J. Eng. Technol. Manage.

19 (2002) 2538

Innovative science and technology commercialization strategies at 3M: a case study

Pedro Conceio a, , Dennis Hamill b , Pedro Pinheiro c
a

IN+, Instituto Superior Tcnico, Center for Innovation, Technology and Policy Research, Lisbon, Portugal b 3M Company, St. Paul, MN, USA c IC2 Institute, The University of Texas, Austin, TX, USA Accepted 12 November 2001

Abstract Large, successful rms, even with a history of innovation, may create organizational mechanisms that hamper innovation and customer response. This paper will describe how 3M purposefully ghts this tendency by attempting to foster innovation within the company through the development of efcient strategies to commercialize technology in rapidly changing environments. The paper will describe 3Ms general policies and its entrepreneurial culture, which are largely well publicized in the popular literature. But the focus will be on on-going strategies to accelerate the commercialization of technology in its electronic business. Specically, the case of the Electronic Markets Center (EMC), a 3M Electronic and Communications Group unit created in 1997 to leverage the broad range of 3Ms electronic products and technologies will be described and analyzed. Fifteen business units were organized around one single entity to more effectively ensure an overall coordinated strategy for 3M in the electronics market that could change the growth rate of 3Ms sales to the electronic industry from 9% per year to 24% per year. The paper will focus on two critical components of the EMC: (1) what were the strategies behind the design of EMC; (2) how did EMC developed processes to manage the interdependence of the technical and business understanding of industry segments and the relations with key accounts. The paper concludes with lessons learned from the 3M experience thus far, and with recommendations on how to ght some of the barriers to innovation and technology commercialization in large rms. 2002 Published by Elsevier Science B.V.
Keywords: Commercialization; Publicized; Organizational mechanisms

Corresponding author. E-mail addresses: pedroc@dem.ist.utl.pt (P. Conceio), dwhamill@mmm.com (D. Hamill), ppinheiro@mail.com (P. Pinheiro).

0923-4748/02/$ see front matter 2002 Published by Elsevier Science B.V. PII: S 0 9 2 3 - 4 7 4 8 ( 0 1 ) 0 0 0 4 4 - 3

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1. Introduction While the nature of competition among rms is highly dependent on industry structure, at a high level of abstraction we can contrast two ways of competing. One is through the optimization of productive resources in order to gain the market-allowed margins of prot. In a way, this competition through efciency corresponds to the perspective of rm behavior of neoclassical economics. 1 A second way is to disrupt the market through the introduction of innovations, which give to the innovative rm a temporary absolute advantage (granted by a formal patent or secured by secret) over every other rms. Again, these forms of competition co-exist in all industries, and are a concern of most rms, but Schumpeter (1950), comparing one with the other, described the competition through innovation as a bomb that destroys the building, while competing through efciency is not much more than hitting the front door. Thus, the concern with being innovative as been a major feature of most rms behavior. But to be innovative, it is important to know how the innovation process works. Early conceptualizations of the innovation process stressed the need to undergo research activities to generate new ideas. Through R&D, rms could institutionalize efforts to search the frontiers of knowledge for inventions that could translate into new products and processes. The commercialization of these products would ensue. Many studies conrm the linkage between R&D efforts at the rm level, and increased performance and competitive stance. Griliches (1998) provides an overview of a vast body of work produced by him largely dedicated to the study of this problem. Manseld (1984) is another major reference. At the other extreme, some suggested that innovation should merely be the result of perceived market needs by rms. The so-called market-pull view of innovation, pioneered by Schmookler, and critically analyzed by Rosenberg (1972), started as an empirical observation, but quickly moved into the normative world of management and policy. Still, despite the existence of a correlation between R&D expenditure in rms and innovation, this relation was far from being direct, linear and predictable. In the simplest terms, an increase by a rm of its R&D budget would not certainly assure a proportional (or even with decreasing returns) growth in innovative output. On the other hand, merely responding to market needs may not provide the leading-edge technological superiority needed to introduce really path-breaking innovations. Tidd et al. (1997) review the deciencies of both of these linear perspectives. The work of Rosenberg (1982, 1994) and others showed the complexity of the process through which new technologies are created and commercialized. Much has to do, more than with the resources committed to R&D, with what Teece (1986) called the rms complementary assets: the way in which in rm is organized, and interacts with customers, suppliers, and competitors. This view requires a more casuistic analysis of successful innovation by rms. Instead of general recipes of what makes a rm innovative, research on how successful innovation occurs needs to be complemented with case analysis of rms with a track record in terms of technology commercialization. This paper is a contribution to this literature. We will describe initiatives within a large, innovative rm, 3M, aimed at improving the performance of technology commercializa1

Of course that in conceptualized perfect markets, price equals marginal productivity, and thus prots are zero.

