Divide and Grow — 171 created a Corporate Enterprise Development program Optical Systems: A Near Death Experience > to look years out to see trends and opportunities  in Back in the s, 3M had developed a microlouver  that could help 3M leverage its technologies into “white technology the ability to create the equivalent of a — spaces” those untapped markets that the company had — microscopic Venetian blind in a single piece of clear not yet entered.  , tiny “blinds” per  film. This film featured about There were two other major organizational changes foot that looked transparent from one angle and opaque in the company’s life, aimed at creating more renewal from another. Surely this film had multiple uses, from and innovation synergy. After the company’s first for- window treatments and automatic teller machines to ski mal strategic planning effort in  , 3M was divided goggles and maybe even computer screens. Believing into four business “sectors” based on related technolo- this was “a technology in search of a market,” 3M’s gies. Each sector had its own research lab to give 3M New Business Ventures Division spun it off to become . But, the business had  the Industrial Optics unit in a shaky start and only one customer, 3M’s own Visual From top to bottom, 3M’s management provides Products Division, which bought the film to reduce active, spirited encouragement for new venture glare in the overhead projectors they manufactured. generation. > Harvard Business Review, 1980 When it was next “adopted” by 3M’s large Traffic and Personal Safety Products Group, the little business , 3M was  increased clout. Seventeen years later, in limped along with what one observer called “a grab bag organized into six “market centers” to more closely align of optical technologies,” the best being light control film the company’s core businesses with the markets they applied to car dashboards to reduce windshield reflec- served. A “millennium study” that sparked those most tion. But, the film was too pricey for the auto industry, recent changes reinforced the power of the divisional and Industrial Optics was losing millions of dollars a structure from a half century earlier. Looking back, s. That’s when Ron Mitsch, then group year by the  observers agree that this was the single most important vice president, Traffic and Personal Safety Products organizational decision in 3M’s history. The divisional Group, recruited Andy Wong to take on, what Mitsch structure with its “divide and grow” imperative created called, an “exciting, stimulating and kind of risky” a unique climate for renewal, corporate self examina- assignment. tion and re-creation. Coming from a lab management background, Wong was eager to embrace the new challenge of being a business unit manager. And, what a challenge it was. 2 When the Coated Abrasives Division 1 was formed in 1948, employees were sent this letter and organization chart explaining the new division’s structure. 2 Raymond Chiu (left), advanced research specialist, and Vincent King, senior research specialist, both of the 3M Microreplication Technology Center, Plasma Display Panel Project, helped develop the microreplicated barrier-rib panel, the core component of plasma displays. This is one example of a white space project that taps into a new market for 3M.

180 Chapter 11 172 With not enough sales, the cost anti-glare, anti-radiation and of running the Optical Systems computer filters with and with- plant in Petaluma, California, out the privacy protection wa s too high. On top of that, feature that became the foun- production of the finished dation for a fast growing microlouvered film involved business. About the same six different manufacturing time, Optical Systems also locations around the country. discovered that another novel There were quality issues and film — derived from a technol- delays in filling customer ogy called microreplication — orders. Critical patents on the could enhance the brightness of technology were expiring and lower liquid crystal displays used in laptop priced competitive films were emerging computers at a time when laptops were from Japan. With less than two years left on proliferating worldwide. The product idea the California plant’s lease and orders to shut — had its start with Sanford Cobb, then senior product 1 — the operation down W ong went into high gear. development specialist, who had received funding What happened next was renewal at its best. The through a 3M Genesis Grant to explore this new type Industrial Optics team developed and filed patents on of film. Paul Guehler, who was then division vice a lower cost, better film. With a vastly improved — and president, Safety and Security Systems, in which Optical simplified — manufacturing process, the Petaluma plant Systems had its “home,” urged the group to pursue the began producing film using two-thirds fewer processing idea quickly. “Japan, the home of major computer man- steps and many fewer and simpler raw materials. The ufacturers, needed it,” he said. “I encouraged them to plant staff reduced production costs by nearly percent  make the investment and move fast.” Optical Systems and cut manufacturing time from  weeks to less than experimented with different types of brightness three. “By doing all that, we were able to afford smaller enhancement film (BEF) to satisfy the standards of scale equipment that could be dedicated to manufactur- every major manufacturer and successfully reached ing our film in one location, not six,” Wong said. The the marketplace first with its new film. plant began meeting all the important performance cri- teria. In a vote of confidence, 3M management decided Optical Systems has five locations that support to buy the Petaluma plant when the lease expired, rather the manufacturing of our brightness enhance- than shut it down. But, the fight for profitability was a long, difficult one because Industrial Optics, renamed — apan, Taiwan, ment film around the world J Optical Systems in , lacked a core business. The  Korea, China and the United States. > Marc Miller next three years were characterized by more financial ector, Optical Systems manufacturing dir losses, three rounds of downsizing, and frustrating experimentation with product improvements and new applications. “The biggest challenge we had in manufacturing  , Optical Systems identified privacy Finally, in the film was cosmetic uniformity,” said Marc Miller, filters for office computing as an untapped and poten- manufacturing director, Optical Systems. “The product tially huge business opportunity. “It took us three gener- had  prisms per inch of width, and each prism was  ations of privacy filters over a -month period before smaller than a human hair. That’s a little over ten miles we hit upon the winning formula,” Wong said. “We of prisms on each square yard of material. We started were taught a valuable lesson in perseverance.” In July manufacturing our film on existing equipment in , Optical Systems finally introduced a full line of  our Menomonie, Wisconsin, plant where 3M makes

181 Divide and Grow — Follow the Technology 173 Scotchlite Diamond Grade reflective sheeting. You can rapidly growing industry,” said Terry Jones, former imagine the challenge we had using equipment to make business director, Electronic Display Lighting, Optical highway signs visible at a couple thousand feet, versus Systems Division, now director, Touch Systems. “We’ve making a film for an LCD viewed at a distance of  made a point of obsoleting our products with newer and inches. We couldn’t tolerate even the most minor defects better ones.” or flaws.” Once the immense market potential for the Among the eight, major display-related innovations film was proven, 3M made a manufacturing investment. cited by computer manufacturer Compaq as part of the “We developed the improved manufacturing process in elopment of laptop computers worldwide successful dev  and on an accelerated timetable,” said Miller.  — over a decade, Optical Systems produced two of them “Our customers’ needs were almost as embryonic as our 3M brightness enhancement film and 3M dual bright- product was. As their requirements matured, we were ness enhancement film. Both are now marketed under able to keep even or a little ahead.” Miller explained the the Vikuiti brand. manufacturing process was constantly being refined. In recent times, Optical Systems entered the touch- “We had to meet the higher expectations of an industry screen market by combining two consecutive acquisi- that was changing yearly,” said Miller. “We had a world- tions — Dynapro in mid-  and MicroTouch in early wide team focused on improving our processes as well  . as the cost of our product.” Optical Systems had its first profitable By  > OH&ESD: Action Teams Transform a Division  and  the business grew year and between  When Robert Hershock returned to St. Paul in  times, from  nearly million in sales to just under after serving as managing director, 3M Switzerland,  million. The business became a full-fledged 3M he became the new general manager, Occupational  , and Wong was named division general division in Health and Environmental Safety Division (OH&ESD). manager (and, shortly thereafter, division vice president). He discovered that the fast growing division had been It was the fastest growing business in 3M throughout dust  depending primarily on two products: the s and is the unqualified industry leader with  the mask, the first disposable, lightweight, effective mask countries. During this  its products sold in almost  and the ever seen when it was developed in ; tremendous growth spurt, the division consistently industrial respirator that successfully matched new U.S.  exceeded company targets with percent of its global Occupational Safety and Health Act standards estab- sales each year coming from products introduced within . Together, those two products accounted lished in  the most recent four years. “We’re in a changing, for most of the division’s sales and profits. 1 Kenichi Saito, product development engineer, Optical Systems Division, helped develop Vikuiti brightness enhancement film (BEF). 2 The first disposable, lightweight dust mask, introduced by OH&ESD in 1961, became a division mainstay. 2

182 174 Chapter 11 “But, OH&ESD was a 3M aberration,” said Professor He shared his vision of an innovative division where employees could take risks and have a high degree of Anne Donnellon, in a case study developed for the autonomy in their work. He described a division where Harvard Business School. “It suffered from a technology base that was incapable of sustaining its earlier growth. communications flowed freely up, down and across the organization. Hershock asked his managers to consider It had no potentially successful new products in develop- ment.” Profits were generated, but there was minimal what they could do to help him realize that vision. Over the next two years, OH&ESD experimented with business development teams focused on charting Bob came into our lab and said, ‘We have new opportunities and products, but their progress terrific market share, but our market is shrinking. wasn’t producing the results the division needed. That’s have to broaden into other kinds of safety We when Hershock explored a whole new approach called “cross-functional action teams.” The goal was to trans- products.’ He was a fantastic leader. form the division from a complacent and risk-averse one > David Braun r etired 3M corporate scientist, Occupational to an innovative, flexible, daring organization. Creating Health and Environmental Safety Division the action teams meant significant restructuring of the division, Hershock said. “Change like this is a revolu- tionary process. You can’t expect to move from one investment in pace-setting new products. People worked system to another without some complications.” in their isolated “silos” and they had not been encouraged The action teams were pivotal to success. The to take the kinds of risks that might require substantial teams focused only on new products with high poten- percent of its financing. “The division generated only  tial. People who led the teams were those with a demon- sales from products introduced in the past five years not strated passion for the product not seniority. Team  percent goal established by the company overall,” the leaders recruited team members, but individuals could Donnellon said. “Bob Hershock knew the division had decide to join or not. Team membership was above and to make dramatic changes.” beyond each employee’s own existing job. Each mem- Hershock worked to change ber had training in the interpersonal challenge of real the division’s culture. He asked team work and each team established its own goals, senior managers to partici- budgets and milestones. Hershock, who retired as vice pate in a cultural audit and president, Marketing, made sure that each action team self assessment of their had the support it needed, including a “senior sponsor” own leadership styles. OH&ESD developed a new line 1 of particulate respirators in the 1990s designed to meet stringent, new regulations. Today, 3M is the global leader in respiratory protection. 2 3M developed this mission logo for use during the first joint experimental 3 3M scientists program with NASA. pack up for a 1988 launch of the Challenger shuttle on which 3M experiments were conducted. 1 Background: Dyneon fluoroelastomer raw gum

183 Earthly Benefits of Space Exploration r st nonaerospace company to respond when U.S. President Ronald Reagan called for private sector involvement in a perma- nently manned space station. 3M’s interest in microgravity research initially came as a sur- prise to NASA according to Chris 2 Podsiadly, then director, 3M’s Science Research Laboratory, 3M even followed its technolo- now retired, the 3M team leader. gies into outer space. As early as “When we r st approached 1958, Scotch audio tape brought NASA, they said, ‘You’ve got to a Christmas message of peace be kidding,’ ” Podsiadly remem- from U.S. President Dwight bered. “We convinced them we Eisenhower transmitted from an were one of the premier materials Atlas satellite orbiting Earth. In companies in the world and this the late 1960s, the Apollo 7 mis- space ‘lab’ would lead to new sion made extensive use of 3M products. In nine months, we uor oelastomers that could with- went from a blank page to a piece stand high temperatures. Over While 3M’s involvement of space hardware that e w in time, 3M tapes, plastics, sealers, with the program ended in the the space shuttle.” 3M success- and ceramics were adhesives late 1980s, as public support fully conducted experiments in part of spacecraft construction of America’s space program space including growing perfect and even protective clothing for eroded, 3M was a bene ciar y organic crystals and making astronauts. of the pioneering work. “This — organic optical compounds both But, the most signi cant project increased 3M’s worldwide with high potential applications space age assignment came in visibility,” Podsiadly said, “and — in the embryonic ber optics the mid-1980s, when 3M teamed — perhaps most importantly industry. More experiments with up with the National Aeronautical people began to understand polymers yielded new informa- and Space Administration (NASA) that 3M was a leader in many tion and Podsiadly’s original to begin long-range, basic technical areas.” team of about seven people grew research in space. The attraction to more than 100. was the near-zero gravity and high-vacuum environment that created conditions virtually 3 impossible to duplicate on Earth. At the time, Les Krogh, senior vice president, Research and Development, now retired, believed that the agreement with NASA would put 3M in the middle of some of the most exciting research being done. “It brought 3M’s worldwide technical com- mu nity recognition as a company at the leading edge of technol- ogy,” he said. The image was enhanced when 3M became the

184 Chapter 11 176 from the division’s executive team. The sponsor ran  and currently is executive vice president, Electro interference when a team faced resource problems or and Communications Market and Corporate Services. political resistance. Teams met quarterly with Hershock Dental products had become a fast paced industry, in informal lunches to review their progress. a lot like a consumer business. New products had to  to   , OH&ESD introduced From new be introduced quickly or the competition would step products developed by products, and  out of the  in and fill the void. Consistent quality in dental prod- those with the highest — the division’s action teams ucts was not the industry norm. If 3M Dental could — made it to market on time. potential be synonymous with quality, that would Overall, the time involved in new prod- give the division a decided marketplace uct development was cut in half. By advantage. percent of the division’s  ,  3M’s chairman of the board sales came from products devel- and CEO, Allen Jacobson, had oped in the previous five years. just introduced a new quality Time to market ranged from four  program called Q s, patterned months depending  months to after the Baldrige Quality Award. upon whether new manufacturing The seven-step Baldrige process processes and equipment had to involved important business dimen- be invented. Quality in the division sions including leadership, product reached a new high. “We met every sin- development, information systems, gle one of our objectives,” Hershock said. human resources, results measurement “We significantly reduced internal barriers and customer satisfaction. Reich asked the qual- 1 to innovation . . . and pushed decision making ity manager of Dental Products, Duane Miller, to get down to include more levels than ever before. And, details. “We weren’t trying to win the award,” Reich we could honestly say that we built a workplace culture said. “What we wanted most was to know how the that really energized the division for growth.” Baldrige process could work for us.” Dental Products: Renewal From the Ground Up > I was planning to retire. But, when I heard Few companies have ever won the Malcolm Baldrige what management wanted to do, I rethought National Quality Award — the most coveted recognition my plans. I was convinced we could do it if . , 3M Dental  In for quality in American business Products Division joined this elite group. Bob Sossaman, rked together. And, I wanted to be part we wo a senior tool and die maker at 3M’s Irvine, California, of the process. > Jim Peterson etired advanced r plant where dental products are manufactured, echoed technologist, Dental Products Division his co-workers when he said, “It was like winning an Oscar. It confirms that — every day — each of us is mak- What happened next involved every one of the divi- ing an important contribution to something great.”  sion’s employees. For the first time, strategic plan- years s, 3M’s dental business was In the   ning wasn’t done by an isolated management group; old. It had established a strong niche in dental bonding instead, one-third of the employees were involved. adhesives and was the market leader. But, by the late Teamwork — especially focused on identifying problems s, strong competition was eroding 3M’s business  — and solving them to benefit customers became a top and its patents were expiring. “New product flow was priority. Dental Products teams learned to work together down to about zero, the division had product quality to significantly accelerate new product development issues and the financials looked poor,” said Charles and commercialization. Reich, who became division vice president in April

185 Divide and Grow — Follow the Technology 177 On the way to winning the Baldrige Award, the we could get out there, do it and lead by example,” said Reich. “I hoped we could have a positive impact on the Dental Products Division re-created itself with astonish- company and we have.” to  , there was a whopping  ing results. From In late percent increase in productivity. Sales doubled, the  , the Dental Products Division com-   bined with ESPE, a developer and manufacturer of percent, distributors division’s customer base grew by dental products and delivery systems based in Munich, gave 3M high marks and 3M dental employee satisfac- tion results far exceeded those of their competitors. Germany. The combined businesses now operate as 3M ESPE, a division of 3M Health Care. the culture of striving for excellence — ... A Resolve to Renew — > 3M Hutchinson continuous improvement in how we meet our Just after World War II, the community leaders of customers’ expectations — that’s what matters Hutchinson, Minnesota, met to decide how best to use the local plant no longer needed by the U.S. government. to me. And, it matters very much. Their search led them to St. Paul where they persuaded materials management coordinator, > Christelle Dufaut  when 3M to buy the empty plant. It was February Dental Products Division Business Center, 3M France 3M began producing what had already become its famous Scotch cellophane tape. When Reich moved on to become vice president of the Occupational Health and Environmental Safety It was a small factory; it grew, it grew and it kept  Division in , Fred Palensky succeeded him and took on growing . . . > Arnold Piepenburg one of the first 10 the long awaited phone call from the Baldrige Award 3M Hutchinson plant employees committee. Dental Products had applied twice in eight years and the second attempt was successful. “Winning the Baldrige Award was a thrill. But, the bigger thrill For nearly five decades, the 3M Hutchinson site was doing business in that environment,” Palensky, now added a wide variety of consumer, office, industrial executive vice president, Specialty Material Markets  and electrical tapes, even though a crippling fire in and Corporate Services, said. “The business is on its way leveled the plant’s warehouse and could have stalled the to being the dental supplier of choice to every customer.” wth. By late  gro ,   -square- , with a newly built The division has continued to grow and its achievement foot plant adjacent to the existing one, 3M began mak- has been an inspiration to others at 3M. “I hoped that ing Scotch magnetic tape. One year later, the plant 2 1 In 1997, 3M Dental Products Division won the coveted Malcolm Baldrige Quality Award. The Hutchinson plant 2 held an open house in 1948, just a year after it first began manufacturing Scotch cellophane tape.

