3M offers you challenging opportunities to grow and succeed in your career.

Learn more
about what it's like to work at 3M. Or, listen to 3M employees talk about what it's like to
work at 3M.
We're Unique
At 3M, we're proud to be in a class of our own. Just a few of the things that set us apart
from the competition:

3M has two parallel career paths in the technical organization known as the "dual
ladder" system. In addition to a management career path, there is a technical
career path. This technical path honors the prestige 3M scientists have enjoyed
during 3M's history and allows employees to advance their position and
compensation consistent with their contributions. All without abandoning what
they do best research and development.

Our culture of innovation means we listen to all ideas regardless of job title or
position.

The "15 percent rule" gives employees the opportunity to spend 15 percent of their
time pursuing a project or idea outside the scope of their day-to-day job. This
environment fosters creativity and innovation what 3M is known for.

Our Genesis Grants give employees an opportunity to pursue an idea with

dedicated funding and resources.

Working for 3M means the opportunity to work with talented colleagues around
the world.

Challenging work - Global Company

At 3M, you'll have the opportunity to work with smart, talented people from around the
world. The diversity of 3M means you can explore career opportunities and develop new
skills, without leaving the company. See how current 3M employees have leveraged these
opportunities to grow in their career. Meet Our People
Values, Ethics and Integrity
3M is a company that you can be proud of. 3Mers are guided by our 3M Values, Business
Conduct Policies and Human Resources Principles.
Leadership
"When you grow your people, the company will grow." Chairman, President and CEO,
W. James McNerney. At 3M, we're committed to developing leaders. Our commitment to
leadership development was recently recognized by the Human Resource Planning
Society and Hewitt Associates who ranked 3M first in a recent study of leadership
development at 350 leading U.S. companies.

Who We Are
3M is a diversified technology company with a worldwide presence in the following
markets: consumer and office; display and graphics; electro and communications; health
care; industrial; safety, security and protection services; and transportation. 3M is a global
enterprise characterized by substantial intercompany cooperation in research,
manufacturing and marketing of products.

Our Values

Provide investors an attractive return through sustained, quality growth.

Satisfy customers with superior quality, value and service.

Respect our social and physical environment.

Be a company employees are proud to be part of.

3M At a Glance

Worldwide sales: $20.011 billion.

International sales: $12.133 billion (61 percent of company's total).

Companies in more than 60 countries.

3M products sold in nearly 200 countries.

More than 67,000 employees.

3M employs mostly local nationals. Fewer than 300 3M employees worldwide are
Foreign Service Employees not residing in their home countries.

Plant locations: 132 worldwide.

Sales office locations: 189 worldwide

3M Businesses
3M serves customers through seven business segments, which increase speed and
efficiency by sharing technological, manufacturing, marketing, and other resources.
These seven businesses are:
Consumer and Office Business
Supplying an array of products that keep homes cleaner, offices organized
and buildings well-maintained, we're home to some of the world's bestknown brands.

Display and Graphics Business

We're a world leader in films that brighten the displays on electronic
products. We're also a leader in touch screens and touch monitors; optical
components used in projection TVs; reflective sheeting for highway
safety; and materials and systems for producing high-performance,
attention-getting graphic images.
Electro and Communications Business
We're a leading supplier of innovative solutions to the electrical, electronics
and communications industries.

Health Care Business

We help health care professionals improve the quality of health care
throughout the world every day.

Industrial Business
Our products and services help manufacturers improve their businesses by
achieving new levels of quality and operational efficiency.

Safety, Security and Protection Services Business

Our products increase the safety, security and productivity of workers,
facilities and systems around the world.

Transportation Business
We serve the transportation market with products and components for the
manufacture, repair, and maintenance of autos, aircraft, boats and other
vehicles

Environmental, Social and Economic Sustainability

Sustaining
Our
Future:
3M's Progress toward Environmental, Social and Economic Sustainability
3M believes that active and responsible citizenship can make a successful company even
stronger. We vigorously affirm our commitment to sustainable development through
environmental protection, social responsibility and economic progress. We are committed
to help meet the needs of society today while respecting the ability of future generations
to meet their needs. That is what we mean by sustainability.
Within this site, you'll find details on our vision, strategies, policies, programs and
performance. This site is regularly updated with results, data and the latest developments
(What's New) at 3M on the environmental, social and economic fronts.
Supporting the Community
From early on, 3M has aimed to
be a good corporate citizen,
helping to bring about a better
quality of life and education in
3M communities.

S
u
s
t
a
i
n
i
n
g
t
h
e
E
n
v

i
r
o
n
m
e
n
t
W
i
t
h
s
t
r
o
n
g
m
a
n
a
g
e
m
e
n
t
s
y
s
t
e
m
s
i
n
p
l
a

c
e
,
3
M
h
a
s
a
l
o
n
g
h
i
s
t
o
r
y
o
f
c
o
n
t
i
n
u
o
u
s
e
n
v
i
r
o
n

m
e
n
t
a
l
i
m
p
r
o
v
e
m
e
n
t
s
t
o
m
i
n
i
m
i
z
e
t
h
e
i
m
p
a
c
t
o
f

o
u
r
m
a
n
u
f
a
c
t
u
r
i
n
g
p
r
o
c
e
s
s
e
s
a
n
d
p
r
o
d
u
c
t
s
o
n
t
h

e
g
l
o
b
a
l
e
n
v
i
r
o
n
m
e
n
t
.
Investing
in
People
We've created a culture that
promotes employee pride and wellbeing by providing the tools,
resources and personal support
necessary to live 3M values and
work for innovation and excellence.