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tion. Why does a large and innovative rm such as 3M need to do something about its technology commercialization capability? Very successful companies are often the victims of their own success. Success brings growth, larger size and increasing economies of scale (Chandler, 1990), more resources to invest in business and technology opportunities (Schumpeter, 1950), higher leverage in the marketplace and in the bargaining relationships with customers and suppliers (Porter, 1988), to name a few advantages. These benets translate into better conditions for further success and growth. Still, success brings with it the curse of complacency and conservatism. These adjectives should not be understood as making an universal moral judgement on the path followed by successful companies, but are rather associated with the consequences of the organizational requirements of large enterprises: more codied and rigid procedures (as people cease to know each other personally). Weber (1997) was the rst to conceptualize this need of large organizations, with his theory of bureaucracies. Chandler (1962, 1980) showed how the creation of bureaucracies based on organizational innovations such as the multi-division company (pioneered by Alfred Sloan at General Motors) was critical to the business development of the large American corporations of the second half of the 20th century. But, again, bureaucracies tend to be complacent and conservative. Technological change, innovation, and changing consumer preferences risk being overlooked. While being large brings advantages in terms of resources available to invest in R&D and other innovative activities, as Schumpeter (1950) argued, it is also true that size brings with it organizational features that can hamper innovation (Teece, 1986). Anecdotes on large rms, even with a history of innovation, becoming complacent and failing to see the technological and consumer preferences changes abound. The example of IBM in the early 1990s comes prominently to mind (Hannah, 1998). The argument outlined in the previous paragraphs seems inconsistent with Chandlers (1990) theory of rm development. In this well known work, Chandler (1990) argued that large corporations, many created by the beginning of the 20th century, were able to accumulate technical, organizational, and marketing capabilities that translated into virtually unassailable rst-mover advantages that led them to dominate over time the oligopolies they generated. Based on this argument, Chandler (1990) went as far as suggesting that the decline of UKs economic dominance was associated with its inability to create the conditions for the emergence of these large global giants, while Germany and the US were able to do just that. However, Hannah (1999) shows that Chandlers (1990) argument, which is largely in synch with common sense perception, is clouded by selection bias: by looking only at successful rms, one looses track of the many failures that occurred over time. Table 1 summarizes what has happened in 1995 to the global top 100 industrial of 1912. It shows that almost half of the giants of 1912 disappeared by 1995, and that almost a third experienced bankruptcy. Thus, despite our common perception that giant rms created at the start of the century are still successful today (we may think of Du Pont, Shell, Procter & Gamble, Siemens, among others), the more common outcome for a large rm, with giant managerial hierarchies and large market and rst-mover advantages, is failure. By the same token, Chandlers (1990) hypothesis on the superior performance of large rms in the US and Germany versus UK fails the scrutiny of careful empirical analysis. In fact, Hannah (1998) shows that only 23% of the 1912 US giants still existed among

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Table 1 Summary measures of long-run performance of the 100 global largest rms of 1912 by 1995a Type of outcome Survives in top 100 Survives and larger in 1995 than in 1992 Experiences bankruptcy or similar Larger in 1995 or on earlier than in 1912 Survives in any independent form Disappears
a

Probability of outcome (%) 19 28 29 35 52 48

Hannah (1999, p. 259).