186 Chapter 11 178 Background: Scotch pop-up tape office dispenser produced its first roll of commercial videotape. With the pop-up tape strips, surface mount supplies and specialty fast growth of 3M Magnetic Media Division’s products, media. The plant also opened a new tape development the plant expanded again with a  -square-foot  , center focused on pharmaceutical and microabrasives addition in  . Meanwhile, the neighboring 3M tape applications. Employment at 3M Hutchinson stabilized plant saw multiple additions. When Post-it notes were , employees after  at about   . introduced nationwide in  , the 3M Hutchinson plant was selected to manufacture them. There were When 3M made the announcement, the whole many more plant additions over the years as manufac- city of Hutchinson held its breath. 3M people turing at Hutchinson grew. came out and said, “We’ll do everything possible Deservedly proud of its accomplishments, the 3M Hutchinson plant also became the first 3M facility to not to lay off employees.” And, they did. earn ISO-  recognition for meeting tough global long-time 3M Hutchinson employee > Linda Rosenow quality standards. Within four years of that milestone, however, the 3M Hutchinson plant had the most chal- lenging assignment in its history. When 3M exited the One of the plant’s strengths was its “focused fac-  , consumer and professional videotape business in tories,” a system employed at all 3M manufacturing the plant lost most of the work on which it had come facilities that divides the work into business groupings to depend. Doug Ward, now manufacturing director, to serve 3M customers at the highest level. Each of Personal Care and Related Products Division, was plant these focused factories had its own production and sup- manager when that occurred. port employees. When the transition occurred, the plant 3M’s goal was not to lay off a single employee invol- was reorganized into seven focused factories: stationery untarily. Some senior employees took separation pack- and office supplies; high-performance tapes; specialty ages and retired early, losing what Jim Bauman, who coating and converting; specialty media; tape develop-  succeeded Ward as plant manager, estimated to be  , ment for pharmaceuticals and microabrasives; vinyl and years of manufacturing experience. That loss made the nonwovens; and surface mount supplies. Plant employ- transition even more challenging, Bauman said, but with ees participated in process and business teams to iden- the help of manufacturing executives at 3M Center in St. tify, plan and implement ongoing plant improvements. Paul, the 3M Hutchinson plant was able to add six new Today, 3M Hutchinson is the company’s largest manufacturing lines. They included VHB (very high — manufacturing operation covering  .  million square bond) tape for the aircraft industry, Post-it flags, Scotch  feet, on divisions. To provide acres and serving  1 1-2 The 3M Hutchinson plant had to renew itself after 3M exited the video- tape b usiness in 1996. It added six new manufac- turing lines, as well as a new tape development center, and is now 3M’s largest manufacturing 2 operation. Shown are the North (top) and South Buildings.

187 Just Say, ‘Yes’ Excellence.) Reluctantly, Carlson Some worried that a new tape ollowing technol- invited his family to the awards dispenser would “cannibalize” ogy wherever it F ceremony and they all came. “My the crown jewel of transparent leads sometimes means sister came up to me and said, tapes. Dispensed in the tradi- challenging a company ‘I’ve been observing people, and tional “snail,” curved shape, the titan. That’s what Casey you just don’t t. ’ But, that’s the product had been around since Carlson, a 3M industrial point, I said, when you watch the 1930s and its market share designer, did when he the videos that feature award was high around the globe. and his team introduced winners, none of these people “When you own a business a new tape delivery sys- ts a mold. We’re kindred spirits.” that big and legendary,” Carlson tem, the Scotch pop-up And, that’s a good thing for 3M. said, “innovation doesn’t seem tape strip dispenser, in as important as avoiding a mis- April 1997. “Scotch Magic take.” Because a clear majority tape, introduced in 1960, of tape sales occur in November was the crown jewel,” said and December, the major gift- Carlson, “and the legacy giving months, Carlson focused was so strong that it almost on developing a tape system that prevented innovation.” made wrapping gifts easier. While Developed in partnership Carlson heard discouraging with 3M Chemist Elmer wor ds from people within 3M Blackwell, who focused (and some called him an incorri- on the tape strips, the new gible maverick), he also had product led to a line of desk- sponsors and champions, includ- top and wrist-band dispen- ing 3M’s CEO and chief executive sers that provide handy, of cer , L.D. DeSimone. “When pre-cut, two-inch pieces of Scotch brand tape. The innovation won both an IDEA Silver Award and a Design Plus Award at the prestigious Frankfurt Fair in Germany in 1997. It also was selected as a “Good Buy” winner by Good Housekeeping magazine I met with Desi, that year, which praised he said, ‘I like what it as a “better than ever you’re doing and I believe version of products we in it. But, don’t get upset. There already loved.” are a lot of ideas that don’t make “The program laid the it and, if that happens, move on foundation for develop- to the next good idea.’ ” Carlson ment of a new ‘tape deliv- stuck with his Scotch pop-up ery system’ that can program and, in 1999, he was one encompass all of our of the r st winners of 3M’s presti- major lines in stationery gious Innovator Award. The award and of ce supplies: went to technical people for tape, Post-it a gs and exemplary use of their 15 percent Post-it notes,” Carlson time. (It has since been com- said. But, the road to bined with the Circle of Technical innovation wasn’t easy.

188 Chapter 11 180 a sense of the plant’s scale, in a single year, it produces continued in a category of fluoropolymer compositions nearly one billion molded parts used in 3M’s transpar- called fluoroelastomers. .  ent tape business and million miles of transparent  That early work led to high tech applications for the — tape enough to circle the earth  times. It is a proud military and aerospace, but the products were costly, plant. People who work there point to a strong safety said Bob Brullo, who joined 3M as a product develop- record, extensive training programs for employees, high  ment engineer in . “Les Krogh, who later retired productivity, clean, neat surroundings and employee as senior vice president, Research and Development, volunteerism in the community. was then vice president of the Commercial Chemicals Division,” said Brullo. “We were trying to decide what to do with this little elastomer business. Les said, > Follow the Technology Wherever it Leads ‘We’re either going to get serious or get out of it.’ The At the heart of renewal are new applications of tech- materials were ahead of their time and DuPont domi- nologies. People call this “uninhibited research for nated the business. We decided to pick and choose uninhabited markets” at 3M, and the philosophy means where we were going to fight. We found exploitable, following technology wherever it leads, often into new vulnerable niches where we could go in, develop new product areas never imagined. 3M’s experimentation technologies and establish strong customer relation- s is a prime  with fluorochemicals back in the mid- ships. We came out of nowhere and became a player; example. Without knowing how the technology would DuPont couldn’t ignore us anymore.” 3M’s new key cus- be applied, 3M bought key fluorochemical patents from tomers were the manufacturers of O-rings for a myriad a Penn State University professor in . Although she  of uses. Since the late  s, the business has grown worked on developing a rubber material that could in double digits annually. resist deterioration from jet aircraft fuel, Patsy Sherman, Looking for ways to expand its customer base, 3M then a 3M lab technician, happened upon a totally dif- sought out the automotive industry. “We started calling ferent use for the compound that became the successful on GM, Ford and Chrysler with the idea of understand-  Scotchgard fabric protector in . Experimentation 1 Nextel™ Flame Air Duct Wrap Interam™ Stopping Dot Fire Barrier Filament Dampening Grease Duct Wrap Mats Paper Tape Sleeves Diaper Fastening Tape Insulation Tape onformable C 3M™ LED Design Extrusion Tapes NVH Tape Light License Plates Bonded Loop Sasheen™ and Removable Highway Decorative Ribbons Marking Tapes Diaper Stretch Tabs Ribbons Hookit™ Abrasive Disks Film-Backed Belts Scrubbing Buf-Puf™ Pads Floor Brushes Pads Easy Trap Duster Summit™ Hand Pads Surface Conditioning Scotch-Brite™ Pads Pads, Wheels, and Belts Scotch-Brite™ SL Discs and Belts Super Cling Floor Cloths Mill Rolls Never Rust™ Floor Pads Scotch-Brite™ Brake Hub Cleaning Disk Food Service Wool Pads Rescue™ Cleaning Pads Non-Scratch Soap Pads Bathroom Scrubbers Cleaning Pads Purple Scour Pad Clean ‘N Entrap™ Mats Anti-Fatigue Mats Nomad™ Strip™ Pads Entry Mats High Performance Roll Gauze First Aid Dressings Coban™ Compression Wrap Steri-Strip™ Coban™ Surgical Tapes Nexcare™ Electrode Backings Ultra Conformable™ Comfort Strips Breathable Wrist Rest Masks and Tapes Drapes Attest™Biological Indicators Surgical Masks Flat Fold Respirators Filtrete™ Comercial Furnace Filters Filtrete™ HVAC Filters Hepa Filters Filtrete™ Room Filtrete™ Face Masks and Cabin Air Filters Air Puriers Electrets Respirators Antimicrobial Cabin Vacuum Bag Air Filters Filters Betapure NT-T ™ Meltblown Webs Liquid Filter Bags PolyKLEAN™ Filters DuoFLO™ Filter Element Thinsulate™ Thermal Flex Thinsulate™ Thinsulate™ for Insulation Bedding Doodleduster™ Oil Sorbent Thinsulate™ Acoustic Flame Retardant Insulation Thinsulate™ Thinsulate™ DP Insulation Chemical Spill Sorbents

189 Divide and Grow 181 — Follow the Technology ing their end-user requirements,” “We were a very small part of 3M’s chemical said Brullo. “We developed prod- business,” said Brullo, “but we operated like ucts to meet those specific needs.” a little, entrepreneurial company. We Not long afterward, Brullo filled focused on offering innovative tech- a small box with 3M’s automo- nologies and a very fast response tive parts samples and headed time to our customers. We had a to Europe, at the encouragement tremendous amount of freedom of George Hegg, an executive to do what we had to do. with extensive experience in also knew how We 3M’s international business. to circumvent the “I went from coun- bureaucracy when try to country work- had to. It was we ing with our local about  when 3M employees, call- we caught up to ing on fabricators and DuPont globally and end-users, explaining passed them.” Brullo cred- 2 what our materials were and its cross functional teamwork what they could do. We had to position ourselves as and strategic alliances with the success of the business. a raw material solution provider because we sold only “Sid Leahy was our group vice president,” Brullo the base polymer and proprietary curing agents not the said. “He urged us to start building alliances outside the finished parts. The next year it was Asia.” Over time, company that could lead to codevelopment projects.” Brullo upgraded his “sample box” to a fishing lure box Experimentation followed with several alliances; some that nicely accommodated his array of fuel line hoses, worked, others didn’t. There were lessons learned, but O-rings, oil seals for engines, engine valve seals, little out of these relationships came technology and product rubber molded “elbows” for crank case ventilation and gains and the recognition that 3M should team up with other prosaic pieces and parts made from 3M’s Fluorel a “big player” to leverage its applications know-how  percent market share in fluoroelastomers. From a and technological expertise to the broader fluoropolymer , Brullo said 3M’s share in this high potential niche  industry. Along the way, the group won two Golden grew  percent in the United States by the late to about Step awards for their commercialization of major new  s. products in  . and  3 This Nonwovens Technology Platform vividly demon- 1 strates how 3M follows technology wherever it leads, into areas nev er imagined when the technology was first developed. Starting with ribbon in the 1940s, hundreds of products using nonwoven technology have since been developed in almost every area of 3M. 2 Dyneon is associated with a wide array of products ranging from nonstick coatings on cookware to seals used in space exploration. Dyneon, now a 3M division, is the second largest producer of fluoropolymers in the world. 3 Raw materials used in the production of Dyneon products.

190 182 Chapter 11 The ultimate outcome of this search . Brullo  business reporter in for the ideal alliance was a 3M part-  , another didn’t stop there. In nership with German chemicals giant joint venture, called Alventia L.L.C., to sell  Hoechst A.G., formed in was formed with the Belgian chem- a line of high performance rubber ical giant Solvay A.A. The agree- and plastic resin products. The joint ment allowed a key 3M raw materi- venture, named Dyneon L.L.C., tested als plant in Decatur, Alabama, to use a business paradigm back in St. Paul — Solvay’s proprietary technology. The historically, people believed that whatever end product was cost effective and avail- 3M took to market should be developed able to both companies. Today, the Dyneon within the company’s walls. When 3M and Hoechst brand name is associated with a wide array of prod- 1 employees,  embarked on this enterprise involving ucts found in such diverse uses as nonstick coatings million  both companies were generating about on cookware to seals used in space exploration. 3M in annual revenues on their fluoroelastomer products. purchased Hoechst’s interest in the joint venture at the gether, the pair quickly generated a To  percent sales end of  and Dyneon is now the world’s second gain. The companies focused on a resin called THV largest producer of fluoropolymers. Brullo, now manag- that retained its flexibility at very low temperatures. ing director, 3M United Kingdom-Ireland Region, was “Given our position in automotive,” Brullo said, “we Dyneon’s first vice president and general manager. knew where to find new applications for THV.” In short order, the material lined the filler tubes of auto gas tanks Classic 3M at its Best — Telecom > to limit the escape of vapors, helping car manufacturers With a four-page business plan, Wayne Bollmeier, divi- comply with U.S. Clean Air Act laws. THV also was sion vice president, Electrical Products Division, set an ideal film for covering greenhouses. It was a natural . They were  two young “intrepreneurs” loose in for fiber optic tubing used to pipe light into areas where Red Carter, product sales manager, Electronic Products in a chemical — accompanying heat might be dangerous Division, and Gary Pint, then product manager, Telecom plant, for example. The new applications kept multiply- Division, both now retired. “Telecommunications ing. “The combination of Hoechst’s manufacturing and electronics were together at first under Wayne,” capabilities and 3M’s applications and marketing Pint recalled. The start-up of what later became 3M expertise means we’ll be able to bring products to mar-  — Te lecom million business in —  about an ket faster than ever before,” Brullo told a Twin Cities began with what Pint called “an incredibly simple plan” 2 3 3M is a leading 1-3 supplier of connecting, splicing, insulating and protective products for the electronics, tele- communications and electrical markets.

191 183 Divide and Grow — Follow the Technology written by the two men. “It was classic 3M at its best,” in project funding and he agreed to the plan on April  , Pint recalled. “We had high-level sponsorship in Wayne,  , recalled Pint. “He left us alone,” said Pint. “After who trusted us and welcomed new ideas. He encour- about nine months, he came to us and asked, ‘How long aged us to look at how 3M could build a market focus is it going to take to prove that what we did was right?’ on communications and electronics combined.”  I said, ‘By the end of this year, we’ll have million to At the time, the businesses were worth no more than  million in business and we’ll be off and running.’ million. “We had connectors and insulating products  yne believed in the business and he put up the money. Wa and tapes and splice closures for the electrical industry,” The market was dynamic; it had a lot of unknowns, but said Pint, who went on to become group vice president, he trusted us and believed 3M had a big opportunity.” Telecom Systems. “We had technology breakthroughs By following the technology wherever it led, that in connecting small gauge wires for electronics and embryonic start led to a huge business. From originally telecommunications. We had splicing plastic that was offering a few tapes and simple copper connectors, the insulated for telephone cables and something new — 3M telecommunications business has expanded into flat ribbon cables with multiconductor connectors that products across several markets by applying , about   could be used in the emerging computer industry. But, the many innovative technologies available. In addition this was the  s and there wasn’t much computer to inventing one of the first multiple copper splicing business. We figured we could cover the market with systems and the first multiple fiber mechanical splicing to  sales reps, four sales managers and a small  system, 3M products help deliver transmission signals staff in St. Paul with a little bit dedicated to R&D.” to people’s homes through the switches that send those Carter and Pint asked Bollmeier for about million  signals. At their best, 3M divisions are entrepreneurial and focus on ● their customers. A “loose-tight” philosophy of management balances entrepreneurial ● action and corporate consistency where it matters most. 3M’s “divide and grow” tradition is the catalyst behind ● business growth. “White spaces” are the untapped markets with promise that 3M ● has not yet entered. time-tested truths Renewal and re-creation are fundamental to the 3M culture. ●

192 Pollution Prevention Pays Long-term investment in South Africa, Asia Pacific An enduring culture around the globe Good corporate citizenship

193 r o l e m 12 o d e Defining Moments l o Strengthen 3M’s Culture f 3M has always been committed to corporate integrity. i This important attribute has been tested over the years n when the company faced numerous challenges. While n ev — en devastating at times — the incidents were difficult o in each instance, 3M emerged stronger. “Doing the ● right thing” has defined 3M’s character again and again. v That has always been the case, even when there were a plant accidents, business divestitures, environmental t issues, and political and economic challenges i o around the world. n

194 Chapter 12 186 Corporate core attributes and values combine to Lawrence, vice president, Personnel, told the Dispatch. — big and small, day after day. They influence decisions “We were determined not to make them dependents, establish the guidelines for how a company and its peo- but to help keep them on an even keel and restore their ple will act. Over time, 3M’s decisions and practices lives as close as possible to what they were before the have underscored a commitment to “doing the right explosions.” — thing” not the easy, expeditious or less costly thing. The company quickly made sure that workers’ com- pensation and insurance payments, as well as company benefits, were paid to the survivors. 3M also contacted > The Day “the Mining” Blew Up the U.S. Office of Social Security to speed up payments.  a.m. on Thursday, February  :  At , a massive  , Since the day after the blast was a payday, a special pay- gas explosion rocked three 3M buildings at the corner master’s window was created to distribute wages on time. of Arcade and Fauquier Streets on St. Paul’s East Side. million  Damage to 3M property totaled about  ,  About 3M employees had just reported for work. but settling that claim was a distant second to caring for The explosion started in Building  , a six-story struc- 3M people and their families. “The company just took ture where minerals were crushed and treated in ovens care of people,” said John Pitblado, branch sales man- heated with butane. The blast swept through under- ager, Los Angeles, at the time. Pitblado later retired as ground tunnels and damaged a neighboring tape pack- president, U.S. Operations. ing plant as well as 3M’s main office building. Fifteen others were injured in St. Paul’s  people died and worst disaster. Two sides of the minerals building were Pollution Prevention Pays and Pays and . . . > wn out and employees were pinned under falling blo s would prove to be a massive test of 3M’s  The floors, walls and ceilings. corporate culture and resolve. That was when environ- “Mobilizing its forces quickly,” the St. Paul Dispatch mentalists and the federal government took aim at newspaper reported, “the company assigned one man long-standing, approved environmental practices used to each victim’s family to work with them as long as American companies. When Rachel Carson’s book, by  emergency fund was set up to pay  , necessary. A , it began to raise  “Silent Spring,” was published in for taxi fares to hospitals, baby sitters, transportation the nation’s collective awareness to the dangers of water of relatives from out of town, telegrams to survivors, pollution. Millions of people across the country marched funeral costs and whatever else was needed.” to call attention in the country’s first Earth Day in  3M also created an emergency aid committee. “The to environmental concerns. And, Congress passed the idea was to help families re-establish themselves,” Ivan Clean Water Act. 1 Chapter opening photos 3M Visiting Wizards share their enthusiasm for science with children at area events; 3M helped fund the new Science Museum of Minnesota and has had a relationship with the museum for many years; Elementary students, like this one, write thank you notes for the school supplies they received through a program developed by 3M, known as Stuff for Schools; The Pollution Prevention Pays (3P) program began in 1975 with a goal of reducing the source of pollution in 3M products and processes, while saving the company money.

