Business Strategy

How has 3M's innovation process evolved since the company was founded? Why was 3M known as the hothouse of innovation?

There is no universal definition of innovation.According OECD innovation is defined as new products, business processes and organic changes that create wealth or social welfare. Similarly Ernest Gundling author of 3M way to innovation has defined innovation as ‘‘Innovation is more than just a bright idea; it is an idea that gets implemented and has a real impact. In other words, somebody has to make it happen.”

Innovation is distinguished from invention by the fact that innovation is usually applied successfully in practice. When innovation occurs, innovations may be spread from the innovator to other individuals and groups. This process has been proposed that the life cycle of innovations can be described using the´s-curve' or diffusion curve. The s-curve maps growth of revenue or productivity against time.

There are many phases of an innovative product.

 In the early stage of a particular innovation, growth is relatively slow as the new product establishes itself.

 At some point customers begin to demand and the product growth increases more rapidly.

 New incremental innovations or changes to the product allow growth to continue.

 Towards the end of its life cycle growth slows and may even begin to decline. In the later stages, no amount of new investment in that product will yield a normal rate of return.

Innovative companies will typically be working on new innovations that will eventually replace older ones. Successive s-curves will come along to replace older ones and continue to drive growth upwards. In the figure above the first curve shows a current technology. The second shows an emerging technology that current yields lower growth but will eventually overtake current technology and lead to even greater levels of growth. The length of life will depend on many factors. Open innovation is a paradigm that assumes that...