Corporations: 3M

3M umbrella

3M Company is one of my favorite brands because for me, it makes practical products attractive.  And I don’t think we can ever run out of ideas to make our modern lives easier, so I believe that practical products are a good business idea.

The story of 3M, like many businesses, is abound with failures.

Failure #1:

Five northern Minnesota entrepreneurs extracted a mineral which they believed to be “corundum, a mineral almost as tough as diamonds and an ideal substitute for garnet, the mineral abrasive found in grinding wheels used by furniture makers. The founders of 3M were banking on success when the company was born in 1902.  Each man contributed $1,000 in start-up funds in exchange for 1,000 shares.  They started their venture in Two Harbors, a booming frontier village on the North Shore of Lake Superior.”

But as it turns out, “3M’s product was actually anorthosite, a soft mineral that is inferior to garnet.  3M’s partners voted to cut their salaries and then abolished them altogether. Meanwhile, impatient suppliers wanted their money, and 3M owed its own employees back pay. (Each of the partners contributed money to cover the payroll.)  3M had little success selling its stock to raise operating capital, and the company was racing head-long for disaster.  Only two investors stepped forward—Edgar Ober, a St. Paul railroad man, and John Dwan, a Two Harbors lawyer and co-founder of 3M, who had a reputation for smart investments.

3M watertower

Photo Credit: Jonathunder

Failure #2:

The founders chose to focus on manufacturing sandpaper, a business they knew nothing about.  If the company was going to make sandpaper, it needed a source of garnet and only two deposits existed in the United States.  *But the company moved to Duluth in 1905 and found a source of Spanish garnet.

3M built its new plant, a two-story, 85-foot by 165-foot structure with a basement. It wasn’t the best construction, but it was all the budget allowed. When raw materials arrived from Duluth and were stacked on the first floor, one Saturday, the weight tested the timbers—and the timbers lost. The floor of the new plant collapsed and every carton, bag and container landed in a heap in the basement.

3M sanding sponge

Failure #3:

With the plant finally restored, 3M faced quality problems. The company had sales of $212,898 in 1911, but disgruntled customers were sending its inferior sandpaper back. To make matters worse, 3M had no lab or technical expertise to figure out what was wrong with its sandpaper or how to fix it.

After weeks of frantic study, a worker noticed some crushed garnet left from manufacturing that had been tossed in a water pail.  The water’s surface was oily.  If the garnet had been contaminated with oil, it would resist glue and never stick to the sandpaper backing.

Piping 3M fire barrier mortar floor penetrations

Photo Credit: Achim Hering

SUCCESS

Retracing the route of the Spanish garnet shipment, 3M discovered that its sacks of garnet had crossed a stormy Atlantic Ocean with an olive oil shipment.  When the ship pitched and rolled, a couple of casks broke and oil soaked into the garnet bound for St. Paul.  3M was left with 200 tons of oily garnet and a pack of angry customers.  Fortunately, Orson Hull, 3M’s resourceful and determined factory superintendent, finally found a solution after many experiments.  He “cooked” the garnet and roasted the oil away.  That incident led to 3M’s first quality program.  *But, regaining the trust of customers would take much longer.

Cable tray penetration electrical service building 3M firestop mortar

For me, that’s a lot to take.  But 3M shows that if we learn from our mistakes, if we persevere, and if we explore possibilities, we can make positive contributions to the world:

  • The world’s first waterproof sandpaper, which reduced airborne dusts during automotive manufacturing, was developed in the early 1920s.
  • A second major milestone occurred in 1925 when Richard G. Drew, a young lab assistant, invented masking tape – an innovative step toward diversification and the first of many Scotch brand pressure-sensitive tapes

3M Scotch Extreme Mounting Tape3M Scotch Sealing Tape

Photo Credit: REisemann3937 and Fungkamseng

  • In the following years technical progress resulted in Scotch® Cellophane Tape for box sealing and soon hundreds of practical uses were discovered.
  • In the early 1940s, 3M was diverted into defense materials for World War II, which was followed by new ventures, such as Scotchlite™ Reflective Sheeting for highway markings, magnetic sound recording tape, filament adhesive tape, and the start of 3M’s involvement in the graphic arts with offset printing plates.
  • In the 1950s, 3M introduced the Thermo-Fax™ copying process, Scotchgard™ Fabric Protector, videotape, Scotch-Brite® Cleaning Pads and several new electro-mechanical products.
  • Dry-silver microfilm was introduced in the 1960s, along with photographic products, carbonless papers, overhead projection systems and a rapidly growing health care business of medical and dental products.
  • Markets further expanded in the 1970s and 1980s into pharmaceuticals, radiology and energy control.

3M Arthur Fry lightbulb Post-It

  • In 1980, 3M introduced Post-it® Notes, which created a whole new category in the marketplace and changed people’s communication and organization behavior forever.
  • In the 1990s sales reached the $15 billion mark. 3M continued to develop an array of innovative products, including immune response modifier pharmaceuticals; brightness enhancement films for electronic displays; and flexible circuits used in inkjet printers, cell phones and other electronic devices.
  • In 2004, sales topped $20 billion for the first time, with innovative new products contributing significantly to growth. Recent innovations include Post-it® Super Sticky Notes, Scotch® Transparent Duct Tape, optical films for LCD televisions, and a new family of Scotch-Brite® cleaning products that give consumers the right scrubbing power for a host of cleaning jobs.

Sources:

http://solutions.3m.com/wps/portal/3M/en_WW/History/3M/Company/At-a-Glance/

A Century of Innovation The 3M Story Book

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