195 Defining Moments Strengthen 3M’s Culture 187 After the Clean Water Act was passed, 3M realized but the climate was oppressive. “My wife and I had it needed to address all three parts of the environmental many special privileges . . . But, this was not our China,” equation: air, water and waste. For 3M, the biggest Ling said. “Everyone was suspicious of everyone else. issue by far was air emissions because hundreds of the Everyone carried a notebook. Everyone was afraid to company’s products required solvents during manufac- speak.” The Lings left China for the United States and turing. In many cases, the only way to eliminate solvents Joe Ling joined 3M. was by developing completely new manufacturing “Like most American companies, 3M was just begin- methods that did not require their use. The search was ning to grapple with water issues,” Ling said, “water on for alternatives. for air conditioning, water for boilers, water sources for Technical people were encouraged to eliminate or manufacturing and handling wastewater. 3M had lots replace the solvents that they had used for decades. The of chemical engineers but only one environmental engi- million annually to R&D  company devoted more than neer, me.” Unlike other companies, 3M, under Ling’s efforts relating to just this issue. Because 3M recognized direction, chose to adopt environmental policies that the benefits of pollution prevention early, it soon was  far exceeded the letter of the law. In , Ling and fel- ed as a leader in this arena. view low 3M engineer Charles Kiester, who later retired as hiring 3M’s leadership was due, in part, to the  senior vice president, Engineering, Manufacturing and of its first Ph.D. engineer who specialized in what was  st Industrial Waste Logistics, presented a paper to the then called “sanitary engineering.” Joe Ling came to Conference and advocated a carefully planned waste Minnesota from China in  to earn an advanced reduction program in addition to a waste disposal system. degree. Ling wanted to focus on municipal engineering, When Ling appeared before Congress as it was craft- but there was no such program at the University of ing its first clean water bill, he advocated “a total envi- Minnesota. His advisors encouraged him to design the ronment concept” that focused on more than water first degree in sanitary engineering, and Ling ran up  alone. He explained to Congress that it would be counter- “My advisors course credits instead of the required . productive to mandate a zero-pollutant discharge into were so proud of their new major that they kept asking the nation’s streams because moving to this level would me to take more courses,” he joked. create more pollution elsewhere than it would eliminate. Ling and his wife, Rose, returned to China to help At 3M, Ling authored a comprehensive program in their country cope with its primitive conditions, but the that he called Pollution Prevention Pays (3P). The  Communists had taken over the country prior to their goal was to eliminate or reduce sources of pollution in return. The Lings were treated well in their homeland, 3M products and processes rather than clean it up later. 2 3 4 Rescuers rush an injured 1 employee from the scene of a 1951 gas explosion at the 3M Minerals Building. An early Pollution 2 Prevention Pays (3P) 3 Tom Baltutis brochure. tests water samples at the 3M Cottage Grove, Minnesota, 4 3M employees in plant. Argentina recycle waste that results from the manufacturing of respirators.

196 Chapter 12 188 Pays was a critical element. Ling — — The third P  mental conference in , Ling could already believed that without a pay back there was no  point to 3P projects at 3M that had elimi- real incentive to change products or processes  , nated  million gallons of wastewater,  that were easy to use and worked well, even , tons of air pollutants and  tons of sludge.  if they contained pollutants. Ling’s ideas were By , when Bob Bringer succeeded Ling  radical for the era, but he caught the ear of Ray as vice president, Environmental Engineering Herzog, then 3M’s chairman of the board and and Pollution Control, he estimated that the 3P CEO. Both men shared the philosophy that it million  — program had saved the company would cost less to reduce or eliminate pollution a conservative estimate because the sum was — at the source rather than trying to clean it up 3P  , based only on first-year results from  afterward. When Herzog gave Ling the okay projects. Together, these projects had reduced to proceed with 3P, it became one of the first 1 environmental programs of its kind in the world According to our chairman of the board and launched by a major manufacturing company. CEO, Allen Jacobson, all new air pollution One early example was striking. 3M engineers control installations will be judged not by return replaced a proven, solvent-based manufacturing process with a water-based system for applying adhesive to on investment but by their technical acceptability Scotch Magic tape. That change eliminated millions and environmental benefit. > Bob Bringer r etired of pounds of air discharges and significantly reduced staff vice president, Environmental Technology and Services pollution-control costs. With savings like that, Ling quickly gained a wide audience for his approach. When he spoke to an environ-  , , tons, water pollutants by   air pollutants by  tons, and waste- tons, sludge and solid waste by  ,  water by  .  billion gallons worldwide. We had a commitment to continuously reduce Opera- , 3M’s Taking an even stronger stand in  tions Committee, the senior leadership of the company, our impact on the environment. The world is a approved 3P Plus, a voluntary plan with a clear message: very small place and pollution doesn’t respect “With or without cost savings, we will spend what is national boundaries. r > Joe Ling etired vice president, necessary to protect the environment.” A major invest-  million gave teeth to the message. ment of Environmental Engineering and Pollution Control 2 3M’s innovative 3P 1 program was a winner of a 1996 Presidential Aw ard for Sustainable Development. A system developed 2 3M engineers reclaims by more than 95 percent of a solvent used at the 3M Greenville, South Carolina, facility.

197 Defining Moments Strengthen 3M’s Culture 189 Over the years, 3M’s focus on the environment also Environment Center and America’s Corporate began to embrace the company’s long-standing world- Conscience Award from the Council on Economic wide effort to reduce workplace injuries and illness as Priorities; the 3P program won the first U.S. President’s well as a pragmatic belief in sustainable development — Sustainable Development Award; and, in Germany, 3M producing products with fewer environmental, health was ranked second in the world for “eco-performance” and safety effects. By , the project that Ling started  among the largest chemical using companies.  in million and pre-  had saved 3M more than  billion pounds of pollution through  ,   .  vented > An Unpopular Decision Proven Right and programs. Between   , the company has “To a growing number of multinational corporations, reduced its volatile organic air emissions by percent,  South Africa is like a piece of flypaper,” one business cut its manufacturing releases to water by percent  reporter observed in  . “It can hardly be overlooked. and reduced its solid waste by percent.  It tends to be pesky and it certainly is sticky.” One unanticipated off shoot of the environmental  3M had been in South Africa for years when a program has been the development of new products that small, but vocal, group of shareholders pressured the were only possible because of the company’s new sol- company to stop doing business there because the coun- ventless processes. Film polymers in paper-thin sheets try was segregated and run by a white minority in a system called “apartheid.” Many American companies  left South Africa in the mid- s and others heard Sustainable development meets the needs the same resolution posed at their annual meetings. of the present generation without compromising “It’s a complex question,” Robert Adams, retired vice the needs of future generations. > Joe Ling president, Research and Development, and chair of the company’s Corporate Social Responsibility Committee, that transmit and reflect light are among many technolo- said in answering an angry shareholder at 3M’s annual gies that have emerged. These brilliantly colored mirrors . “We certainly share the views of  meeting in May er have been created produced from polymers might nev the proponents to eliminate racism in South Africa, but if the process had involved solvents. By not using sol- differ on how it should be done.” we vents, technical employees have often found it easier to 3M was among the first American companies to  get products developed and out the door. adopt the Sullivan Principles in  , a voluntary code 3M received the first annual Gold Medal for Corpo- in which the companies pledged to practice fair and rate Environmental Achievement given by the World equal employment practices as well as contribute to the 4 3 3 3M created an education and training center in South Africa to speed minority advancement in the company. 4 For more than a decade, 3M South Africa’s Health Care business sponsored a program known as Move to Mobility that provides guide dogs, wheelchairs, walking sticks and mobility instructors to help people in rural areas.

198 the large number of college y the early 1980s, there and university professors were concerns about B based there, plus the “brain 3M’s concentration of all its trusts” of Motorola, Texas corporate of ces in Minnesota Instruments, IBM and Dell. with no signi cant locations 3M moved businesses elsewhere. 3M leaders also involved in industries such believed that Minnesota’s as telecommunications, elec- business climate discouraged tronics, semiconductors, expansion within the state. ber optics, electrical trans- After 80 years in Minnesota, mission and distribution, 3M began to look at new tion, a place where we could pilot and corrosion protection to potential locations for some new ideas and test them,” said Austin. Some were native of its businesses. The Move South Backlund. “Because St. Paul businesses, others Austin, Texas, looked it was smaller, it was easier to had been acquisitions, such appealing for 3M’s new start and try new things.” as the California-native research and development Ed Scharlau, who specialized Dynatel Corp. or the Austin- campus. “The governor of in helping 3M families relocate based APC Industries, both in Texas believed that the ‘new to new cities and countries, was product niches of the growing Texas’ should focus on tech- the r st 3Mer to move his family telecommunications business. nology, rather than our tradi- to Austin in 1984. “The challenge Bob Backlund, now retired, tional industries, agriculture in Austin was to move people a 3M employee since 1953 in and oil,” said Russell Bridges, and keep them whole as much plant operations and manage- who worked with Governor as possible,” he said. If a 3M ment, participated in the design Mark White and later joined employee was considering the of the 1.7 million-square-foot 3M. “3M wasn’t having great move, the r st step was a three- center with nine intercon- success getting people day, fact nding trip to A ustin necting buildings on 158 from warmer climates with a welcome reception, tour acres. The labs were all on to relocate to Minnesota of the city and dinner with 3M the same level with walk- and the engineering Austin’s leadership. Families ways and informal seating schools at the University learned about the housing mar- areas designed to spark of Texas [Austin] and Texas ket, schools and cultural attrac- spontaneous conversation A&M had a lot to offer.” tions. Because the country was and idea sharing. A huge After considering 22 in an economic recession and open atrium created with 3M different cities in America’s mortgage rates were high, 3M fresnel lenses captured light “sun belt,” Austin was helped ease nancing costs. and brought it into the build- chosen. “3M wanted to If employees didn’t want the ing. Interior colors of green, create a combination of the bur den of selling their homes, yellow, red and turquoise gave Texas culture and the 3M 3M offered to purchase them. the spaces visual energy. A culture,” said Larry Joines, A special program helped pioneering, holistic wellness now retired, a 3M employee spouses nd ne w jobs and program called Lifestyle 2000 since 1952, who handled vo lunteer opportunities. A 3M had its start there. The center community relations. Austin “friends club” offered recommen- had high-speed communica- was considered a sanctuary dations for baby sitters, lawn tions lines and sophisticated for people who wanted a services and orthodontists. videoconferencing equipment more informal lifestyle. to help shrink the distance to Locals saw it as one of the St. Paul and other 3M loca- friendliest and prettiest tions. “Austin was designed cities in Texas with the high- to be an incubator for innova- — est level of education given

199 Defining Moments Strengthen 3M’s Culture 191 progress of black South Africans in the workplace and per-  returned. When that occurred, 3M was in the top community. cent of South African wage payers; the percent of people 3M South Africa was one of the first companies to of color in management had increased to percent;  integrate its workplace, even though local laws required and the company’s goal was to increase that number segregation. The company’s first full-scale cafeteria built  , nearly  percent of all managers even more. By for employees in the mid-  s was also integrated — and professionals were people of color. By staying put, another radical step. To help speed the advancement of 3M South Africa became known for fair and equal treat- blacks into higher level jobs, 3M South Africa created ment and for supporting the emergence of a new society.  its own education and training center in .  s, most American companies had By the mid- > Thinking Long-Term bowed to shareholder pressure, but 3M was among the This same willingness to remain when times were tough few that stayed in South Africa. “We believed that our served 3M well in the Asia Pacific Region when a dra- aggressive effort to help blacks would ultimately prove matic economic downturn in that region and depreciating more effective than pulling out of the country and for-  . For currencies hit the company hard in  and  ,  saking our employees there,” Jim Thwaits, retired more than  years, 3M had operated in the region and president, International Operations, said. “By with- it had strong market positions. The region represented drawing, we would have eliminated an opportunity to percent of 3M’s total interna- .   billion in sales and  influence change.”  tional revenues in . As months passed, however, it Donn Osmon, now retired, then vice president, became apparent that the economic weakness in Asia Marketing and Public Affairs, was assigned to coordi- was deeper and more widespread than anyone expected. nate the company’s activities in South Africa during this controversial era. “We had boycotts against us, and Our goal is to be sustainable in countries that started to lose some business. The losses grew when we customers withheld their orders because of our decision have a meltdown. It takes rigorous attention to stay,” he said. “Our employees needed reassurance and action. We know how to do it and we that we weren’t going to leave. I met with church groups do it well. Our employees and our customers opposing our position. It wasn’t pleasant, but at least in those countries value the fact that we’ll be they could understand our side when we said our employees had full careers in South Africa and most around. retired executive vice president, > Ron Baukol had their pensions built up. How could we walk away International Operations and dump them?” Osmon remembered several highly lucrative offers made by large local companies to buy 3M South Africa, Wall Street was impatient with 3M’s performance but the 3M Board of Directors’ answer was “No thanks.” and some observers suggested that the company should “The whole decision boiled down to the economic wel- reduce its vulnerability and step back from Asia. But, fare of our employees and their families.” Chairman of the Board and Chief Executive Officer major American companies, 3M was among  L.D. DeSimone stood firm. “We have the ability to with- including Kodak, General Motors, Control Data, Honey-  stand difficult periods and we must,” he said in . well, Coca-Cola and Ford, that signed ads in South “It was a steep, weighty problem for us, but we demon-  pledging to “play an active African newspapers in strated that this company takes a long-term view. We’re role” in ending apartheid. part of the Asian economies and we’re tough enough to Ultimately, 3M was proven right when South Africa go through a rough period and come out stronger.” and a  gained its independence from apartheid in large number of companies that had left the country Background: Volition multimode fiber optic cable

200 or 30 years, Jerry Cederholm has had a glimpse of 3M’s F culture from a unique vantage point. As a security guard, Cederholm has walked the halls of 3M at all hours of the day and night. He’s elded phone calls; reported leaky roofs; shut off Bunsen burners; responded to alarms; and greeted execu- tives, politicians, entertainers and athletes visiting 3M Center in St. Paul. In recent years, Cederholm has been the r st 3M employee most visitors to 3M Center meet. In hot or cold weather, he works in the guard shack greeting those who ask to park in the visitors’ lot that is surrounded by the four administrative buildings. Cederholm has noticed the quirks in 3M’s culture of innova- tion. “I really respect the scien- tists,” he said. “Some of them are a bit eccentric. I remember one fellow who kept his black dial phone long after we had push think 3M should ever stray from button phones installed in the nametag had expired. Cederholm McKnight’s values.” labs. He had a corner cubicle that politely but sternly asked the Comedian Red Skelton was was piled high with papers. He man to wait, while Cederholm Cederholm’s favorite celebrity must have crawled over a table called the front desk at 3M Center visitor. “He came for an anniver- to leave his of ce .” to con rm his decision. “I told sary event and took an informal 3M is still a family company, Dorothy Fisher his name was walk around 3M Center,” Ceder- Cederholm said, but its size is John Ordway,” said Cederholm, holm said. “He was telling jokes challenging. “There’s so much a native of Wisconsin who then and people were buckled over in products, in the diversity — had little knowledge of 3M’s his- with laughter. He kept shaking number of projects the com- tory. “She said, ‘For crying out employees’ hands and saying pany’s involved in, with people loud, let him in! He’s on the ‘Sorry, Mr. Ordway, Your Nametag has Expired’ ‘thank you.’ ” Governors, city taking assignments all over the board and he owns half of 3M.’ mayors, Olympians, President world,” he said. But, even with Mr. Ordway was so nice about it; Gerald Ford, NASCAR drivers, all the change, the McKnight he never made an issue of it. He even professional wrestlers have in uence is palpab le. “His spirit promised he’d get a new ID, too.” been guests at 3M. is still here,” Cederholm said. Then there was the distin- “McKnight and 3M are synony- guished man wearing a suit mous. It feels like he might come and walking fast to a meeting. in any day and look over my Cederholm was new to the com- shoulder. I know we’re operating pany and he noticed the man’s in a changing world, but I don’t

201 Defining Moments Strengthen 3M’s Culture 193 ership is welcomed. When 3M employees show poten- At its Heart, a Strong Culture > tial, they can expect broad responsibilities and multiple, In 3M’s most challenging times, the company’s culture varied assignments in their careers. The most effective has been tested and remained strong. The plant  leaders within 3M understand the value of teamwork, explosion brought out 3M’s compassion for its employ- they promote openness and cooperation, and they ees and their families. When 3M was criticized for actively share information and knowledge. Remarkably, harming the environment, the company became a leader whether a 3M employee is based in Finland, Japan, France, the United States or  other countries around McKnight did not want the evolution and the world, they share the same values with their col- expansion of the company to depend only on leagues oceans away. Some observers have said that this himself. He wanted to create an organization shared belief system — — combined with cultural diversity comes from international assignments that move people that would continually self-mutate from within, out of their home countries. impelled forward by employees exercising 3M promotes a close-knit, caring, family-like atmos- their individual initiative. > James Collins and phere. Given its considerable size, this description may authors of “Built to Last” Jerry Porras seem like a contradiction, but it is not. 3M tries to hire people for a career not just a job along a path of many corporate jobs. In fact, even in an era of “job-hopping,” in pollution prevention. The company chose to be part 3M’s turnover rate is among the lowest of America’s of the solution, rather than a contributor to the growing, global problem. 3M believed it could also be part of a solution in South Africa and it did not bow to consid- Although 3M’s leaders could never predict erable public and shareholder pressure to leave the where the company would go in the future, they country. By remaining there, 3M put its South African had little doubt that it would go far. It became employees and their families first. Similarly, when a steep economic downturn plagued Asia, 3M remained a ticking, whirring, clicking, clattering clock with committed to being a long-term participant in the econ- a myriad of tangible mechanisms well aligned omy of that region. to stimulate continual evolutionary progress. William McKnight imagined a “flat” organization > James Collins and Jerry Porras decades before the concept was a popular business model. His philosophy led to tenets of the 3M culture companies. From its early days, 3M demon-  tune For that employees and observers of the company repeat like strated loyalty to its employees. In the depths of the Great a mantra: minimal hierarchy, intentional informality, s in America, 3M was able to Depression during the  strong support for creativity and innovation. People are avoid laying people off, when most other companies did. trusted to make the right decisions on their own and The company gives its employees opportunities for they’re rewarded for taking initiative. Challenging lead- career development and a variety of assignments that broaden them. Similarly, for decades, the company has You can walk into a 3M plant anywhere in had a promote-from-within policy that gives people the world and you know it’s 3M. Each plant with ambition a wide range of job choices. When Edgar Ober, president, started profit sharing has its own local habits and customs, but , and McKnight instituted a pension plan for  in at the end of the day, people share the same employees in  and an employee stock purchase belief in McKnight’s principles. > Neal Kurzejeski , they were ahead of their time on all three plan in  counts. McKnight was convinced that 3M employees who has spent more than 20 years in 3M manufacturing Background: Scotchlite Diamond Grade reflective sheeting