the top 100 in 1995, while 75% of the large UK rms persisted from 1912 to 1995. Thus, Hannah (1998, p. 64) concludes that Europe has been the home of the Chandlerian stable oligopolies; America has more obviously been the creative (and destructive) dynamo of the Schumpeterian paradigm. Therefore, we can now be more secure of Schumpeters (1950) assertion mentioned in the rst paragraph, that Schumpeterian competition is a much more powerful force than efciency competition. But we also see that creative destruction has been a major feature of the economic history of large rms in the US, probably more intensely than anywhere in the world. These arguments combine to reinforce the idea that the ability of rms to innovate is crucial. And even large rms, which have in principle great advantages as compared with small ones, are not immune to the destructive power of innovation by other rms. We have also seen that the innovation process is not linear, nor a direct result of R&D, neither a consequence of predicting market needs with perfect foresight. So what do successfully innovative rms do right? This answer, obviously, has many responses, and we again insist that efforts to look for recipes are doomed to fail. But we can exclude apparently simple, and seemingly reasonable, answers. For example, we saw that just doing R&D is not enough. And that anticipating market needs is not enough either. It is also not sufcient to try to create monopolistic positions by relying extensively on patenting is not likely to work, especially in highly volatile and vibrant high technology areas. Flamm (1988), and Usselman (1993) showed that Sperrys attempt to design and patent basic approaches to computing, in an effort to establish and sustain dominant market positions early at the outset of the computer revolution failed miserably. The pace and breadth of technical change was so overwhelming that Sperrys patents would be obsolete almost immediately after being granted. Usselman (1993) shows that it was IBM, without being a particularly outstanding technological innovator, which was able to conquer a large pie of the emerging computer market. And the reasons had more to do with Teeces (1986) complementary assets than with technological innovative capability. Therefore, as Mathews (1996) has argued, contrary to the traditional strategy and structure thinking of organization theory, successful and innovative rms have attributes such as exibility, adaptability, responsiveness, that translate into a capacity to innovate rapidly. To encompass these new attributes the term organizational learning has been advanced. Extending the concept of learning, which is traditionally used for human beings,

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into organizations has its challenges. In the broadest sense, we will follow Mathews (1996) denition whereby organizational learning is equated with a rm ability to accommodate changes (e.g. of products, technologies, markets). To systematize further our concept of organizational learning, we will identify three elements: information, people, and organizational units. Here, the term organizational unit is the most ambiguous. It can stand for an entire small rm (without any structural divisions) or for a division within a large corporation. As a working denition, we will say that it is the smallest unit within a rm with a very high level of autonomy. People correspond, obviously, to the individuals that work in the rm. Here, we will be interested primarily in their level of knowledge and potential for learning, which economists often call human capital. Finally, information stands for all the codied knowledge in the rm that is formalized, such as contracts, patents, production processes, R&D in progress, and so forth. Here, we include also all the machinery, computers, and other physical assets, or what is called physical capital. Learning occurs both at people level and at unit level. People learn by increasing their human capital (through education, training, experience, expanding their networks of personal contacts). Learning at the unit level is reected in increased productivity, resulting from scale-effects, better communication, and establishment of routines, among other possibilities. Typically, both of these types of learning should also be reected in an increase in the stock of codied knowledge of the rm, even if much remains tacit. Organizational learning is the result of this increase in the stock of codied knowledge, human capital, and unit-level productivity. Encompassing the way people and units learn is the system of incentives, rules of conduct, guidelines and informal norms of behavior that surround the rms activity. For better of a better word, we will call this context the rms culture. But organizational learning, that is, learning at the rm level, goes beyond the mere aggregation of individual and unit-level learning: it results from the interaction of people and units across the rm. It depends on the relationships and networks that are established between people and units, within the context provided by the rms culture and its market and external environment. For a discussion on economic learning see also Conceio and Heitor (2001). Given this framework of analysis, the remaining of the paper proceeds with a case study of one of the 3Ms efforts to enhance organizational learning. Section 2 will describe, precisely, 3Ms culture, which we classify as being oriented towards innovation. We will show in detail how 3Ms structure, strategy, system of incentives, and informal rules of behavior are oriented towards innovation. A major, and important, feature of this system is the high level of decentralization of 3Ms divisions. These divisions correspond to the units of our conceptual framework described above. 3Ms culture of innovation has been extremely successful at promoting individual and unit-level learning. The high level of autonomy granted to its divisions allowed just the characteristics needed to innovate: exibility, adaptability, and responsiveness, without the encumbrances of a large hierarchy. However, while learning at the people and unit levels has largely been optimized, a perception emerged that rm-wise learning could be enhanced. Section 3 describes a deliberate effort by 3M to promote organizational learning, that is, learning at the rm level, beyond the individual units and employees. Since this effort is still underway, Section 4 presents a brief discussion of preliminary conclusions.