Solutions
for...
Architecture &
Construction
Automotive, Marine and
Aerospace
Electronics Manufacturing
Graphic Arts
Health Care
Home & Leisure

30 Years of Pollution Prevention

Pays
(3P)
In 2005, the 3P program
celebrates its 30th anniversary.
Through
the
voluntary
participation of 3M employees,
more that 5600 3P projects have
been completed, reducing more
that 2.2 billion pounds of
pollution and saving nearly $1
billion based on aggregated data
from the first year of each
project

Manufacturing & Industrial

Office
Safety: Transportation and
Personal
Security (Worldwide)
Utilities and
Telecommunications

10

3M's Major Innovations

Date Event
2001 3M Inflata-Pak Air Cushion Packaging. This packaging eliminates the need
for peanuts or bubble wrap while protecting fragile items for shipping. Made of
tough, durable plastic, it conforms to odd shapes and seals itself.
2000 3M SandBlaster Sponge Products. This line of sanding products includes
sponges, sponge mats and sheets. They are color coded with variations in grit to
take the guesswork out of selecting the appropriate finishing product for the task at
hand. They sand three times faster than conventional sanding sheets, while lasting
three times longer.
3M Laminating Products. These products make laminating possible without the
use of heat.
1999 Scotch Photo and Document Tape. This acid-free tape is ideal for permanent use
since it does not yellow or affect the documents or paper on which it is used.
3M Light Management Technology applies breakthrough physics in
telecommunications, photonics, lighting, medical, automotive, packaging and
horticulture.
1998 Scotch-Brite High Performance Cloth. This microtextured cloth traps dust and
other small particles in its weave, and can be used wet or dry for dusting and
cleaning mirrors and windows. It eliminates or reduces the need for additional
chemical cleaners.
3M Flexible Circuits are adhesiveless flexible circuitry that connect components
in ink jet printers and link integrated circuits to printed circuit boards. They are
used in disk drives, hearing aids and electronic devices, such as cellular phones.
3M began working on flexible circuit technology in the early 1970s and is a
pioneer in the industry.
1997 Pharmaceuticals Division introduced Aldara (imiquimod) cream -- an immune
response modifier -- for the treatment of external genital and perianal warts. The
cream, available by prescription, is a safe, effective new treatment for an estimated
4 million Americans who have this disease.
3M Volition Fiber Optic Cabling System is the first economical fiber optic
network cable system for data-intensive communications network applications.
Scotch Pop-Up Tape Strips and Dispensers allow easy, one-hand dispensing of
market-leading Scotch brand tapes.
1996 3M HFE (hydrofluoroether) Fluids. A family of products designed to replace

11

chlorofluorocarbons (CFCs) and other ozone-depleting substances used in cleaning

solvents, coolants, carrier fluids and other materials.
3M Dual Brightness Enhancement film. Increases the brightness of laptop
computer screens by 60 percent and delivers sharper readouts on pagers, cellular
phones, calculators and other devices with electronic displays.
3M Scotchprint Printer 2000. Large-format graphics printer produces a
colorful, durable 8- by 10-foot display in two minutes and, in less than 20 minutes,
can produce graphics to cover a standard semitrailer truck.
1995 3M Trizact Abrasive Products. The first abrasive product with a precise,
structured surface composed of abrasive composites bonded to a flexible backing.
3M Precise Mousing Surface. The first mouse pad with patented
microreplication technology that offers users precise pointing of their mouse.
Airomir Metered-dose Inhaler is introduced. First medicinal aerosol that does
not rely on a chlorofluorocarbon propellant.
1994 O-Cel-O StayFresh Sponges. The sponge kills germs and their odors on the
sponge, and is the first on the market to use anti-microbial technology.
3M DryView Laser Imaging Systems. Combines for the first time, the high
quality of wet-processed silver halide film with the convenience and cost savings
of dry processing.
3M Nexcare Active Strips Flexible Foam Bandages. An advanced waterresistant adhesive provides extra sticking power on perspiring skin.
1993 Scotch-Brite Never Rust Wool Soap Pads introduced. Made from recycled 3M
polyester film waste.
3M SelfCheck Automated Library System. The first commercial automatic book
check out system for libraries.
1992 3M APC Adhesive-Coated Orthodontic Brackets are introduced, the first
brackets to feature pre-applied adhesive.
Blue-green laser developed. Future applications in communications, data storage
imaging markets.
1991 3M Scotchprint Electronic Graphic System, the first alternative to short run,
full-color, screen-printed graphics introduced.
3M Scotchshield 3 Window Film. Shatter-resistant, heat- and cold-resistant
window protection.

12

3M HELP Patient Care Computer System introduced.

