3M : Real-Win-Worth

 

3M is an iconic innovative company. Although mostly known for “sticky and scratchy things” (post-its and sandpaper), 3M have over 55,000 products, releasing 25 new products per week and over 3700 global patents granted in 2016. Over 90,000 employees, 200 manufacturing plants and 86 labs are all focused on progressing 3M’s innovation agenda, but how do 3M maintain and sustain this engine of innovation?

3M understand the importance of knowledge, and that knowledge is used to create value. “Research is the transformation of money into knowledge; innovation is the transformation of knowledge into money.”

3M have a HR policy that allows all staff to spend up to 15% of their time working on promising new ideas, and provides even more resources and time for those ideas that meet criteria indicating that they show the most promise.

3M love the tough problems, as it’s where they prove their reputation and makes the work interesting! A core 3M principle is to “spend time in the smokestacks”, meaning they go where their customers are, observing them working and ask lots of questions. They don’t guess what the customer needs, they invest their time to know their needs, discovering the big problems that they can try to solve.

Most senior managers want their product development teams to create breakthroughs new products that will allow their companies to grow rapidly and maintain high margins. But more often they get incremental improvements to existing products. That's partly because companies must compete in the short term. Searching for breakthroughs is expensive and time consuming; line extensions can help the bottom line immediately. In addition, developers simply don't know how to achieve breakthroughs, and there is usually no system in place to guide them.

3M team became acquainted with a method for developing breakthrough products: the lead user process. The process is based on the fact that many commercially important products are initially thought of and even prototyped by "lead users"- companies, organizations, or individuals that are well ahead of market trends. Their needs are so far beyond those of the average user that lead users create innovations on their own that may later contribute to commercially attractive breakthroughs. The lead user process transforms the job of inventing breakthroughs into a systematic task of identifying lead users and learning from them. Techniques available also include cross-impact analysis, simulation, and technology forecasting.

Real-Win-Worth

As a project team learns from lead users, the questions and answers it develops often point toward the need for strategic change. Indeed, that’s what happened at 3M. Besides unearthing concepts for new product lines, the team had identified a revolutionary approach to infection control—but developing the competences, products, and services that would bring that approach to market would require the division to change its strategy.

One of the most vocal advocates of Real-Win-Worth screen is 3M, where the screening has been used on more than 1,500 projects. The screening's credibility was enhanced when it played a central role in the ultimate success of the company's computer privacy light-control film. Although the company's micro louvered light film, which simulates a tiny blind, promised unique privacy benefits, it almost didn't get to the market. The first two versions failed in market tests, and the sales force was unwilling to carry the finished product because the high sales price threatened to limit sales to a small market niche. At that point it was a technology in search of a market.

A new general manager forced the development team to adopt an outside-in approach, using the R-W-W screen. This revealed that the technology was effective and patent protected, so it couldn't be copied by competitors. However, the R-W-W screening also revealed a complete lack of market knowledge regarding market size and target customer segments, and whether the privacy film would satisfy the most attractive segments.

Would they be willing to pay a sufficiently high price? Approval to proceed with development was made conditioned on obtaining persuasive evidence of potential demand. This came from test markets; product placements in offices of people with a high need for privacy, such as human resource managers; observational studies; and interviews with computer makers and distributors, which showed a large market potential. Armed with these insights, 3M launched a full line of privacy and antiglare films for laptops and PCs that leveraged the company's brand equity and sales presence in the office products market. Within five years the product line became one of 3M's biggest and fastest-growing businesses.