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Table 2 3M technology platforms Adhesives Biomedical systems Ceramics Chemical power sources Coated abrasives Composites Dental and orthodontia Display technology Electrical insulating materials Electromechanical systems Electronics and software Engineered lms Fiber optics Filtration and separation Fluorochemicals and uoropolymers Health information Imaging Inks and pigments Laser-induced thermal imaging Mechanical fasteners Melt processing Micro-encapsulation and micro-spheres Micro-interconnect systems Micro-replication/micro-structured surfaces Non-wovens Pharmaceuticals and drug delivery Precision coating Radiation processing Skin health Specialty chemicals and polymers Vibration control system Visual systems Weatherable lms

2. The culture of innovation at 3M 3M, founded in 1902 in Two Harbours, MN, is today recognized around the globe as one of the worlds most innovative and admired companies. 3M is a US$ 15 billion 2 manufacturing company with over 70,000 employees 3 worldwide and more than 60,000 products organized in two main business sectors: life science sector and the industrial and consumer sector. Its products, which are the result of 3Ms strategy of building in its more than 30 core technology platforms (Table 2) instead of focusing on a single strategic core competence, range from adhesives, pharmaceuticals, to overhead projectors, abrasives and much more. 3Ms innovation culture comes from the times when the ve entrepreneurs who created a company to explore a mine of what they thought being corundum, 4 realized that all they had was a low grade anorthosite, which would not meet the requirements of the booming abrasive industry as they initially believed. Quickly they had to adapt and focus on producing sandpaper products. But it was with McKnight, who joined the company in 1907 has a bookkeeper and later would become Chairman for more than 40 years, that 3M really developed a culture towards systematic innovation. Since then, 3M has been characterized by McKnights principles of supportive management which encourages employee initiative and innovation. The following is an analysis of the creative and innovative acts of management used by 3M to promote innovation within the company, according to the model proposed by Kozmetzky (as discussed in Carbonara, 1998). On the innovation strategy at 3M see also Figueroa and Conceio (2000).
3M 1998 annual report. 3M 1998 annual report. 4 Corundum is the word used to describe the group of gemstones to which both ruby and sapphire belong. Its chemical composition is aluminum oxide and trace of various transition elements.
3 2

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2.1. Strategy 3M managers take Peters words that only the companies that thrive on chaos by constant innovation are the only ones set to survive in the years to come (Peters, 1997), very seriously. Coyne, 3M Senior VP, Research & Development, says that while for other companies innovation is an important element of their strategies, for 3M innovation is its strategy (Coyne, 1997). Innovation is so important for 3M that is clearly stated in its vision To be the most innovative company in the markets it serves. To promote that innovative spirit 3M has been driven by the following set of strategies. 30%/4 Rule: This rule states that each year 30% of 3Ms sales must result from products introduced in the last 4 years. 15% Rule: One of the most important principles in management at 3M is the promotion of entrepreneurship and freedom to pursue innovative ideas. At 3M that is materialized through the 15% rule, which allows technical people to spend 15% of their time in projects of their own choosing without needing approvals or even without having to tell management in what are they working on. Products are a divisions responsibility: Each division is oriented directly towards the market, aiming at responding to its customer base. Technologies are shared throughout the company: While products responsibility lies within each division, technologies belong to the company. Every division has access to the technology resources of the entire company but also has the responsibility to share its customers technological needs throughout 3M. Technology combinations: 3M promotes the combination of its core technologies in order to advantage of those synergies to innovate new products and new applications. Strong intellectual property protection. Furthermore, in order for 3M to prioritize major new programs and allocate the needed resources to bring them to market sooner, it also sponsors the Pacing Plus Initiative. Under this program, each division is encouraged to develop one or two products that will change the basis of competition, increase sales and protability, eliminate low-value projects and produce growth. Products that qualify for the Pacing Plus Initiative program will be given additional nancial support and access to other resources. To qualify for the Pacing Plus Initiative, a program must meet all the criteria below: 5 Change the basis of competition for a business unit. Provide new unit growth. Meet corporate nancial targets. Use a new product commercialization system. Be fully resourced. Have an accelerated time frame. Have global applications. Incorporate proprietary technology that has patent protection.