1990 3M Hot Melt Fiber Optic Connectors. The first fast, easy connections for fiber
optic cables.
1989 Maxair Autohaler Asthmatic Inhaler introduced. Accurate dose inhalers
triggered by breathing.
1988 3M Fibrlok Fiber Optic Splices introduced. This easy-to-use, highperformance product reduced splicing time from at least 20 minutes to one minute.
1985 First successful optical disks for information storage, video and audio
reproduction.
First refastenable diaper tapes introduced.
3M MS2 Modular Splicing System introduced. Makes joining telephone
cables fast and easy without interrupting service.
1984 3M Medical Laser Imager introduced. The first imager to make fast, highquality medical images from digital data.
1980 3M Cubitron Ceramic Abrasive Materials introduced. Abrasives made from
synthetic minerals which last four times longer than conventional abrasives.
Post-it Notes introduced. The sticky yellow notes that revolutionized
communication by message.
Scotch VHB (Very High Bond) Tapes introduced. Tapes strong enough to
replace rivets and screws in fastening operations.
3M Scotchcast Casting Tape material introduced. Scotchcast casting tape is
50 percent lighter, yet stronger, than plaster casts.
1979 Thinsulate Thermal Insulation introduced. Light-weight warmth with much less
bulk than previously possible.
1978 3M Fire Barrier Sealant developed. Heat-activated material that helps prevent
the spread of fires.
1975 3M Pollution Prevention Pays (3P) introduced, leading to reductions of more than
1.3 billion pounds of pollution.
3M Buf-Puf Skin Care products introduced.
1973 3M Trimax Medical X-ray Film introduced.
1972 3M Data Cartridge technology revolutionizes computer data storage.
1970 3M Scotchban Paper Treatment developed. Makes grease-proof food

13

packaging possible.
3M Box Sealing Tapes replace mess and bother of glue seals for the packaging
industry.
1969 3M Light Water Fire Fighting Foam introduced.
1967 The first disposable face masks for respiratory protection developed.
1964 3M introduces Dry Silver technology. Produces high-contrast or continuous
imagery by heat process in seconds, replacing liquid chemicals, powders or toners
to make prints from microfilm.
1963 Carlton Society formed to honor extraordinary scientific and technical
contributions to 3M.
1962 Tartan Track. The first synthetic running track.
Scotch Magic Transparent Tape is introduced.
1960 3M Steri-Strip Wound Closures introduced. The first medical wound closure
tape.
1959 Scotch-Brite Cleaning Pads for consumers introduced.
1958 Scotch-Brite Floor Cleaning Pads introduced.
1956 Scotchgard Fabric and Upholstery Protector introduced.
1954 Scotch Magnetic Video Tape used in the first recording of television pictures.
1952 Electrical insulation products, 3M Scotchlok Electrical Spring Connectors.
1951 3M Technical Forum is established to "encourage free and active interchange of
information and the cross-fertilization of ideas ..."
First fluorochemicals produced.
3M presensitized photo-offset printing plates introduced.
1950 Scotch Surgical Drape introduced.
1948 Nonwoven fabric developed. The technology has since been "spun-off" to produce
Scotch-Brite Cleaning and Finishing Products, Thinsulate Insulating
Materials, surgical masks, absorbent materials for oil and other hazardous liquids,
as well as many medical and surgical tapes.
Scotch Filament Tape introduced.
1947 Scotch Magnetic Tape, the first commercially acceptable magnetic audio
recording tape is introduced.

14

1945 First electrical tape with vinyl plastic backing is introduced.

1939 First traffic sign of 3M Scotchlite Reflective Sheeting went up in
Minneapolis. This was first of many reflective and retro-reflective products.
1937 Central Research Labs are established to conduct long-range research in materials
and technologies.
1935 First automotive underseal coating products.
1932 First colored roofing granules are produced.
1931 First adhesives and coating products are introduced.
1930 Drew invents Scotch Cellophane Tape.
1925 Dick Drew, a young researcher, acting on his own initiative, develops Scotch
Masking Tape.
1921 3M's first laboratory develops 3M Wetordry Waterproof Abrasives.
1904 First sandpaper is made.
1902 Minnesota Mining and Manufacturing Company founded in Two Harbors, Minn.

15

http://solutions.3m.com/wps/portal/!
ut/p/kcxml/04_Sj9SPykssy0xPLMnMz0vM0Y_QjzKLN4gP9ALJgFjOQBaY9oGLeKCL
WLpDRBC6jE3RRRzRBQI94SK-Hvm5qfpBqXnxocH63voBgW5oSAQUe7oqAgAw8F9dA!!/delta/base64xml/L0lJYVEvd05NQUFzQURzQUVBLz
RJVUZDQSEhLzZfMF9SVS9lbl9VUw!!
3M Leadership
Of all the pathways to growth, investing in our people is most important.
The premise is very simple if your people grow, your company will grow. The key:
linking growth in individuals to those things that unlock energy and activities that our
customers value.
Clearly, 3M's first chairman of the board, William L. McKnight, was a unique leader ...
and 3M has had outstanding leaders at all levels of the company ever since.
Leadership development remains at the top of the company's agenda.
Highlighted Technologies
3M technology platforms are core elements of 3M ingenuity and springboards to meeting
customer needs. In countless combinations, 3M technologies come together as elements
of innovative new products, making them simple to use, yet complex enough to help
make the world smarter, healthier, safer and better.
Light Management
Discover what happens when the science of optics meets the nature of light.
Film Solutions
3M's growing innovation in film technology has created films that resist tears, bring
clarity and provide stability.
Fuel Cells
Learn about 3M's role in creating clean and efficient electrochemical devices that convert
fuel into usable electricity without using combustion.
Lighting Products
3M lighting products provide stylish design flexibility for building interiors and exteriors.
3M Technology Transfer
Enhance the performance of your products and reduce the cost of development by
licensing 3M technologies.

16

"Six Sigma is not a program. Its our game plan. It will challenge all of us, individually
and collectively, to be the very best we can be."
W. James McNerney, Jr.
Chairman of the board and Chief Executive Officer
During the year we attained our goal set in 2001 of training more than 36,000 salaried
employees worldwide in the Six Sigma way of doing business. With this training, our
employees closed more than 12,000 Six Sigma projects in 2004 alone. Through the
tremendous momentum these projects are creating, our company and our customers are
seeing significant process improvements, cost savings, and increased value.