202 Chapter 12 194 were much more likely to be loyal and spend their support and education focused on child care, long-term careers with the company if they had a tangible stake care, elder care, insurance options and a survivor support in the organization. Equally important, McKnight and program for employees who lost loved ones. the leaders who followed him believed that people gnized for their contributions. That’s needed to be reco Good Corporate Citizenship > y the company has a plethora of award programs that wh Raised on a small, South Dakota farm and the son of a honor individual, as well as team, initiative and success. community activist father, McKnight had a strong belief in giving. He made sure that his company was a solid corporate citizen and that it supported worthy local People who have benefited from 3M’s culture causes. McKnight also believed that 3M’s community have moved a number of times and worked their involvement would make its employees feel proud of their company and more connected to its broader goals. y up. I’m one of them. wa plant manager, > Ken Bothof  In , 3M was one of the first companies in 3M Nevada, Missouri, plant Minnesota to create a corporate foundation. This formal commitment to community giving ensured that the money would be there for years to come, regardless As the 3M work force changed and life demands on of economic fluctuations in the marketplace. Along employees and their families increased over the decades with cash contributions to education, health and human th century, the company worked to be attentive  of the services, 3M has given numerous product donations as one of the first companies in to those changes. 3M w each year and put great emphasis on employee volun- Minnesota to start an Employee Assistance Program, teerism. In fact, a recent study of 3M volunteerism in  . And, in the  s, the company focused on how the University of Minnesota Carlson School of by more women and minorities could advance their careers and become leaders. When economic recessions rocked American compa- Mr. McKnight was a man with a golden heart. nies, 3M gave employees whose jobs were eliminated time to find a new job within 3M. And, if that effort was He felt very fortunate about what happened in unsuccessful, they were offered outplacement services his career and he wanted to give that benefit and a severance package. By the  s, when two-career back. > Don Larson etired president, 3M Foundation r couples and care for elderly parents became more com- mon, 3M created a Work and Family Department to offer and Community Affairs 1 2 1 Denise Loving, 3M information analyst, is one of the many 3M employ- ees who tutors students at St. Paul area schools. 2 Frank Junghans, a retired 3M chemical engineer, donates his time and skills to Habitat for Humanity through 3M Community Action Retired Employee Services (3M CARES).

203 195 Defining Moments Strengthen 3M’s Culture  Management found that more than significant presence, for example, Austin, Texas, and Detroit, Michigan. percent of the company’s employees give volunteer time in a year and the 3M’s corporate giving emphasizes its long and deep relationships dollar value of these gifts of time in communities. The company’s  and energy exceeds million. Half of the foundation’s cash involvement with the Minnesota Historical Society (MHS) began in the funding remains in Minnesota with s when Marshall Hatfield,  late the focus on education, human services, a research chemist, was pursuing a arts and the environment. In the educa- personal history project. He discov- tional arena, funding is directed prima- rily toward higher education, particu- ered that some of the oldest items in the society’s collection were cap- larly at colleges and universities where 3M recruits new employees. tured on eroding glass plate negatives. Hatfield 3 put the MHS in touch with experts at 3M who knew how to preserve them. That chance encounter ultimately We have a responsibility to be a good citizen wherever 3M operates. > Harry Heltzer We needed to raise $14 million from the retired chairman of the board and CEO community and 3M’s gift was like the Good One key beneficiary has been the University of Housekeeping Seal of Approval. > Nina Archabal Minnesota. 3M supports three endowed chairs at “the director, Minnesota Historical Society U.” In addition, in anticipation of the Century of Innovation celebration, 3M contributed million to  the university to help support its future development. led Hatfield to become president of the MHS board in The money is designated to programs that enhance million “anchor gift” from 3M helped  . Later a  teaching and learning. fund construction of a new Minnesota History Center Half of the Foundation’s giving involves disaster in St. Paul. relief and matching gifts tied to employee contributions MHS is the second largest holder of corporate percent focuses on and volunteerism. The remaining  archives in the United States and 3M gave MHS a geographic areas of the United States where 3M has a  ,  grant to preserve and maintain 3M’s historical 5 4 Each year 3M presents the Community 3 Volunteer Award to employees who donate time to area charitable organ- 4 3M recently contributed izations. $15 million to the University of Minnesota, so that students like these two will find teaching and learning enhanced. 5 A study done by the university’s Carlson School of Manage- ment found that more than 50 percent of 3M employees volunteer every year.

204 Chapter 12 196  , 3M has sponsored collection. Since has a budget for community an annual National History Day involvement and local employees at the MHS, a program that help decide which causes to support. encourages as many as  ,  At 3M’s Nevada, Missouri, manu- Minnesota children, grades facturing plant with approximately to  , to research and make  employees, the contributions from  presentations on science, the plant and its employees account technology and invention.  for , about one-third of the  , 3M also has a rela- community’s total United Way budget. tionship with the Science employees and ,  With about  Museum of Minnesota that spans three separate plants, 3M Decatur, more than  years. Along with an Alabama, is the largest employer in the 1 ,  annual gift of  beginning in  , 3M   area. The plants accounted for , million to the new Science Museum contributed .   to United Way in  , a combination of employee perched on the Mississippi River Bluff in St. Paul that pledges, retiree contributions, a  , corporate con-   opened in December . Volunteer Bob Barton, tribution, and a golf tournament that netted  .  , creator of 3M’s Visiting Wizards, has worked with the years. Other 3M volunteers help with museum for  We think of ourselves as a 3M family in our research on exhibits and new programs, technical train- small town. The spouse of one of our people ing for museum staff and the preservation of artifacts. on the production floor could easily be the Still other volunteers have served on the museum board including 3M executives Paul Guehler, Bill Coyne, Sunday school teacher or scout leader for my George Allen, Bob Adams and Ron Mitsch. 3M’s prod- children. Many of our employees are community uct contributions to the museum have included Panaflex volunteers. > Larry Johnson plant manager, 3M Knoxville, banners, multimedia and overhead projectors, Post-it notes with the museum logo, Interam wrap used during Iowa, plant building construction, Nomad floor mats and mainte- nance supplies. “Because we hire locally, we’ve worked with our community college to identify the skills people need to succeed in a job at 3M,” said Jim King, retired Decatur had a last-minute request during construc- We  , the college has made a major site manager. “Since tion. It was just wonderful being able to call effort to help us with production training, and we have people from our plant working on degrees in electrical 3M and ask, ‘Can we get some help?’ and the and mechanical technology. The college is expanding answer would always be, ‘We’ll go to work on it.’ its coursework and we’re getting the training support president, Science Museum of Minnesota > James Peterson we need.” King is proud of the lives that his employees have outside the plant. “Sandra Klack is a production In 3M’s plant communities, the spirit of giving really employee,” he said, shines. “We’re a company of people who care about our “and she’s won 3M’s 3M organized the first Stuff for 1 communities,” said Barbara Kaufmann, manager, 3M national Community School Program in 1995. By 2001, Foundation, Education Contributions. “We’ve always Volunteer Award two the program had expanded and believed in being good citizens and looking out for the years in a row for provided supplies to more than places from where we come. We want to work for good helping teen-agers 14,000 students in 29 St. Paul schools, healthy and safe communities.” Each 3M plant at risk.” public schools.

205 Defining Moments Strengthen 3M’s Culture 197 twin towers. John Becker, senior account representa- Over the years, 3M’s penchant for giving has tive, Occupational Health and Environmental Safety   , increased. 3M’s cash contributions grew from Division, slept in his van near the site so he could help in to   — the first year of the 3M Foundation — rescue workers. . Product donations also have steadily  million in By September  , 3M teams were in place in New risen to more than  million annually over more York City and Washington, D.C., to support the rescue recent years. Early in , 3M was awarded the Points  workers. “Our mission was to get the proper respirator of Light Foundation’s Award for Excellence in Corporate products to the right people in the shortest time,”  years of vol- Community Service in recognition of said Dirk Edmiston, regional sales manager. Behind unteer service by 3M employees. that simple statement was an all out effort on the East 3M employees have always been willing to rise to a Coast as well as St. Paul and manufacturing plants in pressing need, including the aftermath of terrorist attacks Aberdeen, South Dakota, and Valley, Nebraska. 3M on New York City and the Pentagon in Washington, D.C., respirators to rescue workers  ,  donated more than . 3M employees from New York on September  ,  at both disaster sites.” City and New Jersey assisted rescue workers at “ground the World Trade Center’s zero,” the site of the collapse of At the foundation of 3M’s culture are critical attributes that influence ● big and small. — decisions 3M is committed to “doing the right thing” not the easiest or ● least costly thing. ● A “culture of caring” for employees is a major tenet of the 3M culture. ● Integrity is imbedded in 3M’s culture. 3M leadership is willing to take and hold an unpopular stand ● if it believes it is the right thing. time-tested truths ● 3M takes a long-term view in the economies where it has a presence. While culturally diverse, 3M employees around the world share ● the same core values. 3M has always believed in being a good corporate citizen. ●

206 The rise and fall of the copying business Magnetic media: from pioneer to commodity Challenging Eastman Kodak The Imation spin-off

207 r o l e m 13 o d e l A Culture of Change o f Long before “reinvention” became a buzzword of American i business, 3M already had made change a central part n of its corporate culture. Many say the company’s success n over the years is linked to its ability to change as 3M, o its products and the world marketplace evolves. In fact, , when the company greeted the new century in  v more than half the businesses that were 3M staples a years before had disappeared from the corporate  t portfolio. ● On the surface, eliminating a product, i o a project, even a division or more, might seem n an admission of failure in business. But, that

208 Chapter 13 200 analysis would be superficial and incomplete. Over the 3M even has shed businesses in industries it actually years, 3M has worked to make its own products obsolete created when those ventures matured or changed so — before its competition does or the protection of crucial much that they no longer fit 3M or delivered the returns patents expires. 3M also has acquired companies with they once did. New competition often has been a factor an eye on strengthening a core business. Some of these in these tough decisions. For example, Xerox plain acquisitions have succeeded, while others failed to yield paper copying ultimately eclipsed 3M Thermo-Fax the expected product synergy or financial returns. For copiers, the first dry copying system in the world. 3M example, 3M acquired National Outdoor Advertising  invented magnetic audio and video recording in (later called National Ad), believing that bill-  in and led the industry for decades before the business boards would be natural venues for miles of Scotchlite reflective sheeting. Years later, even though National Ad Ye s, there were mistakes made. You work — strong product produced strong revenues, the real goal with human beings and you’re going to make — synergy , 3M sold the  hadn’t materialized, so, in mistakes. > Ken Schoen r etired executive vice president, business. 3M Information and Imaging Technologies Sector In , 3M sold its cardiovascular and orthopedic  surgical products businesses valued at approximately million when it became clear that 3M had no com-  became a low-price, low-margin commodity product in petitive advantage in an industry that favored suppliers  the s. 3M also invented the world’s fastest, high- with broad, deep product lines. In many cases, even speed, digital fax machine, but the product was ahead though a business is exited, it leaves behind technologi- of its time, and 3M chose not to capitalize on the idea, cal know-how that is valuable years later. believing that consumer acceptance would be slow. In virtually every case, a product or business is shed when it no longer meets the rigorous financial expecta- 3M has an organic, living nature. Pruning  tions established in when William McKnight set is the natural, though difficult part of annual sales growth at percent and  continuous revitalization. Meanwhile, profit targets at percent.  new technology platforms become the seeds of future growth. r etired chairman > L.D. DeSimone of the board and chief executive officer 1 Carl Chapter opening photos Miller’s “Eureka!” came after he viewed a leaf melting into a snowbank, which demonstrated differential heat absorp- tion and led to the invention of thermog- raphy and 3M’s Thermo-Fax business; Imation floppy diskette; Scotch recording tape No. 101A. 1 National Outdoor Advertising seemed like a natural outlet for Scotchlite reflective sheeting.

209 A Culture of Change 201 The decision to eliminate a product or business always decided to spin off its data-storage and imaging-systems involves soul-searching and loss for 3M decision- businesses (with historical roots in magnetic recording makers and employees alike. In making these decisions, and photography). 3M reflects an element of its culture dating back to  Of all the businesses 3M has shed over its years, , when optimism and a can-do spirit prevailed over  the two, seminal decisions that people point to as most potentially fatal crises that threatened the very existence significant involved the sale of 3M’s Duplicating of the company. Products business to Harris Corporation in Atlanta, Alex Cirillo Jr., vice president, Commercial Graphics Georgia, and the spin-off of 3M’s data-storage and imag- Division, calls it the “MacGyver culture of 3M” (based creating a new company  ing-systems businesses in  on a s’ American television show): “We’ve always called Imation in Oakdale, Minnesota, near 3M head- — baling wire, believed that we can take what’s at hand quarters. The two decisions have several elements in and make something out of it, no matter — this and that common both involved businesses that 3M created — what,” he said. “We believe this in the beginning of and, in fact, ranked number one in the marketplace for projects, during projects and at the end of projects. We — largely decades. They were “homegrown” businesses do everything possible to make something work before created within 3M and commercialized and built with it’s cut loose. This is a good thing, not a bad thing.” the energy of many internal sponsors and champions. The businesses were risky because the products were based on pioneering technologies. They not only changed We need to have winning technologies, winning the basis of competition; they also created all new, products and winning business positions. global industries. The businesses were highly profitable And, if we don’t, we have to take tough action. for decades, and they represented a significant share of executive vice president, 3M Health Care Markets > John Benson the company’s total annual revenues. They also produced many of 3M’s next generation of leaders. Some observers have criticized 3M for the amount Deciding to shed these businesses also set major of time it takes to make a decision about “shedding” precedents. Until the sale of the Duplicating Products a business. The company kept National Ad in the fold Division to Harris,  employees never had left 3M for nearly years. Some say the very existence of  at once. While they were guaranteed jobs at the new Duplicating Products (home of Thermo-Fax copiers) company, they no longer were part of 3M. . The  was questioned well before it departed 3M in Even more difficult was the spin-off of 3M’s data- same observation was made a decade later when 3M storage and imaging-systems businesses, when , 2 2 Bob Dwan and Groucho Marx, of “You Bet Your Life,” listened to a recording on Scotch audiotape. Magnetic recording 3 and photography products eventually led to data-storage and 3 imaging products in the 1980s and 1990s.

210 202 Chapter 13 employees left to form a new company. At the same age , became the youngest general manager of a 3M   ,  time, another jobs were eliminated worldwide. division that created a brand new industry and generated Both decisions occurred in a  -year time span . billion in annual revenues by   when the nature and pace of business changed dramati- The story of the invention and commercialization cally in the United States and worldwide. A recession of Thermo-Fax copiers is a classic 3M innovation s, followed by voracious corpo-  began in the early model: create a product never seen before using new rate acquisitions in the mid-  s; then a stunning technology, grow that business through aggressive sales led to another recession market “correction” in  and distribution, lead the market for decades, exit the in America, financial losses, layoffs and a new term business when it has reached the end of its most prof- introduced to the corporate lexicon, “downsizing.” itable life cycle, harvest technological know-how and Many companies, including 3M, faced hard choices. apply it to new products. While some areas remained profitable, they didn’t meet In retrospect, some believe that 3M should have the company’s financial objectives. 3M’s decision to committed more research and development (R&D) sell the Duplicating Products Division prepared the dollars to “obsolete” its copiers and stay ahead of the company for the most wrenching decision in its history, competition that ultimately surfaced. Others have sug- a decade later. gested that 3M’s undisputed leadership led the company to underrate the impact of competition. Whether these perspectives are accurate or not, Thermo-Fax copiers and Ultimate Fall — The Long Rise > — of Thermo-Fax Copiers and the line of duplicating products that it spawned produced major, sustained profits over decades, acceler- When mechanical engineering ated 3M’s international growth and proved that the com- student Carl Kuhrmeyer grad- pany could successfully make and sell a product com- uated from the University of bining hardware (a copying machine) and a consumable , even this Minnesota in  product (coated paper). But, like most breakthroughs at ambitious grad didn’t see 3M, the path wasn’t easy or straight. himself occupying an executive s meant putting  Copying a document in the office next to William pen to paper, typing the document using carbon paper McKnight years   copies on the mimeograph or –  or creating later. But, that’s what Ditto machine, a process that produced less than happened, after perfect copies. Kuhrmeyer, at 1

211 A Culture of Change 203 But, that all changed when Carl Miller, a scientist that positioned the original document and copy sheet in 3M Central Research Laboratories, discovered the like mirror images. In addition to Miller’s Thermo-Fax . 3M’s  process that became Thermo-Fax copiers in process, the company’s patents covered each of these New Products Division in the fabled Benz Building three elements of the new copier. landed the assignment to transform his invention into , sales took off, and the Duplicating Around  a saleable product. There were about five projects being Products Division was born, with Ray Herzog, later explored at the time including an offset plate for print- named chairman and CEO, as its general manager and ing and a fluorochemical project that led to Scotchgard relentless champion. The division stayed in the Benz fabric protector eight years later. Building on the East Side of downtown St. Paul, where “We had to fight to get enough money to develop the people knew they were breaking new ground. “We were Thermo-Fax machine,” Kuhrmeyer recalled, “because separate,” Kuhrmeyer said, “so we were independent. no one was sure of the market. ‘Why do you want to We had freedom to do what we needed to do. That was do this; where’s the market?,’ they asked. We said, ‘We good because we were in a new business, very different think people are going to want to make copies of things from tape, abrasives or reflective sheeting. We were and it’s hard to do it today.’ We thought, here’s a chance plowing new ground and building thousands of copying to broaden 3M’s product line beyond tapes and adhe- machines a month. Making a coated product like tape or sives into something new and really make a mark on abrasives is quite different than making a piece of hard- the world.” ware. We had to hire different kinds of people to get the The development of Thermo-Fax copiers into a job done, and we built factories that were different from commercially viable product took a decade and an anything else in 3M.” million. Kuhrmeyer and a team  investment of about Through the s and  s, Duplicating Products  of chemists and engineers worked closely with Miller rapidly, because the Thermo-Fax machine had grew to create the first desktop copying machine, called the no real competition. While Xerox had surfaced by this Model  Secretary, in  . They overcame three, time, their plain-paper copier was, “bigger than a key technical obstacles. First, they needed a consistent, piano,” cumbersome and had a nasty habit of catching high-energy light source to shine across a sheet of on fire, according to Dick Lidstad, retired 3M vice pres- paper. They went to General Electric for that invention. ident, Human Resources, who began his 3M career in Second, they needed to build a reflector that would the Copying Products Division. The Xerox product was concentrate light into a narrow beam that crossed the  much more expensive at , per unit, compared to  paper’s surface. Finally, they had to create a mechanism  a Thermo-Fax copier that used a specially coated 2 3 A 1955 advertisement 1 for Thermo-F ax copiers. 2 A 1956 advertisement extolled the efficiency of the four-second copies. 3 Ray Herzog (right) and E.F. Boverman mapped out the market for new office products in the 1950s.

