Five businessmen founded 3M Company as a Minnesota mining and manufacturing. The company produces products in health care, worker's safety, industry field, and consumer goods. 3M records tremendous growth since its establishment, and more than 60,000 products are being produced in different brands. The company contributes to global development through the protection of the environment and sustainable economic progress. 3M net growth is recorded to be more than a 32billion US dollar in 2020, increasing 1 percent from 2019. The company's massive growth resulted from the first CEOs who helped shape 3M to what it is today. The paper will highlight the nurturing of a culture of entrepreneurship and innovation while looking at the organization's weaknesses and strengths in the era of two CEOs, McKnight and Desimone.
Institutionalizing of Entrepreneurship in the McKnight and Desimone era
The institutionalization of entrepreneurship and innovation at 3M was a result of both formal and informal developments. In 1937, drew created a central research lab that helped monitor adhesives' development and supplements the product work divisions. According to Sakyl (2019), McKnight created a 15% time to help researchers create projects that would help in the company's growth. During his reign, McKnight also created a program of rewards to help recognize employees who produced excellent and efficient work. These programs were carton society awards for achievements in scientific research and circle of technical excellence. There was the encouragement of taking risks and accepting failures as part of establishing new technology methods.
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3M Organization Strengths and Weaknesses
There was the introduction of incentives and profit bonuses that helped to keep company employees motivated. McKnight ensured a low turnover of employees to help individuals become committed to the company and avoid sharing knowledge and skills outside the company. McKnight also helped develop an innovative machine that helped create new technologies and leverage individuals' technical skills. Apart from the company having some strengths, few weaknesses were experienced in the company. In 1998 under DeSimone's leadership, the company was not selling blockbusters since DeSimone was not making bets on developing new technologies. There was a concern of DeSimone failing to become serious in the funding of essential projects under research.
Related and Unrelated Diversification in 3M
Diversification is the enhancement of existing products to increase market opportunities. According to Sweeny (2016), related diversification is whereby a business expands the product line, while unrelated diversification means adding unrelated products. For the related diversification, 3M moved from corundum to sandpapers using the same abrasive product. 3M was also producing masking tapes and scotch products for cell phones. The use of related diversification helped the company to make big profits after expanding to international countries. In unrelated diversification, the company targets many industries ranging from health care, electronics, manufacturing, oil and gas, and DIY components.
Benefits of Diversification in 3M
Diversification has helped 3M to share knowledge and skills with different people worldwide. The company also distributes its products to consumers directly through wholesalers and retailers. By using unrelated diversification strategies, the company has been able to offer solutions to many people. Health is a problem that affects most individuals, and therefore diversifying in health helps to solve ailing diseases. The company is always changing and improving products to keep up with the current market. 3M lacks standard policies for funding. Lack of proper strategy of financing of innovations delays the targeted culture of innovation for the company.
The strong growth of 3M organization has been attributed to the great innovation in the company. 3M records a strong history of diverse innovation that has helped improve the state of other businesses. It's through McKnight that employees are encouraged to be responsible for their inventions.
References
Sakyi, K. A. (2019). Global Operations Innovativeness and Entrepreneurship at 3M Company Limited.
Sweeney, J. B. (2016). The 3M Company: Applying the Theory and Changing the World. Journal of Corporate Citizenship , (64), 37-46.