3M Business Conduct
At 3M, we believe that what the company stands for is just as important as what we sell.
Our Business Conduct Policies have helped us build a century-old tradition of operating
with uncompromising honesty and integrity.

Diversity at 3M
Valuing our uniqueness while respecting our differences,
maximizing our individual potential, and synergizing our
collective talents and experiences for the company's
growth and success.
Diversity is not just a "buzz" word at 3M.
It is an important part of our world. As an international
company, working with a diverse group of colleagues is
part of the 3M experience. Where else can you have a
conference call with someone in Asia in the morning, and
someone from Brazil in the afternoon? Our customers
depend on us to deliver innovative products for work and
home. We depend on the unique ideas and talents of our
diverse workforce to deliver - and they do. Explore this
site to learn more about why diversity is so important at
3M and what we are doing to foster an inclusive and
diverse workforce.

3M Business Conduct Policies

17

3M has 19 global policies in 5 subject-matter areas.

Doing Business Legally and Ethically
> Compliance
> Ethical Business Conduct Guidelines
Protecting 3M's Reputation and Assets
>
>
>
>
>
>

Business Gifts and Entertainment

Confidential Information
Conflict of Interest
Electronic Resources
Internal Controls, Financial Reporting, Document Retention and Auditing
Securities Trading and Insider Information

Respecting Each Other and Our Communities

>
>
>
>

Advertising and Product Representation

Environmental, Health and Safety
Harassment
Privacy

Operating in a Global Marketplace

> Antitrust and Competition Law
> Transacting International Business

Dealing with Governments

>
>
>
>
>

Doing Business with Government Agencies and Government Contractors

Hiring of Former and Current Government Employees and Consultants
Lobbying
Political Activities
Political Contributions

Business Conduct Policies

Doing Business Legally and Ethically

18

The foundation of 3Ms business conduct program is this: we will do business legally and
ethically in all aspects of our global operations. The policies in this section describe the
requirement that employees and others acting on 3Ms behalf must abide by all laws and
company policies at all times. This section also provides some guidelines for making
ethical decisions, which you should use in those situations where neither law nor policy
tells you exactly what you must do.
Protecting 3M's Reputation and Assets
3Ms reputation is earned every day in all of our locations by all of our people. Our
reputation is the result of our products performing as we say they will perform, keeping
our promises to our customers and holding to the highest standards of financial and
business integrity. People must have confidence in the accuracy and thoroughness of
3Ms accounting and reporting systems. At the same time, we must protect 3Ms assets-physical property, equipment, trademarks, intellectual property, electronic files and
confidential information. We cannot allow our stewardship of these assets to be
influenced by personal, family or other outside interests that may conflict with 3Ms best
interests.
Respecting Each Other and Our Communities
One of 3Ms core values is to respect our social and physical environment. We are
committed to the goal of sustainable development through environmental protection,
social responsibility and economic progress. For us, sustainability means meeting the
needs of customers, employees and communities today, while ensuring that resources will
be available for future generations to meet their needs. We recognize that the companys
long-term success springs from our strategies for continuous progress on environmental,
health and safety concerns. We also strive to attract and retain a diverse and talented work
force in a company where initiative is rewarded, privacy is respected, employee health
and safety is safeguarded and innovation is a way of life.
Dealing with Governments
Many 3M business units do business with one or more governmental bodies. This may
include business with federal, state or local authorities, or with government prime
contractors or subcontractors in the United States, or with national or local government
agencies or government prime contractors or subcontractors outside the United States.
Many laws and regulations apply in these situations. 3M is committed to being a
responsible company with uncompromising integrity in all its dealings with local,
state/provincial and national governments, and their prime contractors and subcontractors
around the world. Before beginning to work with these entities, those acting on 3Ms
behalf must understand the rules that apply to working and interacting with governments
and government officials.

19

3M is a global company, with suppliers, customers and competitors in every country in

which we do business. Each of those many countries has laws that regulate how
we interact with those groups as we conduct business.
3M is a global company, with suppliers, customers and competitors in every country in
which we do business. Each of those many countries has laws that regulate how we
interact with those groups as we conduct business. Because 3M is a U.S. company, many
U.S. laws apply to our business operations around the world. At the same time, 3M is
subject to laws in the various countries in which we do business. It is vitally important
that we comply with all applicable laws and regulations that affect our global business
operations. You should seek guidance from your assigned 3M legal counsel whenever
you are unsure of your obligations in these complex areas.

http://www.ideafinder.com/features/century/3m.htm

The primary reason for 3M's success is the people of 3M. This company has been blessed
with generations of imaginative, industrious employees in al 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.
Much of 3M's rich culture comes from the principles that former President and Chairman of
the Board William L. McKnight set forth. McKnight believed "management that is
destructively critical when mistakes are made kills initiative. It's essential that we have
many people with initiative if we are to continue to grow." It is this growth that continues to
make 3M a leader in the 21st century. Their achievements are the foundation of a proud past
and the bright future of many innovations to come.
The year 1902 held bright promise for five businessmen in Two Harbors, Minnesota. They
started Minnesota Mining and Manufacturing Company (3M) to mine what they thought
was corundum, a mineral ideal for making sandpaper and grinding wheels. The mineral,
however, turned out to be a low-grade anorthosite. Sales of the poor-quality mineral were
weak, and the company nearly failed -- but its founders persisted. They persevered by
closing the mine, moving to Duluth, Minnesota, and making sandpaper with abrasive
minerals purchased from another source. And the rest, as they say, is history.
TO LEARN MORE
INNOVATION FACTS:
Post-It Notes from The Great Idea Finder
Scotch Tape from The Great Idea Finder
Masking Tape from The Great Idea Finder
Scotchgard from The Great Idea Finder