212 204 Chapter 13 paper sold by 3M. To counter the cost issue, Xerox Kuhrmeyer’s opinion, the power shift occurred when leased its machines and made money by charging about Xerox could tout permanent, plain-paper copies and 3M ½ cent for every copy a customer made. could not. Before long, other competitors, including The easily portable Thermo-Fax machine, dubbed Kodak and IBM, were pursuing the fast growing, lucra- “the down the street machine” by 3M sales representa- tive copying business. By this time, Kurhmeyer was vice tives, had broad appeal inside and outside the United — president of 3M’s largest division Duplicating Products. States. “Copying was a prime mover in helping us estab- lish our foreign ventures,” recalled Maynard Patterson, 3M was the market leader in tapes and a leading architect of 3M’s global expansion. “That was abrasives in the United States, but in other s when copying products’ sales  especially true in the were going wild and so was 3M’s international growth.” countries there were local competitors that led In fact, the first Thermo-Fax copier was introduced to the category. With copying machines, we won Europe in  , only a few years after its United States the business and the world beat a path to our debut. “The Thermo-Fax machine was a product that we door. That success generated cash flow 3M could sell in almost any country or city of the world,” said Kuhrmeyer. “After opening an office to sell copying needed to invest in global growth. > Ron Mitsch products, 3M then could introduce tapes and abrasives.” retired vice chairman of the board and executive vice president 3M was the undisputed world leader in copying  . In addition to copiers, the division  to from introduced the first overhead projector (the Thermo-Fax It wasn’t until the mid-  s that 3M introduced copier was the only one on the market that also made a copier that could compete with Xerox. “It took many , the division introduced a transparencies). By  millions of dollars to come out with a plain-paper copy dual spectrum dry copying process that produced an product and we were late,” said Kuhrmeyer. “We had .  improved image, followed by a color copier in percent profit on our coated- been making about a   , Xerox was nipping at 3M’s heels. It had By paper copiers. When a product is pulling in revenues developed smaller, faster, more reliable machines. like that, it takes remarkable judgment to admit that Japanese competitors had begun licensing xerography your product might, in fact, be obsolete.” In retrospect, and making their own copy machines. Xerox also Kuhrmeyer and others say that 3M should have pur- had targeted the larger volume markets, while 3M chased the Xerox technology when it had the chance had focused on smaller markets, such as schools. In  years earlier. 1 3M copying products were sold 1 around the world. In 1970, a 3M employee trained distributor employees to service a 3M copier in Dakar, Senegal.

213 A Culture of Change 205 Harris, in  , and, about three years later, 3M sold We w ere trying desperately to develop another  3M employees joined its share to Harris. About thermography product that would compete with their new employer. With the departure of Duplicating xerography. We introduced a lot of machines Products, another 3M employees found their jobs  ,  eliminated. To find new opportunities for these people, with a lot of different technologies. It was like 3M created a company-wide early retirement package, searching for the Holy Grail. > Dick Lidstad  or older to retire with enhanced allowing people age retired vice president, Human Resources people took  benefits and a separation bonus. About ,  found new positions at 3M. that option, while  3M’s dual-spectrum product competed head to head s, when the competition with Xerox until the late  Recognizing that we had lost our ability to finally pulled ahead for good. compete and offer a distinctive and unique “There is a life cycle for every product and that is product was really hard for 3M. > Dick Lidstad one of the hardest things for management to recognize,” said Kuhrmeyer. By , 3M was no longer the market  leader and Duplicating Products was not producing uilt a tremendous business. The thought We ’d b the  percent operating profit expected of established that we were now failing wasn’t easy to take. divisions. This was adversely affecting other parts of r > Ralph Ebbott etired vice president and treasurer 3M’s operations. “There was pressure to find a solution,” recalled , was general manager of the  Lidstad who, by “It was hard to accept,” said Kuhrmeyer, “but you Business Communication Products Division. While 3M have to recognize reality. Every product has an end. had a foothold in the fax business, Lidstad told manage- There aren’t too many products that continue for ,  ment that the Japanese “owned” the business and 3M  ,  years.” had no unique product advantage. For decades, Thermo-Fax business and its “product progeny” had a mostly profitable and glorious ride. One of the biggest mistakes the company made > Magnetic: First a Pioneer, Then a Commodity was not working with the people who began The fortunes of war, a singer’s desire to prerecord his network radio show and 3M’s commitment to a new Xerox. We turned them down twice because their research and development program all combined in the idea didn’t fit our b usiness model. 3M made most  mid- s to revolutionize the recording industry. This of its money selling sheets of coated paper. We fusion of seemingly unrelated events gave the world the couldn’t imagine a copy machine business with- first commercial magnetic sound recording tape, Scotch .  , in  No. out consumables and only clicks on a copying s, a Danish engineer, Valdemar Poulsen, In the  machine counter. > Ron Mitsch had successfully invented a recording device that used wire to store magnetic impulses that could reproduce Lidstad hunted for a joint venture partner for the  sound. For years, others tried to refine this idea. fax business so 3M could derive some benefit from its A major breakthrough came during World War II leadership but with no success. Meanwhile, the idea when U.S. Signal Corps officers monitoring late night of a joint venture for Duplicating Products looked like German broadcasts realized the programs must have a timely, pragmatic way for 3M to ease out of the busi- been prerecorded. But, how did they do it with such ness. The company struck a deal with its distributor, lifelike sound? The Germans had perfected a recording

214 Chapter 13 206 coat a lot of cellulose Both our duplicating products and magnetic acetate film and we cer- businesses were huge technical and business tainly slit a lot of film, successes. In copying, we just didn’t go to plain so I thought, we ought to be able to do it. paper in time. We had a 50-year run in magnetic At least we ought to tapes, but the trouble was our technology was take a crack at it.” overcome by other types of recording media This new project sur- selling at lower cost and lower margins. faced when 3M’s electrical tapes were major products demanding front-and-center > Paul Guehler senior vice president, Research and Development focus: “We had to bootleg our work on magnetic tape — and justifiably so — because we were under pressure to take care of the ground we’d gained on competitors machine called a Magnetophone that produced high-  different electrical tapes,” with our fidelity recordings on magnetic plastic tape, instead Tierney, who retired as vice of wire, at a quality level never before heard. president, Reinforced Plastics The U.S. government was aware of this technology Division, said. He kept the proj- and 3M got its chance to experiment with making ect going by announcing that : “We had an even better magnetic tape in  Mel Hegdahl would be the our first exposure when the National Defense “number one guy charged Research Committee asked us if we could with the technical respon- produce magnetic oxide-coated acetate film sibility for helping to bring and slit it in quarter-inch widths out this new product — a mile long,” said Hugh magnetic tape.” The 3M team Tierney, vice president, used black iron oxide, refined Tape Research and from binders used in making Development and sandpaper, and a gray, vinyl Manufacturing, at the treated backing. It worked time. “We claim to well, even though the 3M be coating experts team had no machine on and we certainly 1

215 A Culture of Change 207 which to test samples. In addition, the backing solved manufacturers to create magnetic tape expressly for coating and slitting challenges that were more difficult their equipment. than any they’d ever encountered. Within a few months,  In , 3M formed its Magnetic Products Division 3M had already improved upon its first product. and, with audio recording tape a resounding success, About the same time the 3M team was inventing work had already begun on videotape. As early as ,  the world’s first commercial magnetic tape, John Mullin, 3M produced a black and white video recording tape an electrical engineer who had served in the U.S. Signal for Bing Crosby. A few years later, 3M developed a Corps during the war, wowed his colleagues at a conven- sophisticated “quadruplex” videotape for a brand new . After the war, Mullin  tion of radio engineers in video recorder that Ampex Corporation was preparing had disassembled two German Magnetophones and to demonstrate for the Association of Radio and Televi- reels of tape, to his  pieces, along with mailed the sion Broadcasters in Chicago. Ampex was using another  San Francisco home in small packets. Mullin company’s magnetic tape that kept failing, putting the reassembled the machines, experimented with improv- whole project in jeopardy. ing them, and unveiled audio tape recording to his stunned peers at the convention. Soon afterward, Bing eren’t always the smartest guys, but We w Crosby, then America’s most popular crooner, got wind we were persistent. r > Hugh Tierney etired vice of Mullin’s demonstration and hired him to mastermind president, Reinforced Plastics Division prerecording Crosby’s weekly radio shows, a contro- versial step at the time. Crosby aired his first “Philco Hour” broadcast on 3M’s magnetic tape in October Wilfred Wetzel, a 3M research scientist, heard the  . Mullin soon joined 3M. news only hours before the public showing and hud-  3M quickly “obsoleted” its own magnetic product dled with tape binder scientist Melvin Sater in the 3M with the far superior No.  recording tape that used  hours lab. Sater and his team worked nonstop for red iron oxide. After its introduction in  , No.  and managed to make enough  -inch-wide videotape became the international standard until the late  s. for two sample rolls. After Wetzel had already boarded 3M had its pick of many potential markets and a plane for Chicago, a lab technician raced to the plane, chose several: home recording, professional recording passed the samples to the pilot on a message pole arm- for radio, and record recording for making masters on ing Wetzel for the meeting. tape instead of disks. Not wanting to get into the hard- Sater’s team had developed the tape without ever ware business, 3M collaborated with recording machine seeing the Ampex machine, and yet the result was 3 2 1 Whimsical artwork from a 1949 Scotch audiotape brochure cover. Bing Crosby’s successful recording 2 of the “Philco Hour” introduced 3M products to the radio industry. 3M advertised its Wollensak sound 3 equipment in 1962.

216 Chapter 13 208 astounding: “photographic picture quality,” one viewer I had product responsibility for what we called gushed. The audience erupted in whistles, cheers and floppy disks when they were first on the market. years for phonograph record-  stamping feet. It took We projected $100 million in sales for the disks ings to evolve to spoken words and longer for good music reproduction. It also took years before “talkie”  and people said, what’s your basis for specu- motion pictures on film were available. 3M had pro- lating 20 to 30 percent growth? Nothing grows gressed from inventing sound recording tape to high- that fast. It turns out we underestimated it. fidelity video in just nine years. etired director, Community Affairs, and vice > Dick Hanson r to the early   From s, 3M produced a con- tinuous stream of new products including open-reel president, 3M Foundation, formerly in the Magnetic Media business audio and videotapes and tape cassettes, -track audiotape cartridges, magnetic  tape for motion picture sound track the television networks and companies special- mastering and computer tapes and izing in instrumentation, from geophysical study diskettes. Videotape technology moved to space exploration. Then magnetic tape became from a -inch-wide tape  -pound roll of  a consumer business and attracted competition nearly a half-mile long used by broadcasters to from all over the world, primarily Japan. “The video cassettes for home use. Consumer audio- projected growth seemed too good to be true. We tape cassettes became small and compact, and didn’t have the capacity to produce fast enough to the tape itself was only one-eighth-inch wide. meet the explosive demand,” said Alfred E. Smith, In , when 3M won an Emmy award for  general manager, Magnetic Audio Visual Division, pioneering the development of videotape, observers in the early  s. “We didn’t move as quickly might have thought 3M’s magnetic recording business as our Japanese competition, and they was on top of the world. In fact, said Dick Hanson, invested a lot more in the business. We saw 1 years in 3M’s Memory Technology who spent  our operating margins cut in half, from Group, “by then, the whole magnetic media  percent roughly  percent down to business was heavy in red ink.” 3M had or lower. That diluted the rest of invented and “owned” the business with 3M’s performance.” Japan was par- huge market shares and strong profits in ticularly strong in the booming com- the professional markets. 3M supplied all puter diskette business, as personal 2 1 3M won an Emmy in 1983 for its pioneering videotape. 2 In 1981, 3M celebrated the 25th anniversary of the introduction of videotape. 3 3M Black Watch tape cartridges provided data centers with protection and readability for archival storage. 4 Floppy diskettes were 5 The another of 3M’s many data storage products. 3M laser disk revolutionized information storage and retrieval in the 1980s.

217 209 A Culture of Change computers became popular, and in the low-margin Electronic and Information Technologies Sector. “3M consumer audiocassette markets. invested heavily. We modernized existing plants, The computer business, later called “data storage,” put in new plants and added the latest equip- quickly became a commodity business with large-scale, ment in the United States, Europe and automated production, multiple competitors, narrow Japan. The end goal was to push the margins and product offerings that were basically the cost of manufacturing floppy disks, same from company to company. diskettes and videocassettes down “If we were going to compete effectively in the to the lowest level possible. We industrial markets, we had to compete in consumer,” succeeded in doing that in said Smith. “We decided to do battle in the videocassette about four years. We could market. Our magnetic manufacturing processes became go toe to toe with the the best in the company; they had to be — we had the Japanese and do well.” most competition. Data Storage introduced a new stan- Because 3M’s tradi- dard of manufacturing expertise to 3M.” tional focus was in the “We put our best efforts toward being a world-class industrial and profes- competitor,” said Al Huber, retired sector vice president, sional markets, no one had strong background in the consumer arena. had superior technology. We made magnetic We “Historically, our con- media better than anyone else in the world, sumer experience was limited to products in which including the Japanese, but they were willing we had great strength, like to accept a lesser profit. We thought we could Scotch brand tapes,” said be better technologically. Ultimately, we thought Huber. “We didn’t have experi- could win. This drove the decision to spin we ence with distribution to the huge discounters like Target, Wal-Mart off the business. We knew the new company and the electronics superstores.” (later called Imation) would have the best tech- Competition for the consumer dollar nology in the world. > Charlton “Chuck” Dietz s and  was fierce in the s  — TDK and Maxell were two well-known Japanese brands. retired senior vice president, 3M Legal Affairs 5 3 4

218 210 Chapter 13 “We decided we had to look at where product prices ept trying to fix the same problem (with We k and the cost of manufacturing were going. We exam- copying and magnetic) with the same solutions, ined every step of our process and made big changes.” so we ended up with the same answers. One Through high-speed automation and major simplifica- tion of the whole manufacturing process, Thomason of the positive sides of 3M is knowing what its said magnetic media reduced its costs dramatically. For core competencies are. The negative side is example, the manufacturing team reduced 3M’s cost when we come across a business that’s on the of producing a videocassette, including the tape itself, border of our core competencies, we still apply the traditional techniques. > Fred Harris Jr. It’s sad that it’s gone, but it served its purpose formerly division vice president, Audio and Video Products Division, and had a good life. Video recording completely now staff vice president, Community Affairs and Workforce Diversity changed the television industry, and the computer business wouldn’t have gotten off the ground In the United States, the biggest audiotape competitor without magnetic tape. > Dennis Horsford r etired was Memorex, which promoted its product superiority product coordinator and marketing manager, Magnetic Media Division in commercials featuring Ella Fitzgerald hitting a high note on tape and shattering glass. 3M struggled with quality issues, while the Japanese touted superior quality. to h the plastic cas- cents, even thoug  from about   , our competition was investing  and “By sette “shell” alone contained  different parts. “In most heavily and taking an aggressive approach to winning production speed of our operations, we increased our market share,” said Huber. “Frankly, we by more than two and a half times,” got behind the curve in competing Thomason said, “while ensuring high with ‘Japan, Incorporated.’ It was quality. We consolidated all of our a dog fight.” magnetic manufacturing from four fac- “After about four years, we were tories to one in Hutchinson, Minnesota, getting hammered,” said Larry and we did it in months.”  Thomason, then manufacturing Although 3M’s magnetic media director, Magnetic Media. business earned awards for produc- tivity improvements and topnotch 1 1 Scotch select series video- cassettes helped consumers pick the right one for the right use. The theme was: “choose them based on how you use them.”

