Managing and developing ideas
How does a company encourage people to look beyond their current goods and services to something better and/or different? The answer lies in the company’s culture, ie the typical pattern of relationships and behaviours within an organisation. For people to be creative they have to have freedom; freedom to explore new ideas within an environment that tolerates mistakes, understands and manages the risks involved.
Product innovation involves prioritisation, trials, failure and risk. The key is to minimise the organisational and financial risk. This relies on effective processes to deliver consistent results by managing innovation. The challenge is to improve these processes continually without stifling people’s creativity, as this would stop the flow of new ideas that are vital to success.
There are many ways to encourage good ideas, from brain storming to reverse thinking. Brainstorming involves asking groups of people to generate ideas, however fanciful, eg for solving a particular practical roblem. A complete list of brainstormed ideas can then be analysed to agree what is feasible.
Reverse thinking allows people to broaden their thinking. For example, instead of asking ‘How can we get the workers to the material?’ Henry Ford turned the problem round. He asked: ‘How can we get the work to the people?’ With this reversal of a basic assumption, the assembly line was created.
3M has no particularly favourite method of generating ideas, much depends on a manager’a style. 3M believes that the most critical thing is to be proactive. Ideas rarely just pop into people’s heads; they have to be encouraged and developed.
3M’s innovations have not started with one-off discoveries or ‘eureka’ moments. Its new products result from deliberate, rigorous commitment to the technological development of solutions to customer needs. This customer-focused approach involves finding out what existing and potential customers want through detailed market research. A customer-focused organisation starts with the consumer, and then creates the products that match consumer demand. This contrasts with old-fashioned production companies of the past that thought they knew best. They delivered what they were good at producing, rather than what customers wanted.
At 3M, the generation of new ideas focuses on the customer. For example, the new 3MTM Paint Preparation System (PPS) solved a number of problems in garage body shops where cars are repaired after accidents. Launched in 2000, PPS is a completely new paint system that:
allows greater efficiency
eliminates traditional paint mixing pots and filters
is usable at any angle and requires 70less solvent for cleaning.
It is revolutionising car repair and has won numerous design and innovation awards.
With innovation, urgency and speed are essential: Competitors may be thinking and working on similar lines. 3M has numerous programmes to ensure that it identifies new products with significant potential and allocates resources to commercialise them faster.
Commercialisation means taking an idea and then getting a product into the hands of paying customers as quickly as possible. This involves many stages, including:
Each year at 3M, thousands of ingenious ideas and technologyapplications emerge. It is vital to prioritise these ideas and focus on those with the greatest potential for growth and profitability.
Make a prototype
Typically there will be numerous prototypes, trials and modifications.
Manufacture the product
Consistent quality for customers has to be balanced with costs, profitability and environmental concerns. Organisations like 3M are committed to continuous improvement, using sophisticated tools and techniques to reduce variation and deliver consistent results to ensure value for customers.
Market the product
This involves creating the brand identity and positioning for the product.
By creating the most effective channel to market. This involves distributing products through those channels that most suit the final consumer, eg placing Post-it¨ Notes with local stationers, newsagents and supermarkets.
Intellectual Property Rights
Many of 3M’s ideas are patented (each year the company applies for more than 500 patents). Once 3M has been granted a patent in a particular country, it has the legal right to prevent other firms from profiting from its ingenuity for a specified period of time. This ensures that 3M can put resources into commercialising the idea without fear of another company copying it.
Patented ideas are sometimes referred to as ‘intellectual property’.
3M’s intellectual property also includes its trademarks (ie brand names) such as Scotch®, Scotch-BriteTM and Post-it® as well as its corporate brand identity which is a combination of the red 3M logo, and the style the company uses for its literature and the way it presents its products.
As part of 3M’s acceleration programme worldwide, a small focused team, the Enterprise Growth Team, is working in the UK to speed up the process of getting new products to market. The team is multi-disciplinary, involving people with sales, technical, manufacturing, product development and business experience. It is focused on finding new customer-driven applications for existing 3M technologies.
3M has over 30 different technologies, from pharmaceuticals to microreplication (the creation of thousands of tiny shapes on a surface), which have been applied to a wide range of products from high performance abrasives to reflective traffic signs. The task for the Enterprise Growth Team is to identify new applications, or new product ideas, for these technologies.
To date, the Enterprise Growth Team has increased sales from novel products based on new applications using existing 3M film technology. It is now extending its approach. Its success is partly because:
its sole purpose is to find new ideas to grow sales
it is focused on stretch targets
it has no constraints or boundaries
it works as a small flexible, highly motivated team.
The team’s role is to:
encourage idea-generation. This role is publicised within 3M so the team is seen as a central point for ingenuity/idea capture
prioritise ideas against standard criteria
commercialise products within 3 to 6 months, so as to
deliver targeted sales growth for the UK.
Innovative applications: multi-layer films
3M produces a range of multi-layer films which draw their inspiration from nature, particularly the glittering blue wings of the Morpho butterfly which are created without the use of colour pigment. By combining films in layers similar to those of a Morpho butterfly’s wings, 3M has produced multi-layer films which reflect in the same way, whatever the light angle.
3M recognises that it is not the technology itself that is important but its commercial application. To date, applications for these films include LCD displays, so increasing screen brightness, reducing screen glare and providing viewing privacy. The brighter screen means energy efficiency and smaller batteries, enabling smaller equipment. Examples include: screens in laptop computers and personal digital assistants (PDAs) – and extend to fast growing, exciting applications such as the latest coloured mobile phones, car navigation displays and rear-projection televisions.
Working as a focused team in the UK, the Enterprise Growth Team identified two specific new applications for multi-layer films which are delivering strong sales growth:
3MTM Thin Sign Technology. By combining three different types of multi-layer film, 3M has created a new display solution, with the advantages of the latest ‘edge lit’ sign technology at a price more consistent with traditional lower-cost, back-lit alternatives. The new technology also means the illuminated signs use less energy and generate less heat, thus reducing air conditioning costs when used, for example, in stores.
Decorative applications on luxury goods. The film creates an attractive colour effect, helping to differentiate the product and add value. Uses include CD covers, perfume packaging, Kylie Minogue’s tour brochure and latest DVD, greeting cards, and even designer lampshades.
Maintaining the momentum
While short-term success can arise from a one-off product or service, it is often just the entry ticket to a new market. Companies have to be able to repeat that first success, as there are always other firms ready to copy, catch up and overtake.
Innovation is at the heart of how 3M operates. The company has an entrepreneurial culture that encourages people’s ingenuity managed by a structured development process.
During its first 100 years, 3M has received many accolades for innovation. The company is now focused on maintaining this momentum in increasingly tough markets to match its success of the last century.
Case study was adopted from www.businesscasestudies.co.uk
Answer the following questions:
Discuss the main factors that make 3M an innovative organization. Which business functions have contributed to these factors? (30 marks, 300 words)
Discuss the importance of the commercialization process for innovative organizations such as 3M. (30 marks, 300 words)
The case describes the multi-layer films as an innovative application at 3M. Pick another innovative application or product of a different organization and discuss the reasons for the product to be innovative. (40 marks, 400 words)