20

21

http://icmr.icfai.org/casestudies/catalogue/Human%20Resource%20and%20Organization
%20Behavior/HROB022.htm

Abstract
The case examines the organizational culture at 3M and the way in which it facilitated
innovation at 3M. The policies and mechanisms adopted by 3Ms management to
encourage the spirit of innovation in its employees are also discussed. The case takes a
close look at 3Ms environment of innovation; the culture of knowledge sharing; and the
reward system. It also discusses the steps implemented by the new CEO, James
McNerney, to accelerate growth at 3M. The impact of cultural change at 3M on the spirit
of innovation is also discussed.
"3M! No doubt about it. You never know what they're going to come up with next. The
beauty of it is that they probably don't know what they're going to come up with next,
either. But even though you never predict what exactly the company will do, you know
that it will continue to be successful."
- Bill Hewlett, Founder of HP, commenting on the company he admired most.
"My job is to add scale in a fast-moving, entrepreneurial environment. If I end up killing
that entrepreneurial spirit. I will have failed."
- James McNerney, CEO, 3M in January 2002.
"There is a change in culture, and it is cause for concern."
- Arthur Fry, inventor Post-it Notes, in June 2002 commenting on culture overhaul
at 3M.
"In a company that's really driven by creative thinkers - how do you do Six Sigma and
creativity? You can't. And if you force that model on an organization, you're just bound to
make it moribund."
- Ryan Mathews, business consultant and critic of Six Sigma management, in June
2002.
ONE HUNDRED YEARS OF
SUCCESSFUL INNOVATION
It was celebration time at 3M! The company
completed 100 years in business in 2002. For
many, 3M represented the house of
innovation (Refer Exhibit I). For 100 years,

22

3M formula for growth - recruit the right

people, provide them with the right
environment to work and let them do their
things - resulted in around 55,000 products
and over thousands of patents for the
company
Analysts attributed 3M's success to its
commitment to innovation. They pointed out
that 3M gave its employees the freedom to
conduct research in areas of their choice even
if that research was not related to their official
projects. By thus nurturing the talents of its
employees and fostering a climate of
innovation, 3M became one of the most
innovative companies in the world.
In 2001, James McNerney Jr. (McNerney) took over as Chairman and CEO of 3M and
announced several initiatives to revive the stagnating growth rate of the company. He
initiated cost cutting measures, rationalized purchases, and implemented process
improvement programs in the company. He gave a centralized direction to the company
from its earlier laissez-faire working style.
Analysts cautioned that the changes brought about by McNerney might harm the 100year old culture at 3M that fostered innovation and sustained its growth over the years.
However, McNerney pointed out that the changes brought about in 3M would provide the
company a strategic direction in a volatile business environment without harming its
organizational culture.
INVENTING 3M
In 1902, five businessmen founded Minnesota Mining and Manufacturing (popularly
referred to as 3M) in Two Harbors, US. The new company was in the business of mining
corundum, a mineral best suited for making sandpaper and grinding wheels. In 1904,
when an artificial abrasive replaced corundum, 3M decided to manufacture sandpaper.
Edgar Ober (Ober), one of the founding members of 3M, approached his friend Lucius
Ordway (Ordway), a successful businessman for funds for the new venture. Ordway
agreed to invest $25,000 in the company, on condition that he won't be involved in the
day-to-day affairs of the company. However, by 1906, Ordway had invested around
$200,000 in 3M and had become involved in the day-to-day affairs of the company. In the
same year he became the President of the company......

http://www.poppendieck.com/leadership.htm

23

The Leadership Paradox

No one has yet figured out how to
manage people effectively into battle;
they must be led, wrote John Kotter
in What Leaders Really Do[1]. He
notes that leadership is about helping
people cope with change, while
management is about coping with
complexity. Leaders set direction,
managers plan and budget. Leaders
align people, managers organize and
staff. Leaders motivate, managers
control.
Champion
In this context, it should not be a surprise that each new product development
program at 3M is led by a champion. Innovation at 3M is brought about by
excited, motivated teams. They are led by a product champion who probably wrote
the initial product concept, gathered management support for the program, and
recruited most of the team. The champion interprets the product vision for the team,
thus representing the customer who is not, after all, on site. The champion sets the
pace of development and determines how decisions get made. A champion is also
expected to keep working on a good idea even if the program gets killed by
management.
Shusa
Similarly at Toyota, a new vehicle development program is led by a shusa or chief
engineer. In contrast to the coordinating role of a new vehicle manager at US auto
companies, the shusa has complete responsibility for the vehicle, and has the
authority necessary to make all program decisions. The Toyota shusa has been
called a heavyweight program manager[2], but this is a misnomer, because a shusa
is a leader, much more than a manager.
Perhaps the correct characterization of a champion or shusa is a respected leader.
The emphasis of the role is on setting direction, aligning the organization and
motivating the team. At 3M, the champion is largely self-nominating, and in both
companies, the role holds great stature. In both 3M and Toyota, the product
produced by one of these leaders often bears their name (Fuji-sans car or Art Frys
Post-it notes). These companies seem to understand that if a team is to deal with
change and innovation, a respected leader is needed; a coach is not enough and a

24

manager (in the traditional sense) is the wrong approach.

