3M Optical Systems:

Managing Corporate
Entrepreneurship

MST550 – Capstone
Professor Jack Raiton
HBSP Case #395-017
 Discussion Questions
1. What practices make 3M such an innovative
company?
2. What is Any Wong’s role as the OS Unit’s
general manager? How effective has he been?
3. What is Paul Guehler’s role as division vice-
president? How effective has he been?
4. What should Andy Wong do with the computer
screen AFE? If he gets the AFE, should Guehler
fund it?
 Case Outline
• The Situation
• Background of 3M Corporation
• Internal Context at 3M Corporation
• Background of Optical Systems (OS)
• The Product is Born
• The Product is Reborn
• Wong’s Options
• Guehler’s Options
• Wong’s Role/Effectiveness
• Guehler’s Role/Effectiveness
• Desimone’s Role
 The Situation

The 3M Corporation’s Optical Systems (OS)

business unit needs to decide if they should
proceed with the deployment of a new
computer privacy screen despite two
previous marketing failures.
 Background of 3M Corporation
• 100 Years of Innovation Highly Diversified
Global Company
• “High-Tech”: Spends twice the U.S.
Industry Average on R&D (6-7% of sales)
• Strong emphasis on new products and
technologies
• Fosters individual’s innovation within the
workforce (“15% rule”)
 Internal Context at 3M
Corporation
• Respect for the individual
– “Stimulate ordinary people to produce extraordinary
performance”
• Supportive policies/practices
– 15% bootleg rule
– “Make a little, sell a little”
• High standards, stretch objectives
– 10% sales growth, 20% PBT, 27% ROCE
– 30% sales from new products
 Internal Context at 3M
Corporation…cont.

• Acceptance of “well-intentioned failure”

• Share/leverage resources
– “Technology belongs to company”
 Background of Optical Systems
(OS)
• OS Track Record (1979-1990)
– Formed in 1979 through consolidation of several 3M
optical technologies
– Experienced 11 year microlouver development effort
with minimal products
– Lost between 3 to 5 million dollars per year
– “Technology in Search of a Market”
• OS Changes Focus (1991-1992)
– In 1990 new top management appointed
– Focus on applications for technology
 The Product is Born
• In late 1990, the OS Team launched the computer
privacy screen
• Product used “microlouver” technology to offer
privacy of screen information
• By early 1991 the OS Team saw poor market
reaction due to the large number of sizes needed
and high purchase price
• Product was modified and re-launched in late
1991 with minor changes, but to no avail
 The Product is Re-Born
• Through prior-product analysis, market
research, and harnessing some of 3Ms other
technologies, a 3rd generation was created
and readied for market in 1992.
• It combined features of competitor’s such as
anti-glare, anti-static and anti-radiation
• Was ready for decision on “Authority to
Proceed”
 Wong’s Options
Go Postpone/Cancel Other Options
•Learning from two •Poor market research •Self fund
previous launches •Poor product concept •Mentor’s support
•Met rigorous three- •Price too high •Outsource
phase process •Unrealistic market
•Team closest to share forecasts
market, competition, •Unrealistic risk
technology (trust them, assessment
don’t second-guess)
•Needs more data,
•Committed team further study
(motivational impact)
•Last chance for OS
•Wong must be the
champion
 Guehler’s Options
Approve Reject/Send Back
• Project passed three-phase • Recognize as “well
review
intentional failure”
– Shouldn’t second-guess
now • Has other high-profile
• Cost relatively low “Pacing Projects”
($750K) • Problems with product,
• OS unit believes, price, marketing strategy
committed • Lacks internal support
• Don’t want to kill OS unit
– Big project in pipeline
(Needs 30% new products)
 Wong’s Role/Effectiveness

• Attracting good people

– Noirjean, Melby
• Developing/motivating his team, building
unit’s capabilities
• Creating, pursuing growth opportunities
• Keeping management “in the boat”
 Guehler’s Role/Effectiveness

• Empower frontline manager to find/develop

attractive opportunities
• Coach/nurture/support frontline managers to
develop confidence and capabilities
• Set standards/goals for and develop self-
discipline among frontline
• Balance between discipline and support
 Desimone’s Role

• Sets, communicates, monitors standards and

objectives
• Protects, reinforces norms and values
– Respect for individual

Primary focus on organizational context more

than strategic content