219 211 A Culture of Change manufacturing, 3M was in a bind. While it sold its lacked,” said Kuhn. “Ultimately we learned a lot from products for little or no profit, its competition sold their rania.” Ferrania was a respected company with a Fer products for even less. Even though the consumer busi- major presence in Europe. 3M acquired Ferrania S.p.A. ness had huge growth potential, 3M had little experi- in  in a stock purchase valued at  million. It was ence with a low-cost, low-profit-margin model. -year history. “They had 3M’s largest acquisition in its  The markings were clear — xit this business, even e technology and well-educated, good people but taking though 3M invented it. To stay in the “dog fight” meant on Kodak was a big challenge and, in today’s market- 3M had to invest enormous amounts of money in order place, perhaps insane,” said Kuhn. to remain the low-cost producer, with no assurance that While 3M’s coating expertise was a plus, the photo- profit margins ever would improve. “Exiting it was the graphic business struggled with quality issues and right decision,” Huber said. effective marketing eluded them. Meanwhile, other new competitors entered the scene including Germany’s Agfa, Britain’s Illford and Japan’s Fuji. > Challenging the Giant Ultimately, 3M’s photographic business became In marked contrast to 3M’s leadership in magnetic prod- the largest supplier of private label film to customers to face  ucts, the company made a bold move in around the world, but the consumer business stayed off with large, successful Eastman Kodak. Bert Cross, with Kodak and the newest up-and-comer, Fuji. 3M then 3M’s president, believed that 3M’s strong expertise even introduced the world’s fastest daylight-balanced in coating technology was a natural entrée into the photo- but chose not to invest color transparency film in  graphic film business. To kick off this venture, in  further in the business, especially when adaptation to 3M purchased Dynacolor, an American film processor digital photography would have required significant and manufacturer, and a small French film manufac- dollars. 3M actually made its greatest strides in medical -person French company  turer. Unfortunately, the X-ray films, including a high-speed film that cut down was nearly bankrupt; its film product was substandard exposure time and a high light system that eliminated a movie film plant in India and 3M had agreed to build the need for a darkroom to load and process X-ray film. without the expertise it needed. Although 3M exited the photographic business in its restructuring and spin-off of businesses in later years, Kodak was head and shoulders above anyone the Ferrania acquisition gave 3M a major presence in else in the world. > Ralph Ebbott etired vice president r Italy. By   in Europe and , 3M Italy ranked No. and treasurer and one of the first 3M employees to relocate to Ferrania  in the world, after Japan, in total 3M business. No. Josef Kuhn, a multilingual 3M mechanical engineer, > An Unprecedented Decision was appointed general manager of the stumbling French  , On November , 3M announced an unprece-  operation. He went in search of technical expertise to dented restructuring of the company. The leadership had transform the French business into a viable manufac- decided to spin off its marginally profitable data-storage turer and build the plant in India, soon discovering that and imaging businesses into a new company and discon- this business required far more resources than he first tinue its audio and videotape businesses. That meant had imagined. eliminating ,  jobs worldwide, mainly through attri-  Kuhn, who later retired as senior vice president, tion and early retirement programs. It meant finding Engineering, Quality and Manufacturing Services, new products that could replace major production that and others from 3M learned about the availability of  -square-foot ,  disappeared from the company’s rania, S.p.A. of Italy. “They had excellent technol- Fer manufacturing plant in Hutchinson, Minnesota. Approxi- ogy for filmmaking and coating; better than we had. 3M employees joined the new company, mately  ,  They also had a multilayer coating technology that we soon named Imation.

220 Chapter 13 212 Imation, whose major products would be data car- How we went about this is unusual in business. tridges, diskettes and optical disks, medical imaging, didn’t give Imation a poor balance sheet. We X-ray film and color proofing products, became a gave them a balance sheet that looked very We .  , y traded company on July  .  billion publicl  Bill Monahan, a  -year 3M veteran, became Imation’s much like 3M’s. 3M didn’t need to get richer from new chief executive officer. Monahan’s challenge was the transaction. Our main concern was a clean to create a nimble company that could keep pace with break and a good start for the new company. an ever changing market. > L.D. DeSimone At 3M, the decision was painful but uniformly supported by upper management. Ultimately, 3M’s chairman of the board and chief executive officer, L.D. DeSimone, sat at a table and polled every member of his management team. He asked each person to tell him what he or she thought of the spin-off idea and whether this was the best decision. They all agreed it was, knowing that 3M would not be the same company after the spin-off. It was hard getting to the decision, not making it, said DeSimone. “I said, ‘This is the best option we have’ . . . there was no perfect option.” There was emotion behind this decision. The process went on for about two months with meetings almost daily. At the end, there was exhaustion, almost like the exhaustion you suffer with the loss of a parent. > Kay Grenz vice president, Human Resources A 1996 advertisement 1 announced the spin-off of 3M’s data storage business into a new company, called Imation. 1

221 A Culture of Change 213 “It was a joyless process to tell people the reason The spin-off was one of those reality checks, was that we just couldn’t be successful in the business pointing out our need to stay competitive and that they had to leave the company, knowing that — and as a company . . . it was a wake up call they didn’t want to leave,” said Lidstad. “Our policy has always been to be honest with — fo r a lot of our employees. a sobering one people,” said Lidstad. “Tell them as much as you can executive vice president, Health Care Markets > John Benson and do it very well.” 3M created a “transition center” not only for 3M employees affected by the spin-off, The decision was a shock and a loss for employees but also for anyone in 3M who wanted information, at all levels. At 3M, where people had come to believe support and counseling. It gave employees an opportu- that they were guaranteed a “job for life,” the spin-off nity to deal with the loss, and it gave them a chance to proved this assumption wrong. It was Lidstad’s role as consider all their job options. It also offered financial vice president of Human Resources at that time to see and retirement planning. “I think people viewed that as that 3M people who had to leave made a safe landing. important and timely assistance,” Lidstad said. “We also He had learned much from the sale of Duplicating offered employee assistance for people going through years earlier. Products  the grieving process. For many employees, it was like a death in the family.” Shedding a product, project or division can be healthy; it is ● sometimes a necessary part of a growing, changing company. ● There’s time to win and a time to cut your losses: know the difference. ● Decisions to sell or exit a business require courage, clear heads and compassionate follow through. Even if a business is sold, valuable expertise and technology often ● remain in the company. When the marketplace and the margins change, re-visit your ● time-tested truths business goals. Good ideas can come from outside 3M; be wary of ● “not-invented-here” blind spots.

222 3M leaders have similar backgrounds A glimpse of individual contributions Many are ‘intrapreneurs’ Management styles vary, but goals are in sync

223 r o l e m 14 o d e The Right — 3M Leaders l o Choice at the Right Time f Bert Cross played a mean banjo and never went to college. i William McKnight carried his own luggage and wore n mended suits. Ray Herzog was a high school coach and n science teacher. Lew Lehr grew up in a little Nebraska o town and worked on nearby farms during summer vacations. The ● men who became the leaders  v  years were largely Midwestern, of 3M in its first a middle class, hard workers. Most came to 3M with t technical training; all built their business careers i o at the company; and none felt fully prepared for n

224 216 Chapter 14 the opportunities that came their way. But, that didn’t all buy equipment from the same vendors We keep them from tackling ne w assignments with gusto. and raw materials from the same people. We buy “The leaders of 3M were common people with the same computers and software. We listen to modest beginnings,” said John Pitblado, who joined and retired several decades later as presi-  3M at age the same consultants. We hire from the same dent, U.S. Operations. “They were willing to work hard schools. So what’s the difference? It’s people. and they were curious. Nobody tried to climb the social Plain and simple. This company relies on people. ladder in St. Paul. We didn’t have lunch at the down- etired senior vice president, Engineering, r > Charles Kiester town Minnesota Club; our headquarters were out in the sticks.” Manufacturing and Logistics 3M people have been willing to challenge their lead- ers over the years. “The company is like a caring family, After Henry Bryan, Edgar Ober, Lucius Ordway and although we didn’t always feel that ‘father knew best,’ ” McKnight shepherded 3M as the company’s presidents said Ralph Ebbott, who spent his career in finance and through , seven men followed them as   from accounting and retired as vice president and treasurer. leaders of the company. McKnight served as chairman “The CEO was always very much in charge, but we felt  –  of the board from , while Richard Carlton we could openly disagree with him.” ); and Bert Cross  –   ); Herbert Buetow (  – ( Until  , when W. James McNerney, Jr., from ( –  ) ran day-to-day operations as president.   th chairman of General Electric, was named 3M’s the board and  th senior executive, every one of the > Carlton: Father of 3M Research leaders came from within 3M. Starting with McKnight, With his bachelor of science in engineering, Richard they all spent years in the trenches of research and P. Carlton, hired in  , was the first technical person development (R&D), sales, manufacturing, interna- with a college degree. Carlton is credited with creating tional and division operations. the company’s first lab with quality measures and stan- The leadership and personal styles of these top dards and, within a few years, he was coordinating executives varied. Those who worked directly or indi- research, engineering, manufacturing and new product rectly for them agree that each was the right choice development. Carlton contributed many of his own for the times. In his own way, each fostered innovation patentable ideas to 3M including a new adhesive binder and growth. All of these men had one basic similarity, using safer, synthetic resin; a flexible and durable abra- observers recall. They all stood tall in tough times. sive disc to grind curved surfaces on cars; and a process 2 1 Chapter opening photos William McKnight introduced the company’s first pension plan in 1930; A 1950s annual shareholders meeting; Illustration of 3M’s modest beginnings in Two Harbors, Minnesota; A sketch of 3M leaders, A.G. Bush and Richard Carlton.

225 3M Leaders — The Right Choice at the Right Time 217 for electrocoating sandpaper, giving it more cutting and this together and he’ll get something entirely dif- s, the versatile Carlton had added power. By the  ferent.” A move at that time to hire only people with  , at age labor relations to his responsibilities. In college degrees for technical jobs fizzled.  , Carlton became 3M’s fifth president, serving until Carlton created a technical policy committee in the just a few  ill health forced him to resign in  s that became a forerunner to 3M’s Technical weeks before his death. Council and Technical Forum in which, even Carlton was a man who nurtured today, ideas are freely shared company- innovation, rejected the notion that wide. John Pearson, a Carlton Society only people with degrees could member, served on that committee. come up with the best ideas, “That effort was the first intended fostered knowledge sharing to ‘institutionalize’ a culture of and served as a mentor to many. innovation at 3M,” he said. “Dick When Maynard Patterson was a strong proponent of getting became general manager of people involved so they didn’t 3M Canada, Carlton gave him become isolated islands. On Sat- “ground cover.” “We anticipated urday mornings, we brought our some trouble because all 3M busi- lab notebooks up-to-date and we ness in Canada was to be done through talked with people from other labs. We’d this new, little company,” said Patterson, sit down, tackle problems and pick each who later retired as group vice president, other’s brains. Carlton encouraged that.” It isn’t 5 International Division. “ ‘If you ever have any surprising that the Carlton Society, named after him, trouble,’ Carlton told me, ‘pick up the phone and call.’ honors 3M technical employees whose careers exem- He gave me wide scope to do what I felt had to be done.” plify innovative research that led to patentable products. “Dick Carlton called a meeting of all the lab people, Carlton created 3M’s Central Research Laboratory including the flunkies like me without college degrees,” with a broad imperative for experimentation as well said Don Douglas, who retired as 3M’s vice president, as for conducting research to support the company’s Reflective Products. Carlton addressed the educated: division labs. “You all know that if you put this and this together, “Carlton set the tone for all the labs,” said Les Krogh, you’ll get this,” Carlton said. “But, you take Don retired senior vice president, Research and Development. Douglas, he doesn’t know any better, and he’ll put this “He was an idea man and he had a huge tolerance for 4 3 Henry Bryan, a 3M founder, served 1 as the company’s first president. 2 Edgar Ober served as 3M president 3 Lucius Ordway’s for 21 years. substantial investments carried 3M through its early years; he served as 4 William president from 1906–1909. McKnight, hired as an assistant book- keeper in 1907, served as president from 1929–1949 and chairman from 1949–66. 5 Richard Carlton served as president from 1949–1953.

226 218 Chapter 14 Lew Lehr, who later became a chairman, credits Carlton with envisioning 3M’s Health Care business — a venture that started small and, under Lehr’s direction, experimentation.” While to be a major 3M market center and revenue grew working on ways to create producer. electrostatic coating for sand- paper, two young lab techni- > Buetow: The Quiet ‘Mirror’ of McKnight cians, who had spare time, cut out paper If ever there was an unsung leader at 3M, it was Buetow. them in the coating apparatus. dolls and put He stood in the long shadow cast by McKnight. Buetow “Who should come along but Mr. Carlton,” was an administrative powerhouse and a businessman bered. “He said, ‘Hi, fellows, how’re you gh remem Kro , explosion shred- with heart. When a February  ,  doing?’ He looked at the dolls, which were coated beau-  ded the six-story 3M minerals building, killing tifully, and he said, ‘I think you’ve got it.’ He never said others, Buetow was there. A  people and injuring a word about the paper dolls.” manager expressed his concern about 3M customers, lamenting, “This’ll put us weeks behind schedule.” Buetow countered, “Let’s take care of our people first; then we’ll worry about schedules.” Richard Carlton was the first to to During his tenure as president from  stress the importance of investing  , Buetow led major growth initiatives. 3M’s a significant percentage of earnings embryonic international business was expanding fast; plants and facilities in the United States back into research. He won the were multiplying; new business opportunities support of 3M’s senior leaders. That  sprouted like spring wheat. When asked in investment had a domino effect; how big 3M wanted to be, Buetow said, “Size is it produced marketable products not so much an objective as it is a result. We will continue to grow in direct proportion to that created an explosion on the ambitions of people who want a better 3M’s bottom line. > Don Larson future, both for themselves and for others retired president, 3M Foundation, who joined whose condition can be improved through 3M products, services and know-how. To 3M as a production employee 1 2 1 The Carlton Award, named for President Richard Carlton, is given to technical employees who demonstrate innovation and collaborative research. 2 Under Herb Buetow’s watch in 1951, a gas explosion roared through the 3M minerals building, killing 15 and injuring 49 others. 3 Buetow, 3M’s president from 1953–1963, had a reputation for fair play, sound judgment and meeting challenging assignments. A 1955 4 executive meeting at 3M’s Wonewok Conference Center.

227 — 3M Leaders The Right Choice at the Right Time 219 do less than our best at solving problems and filling office to congratulate him and he asked, ‘Where are needs would limit our growth . . . I don’t believe any of  charts?’ ” my   – – us wants that.” Buetow also appreciated the need for a skilled By the time Buetow became president, 3M had a sales team. “He helped strengthen sales and marketing “vertical organization” in which divisions and interna- with the help of A.G. Bush, who had been hired by tional subsidiaries had a strong measure of autonomy. McKnight,” said Don Larson, retired president, 3M This plan was based on McKnight’s notion that 3M Foundation. “He sold top management on the need for would “divide and grow” by creating entrepreneurial businesses led by people who were in charge of their Herb Buetow learned everything he knew from own product and profit destinies. It was a creative William McKnight. They had the same philoso- approach when McKnight envisioned it in  . Peter phies. Herb put trust in people. When he gave Drucker, the guru of management theory, told McKnight it was a bad idea. Never mind, McKnight did it anyway, you an assignment, he expected it to be done and Buetow inherited a stable of ambitious 3M people right and on time. > James Klein etired manager, r with an entrepreneurial bias. International Customs and Trade Affairs Buetow was particularly strong in finance and that solid oversight of the company’s assets made it possible for 3M to generate enough cash to finance its own a corporate aircraft at a time when we had many things ambitious expansion in the years Buetow was president. cooking and we needed to save time. He was instru- “His focus was on the financial and administrative areas mental in creating Wonewok Conference Center near that he knew well,” said Wally Forman, retired execu- Park Rapids, Minnesota, because he believed in creat- tive director, Compensation, Benefits and Organization. ing a place away from the office to share ideas and to “Herb Buetow had three organization charts in his center dream.” represented the present organiza-  desk drawer. Chart Buetow was a low-key, quiet man by nature and tion, chart  was a proposal and chart  reflected what leadership style. He loved classical music and, upon his the ultimate organization should look like. Whenever retirement, the company endowed the Buetow Music anyone came to him with a proposal, he’d lean back in Chapel at Concordia College in St. Paul in his honor. his chair and pull the desk drawer out far enough so that  .  at age Buetow died in to make comparisons. and chart   he could see chart The day Bert Cross became president, we went to his 3 4

228 220 Chapter 14 and weather. Another embryonic product designed to Cross: The Entrepreneur as CEO > make street and highway signs more visible wasn’t as a lab tech-  Bert Cross started his career at 3M in much better. nician, advancing to manufacturing manager, Adhesives Phil Palmquist, a pioneer in reflective technology, Division, five years later. Cross soon distinguished him- had been told to stop working on the project and go self as a risk-taker and champion for a seemingly profit- back to working on coated abrasives, a proven money- less product — Scotchlite reflective sheeting. While it was a large profit generator in later years, when Cross was , the product’s future manager, New Products, in  One of the most significant factors in creating was uncertain. the 3M of today was reflective products. The technology led to all of our light management Here’s one of the things I liked about 3M. Sure, applications. They represent about 25 percent you had a boss and you were theoretically of the company’s total sales. > Paul Guehler wor king for him, but Bert Cross and Harry senior vice president, Research and Development Heltzer always made me feel like I was on the same team working with them — not for them. maker for 3M. Instead, Palmquist returned to the 3M > Don Douglas etired vice president, Reflective Products Division r p.m. to  p.m. and  lab about four nights a week from  successfully created a reflective product that was times brighter than white paint. Cross became the prod- Young Harry Heltzer, a metallurgical engineer by uct’s champion. training, came up with the idea of using glass beads to “It took us eight long, dry years to finally make  reflect light. He made his first beads by pouring molten cents in profits from Scotchlite sheeting or at least to — glass out a window of the 3M minerals building and get the bookkeepers to agree collecting the shattered glass six stories below. But, that we made some money,” turning the glass bead idea into a commercial success Cross said. Sales for — center was costly and 3M’s first product Scotchlite reflective sheet- didn’t — striping for roads  ing were  ,  in , reflect enough and it couldn’t ,   the first year; withstand the rigors of traffic in the second;  ,  1

229 — 3M Leaders The Right Choice at the Right Time 221 in the fourth. ,  in the third; and  World War II gave Scotchlite sheeting a huge boost because the military ordered it for blackout markings on aircraft landing strips and along tank trails. Under Cross’ leadership, the market for reflective sheeting grew dramatically and, in  , he was named vice president and general manager 3 of the new Reflective Products Division. After his success with reflective products, Cross brought his classic entre preneurial thinking to Graphic ions in no uncertain terms. But, Cross also was an round that created and Printing Products — the fertile g — effective mentor two men who reported directly 3M’s Thermo-Fax copiers and revolutionized copying. to him, Heltzer and Ray Herzog, followed him as 3M Later, he would imagine still another new business for CEOs. All three were considered “product pioneers” 3M Photographic Products. because they made their marks at 3M in new ventures Cross was a researcher at heart and, when he retired that became major, revenue producing businesses. , he had  from 3M in patents to his name.  Cross was a strong supporter of Clarence Sampair Only Cross’ exterior was gruff. “On the surface, he and Maynard Patterson, the “co-architects” of 3M appeared to be hard as nails,” said International. During Cross’ seven years as the com- Don Hambleton, who worked in  , 3M started to  pany’s top executive, from  administrative support during new international companies around the world.  the s and retired as assis- , Cross  to  After serving as president from tant secretary, Finance. “But, was the first person to succeed McKnight as chairman when you got to know him, he of the board. While McKnight continued to serve as had a heart a lot bigger than most  , Cross had honorary chairman until people realized.” Cross had an the challenging distinction of following authoritarian leadership style;  him in the top job. Cross died in he was a stern disciplinarian, .  at age and he expressed his opin- 2 The September 1964 issue of Forbes 1 magazine featured Bert Cross on the 2 cover. Cross, pictured in 1971, was proud of the patent awarded on his own — invention the Plastiform magnetic hatband. 3 Cross’ first paycheck in 1926 was for $27.50.