Software Development
It has been claimed[3] that software development is similar to new product
development, because it is an activity which creates something unique for a
customer, something which has not been made before. In this sense, programming is
not like manufacturing, which makes the same thing many times over and strives to
make each instance the same.
If software development is like new product development, then how should software
projects be led? There seems to be some ambivalence surrounding the role of
leadership in agile methodologies, possibly stemming from the traditional role of a
project manager in software development projects. Often the project manager does
not have a technical background and may not feel responsible for understanding the
technical aspects of the project. Usually the project manager is trained for and
measured against the control of scope, budget and schedule. This administrative role
is quite different than the leadership role exercised by a champion or shusa.
If a software project requires vision and must cope with change, this is not going to
come from following the rules taught in project management certification courses. If
stakeholders need to be aligned and the team needs motivation, managing scope,
schedule and cost is not the place to focus attention.
Scrum Master
What are the alternatives to project managers? Beck suggests the use of a coach.
Schwaber and Beedle propose role of a Scurm Master: The Scrum Master
represents management and the team to each other.[4] is in touch with all
aspects of the project[5] is responsible for ensuring that impediments are
promptly removed and decisions are promptly made.[6]
A coach or Scrum Master is not quite the champion of 3M or the shusa of Toyota,
but then again, there is a difference between new product development and most
software development. At 3M and Toyota, the customer is not readily available and
must be represented. In fact, its pretty well accepted at 3M that asking existing
customers what they want is not the way to come up with innovations. Instead, you
have to understand the problems that customers have, anticipate future needs, and
invent something new to solve their problems. A 3M champion creates and
communicates a vision of the new product, just as at Toyota, the shusa writes the
description of the new vehicle. To do this, they need a high degree of technical
expertise as well as a deep understanding of the customers.
Most agile methods depend upon the customer to create a vision of the software
under development. Sometimes this will work, but it places a large and sometimes

25

unrealistic burden on the customer. While the champion and shusa are technical
experts, the customer usually is not, so the customers vision of a solution may be
limited. In practice, customers often dont know what they want, and to make
matters worse, there are often multiple stakeholders, making it unclear who the
customer really is.
The Scrum Master represents the customer to the team, and thus must understand
who the customer is and what all the stakeholders really want. However, the Scrum
Master is not chartered to come up with the technical vision of how to address the
customers needs. In XP, the technical vision of the system is expected to evolve
throughout multiple iterations.
Design vs. Vision
The biggest criticism of agile methodologies is that they do not provide for overall
design prior to the beginning of development. At Toyota and 3M, the product largely
emerges from the development process, but the programs start with an overall
technical vision of what the product will look like in the end. In fact, the shusa has
been equated to a system architect of a new car.[7] Both the shusa and the champion
are leaders, not managers, but as very experienced technical leaders, they provide the
overall design to the product under development, or assure that an overall design is
established by the team. They judge the level of design necessary to allow
development to proceed in an emergent manner, while assuring that there are no
downstream surprises which should have been anticipated.
If a development process must deal with wicked problems (see separate article),
then by definition, the solution emerges as development proceeds. Such projects
need someone to make the tradeoffs between early design and emergent
development. In world class new product development organizations, this role
belongs to the champion or shusa, a respected leader with the technical and
customer savvy to make such tradeoffs.
Technical Lead
Experience shows that if there is not someone to make similar tradeoffs for a
software system, large organizations have a tendency to err on the side of caution. A
corporate architecture committee, customer committee or administrative coordinators
will usually lack an overall vision of the project, and so will look for comfort in
detail, even though the detail is not what is needed to proceed safely. It would be
better if there were a technical lead on the program to create and be responsible for
maintaining the technical vision. It would not be so good, however, if the technical
lead were not a leader. A leader not only sets direction, but also aligns and motivates
people. The shusa and champion are expected to secure resources, remove
impediments, and lead the team into battle. A technical lead who either sits on a

26

pedestal or on the sidelines will not be able to lead the team.

If becoming a technical guru or a PMI graduate does not make a person into a leader,
then how should leaders be developed? First, an organization should understand
what it means to develop leaders. The armed forces develops leaders as their
primary responsibility. A Special Forces team, composed of a dozen experts and a
leader, is expected to adapt continually to very demanding conditions, given only the
broadest of objectives. But even the most ordinary army units are composed of
teams with a leader who is expected to respond to events on the ground, adapt to
changing conditions, make decisions and lead the team. Although military training is
not being advocated, it might be educational to understand how the military trains its
leaders.
Developing Leaders
At 3M, people with technical competence are encouraged to develop a new product
concept based on solving a customer problem. In order to carry out that vision, they
find they need to recruit and motivate a team and secure resources from the
organization. This is one of the most popular career paths in the technical
organization, and so many technical people learn how to follow this path.
Toyota and 3M have learned how to make the role of technical leader one of the most
desirable in the corporation, and thus they are able to develop a large number of
qualified leaders. On the contrary, project management is frequently considered an
undesirable career path for software developers, so few seem interested in learning
how to manage. To break this vicious circle, an organization needs to begin by
considering how to make the role of project leadership attractive to technical
experts. Changing job expectations from administration and management to vision
and leadership would be a good start.
Finding Leaders
Where does an organization find people to fill the newly defined role of project
leader? In many cases the training ground might already be in house. In the past ten
years, supervisors and managers in operational areas such as manufacturing, logistics
and customer service have been trained to focus on empowering the first line
workers to deal with problems and improve their own processes. Thus many
organizations already have leadership development programs in place, they just
havent moved beyond the operational areas yet.
Good operations managers are likely to make good software project leaders, because
they have already learned how to work with people and lead a team. If you are
blessed with good operations, then look for respected supervisors and first line
managers in operations who have a technical background or aptitude, and consider
training them as project managers. Alternatively, but not as good, consider sending