3M Intranet: Bill Coyne on the Pacing Plus Initiative.

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2.2. Culture and environment 3Ms culture is based in McKnight management principles laid out in 1948. More than a great manager McKnight was also a business philosopher, who crated a corporate culture that encourages employee initiative, entrepreneurship and innovation. The following are the basic rules of management he laid out in 1948: 6 As our business grows, it becomes increasingly necessary to delegate responsibility and to encourage men and women to exercise their initiative. This requires considerable tolerance. Those men and women to whom we delegate authority and responsibility, if they are good people, are going to want to do their jobs in their own way. Mistakes will be made. But if a person is essentially right, the mistakes he or she makes are not as serious in the long run as the mistakes management will make if it undertakes to tell those in authority exactly how they must do their jobs. Management that is destructively critical when mistakes are made kills initiative. And its essential that we have many people with initiative if we are to continue to grow. Failure is part of the innovation process: Tolerance for ideas that do not work and learning from mistakes is an integral part of 3Ms culture of innovation, where failure is seen as a learning experience. Informality: 3M is open, informal and in a rst name basis. Entrepreneurship and intrapreneurship: Evolutionary spin-offs have developed a key role in 3Ms growth. 3M also fosters innovation by allowing the formation of both formal and informal new venture teams. These teams, which are composed by manufacturing, engineering and marketing full-time volunteers, have the ability to stay together if a product proves to be successful. These may represent the rst steps towards a new business unit. New venture teams are ruled by the principle of start small, learn how a business works and then expand make a little, sell a little. Diversied technological base. Technology exchange within the company. Customer driven innovation: 3M has a strong commitment to develop products driven by the marketplace. Since its early days that 3M realized that in order to create products that really satisfy the customers needs, both sales representatives and technical people had to be in frequent contact with the customers where the products were being used. It was again McKnight as a Sales Manager who understood that a salesman would have a better chance of providing competitive products if he could get into the factory oors, talk to the workmen who used those products, and understand exactly what were his needs and explain him how 3M products were superior to the competition. This way 3M identies the customer problems, anticipate their needs and develop innovative solutions. All of these aspects promote a culture that emphasizes risk taking, teamwork, innovation and entrepreneurship.
6

Available on the Internet at: http://www.mmm.com/prole/looking/mcknight.html.

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2.3. Networks Communication is an essential part of 3M success. To facilitate the communication between technical people, marketing, sales, manufacturing and customers, 3M encourages formally and informally networking activities that will assure coordinated actions. The following are some of the means through which 3M creates conditions to an efcient interaction and cooperation among its employees, internal organizations and customers. 3Ms Technical Forum: Organization to which all technical people belong and where they share technology, best practices, policies and procedures. Besides its lectures and problem solving sessions, the Technical Forum also sponsors an annual event where all the divisions show their latest products and technologies, and also sponsors specialized chapters in different technical areas. Exchange of personal between divisions and countries: It is a common practice at 3M to see engineers and other personal come to US labs and US personal go oversees to help introducing new products or new technologies. Infrastructure to facilitate communication: 3M takes advantage of the latest technologies to promote communication and interactivity between teams. At 3M, the usage of tools like groupware applications, teleconference and videoconference equipment is a common practice within the entire company. 3M also has its own internal TV to disseminate corporate information, values and messages, which is also used for distance education (seminars or courses). Furthermore, even the facilities are designed to facilitate the interaction between people from different divisions and different functions. 2.4. Organizational form At 3M each division is managed as an individual company. This decentralization into small and autonomous business units allows them to minimize bureaucracy and concentrate on new ideas and their own customer base. Typically, the creation of a business unit is the result of the consolidation of a new product team. When a 3Mer has an idea for a new product, he or she recruits a team of members from technical areas, manufacturing, marketing and sales. The team designs the product and plans how to manufacture, market and sell it. All members of the team grow according to the project growth. Some of them become departments, some become divisions, while their project leaders become department managers or division managers. As a result, although 3M is big it acts small. 2.5. Motivations and incentives At 3M, recognition is done through formal and informal mechanisms. In addition to the common tools to promote creativity and innovation, like salary increases and promotions, nothing is so effective as assuring that dedication, hard work and success are recognized both by peers and senior management. In this context, 3M developed the following serious of programs and awards to recognize its most valuable employees: Golden Step Award: Recognizes teams whose new products have achieved US$ 5 million in protable sales within 3 years of being launched.