230 222 Chapter 14 as a big surprise to Heltzer: “I arrived home from a busi- > Heltzer: Extending the Global Arena ness trip and there was a note from Bert to come and When  -year-old Heltzer knocked on 3M’s door see him,” Heltzer remembered. “I went in and he said, in the depths of the Great  looking for work in ‘Well, we’ve made our selection.’ I was a candidate, but Depression, he got a job unloading freight cars and there were others, too. I said, kind of resigned, ‘Well, feeding mineral crushers. “I started as close to the bot- that’s fine.’ Then Bert said, ‘It’s you’ and I answered, tom as anyone could,” Heltzer said. But, he had aspira- ‘You’ve got to be kidding!’ ” tions, and Sampair, then head of production, and Cross, A creative and persistent innovator himself, to this then new products’ champion, became Heltzer’s role day Heltzer believes that no matter how large 3M models. “I found people I had great respect for and becomes, the spirit of innovation will stay intact as long I said, ultimately, ‘I’d like to be in their jobs.’ ” as people have the freedom to pursue their best ideas. From the factory to sales to production management “You have to gamble on people who are creative and and finally group vice president managing multiple divi- willing to work hard with an appetite for challenge,” sions and businesses, Heltzer’s span of responsibility he said. “If you keep enough ideas cooking, some will  grew  years, until he was named CEO in over come along as products. Then, when you find you’ve got to succeed his role model Cross. The appointment came a breakthrough product, you pour as much effort, talent and money into it as you can. That was McKnight’s phi- losophy and it continues to be a sound one.” , 3M added On Heltzer’s watch from   to new international companies, bringing the total out-  . He was a strong proponent side the United States to  of overseas experience for 3M’s future leaders, well before an offshore assignment was considered a career- maker. And, while these companies had broad autonomy and authority, Heltzer could see the importance of inte- grating 3M’s international and domestic businesses so that both were operating with a one-company mindset, regardless of geography. That was a hard sell but, under Heltzer, this shift in thinking began. Given his involvement with the origin and growth of reflective products, Heltzer was a strong advocate of maintaining solid, trusted relationships with govern- ment policymakers and regulators. “Legislation doesn’t come as a result of one day or one hour or one period of time,” Heltzer said. “It may take years before it’s drawn and there has to be a continuing relationship to get our story across.” Heltzer was also a proponent of strategic acquisi- tions, even though the company’s bias had always been to “grow its own” new ventures. “Not everything can be invented here, no matter how much we provide in the way of talent, imagination and dollars,” Heltzer said 1 s. “Sometimes an acquisition is the in the early  obvious answer.”

231 3M Leaders — The Right Choice at the Right Time 223 As one who benefited from good mentors, Heltzer he wanted and he wasn’t a pushover, but he was very was supportive of new ideas, said Ray Richelsen, retired courtly in the way he went about things.” executive vice president, Transportation, Graphics and When Gordon Engdahl, retired vice president, Safety Markets. “I was an engineer in Reflective Products Human Resources, went over budget on a capital expen- years old. I remember walking into an  and barely diture, Heltzer took him to task. “He read me the riot it was like walking into — Operations Committee meeting act because I’d overspent and I admitted I had done a room full of gods. We were asking for money to make exactly that,” Engdahl said. That same evening in the glass beads in a completely different way and here was parking garage, he came over and put his arm around Harry, the inventor of glass beads. When I finished, he me and said, ‘Gordy, I just want you to know that talk said, ‘Let me get this straight. You’re going to make was nothing personal.’ He could differentiate between them wider; you’re going to get the lead out; and you’re business and human relationships. He didn’t want me going to make them for less cost?’ I said, ‘Yes, sir.’ He to see it as a personal attack.”  said, ‘I tried to do that for years and couldn’t get it done. Good luck, son.’ The project was approved. What > Herzog: Stepping Up, Standing Tall struck me about Harry was that he was so supportive.” With Duplicating Products Division generating more When 3M was implicated in making illegal political —  than percent of the company’s revenues, Herzog contributions to national candidates, including the — the man who built that business rode his success to committee to re-elect President Richard Nixon, many the CEO’s office in  after Heltzer’s abrupt resigna- at 3M regard Heltzer as standing tall in one of the tion. It probably was the most challenging moment in company’s biggest — and most publicized — challenges. his career: Herzog briefly assumed three roles as CEO, “Whether or not he was personally involved, I don’t president and chairman of the board. “He wore three know,” said Richelsen. “But, he was the guy in charge hats and it was very hard,” Herzog’s wife, Jane, remem-  and I remember he said in , ‘I’m going to resign bered. “He was exhausted all the time. The responsibil- because it happened while I was CEO and I’m going ity was unnerving, but he also believed he was up to it.” to take the blame for it.’ That was a very classy move Observers credit Herzog with helping the company on his part.” regain its self-esteem after the political scandal. Observers remember Heltzer’s leadership style as out- “When Ray took over, there was no one else in the going, warm-hearted and gentlemanly. “Harry was like succession plan, so he had to take over everything,” said an old shoe, easy to approach and affable,” said Ebbott, John Ordway, long-time board member and grandson of retired 3M vice president and treasurer. “He knew what 3M’s early investor Lucius P. Ordway. “For two to three 2 Harry Heltzer, who 1 played a key role in developing 3M’s reflec- tive products business, served as chairman and CEO from 1970 to 1974. 2 Ray Herzog, center, pictured at a manage- ment meeting in 1957, assumed the roles of CEO and board chair in 1975.

232 224 Chapter 14 years, he ran the company, domestic, international, hesitate to go ahead and do it,” said Appeldorn. “He — everything with a couple vice presidents. It was tough. created BPSI, Business Products Sales Incorporated, He led 3M with an iron fist and he had to do it. There and without that 3M never would have built the divi- were a lot of decisions to make because the company sion into a billion-dollar business. When we came up was growing fast.” with the prototype for a new overhead projector in Not long after becoming CEO, Herzog reflected , he told us he wanted to be in production January  on what it would take to move the billion company  August. He’d show up in the lab unannounced by forward: “If I could ask for anything,” he said in ,  and invite us to lunch or dinner. It was an impromptu “it would be for good people who are deter- recognition of our efforts and, when we mined to be successful. I guess maybe talked about the project, he knew I’m lucky, because it seems to me the details.” Herzog practiced we ’ve got them.” McKnight’s philosophy of giving Herzog didn’t set out to people latitude. “He allowed be a corporate leader at all. people to make mistakes and He taught high school math he didn’t penalize them for and science and coached mistakes that might even the St. Croix Falls, cost the company money,” Wisconsin, high school said Jane Herzog. basketball team. Herzog Although duplicating met his future wife, Jane, products had been Herzog’s while teaching in St. Croix pride and joy, generating Falls, her hometown. But, he multimillion-dollar revenues realized the opportunities were for 3M over many years, he better in business than in educa- knew they would run their course tion so Herzog took a job as quality and disappear, Appeldorn said. control analyst in 3M’s main abrasives “The only thing we can do,” Herzog told  plant in . “I don’t think Ray ever aspired Appledorn, “is create as many new businesses 1 to be CEO,” Jane Herzog said. “But, he would as we can because this Thermo-Fax business will die.” always grab another challenge. Competition is an inte- This was a premonition that would come true in the gral part of 3M, I believe, and my husband was a great s. “He knew this even before Xerox came on early  competitor, along with most of the others who climbed the scene,” Appledorn said. “He understood that every the corporate ladder.” product has a life cycle and the cycle ultimately comes Herzog had an affinity for numbers. He could pick to an end.” up a sheet of figures and analyze it immediately. When In support of innovation with profitable results, new assignments surfaced, he gravitated toward the Herzog created the Golden Step Award in  to rec- one with which he could do the most good, for exam- ognize people responsible for new business ventures ple, new product development. Herzog was an advocate that meet a high level of sales and profitability. Since of new ideas. “Ray was charismatic; he had a keen  employees have won Golden Step ,  then, more than business sense; and he exercised it rapidly,” said Roger ards as members of new product teams. aw Appeldorn, retired 3M corporate scientist and a driving authoritative and — Herzog had a strong personality force behind 3M’s important new microreplication dynamic. Some described him as a “hard driver,” while technology. others called him the “Iron Duke.” Herzog was willing “Ray had a complete perspective from product cre- to live with his decisions, whether popular or not. “Ray ation to market. When he saw an opportunity, he didn’t was tall, muscular and powerful looking,” said Ebbott.

233 The Right Choice at the Right Time 3M Leaders — 225 “When he made a decision, it was done. He was also Lehr: The Amiable Planner with Vision > the person who said work has to be fun and if it’s not , he tapped Lewis When Herzog became CEO in  fun anymore it’s time to move on.” Lehr, a chemical engineer, to become president of U.S. “Ray was chairman of the board and CEO when Operations. When Lehr was named 3M chairman of the I was involved in starting an Orthopedic Products board and CEO four years later, he already had earned Division at 3M,” said Bill McLellan, retired staff vice universal respect and was favorably regarded by associ- president, 3M Corporate Services, Austin, Texas. “I ates and employees alike. remember going in for Operations Committee reviews, Like Herzog and the other leaders who preceded and my knees were shaking behind the podium. Ray him, Lehr came from a modest background. He was was a tough guy and very astute. He did things that born in Elgin, Nebraska, and worked summers on farms were important to the company, notably foster the during the Great Depression. Those y ears taught Lehr gro wth of our copying business.” the value of work and all-out effort. Lettering in foot- “Ray was disciplined and tough-minded,” said Dick ball and basketball, Lehr was class president and vale- Lidstad, retired vice president, 3M Human Resources. dictorian. After serving in World War II under Gen. “I liked him because he wasn’t one who was taken with George Patton, Lehr earned his engineering degree power. You knew he had power, but he didn’t manhandle at the University of Nebraska and, on a professor’s it. He was fond of saying, ‘People only use about  per-  to find a job advice, traveled to Minnesota in cent of the authority they have and, at 3M, we’re look- in the 3M Tape Division. Evenings, he attended law percent.’  ing for people that use the other school because he had a keen “In saying that, Ray was giving people permission to do things. He encouraged them to go out and follow their instincts.” . Ray Herzog died in  at age  2 1 Ray Herzog (right) and Bing Crosby at the 1964 Beat Bing National Pro/Am Golf Tournament. 2 A 1984 issue of Nation’s Business magazine featured Lew Lehr, 3M’s chairman and chief executive officer.

234 Chapter 14 226 interest in patent law. But, his life at 3M soon became 3M’s Leaders too busy for him to continue law school.  In the s, Lehr had a chance to try his hand at President 1902–1905 Henry S. Bryan product development; his creativity and persistence ulti- President 1905–1906, 1909 –1929 Edgar B. Ober mately spawned a new division. Three surgeons from the Lucius P. Ordway President 1906–1909 highly respected Cleveland Clinic asked 3M to develop William L. McKnight President 1929 –1949, an impermeable adhesive-backed plastic surgical drape COB 1949 –1966 to reduce the risk of infection during operations, and Carlton asked Lehr to conduct the clinical work. By President 1949 –1953 Richard P. Carlton  , the new surgical drape satisfied doctors, and it President 1953 –1963 Herbert P. Buetow generated revenue for the first time. Bert S. Cross President 1963 –1966 The pioneering success of the new product was challenged when the drape shriveled in high tempera- COB and CEO 1966 –1970 Bert S. Cross tures during sterilization. Told to stop working on the Harry Heltzer COB and CEO 1970 –1974, project, cease manufacturing and unload the inventory, COB 1974 –1975 Lehr said “Yes, sir,” but he waited until the factory had Raymond H. Herzog CEO 1974 –1975, produced six months’ worth of drapes. In his spare time, COB and CEO 1975 –1979, COB 1979 –1980 Lehr sold a government agency on the drapes; he showed Lewis W. Lehr CEO 1979 –1980, his boss the receipt and convinced him to rescind his COB and CEO 1980–1986 cease-and-desist order. On the heels of that shaky, John M. Pitblado President, U.S. Operations entrepreneurial start came autoclave tape for hospital 1979–1981 linens, surgical tapes, wound closures and nonwoven surgical masks in about a ten-year time span. By the James A. Thwaits President, International time Lehr was named president, U.S. Operations, in Operations 1975–1987 percent of 3M’s  , 3M Health Care was producing  COB and CEO 1986 –1991 Allen F. Jacobson global sales. COB and CEO 1991–2001 L.D. DeSimone Lehr inherited a tough business environment in the James McNerney, Jr. COB and CEO 2001– W.  s when the economies of the United States and other major industrialized nations were suffering simul- taneous recessions. At the same time, the United States COB = Chairman of the Board CEO = Chief Executive Officer Background: Post-it note 1 From left: Bert Auger, R.C. Bertelsen 1 and Lew Lehr worked on the packaging for surgical drapes in 1950. 3M con- 2 tributed products and technology to the space program in the 1960s and, U.S. later, 3M conducted research projects aboard several space shuttle missions.

235 3M Leaders — The Right Choice at the Right Time 227 faced an energy crisis and the cost of raw materials five business groups, each with different management soared. 3M’s earnings were off and savvy competitors and business goals. In some cases, sales representatives with new technologies nipped at the company’s heels. from 3M divisions were competing against each other Soon after Lehr was named chairman of the board by offering similar products to the same customers.  and CEO in , a Fortune magazine article offered When they met on this competitive turf, some 3M reps insight into his nature: “Lehr is more cerebral than didn’t even realize they represented the same company. Herzog,” the article noted. “He is generous with his time This duplication of effort moved Lehr to propose the first formal strategic planning process that 3M had undertaken in its eight decades. He established seven Lew Lehr brought strategic planning to 3M. study committees of 3M senior management to exam- He was a visionary and he encouraged new  ine what 3M could expect in the year . The com- mittees included research, international, community business models. > Ron Mitsch retired vice chairman of the board and executive vice president Everybody said, ‘You can’t get this done in six months,’ and he said, ‘We’re going to do it.’ and easy-going . . . The unpretentious son of a haber- dasher, he walks the corridors chatting with underlings The process succeeded because 3M had the without striking fear in their hearts. He seems incapable right leader doing it. etired vice president r > Arlo Levi of affectation. While Lehr was having his picture taken and corporate secretary for this article, the photographer’s glasses fell through a wire mesh. Lehr watched with interest as an engineer fished them out (with adhesive on a pole) . . . much the relations, manufacturing, sales and marketing, and wa y children reclaim quarters from beneath grates. What human resources. Interestingly, each committee chair kind of sticky stuff does 3M use on the end of its poles, was selected because his committee’s focus was not Lehr was asked. ‘I don’t know,’ he admitted amiably, his own business specialty. Nor did 3M seek the help ‘Some kind of gunk.’ ” of an outside management consultant because Lehr The reorganization of 3M under Lehr’s leadership believed it would take that firm six months to under- as chairman of the board and CEO was a significant stand the company. “We’d all gone to industry meetings  , the company had grown dra- turning point. By and then talked informally about how we’d reorganize  matically to about business units organized among 3M,” Lehr reasoned. “We knew how to do it ourselves.” 2

236 Chapter 14 228 The committees did, however, conduct careful research  -year span; and sector labs would handle a five- to with outside sources in modern business parlance, known Central Research could return to its long-range research as “benchmarking.” mission focused on new ideas and a time frame of This “organic” approach to planning was effective, years.   to Lehr said. Those who had participated in the work The planning process also underscored the impor- from beginning to end were accepting of the results. tance of continuing to integrate 3M’s domestic and The process was efficient, focused and took five months. international functions while giving people working From that planning came significant changes for 3M. in the United States and outside the United States more The company was reorganized into four business “sec- chances for “cross training.” In addition, because the tors” in which divisions with compatible technologies were grouped together. (Nearly years later, in  ,  To be a good manager, you have to like people, 3M would reorganize into six market centers focused you must have a sense of humor, and you cannot on compatible or allied markets.) fix your feet in concrete unless you’re willing to In addition, because Central Research was being torn between long-range research and more immediate crack the concrete once in a while to get your research needs requested by 3M divisions, “sector feet out. > Lew Lehr etired chairman of the board and CEO r labs” were created. That meant that division labs would focus on shorter range research, up to seven years out; company had grown dramatically, it became clear that 3M needed a more formal structure for identifying people with top potential and giving them the experience Lew Lehr took the lead in transforming 3M into and opportunities to move into senior positions in 3M’s a very quality-minded company. Historically, 3M heavily “promote from within” corporate culture. To cared about quality, but he understood that we achieve this, 3M created a Human Resources Policy had to have systems to ensure reliability and  Committee in . Given his own creative approach to starting and quality throughout our organization, rather than building 3M Health Care, Lehr was concerned about just inspecting the end quality of our products. promoting a spirit of internal entrepreneurship. To help executive vice president, Electro and > Charles Reich accomplish this, Lehr asked Gary Pint, then group vice president, Electrical Products Group, to chair the effort. Communications Markets and Corporate Services 1 2 1 3M China Ltd. became the company’s 53rd international subsidiary in 1985. 2 Lew Lehr was universally respected and favorably regarded by his associates and employees. 3 The Lewis W. Lehr Career Quality Achievement Award was first presented in 1996.