27

everyone who will lead a software team to a good training program for first line
supervisors in an operational area. But note that it is easier to develop people who
know how to lead into managers than it is to develop people who know how to
manage into leaders.
You Get What You Expect And What You Inspect
The bottom line is that people respond to the expectations of their management.
Software project leaders do not develop in a position where the primary expectation
is change control and the primary measurement is earned value. An organization will
get what it values, and the agile methodologies do us a great service in shifting our
perception of value from process to people, from documentation to code, from
contracts to collaboration, from plans to action.

http://www.findarticles.com/p/articles/mi_m1038/is_n5_v35/ai_12774259/pg_3

ACTION GUIDELINES
Consider this example of how 3M management successfully launched Scotchfiber
(disguised name), a marginal new product. Manufacturing process innovations had
enabled one of the company's industrial divisions to invent a unique and superior way of
implanting fiber. Though not immediately useful for the division's current product range,
the new process led to the development of a set of products that could be potentially
useful for a new set of industrial customers. The company's sales force, distributors, and
customers were not overly enthusiastic with the initial applications developed for the new
product because they were not totally consistent with the division's current product line.
Moreover, the overall market potential for such applications was such that even if 3M got
a significant share in the first year, it would still be less than 2 percent of the division's
overall sales--a classic marginal new product.
A product launch team was assembled with the responsibility for putting together a
marketing plan. The leader of the launch team was an enthusiastic supporter of the
product concept. Instead of the first-year target, which was less than two percent of the
division's sales, the team focused on a third-year target, which represented a substantial
amount of money. The heart of the planning process was an intensive scenario analysis
28

conducted with the help of the 11 company experts and ten customer lead users who
evaluated various scenarios for taking the product to market. The exercise, which was a
blend of both qualitative and quantitative analysis, revealed that the company's
distribution channels for the new product required heavy up-front sales force support for
achieving the desired sales targets. But the sales force was heavily involved in its breadand-butter products. How could a marginal product get their attention?
The resolution came at a sales managers' conference. One manager suggested selecting a
"Scotchfiber Specialist" for each region. That way the bulk of the sales force could
concentrate on its existing products, but 50 percent of the specialist's time would be
devoted to Scotchfiber. Moreover, that specialist would also assist in developing
Scotchfiber applications in neighboring territories. A cadre of innovation diffusers was
created. Of course, changes in quota and commission plans were needed, but because line
managers in charge of the implementation had suggested the idea themselves, it was
carried out without difficulty. The product launch team, under the guidance of the product
champion, diligently worked on all the details. After being launched, the product crossed
its target in about nine months. Since then, the product has been steadily and
systematically increasing in sales and profits.
What lessons can we learn from the Scotchfiber experience? Several come to mind.
Develop product champions--but equally important, involve line management in product
launch planning. Like all new products, marginal new products need champions,
particularly people with enough authority to accelerate and innovate the
commercialization process. New product inventors generally happen to be scientists in
the lab or salespersons in the field. These people are rarely pulled out of their routine jobs
to head the commercialization process. Moving people around an organization may be
difficult, but product champions should at least be part of a "product launch team." This
puts the responsibility for the product's success squarely in the hands of those who want
it.
Another advantage of product champions is that market feedback can then be interpreted
quickly and accurately for further developmental work. This is especially true when the
chief protagonist is a nonmarketing individual. Otherwise, such feedback through normal

29

channels could lead to interdepartmental squabbles and misperceptions--R&D blaming

the salespeople for not understanding the product, and the salespeople blaming R&D for
not understanding their customers. A product manager's story after her most recent new
product failure illustrates this point:

I wish the product's inventor was with

me when I made the customer visits. It
was obvious that a product redesign was
necessary. But I had to be sure that I was
not reflecting my own initial misgivings
regarding the product. Not wanting my
motivations to be perceived as political, I
waited for concrete evidence to emerge.
That took a year. It was too late.
Unfortunately for this company, the real product champion was relegated to the
laboratory, and out of courtesy the product manager was diffident in voicing the product's
real drawbacks. The end result: a failed product launch.
The product champion idea benefits protagonists from other parts of a company as well.
A product champion from sales insisted on having a new product perfectly tailored to suit
his company's large customer base. But a direct working relationship with the
engineering team convinced him that the new product could only address the needs of a
few (but important) customer segments. The rest of the sales department had no difficulty
accepting such a focus because it was their own hero who told them about it.
The product champion idea is pivotal for a successful launch of most innovations. But in
the case of marginal products, it needs to be balanced by the organization's
implementation capabilities and biases. To succeed, a company absolutely must involve
line management in launch planning.
Because line managers are usually tied up with the regular duties of manufacturing and
selling the rest of the company's product line, top management is often reluctant to