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Technical Circle of Excellence: Recognizes technical employees who excel in their work. These awardees are nominated by the entire technical community. Carlton Society: Honorary organization of individuals who made extraordinary contributions to 3Ms science and technology. Genesis Grants: Corporate grants to support ideas which do not t into the technical peoples division. Alpha Grants: Grants awarded for innovations in administrative, marketing and nontechnical areas.

3. Case study: the Electronic Markets Center and the 3M electronic business In 1995, worldwide 3M sales to the electronic industry were approximately US$ 1 billion or about 10% of 3Ms total sales. These sales were addressing an estimated total worldwide electronics industry of US$ 800 billion and an available market for 3M products of at least US$ 20 billion. 3Ms approach to this market has been very fragmented, mainly based on individual products and divisions focus. As a result of a lack of coordination between the business units and the consequent duplication of efforts, 3M was not leveraging its broad range of products and technologies in the electronic industry and was observing frequent signs of customer dissatisfaction that often decreases customer loyalty. As another consequence of that fragmentation 3Ms brands and products and technology presence within the electronic industry was also diluted. One of 3Ms greatest strengths is the autonomy and independence of its some 45 divisions, each able to respond quickly in its business arena, assisted by corporate technology centers and other resources, but not handcuffed by large organizational structure. Over a dozen of these divisions have found the electronics industry to be attractive opportunity for their products, especially due to higher industry growth when compared to some of their other industrial market segments. These divisions have thus evolved a very curious and interesting portfolio in electronics, albeit one that grew accidentally, and without purposeful focus on electronics customers needs. In particular, since business engagement was being managed by business units which were on the average about 25% focused on electronics, most customer activity received only fractionated attention and very little cross-division partnering took place. In February 1997, the 3M Electronic Markets Center was created to help 3M position in the electronics industry by driving a one companyone voice initiative in the electronic business. Although the overall growth of the electronic industry exceeds 12% per year globally, and some segments are growing even faster at 2040% per year, 3M growth had not kept up with these industry levels. The challenge for this new organization was to help change the growth rate of 3Ms sales to the electronic industry from 9 or 10% per year to well over 20% per year, with a goal of achieving a US$ 10 billion 3M sales volume to the electronics industry in 2006. In this context, the EMC was designed to put in place processes to achieve the established goals through three main strategies:

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1. Leverage 3Ms broad product portfolio in key accounts to accelerate growth of existing and modied products. This sell what weve got portfolio management strategy focuses on making it easier for customer decision makers to access and use the rich broad selection of 3M products. 2. Identify through close key account involvement, opportunities to leverage 3Ms breath in technologies to sponsor and improve the probability of success of products new to the world which address real customer problems. This strategy emphasizes deep understanding of customer needs by segment and linking those needs to potential solutions from multiple 3M technology sources. 3. Identify gaps in 3Ms product and technology portfolios, with respect to industry needs, and drive alliances/acquisitions to ll them. In order to drive 3M to the desired growth objectives in the electronics industry initiatives were focused in four industry segments which are growing rapidly and which offer opportunities for a majority of the divisions related with the EMC. Those segments were: storage systems, semiconductors, display systems and printed circuit board fabrication and assembly. These segments each offer signicant growth, key accounts running similar manufacturing processes, needs for technology solutions and they each exhibit opportunities across a number of 3M division. 3Ms business in electronics spans a wide variety of products including: Board and cabinet interconnect: copper, CoAx, ber. PC and ex circuit component interconnect, sequencing tapes, EMI control. Flip-chip, MBGA, micro-interconnect to chip. Chip and wafer processing; micro-abrasives, specialty chemicals, static control, electrooptic packaging. Vibration control, special tapes and adhesives. Brightness enhancing lms, optical lms. Packaging and labels at all integration levels. Micro- and macro-ltration products.