237 The Right Choice at the Right Time — 3M Leaders 229 “Gary created subgroups in manufacturing, in our The usually amiable Lehr also was willing to take sales offices, in our plants,” said Lehr. “He asked  when the state on Minnesota’s governor in them all to develop guidelines for internal entrepre- adopted a “superfund law” that expanded corpora- neurship and to determine how people should be tions’ liability for hazardous waste damages. On recognized for being entrepreneurs inside the a broader level, Lehr became an outspoken critic company. It was an awareness program designed of Minnesota’s business climate. Not long after- to make people understand that even if they ward, Lehr announced the decision to invest in came from the tax department or the fire a major new research and development facility department, there was always room for doing in Austin, Texas. things a better way.” About the same time, Before and after his retirement, Lehr was the committee, with Lehr’s full support, active in a large number of volunteer organi- hired Gifford Pinchot, a well-known manage- zations, often serving in a leadership position. ment consultant and author of the book He felt strongly that contributing to society “Intrapreneurship,” to do his own assess- as a volunteer was a responsibility for every ment of 3M’s intrapreneurship quotient. successful business person. People inside 3M also began using Pinchot’s apt term. > Jacobson: Disciplined, Cost-Conscious and Big-Hearted Lehr also is credited with seeing the huge potential in consumer prod- Like some of 3M’s earlier chairmen, ucts at a time when the company was Allen Jacobson was a chemical still operating on a strong industrial engineer, but among all of 3M’s products mindset. He put his full sup- leaders he knew the most about man- port behind Post-it notes when others  ufacturing, because he spent years 3 inside the company were openly skep- of his career in and around plants. While as he was nicknamed spent his first three — — “Jake” years in the 3M Tape Lab, he quickly moved into Lew Lehr was a visionary and a terrific people process engineering and manufacturing production, person. He’d reach out to everyone. He won the working as a technical assistant to plant managers in Hutchinson, Minnesota, and Bristol, Pennsylvania. respect of 3M employees, customers, other CEOs and people in government. > Dave Powell Jake came right out of the core of 3M’s vice president, Marketing business. He was an engineer’s engineer, very strong and all business. He loved the details, he ambitious effort in magnetic tical, and he backed an products to compete with Japanese manufacturers for was hard working and he was stern. But, behind the fast growing consumer audiotape and videotape it all, he had a sense of humor. > Dick Lidstad markets. He supported 3M’s involvement with National retired vice president, Human Resources Aeronautics and Space Agency (NASA), which involved conducting research in space and exploring materials science, and he backed increased spending in research Eight years after joining 3M, Jacobson showed enough after years and development. He was CEO when — promise to be named production superintendent at Bristol of painstaking work — the People’s Republic of China and, within four years, he became manager of the St. allowed 3M to establish the first company wholly owned Paul Tape Plant. While he moved on to divisional lead- a foreign firm. by operations ership, management of 3M’s international

238 230 Chapter 14 in Canada and Europe and later the industrial and con- Jacobson was the right choice to steer around the shoals. s, Jacobson didn’t forget  sumer sector in the early Slower economic growth had become a worldwide phe- his roots in manufacturing when he became chairman nomenon in that decade, and 3M could no longer bank  of the board and CEO in . on brisk business in one part of the world counteracting To outside observers, Jacobson had a style dramati- cally different from his predecessor, Lehr. In contrast I was new to my position in Environmental to Lehr’s personal warmth and salesmanship, Jacobson Engineering and Pollution Control and I brought was seen as the analytical, tough-minded leader who focused on cost cutting and efficiencies in the second a number of recommendations to the Operations slid into — and the world — s as America  half of the Committee about things that I thought we a deep, long recession. Lehr told Jacobson that, among needed to do. Jake got fully behind them, and many qualities he admired in him, Jake was pleasantly he made the environmental commitment for “predictable.” the company. > Bob Bringer r etired staff vice president, If I were to describe my style of doing things, Environmental Technology and Services I’d say I was a hands-on manager who likes to have as much involvement as possible with slow business elsewhere. In addition, by this time the technological capabilities of companies in other coun- 3M people. r > Allen Jacobson etired chairman of tries had grown significantly. 3M had more and better the board and CEO competition and it was global in nature. The best way to win in this new climate was to be more productive and Jacobson took his role as sponsor seriously and con- efficient, Jacobson believed. Even so, 3M would not cut sidered it one of the high points of his career. “Some back on its research and development spending; under of the opportunities I was able to sponsor grew into divi- Jacobson, investment in research and development sions, such as Packaging Systems, Disposable Products, steadily increased. Converter Specialties and Automotive Specialties,” he Jacobson is credited with creating the J35 program . “The role of a sponsor is one  told a colleague in aimed at reducing three, key manufacturing areas by of the most rewarding a manager can play.” percent. They were: the labor involved in producing  s presented a new economic scenario, and  The a product; the cost of ensuring quality through better 1 Allen Jacobson, pictured in 1952, 1 was 3M chairman and CEO from 2 3M reached its first 1986–1991. $10 billion year in 1988 while Allen Jacobson was at the helm. For tune 3 magazine ranked 3M the second most admired corporation in America in 1986. 4 The April 10, 1989, issue of Business Week magazine focused on 3M Innovation.

239 231 The Right Choice at the Right Time — 3M Leaders engineering; and manufacturing “cycle time.” “We had given substantial early retirement packages. “In order to make some basic changes,” Jacobson said, “and we to preserve our culture, I felt we had to treat people needed to give people time to make them. If you have the way we would like to be treated,” said Jacobson. to change a factory layout and install more automated “We put them on an unassigned list and did everything equipment, you can’t do that overnight. The pro- possible to find jobs inside 3M for them. I think gram lasted five years and, because of it, we that decision did a great deal to preserve became a more competitive company.” our credibility with 3M employees.” Those efficiency gains were par- During his tenure, Jacobson ticularly important in helping 3M emphasized the importance of compete in lower n product margi grooming future 3M leadership categories. And, when the U.S. encouraging people to take by international assignments. Of members the approximately  Jake had a strong, of his Management Committee, engineering mind. The  percent had 3M experience efficiencies were probably outside the United States. “That,” Jacobson said, “was not the norm very visible to him, before among American companies.” Under others saw them. > Don Larson  Jacobson, 3M set a goal of generating 2 percent of the company’s total revenues from out- , observers credit  recession reached 3M’s door in side the United States by  ,   . Between and Jacobson’s cost-cutting program with helping the com- billion to  international revenues grew from just under pany weather the economic downturn better than most.  billion and reached the  percent goal. Jacobson also When Jacobson became chairman of the board and emphasized the importance of strong technical support chief executive officer, 3M management already had worldwide not just in the United States. decided to get out of its once highly prized office copy- ing business. Seven hundred people joined the joint ven- Allen Jacobson was very disciplined. He is the ture formed with Harris. It was Jacobson who insisted reason 3M made it into the 1990s successfully.  that approximately other people displaced by the  , decision be helped to find jobs elsewhere in 3M or be > Paul Guehler 4 3

240 232 Chapter 14 It was on Jacobson’s watch that 3M reached its first Thwaits said that DeSimone’s success in Brazil . To mark the occasion in the  billion year in  demonstrated that he understood all the steps taken would United States, he announced that December  along the production path. The assignment also involved be an extra holiday for all U.S. employees, and he traveling to remote places. Thwaits remembers when encouraged the general managers of 3M’s international bad weather forced him, DeSimone and other 3M man- companies to follow suit. agers to take refuge in a remote Costa Rican hotel, Jacobson, like other chairmen, was active in his com- sleeping six to a room with an open shower and toilet munity through his years at 3M. Well into his retirement, in the corner. DeSimone’s adaptability in that incident Jacobson, like Lehr, continued to volunteer his time. and over the years showed Thwaits that, in his words, “Desi wasn’t a stuffed shirt.” DeSimone’s leadership at 3M will be remembered DeSimone: The Champion with Grit > and Persistence for his empathy for people, his commitment to inno- vation and his willingness to make hard decisions and L.D. DeSimone was  , a native of Montreal, Canada, weather tough economic times. and a chemical engineering graduate of McGill Univer- When he became 3M’s chairman of the board and sity when he joined 3M in Canada. Eager for challenges, , DeSimone  chief executive officer in November took technical posi- — nicknamed “Desi” — DeSimone — at age  — was about five years younger than most tions in the United States, Canada, Australia and Brazil, of his predecessors. His tenure lasted a full decade until all in a single year.  . In the company’s his retirement shortly before he was “Desi was a brash kid who was running around the first century, no one, with the exception of McKnight, world,” Jim Thwaits, then 3M president, International served longer as chairman of the board and CEO. Operations, told a newspaper reporter in . “But, he  DeSimone inherited a company threatened by a deep was very innovative and smart.” When he was sent to recession in . Observers credit him with recognizing  Brazil in  , DeSimone was given responsibility for that 3M could not “save its way out of crisis,” said all manufacturing there within three years. It was a mixed Appeldorn. “He said we had to get back to creating new blessing because tough import restrictions meant that products and developing new businesses. We had to neither equipment nor raw goods were available for many regain our intrapreneurial edge. He did it by leading 3M products. DeSimone and his employees jury-rigged by e xample. He acted as a champion for a lot of little machines and scrounged for alternative materials to businesses. For example, he kept our Industrial Optics make products ranging from surgical masks and respi- business alive when it had been formally killed a couple rators to abrasives. 1 1 In 1995, 27 percent of 3M’s sales came from products introduced within the previous four years. 2 DeSimone, pictured in 1995, served as chairman and CEO from 1991–2001.

241 3M Leaders — The Right Choice at the Right Time 233 times. He was able to keep little projects moving and Desi will be remembered years from now as one funded so they didn’t get lost. Desi was a champion like of the most thoughtful leaders of our company. Herzog and Heltzer only more so. To a great extent, I — He didn’t make a decision without considering think Desi developed the intrapreneurial CEO manage- ment style at 3M.” every potential ramification and, for him, Under DeSimone’s leadership, 3M inaugurated the the number one consideration was employees. Pacing Plus Program that singled out the most promis- I know, because I saw this first hand. > Kay Grenz ing new products and business ventures and rewarded vice president, Human Resources them with additional corporate resources, attention and accelerated effort to bring them to market. One look at the major revenue producers for 3M in its cen- of earnings that 3M averages . . . and that’s the crux tennial year illustrates the power of DeSimone’s idea. of the thing.” Many of those now successful ventures were Pacing It was DeSimone who put his own personal and s.  Plus Programs in the emotional investment in the business aside and polled But, one venture that didn’t make it was 3M’s once  . his management team in late successful information and imaging business, a sector 3M’s memory and Carving out that DeSimone was asked to lead in . When he  imaging businesses and cutting accepted the responsibility, the business was the least percent  them loose meant that of the company’s revenues would disappear. Strategically, if both 2 What’s important is what we’re doing now and businesses were to grow, they how we’re preparing for the future. Principles needed to be combined in a don’t change. Values don’t change, but our ultimately single unit. That became a new company surroundings change. We have a saying, ‘If you called Imation. want to be comfortable with the future, you better DeSimone had the be part of creating it.’ quoted in > L.D. DeSimone courage to make the hard Corporate Report magazine when he was named Executive of the Year decision about what had been a major part profitable of 3M’s four sectors, despite improved earn- of 3M. Some say the ings in the highly competitive markets of consumer decision came too videotapes and computer diskettes. The huge sector late, but virtually no produced a mind-boggling array of products, from mag- one questions the netic tapes to laser imagers and advanced color-proofing reason for it — or the systems. As a sector manager, DeSimone’s challenge courage required to was to cut costs, while not sacrificing research on new make it. This was a products. Lehr called it “a fine balance.” wrenching choice, While DeSimone and his sector were able to make one that DeSimone — major gains in profitability, the business still fell short who focused on the of historical 3M expectations, and DeSimone’s even- impact of decisions handed approach to decision-making became clear. on people felt to his — “The business has been providing a good portion of the bones. earnings increase of 3M,” DeSimone told a business When the econ- reporter in  , “but it still doesn’t provide the quality omy of the Pacific

242 Chapter 14 234 Engines in Cincinnati, Ohio. He had been at GE for Desi’s tenure as chairman was the longest since years before joining 3M.  William McKnight’s. The leaders he singled out, Shortly after his appointment, McNerney and the the decisions he made and the technology he 3M management team launched a number of initiatives to drive growth and performance in the midst of one supported are important to 3M today and will of the toughest postwar manufacturing recessions. continue to be vital in 3M’s future. He embodied Rejuvenating volume growth, improving quality and the culture of 3M—multicultural, multilingual, driving efficiency were the immediate objectives. multidisciplinary. He has been all of those things Six Sigma, the company’s primary initiative, pre- sented a new, data-driven pathway to process improve- and more. r > Bill Coyne etired senior vice president, ment. Nearly every employee is involved in this quest Research and Development for improvements in costs, cash and growth that will benefit 3M, its customers and its suppliers. s, its impact  Rim went into a tailspin in the late 3M Acceleration is focused on faster and more effec- on 3M’s performance was significant. Though he was tive commercialization of new products. This initiative criticized by Wall Street, DeSimone stayed the course, provides a process to prioritize research and develop- believing that the company’s long-term investment in ment investments and to make sure that the very best that region would pay off. Rather than back away from high priority and high potential opportunities are fully business interests there, 3M held firm and the decision funded and commercialized. continues to pay off. The Sourcing initiative not only helped the company overcome a challenging economic environment, it set the stage for long-term improvement of 3M’s financial Desi’s legacy will be a strong, almost dominating, performance. attitude toward the environment. > Alex Cirillo eProductivity is helping 3M take better advantage division vice president, Commercial Graphics Division of the Web to increase speed, enhance customer service and build customer relationships. This initiative uses the DeSimone will also be remembered for his belief latest technologies both to drive down cost and acceler- that business has a key role in sustaining the planet’s ate growth. environmental resources. He co-authored a book with  , the management team, under McNerney’s In Frank Popoff, chairman, Dow Chemical Company, guidance, also fundamentally changed the dynamics called “Eco-Efficiency” that outlines how business has of leadership development at 3M. These advances were a major stake in sustainable development. The book based on 3M’s deep-rooted respect for an individual’s makes a case for eco-efficiency and its direct rewards for personal ownership over his or her own development business including enhanced productivity, better access as a leader and were designed to give each person both to capital and new product and business opportunities. the freedom and the tools to make a difference for the company. “First, we established what we expect from our McNerney: Focus on Global Competitiveness > leaders and put programs in place to further their devel-  st century, it named its first As 3M moved into the opment,” McNerney said. chairman of the board and chief executive officer from “Second, we formed the 3M outside the company. W. James McNerney, Jr. took over ames McNerney, W. J 1 Leadership Development  the company’s reins on January  . A native of , Jr., named CEO in 2001, Institute to foster the attain- Providence, Rhode Island, McNerney came to 3M from was the first 3M leader ment of these critical leader- General Electric (GE), where he last served as president recruited from outside ship attributes. Third, we the company. and chief executive officer of General Electric Aircraft

243 3M Leaders 235 — The Right Choice at the Right Time changed the focus of our employee assess- McNerney said he continues to be ment and compensation system to impressed by the vast technological, better motivate, reward and recognize market and geographic power of 3M. our very best contributors. And In fact, in , the company’s  fourth, we are making the most of official name was changed from our ‘global brains’ — facilitating Minnesota Mining and Manu- the international transfer of knowl- facturing to 3M Company to fully edge, best practices and people capitalize on the power of the brand. to advance 3M’s already powerful “We will continue to invest in global capabilities. successful technology platforms, and “This renewed focus on leadership our rich culture of innovation will always development motivates and encourages be the springboard for new products. At the everyone to reach their full potential,” he said. same time, we are infusing that culture with new 1 “When we raise the game of every individual and energy and aggressively pursuing multiple avenues for every team, we raise the game of the entire company.” gro wth to complement and leverage 3M’s historical organic growth engine.” ● 3M’s top executives needed mentors, too; over time, they learned to be mentors, sponsors and champions of others. ● 3M’s leaders learned early to be team players. ● Many of these leaders have thought and acted like entrepreneurs. ● Over 100 years, 3M has had the right person at the right time in the top job. ● Every 3M leader has stood tall in tough times. time-tested truths

244 236 Acknowledgments This book is a compilation of 3M voices, memories, facts and experiences from years. In the course of three years, more than employees,  the company’s first  retirees, customers, board members, journalists, business scholars and other observers of 3M were interviewed for this book. They told us stories we’ve heard before, as well as new ones that may surprise readers of this book. Countless others contributed photos, memorabilia, research support and feedback on the manuscript. The Minnesota Historical Society, which houses the 3M archives, was most helpful in providing both research materials and many of the images used in this book. Our thanks to them all. (Partial Listing) 3M Trademarks Lacelon™ tan Turf ™ Tar Safety-Walk™ Active™ Littmann™ Tattoo™ Sasheen™ Aldara™ ® Magic™ Tegaderm™ Scotch Aseptex™ Magnetic™ Thermo-Fax™ Black Watch™ Scotchban™ Microfoam™ Thinsulate™ Buf-Puf™ Scotch-Brite™ Micropore™ 3M™ Colorquartz™ Scotchcal™ Minitran™ Three-M-Ite™ Command™ Scotchcast™ Mistlon™ Transpore™ Controltac™ Scotchgard™ Nexcare™ Tri-M-Ite™ Diamond Grade™ Scotchkote™ Nextel™ Trizact™ Durapore™ Scotchlite™ Nomad™ Unitek™ DuraPrep™ Scotchlok™ Novec™ VHB™ Dyneon™ Scotchmate™ O-Cel-O™ Vikuiti™ Elek-Tro-Cut™ Scotchshield™ Panaflex™ Volition™ Filtrete™ Skimmit™ Plastiform™ Wetordry™ Fluorel™ Steri-Strip™ ® Post-it Imperial™ Stikit™ Interam™ Tambocor™ Reston™ Isotak™ Tar tan Track™ Retsul™

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