Ceramic dental braces?With a product line totaling more than 50,000 different items, Minnesota Mining & Manufacturing, better known as 3M, has developed a global reputation for technical ingenuity and marketing innovation. Perhaps best-known for consumer products such as Scotch brand tape and Post-It notes, 3M is a global manufacturing giant with facilities throughout the U.S. and in over 60 countries. Think you know 3M? Did you know that the company makes highway traffic signs and ceramic dental braces?
A tale of five men
Five Minnesota businessmen founded 3M as a mining business in 1902. The mining venture was not too successful, but the company soon turned to the more profitable prospect of sandpaper production. Since then, 3M has capitalized upon innovations such as Scotch brand masking tape - introduced in 1925 - as well as Scotchgard fabric protector and Thinsulate thermal protection.
International appeal
The company's Consumer and Office division produces Post-it notes and Scotch brand tapes; the Health Care Markets department develops medical and dental supplies; and the Transportation, Graphics and Safety sector produces reflective sheeting, high-performance graphics, automotive parts and industrial breathing filters. The company's other divisions are Electro and Communications, Industrial, and Specialty Material. More than half of 3M's annual revenue comes from international sales, and the company spends more than a third of its robust research and development budget abroad.
An innovator, pure and simple
With 40 tightly intertwined divisions, debate arises over how to classify 3M. Diversity technology? Diversified chemicals? Or an image- and document-processing company? CEO DeSimone says he would like 3M to be known as an innovator, pure and simple. The company pumps six percent of annual revenues into the research and development department, and many of its products are a result of the "Fifteen Percent Rule." This rule lets technical employees devote 15 percent of their own time to working and developing their own inventions. They are allowed to work on company time, using the company's resources. 3M's new Pacing Plus program invests more resources into the company's more promising products that have the potential to bring in more than $100 million in revenues.
Fighting back
In 1998 the company's profits were hit by weak sales in Asia and Japan as a result of the collapse in those markets. The company's stock fell about 20 percent in a one-year period from July 1997 to July 1998. Just under a quarter of the company's earnings came from Asia in 1997. DeSimone responded by slashing nearly 5,000 jobs, nearly 500 more than anticipated. Although the CEO has also launched an effort for more and larger acquisitions, some analysts say DeSimone has not acted fast enough. The company has not yet named DeSimone's successor; DeSimone turns 64 in mid-July and in 2001 reaches the mandatory retirement age of 65.