About 60% of 3Ms sales to electronics are outside the US and are supported very heavily by 3Ms global organization. Divisions are headquartered in the US; 5 in Austin, Texas and the remaining 40 in St. Paul, MN. These divisions are headed by General Managers who have global P&L responsibility for their products. For the past 50 years, 3M has been building a strong international organization, with wholly owned subsidiaries in over 80 countries, structured to support those global divisions with local logistics, sales/marketing, manufacturing and technical organizations driving country-specic customer satisfaction. This is a complex task, handled by a complex organizational structure, but the traditional think globalact local approach has worked well for 3M over the years. As the EMC was created, the need for global emphasis was forefront, as the electronics industry is made up of a complex shifting pattern of technology and manufacturing regional strengths and competencies. Thus, regional EMCs were put in place for Europe, Japan and the southeast Asia region, with directors reporting to the global EMC in Austin, Texas. Addressing the challenge of better focusing 3M on electronics, and building understanding and intimacy with the industry, the EMC was structured to provide that leadership for 3M. An industry marketing organization was put in place to provide, for 3M, overall

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industry insight, market segmentation and industry consortial involvements. In each selected segment, technical marketing teams provide segment insight and foresight through technology and process roadmapping, leadership participation in segment industry and standards organizations, and overall 3M portfolio management strategies and priorities. In addition, in each selected segment, strong technical sales leaders have been assigned as key Account Managers for each major customer to provide a single point of presence for both existing product access and technology problem solving for the accounts. One of the strongest elements of the EMC approach is the identication of a number of corporate strategic accounts. These make up the top 20 electronics OEMs in the world. Each of these have assigned to them a Strategic Account Director or Manager responsible for: Providing a single channel for these most important customers. Promote 3Ms total capabilities. Align 3Ms major programs to customers present and future business needs. Deploy 3M global resource to support customers global operation. Present 3Ms value-add solution package. These account leaders have put teams in place to ensure that all engagement ranging from daily support of purchasing and logistics issues all the way to management of joint technology development programs are managed smoothly and coordinated across all of 3M. The EMC initiative is clearly a departure from the typical 3M approach of product driven divisions moving into new markets leveraging niche applications from earlier served home markets. That traditional approach was not working until the EMC addressed specically the challenge of enabling 14 divisions working together to leverage 3Ms broad technical offer in electronics, to be closer to the market and to deal with the customer with one single face. Table 3 lists the divisions involved. The challenges of totally gaining that leverage while maintaining division autonomy and ability to act are not easy to overcome! Attempting to accelerate the technology commercialization process through customer foresight driven compelling business cases only works easily if control is centered in a single business unit, not dispersed among several. Integration of the efforts of these business units in electronics is well underway.
Table 3 3M business units in the EMC AdCer: Ceramic Project AdhD: Adhesive Systems Division ASD: Abrasive Systems Division BSD: Bonding Systems Division EH&PD: Electronic Handling and Protection Division ELPD: Electrical Products Division EPD: Electronics Products Division FPD: Filtration Products Project ITSD: Industrial Tape and Specialties Division OSD: Optical Systems Division PMD: Performance Materials Division PSD: Packaging Systems Division S&SSD: Safety and Security Systems Division TSD: Telecom Systems Division

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4. Conclusions The EMC initiative exemplies 3Ms efforts to maintain its innovation leadership through changes in its organizational structure and strategy. Drawing from the strengths of its culture and organization a new unit, EMC, was created to coordinate 3Ms response to pressing market needs in a growing sector. The point we would like to stress is that there was a need for some higher level of coordination (beyond the division level) to achieve 3Ms intended integrated response. While the strategy behind the establishment of highly responsible and autonomous divisions has shown to be sound and effective, the identication of a very large growth opportunity in the global electronic industry could not be addressed with the fragmented divisional market approach. This 3M case study illustrates that organizational change to enhance innovation and creativity does not necessarily go in the direction of creating smaller and more fragmented units. Often it is more important to enhance the networks and connections among existing organizational units to provide a more coherent rm-wide response to market needs. References
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