30

involve them in distracting planning activities. This is a big mistake. Because of their
operations experience and skills, people in line positions are likely to have insights that
aid the new product commercialization process. Further, once line management
participates in the planning stage, implementation is straightforward.
Investigate 'the qualitative differences in the input among scenarios, not merely the
quantitative outcome. The most frequently used new product planning tool is "scenario
analysis."A team closely associated with the product or the market makes its best guess of
how the product may fare under different scenarios. Revenue and costs are projected for
the different options, and management chooses one that best meets its revenue, profit, or
ROI goals. This is usually an exercise in number crunching. Finance managers determine
the basic hurdle rate new projects have to satisfy, and the operations people (both
manufacturing and marketing) provide the likely output numbers for different scenarios.
The outcome represents a budget allocation for the new product.
Such an exercise, however, does very little to aid management decision making. Most of
the variations in input are mere artifacts of the accounting numbers (such as cost of
goods) rather than thought-through strategic differences. As a result, once the blueprint
has been signed off by top management, the rank and file go back to executing the launch
mechanically, spending the approved amount by line item. The entire success of the
launch is dependent upon the magical fulfillment of the output scenarios. Very little
attention is devoted to understanding the logic and leverage of the inputs on the outputs.
People know how this works for their other more important products, so they assume that
the same must be true in the case of new products. Such an emphasis on output leaves
managers helpless in assessing and influencing the course of a struggling new product.
The launch failure is blamed on the inability to forecast the outcome. Nothing could be
further from the truth.
Unfortunately, most scenario analyses we have seen focus on output. The proliferation of
personal computer software and spreadsheets has made the problem worse. A
microcomputer cannot assess the basic strategic variations in input: only managers can
and should do that. For new products, it is essential to spell out concretely the marketing
mix strategy underlying each of the scenarios: What price? What positioning? Which

31

channels? The company should realistically assess the feasibility and fit of each of the
marketing mix scenarios to its own strengths and weaknesses. Not only should each
scenario be costed out, it should be evaluated for long-term strategic desirability.
Get a high share of the organization's mind, but within the context of its other products.
Sales revenue and profit targets for marginal new products are rarely substantial enough
to grab lower and middle management's attention. Motivating and sustaining a sales
team's interest with such low numbers is most difficult. Framing the problem
appropriately is a way out of this jam. A target such as $5 million in the first three years
seems much more imposing and important than a mere $500,000 in the first year ! Instead
of defining first-year targets, which are generally modest, set three- (or two-) year sales
targets, which highlight the importance of carefully planning a new product's launch. At
the same time, it is important not to ignore the context provided by the other product
lines. Time and attention spent on marginal products will certainly draw on resources
being expended on other products. The trade-off or opportunity cost calculations must be
made carefully. We are not suggesting that such an analysis should drive the "go" versus
"no-go" decision on the new product, only that management should be alert and aware of
the downside. Decide how far you are ready to go before you say enough is enough.
It is also useful to remember that a marginal new product often has more than one
constituency to satisfy. If a company's current sales force and distributors are given
responsibility for taking the product to market, they have to be given a good reason for
pushing toward the new product's goals. The opportunity cost of their time and effort
must also be an inherent part of the launch calculation. Denying the new product to
existing sales and marketing channels could lead to morale problems and adversely affect
performance. In short, a careful analysis of the cost and benefits for the various members
in the pipeline has to be worked out.
High profile recognition of innovation must be part of corporate practice, as at 3M.
Incentives and promotions at 3M are linked to achieving the division's new product
objectives. Key members of a team who develop a successful new business typically gain
added recognition and career opportunities. Each of its 40 operating divisions is kept
small (about $250 million). This enables even small innovations to get off the ground.

32

Most marginal new products fail because they are mistaken for product line
enhancements. But to launch every marginal new product as though it were strategic life
and death is equally fallacious. The product may even succeed and make money, but such
a success usually comes at the cost of the company's regular line of business. Companies
that are able to spot marginal new products and provide them with the entrepreneurial
support without compromising current product lines are likely to have new product
successes that don't cost much. And when this steady stream of products adds up (as in
the case of a 3M or a Rubbermaid), suddenly the company has significant new products
and new markets without the financial strain and risks that accompany major new product
programs. Each new product by itself may not immediately be a significant contributor to
the bottom line, but put together, they certainly add muscle to the company. Why would
anyone want to pass up this opportunity?

When 3M developed the Post-It Note, it pasted the clever invention - the nonsticky glue - on noticeboards to which ordinary pieces of paper could be
attached. It took some time before it was realized that it would be much better if
the glue was put on the, now ubiquitous, little notes.
Returning to the story of the 3M Post-It Note: the company's marketing
department saw no potential for the product, but the secretaries in the company
who had been using them saw their value and persuaded the company to
proceed with their commercialization.
Innovative companies
Progressive, innovative companies, such as 3M, Dupont and Royal Dutch/Shell,
enable all of their employees to have additional time and financial resources to
pursue the development of their innovative proposals.
Other outstanding innovators, such as Toyota, track managers' success in
encouraging direct reports to generate suggestions for improvement and include the
results in performance appraisals. This results in more than one million such
improvement suggestions annually (95% of them are implemented.)
Some innovative companies even mandate innovations. For example, at 3M the
divisions are expected to generate 30% of sales each year from products developed
within the preceding four years. This prevents employees from becoming complacent
by relying on the tried and true.

33

Innovation management requires employee training in creative thinking,

plus modification of the corporate culture to encourage risk-taking and the
provision of logistical resources to enable the progression from developing
creative ideas to successfully rolling them out as innovations.

34