"3M" comes from "Minnesota Mining & Manufacturing," but those
three M's might better stand for Mistake = Magic = Money. Throughout
its 101-year history, many of 3M's breakthrough products have
followed a similar arc: A 3M customer identifies a problem, and a 3M
engineer expresses confidence in being able to solve it. He bangs
his head against the wall for years, facing repeated setbacks, until
management finally tells him to stop wasting time and money.
Undeterred, the engineer stumbles onto a solution and turns a dead
end into a ringing success.
Lots of companies like to talk about giving employees the freedom
to make mistakes. But 3M found a way to incorporate random chance
into company policy, driving its transformation from a struggling
startup to a FORTUNE 500 mainstay. When Jim Collins and Jerry
Porras, co-authors of the besteller Built to Last (1994), asked Bill
Hewlett of Hewlett-Packard for a corporate role model, he replied,
"3M! You never know what they're going to come up with next. The
beauty of it is that they probably don't know what they're going to
come up with next either."
| Innovator |
William McKnight |
| Year started |
1902 |
| Family run |
59 years |
| 2002 revenues |
$16.3 billion |
| Factoid |
Folks used Scotch tape to patch
cracked turkey eggs and to coat
zeppelins. |
Although William McKnight, the man responsible for 3M's
entrepreneurial culture, was not, in fact, a company founder, he
does deserve the credit for what made 3M successful during his 59
years at the company and beyond. Says Noa Staryk, chair of the
McKnight Foundation, which McKnight founded in 1953: "There are two
values that resonate from my great-grandfather: innovation and risk
taking."
McKnight ended up at 3M by mistake. The company had turned him
down for a laborer's job in 1906, and when it wanted to hire him as
a bookkeeper a year later, he had already decided to accept a
position elsewhere. But upon hearing that his mother was ill, he
refused the job offer and prepared to go home--only to learn that
his mother had recovered. The only option left was 3M. It turned out
to be the best mistake that ever happened to the company.
The birth of 3M sounds like the beginning of a bad joke: A
lawyer, a doctor, two railroad execs, and a meat market owner form a
company in 1902 in Two Harbors, Minn., expecting to get rich.
Minnesota Mining & Manufacturing (quickly nicknamed 3M, although
that didn't become the company's official name until last year) set
up business to mine a superhard material called corundum, which
could be made into high-quality grinding wheels. But "like so many
others who organized mining ventures in the early 1900s," wrote
Virginia Huck in Brand of the Tartan--The 3M Story (1955), "the
founders of 3M apparently incorporated first and investigated
later." And their corundum turned into a conundrum: Instead of a
prized mineral, it was a soft rock and an inferior abrasive.
According to Huck, "By the end of 1904, 3M stock had dropped to the
all-time low on the barroom exchange--two shares for a shot, and
cheap whiskey at that." 3M's raison d'etre had suddenly evaporated.
The founders shifted gears, entering the abrasives business
directly by making their own sandpaper, even though their corundum
was virtually worthless as an abrasive. 3M had moved to Duluth,
Minn., to make the sandpaper, but the local humidity often kept the
product from drying properly. Into this comedy of errors came a shy,
red-haired 20-year-old, William McKnight, as an assistant
bookkeeper. "I was the scaredest boy that ever lived when I applied
for that job," he said. Wrote Huck: "His assets were a most brief
business school training [five months], inherent determination, and
high ambition. No one who saw the quiet, serious boy apply for the
job could have possibly predicted that in a very short time he would
become the major influence in the success of 3M."
McKnight was soft-spoken but also direct and efficient. As sales
manager in 1911, he established the policy of going into the
backroom with a client's workmen--where he could demonstrate 3M
products and learn their concerns--instead of just dropping off a
catalog in the front office with a purchasing agent. In doing so, he
realized that 3M's sandpaper was inconsistent at best, inferior at
worst. To increase quality control, he believed the company needed
someone to facilitate communications between sales and production.
Upper management agreed, and thinking McKnight perfect for the job,
named him general manager in 1914.
His tenure started--naturally--with a mistake. Just as the
company showed a profit, with sales at about $22,000 a month, angry
clients suddenly began returning 3M sandpaper. It turned out that
several casks of olive oil had spilled onto a shipment of 3M
abrasives in transit, and the oil-tainted "sand" failed to retain
its adhesion to the backing paper. And no one had noticed the
problem. After that debacle McKnight established a research lab to
test materials at every stage of production. It was a crude,
closet-sized affair--"I had to back out when Mr. McKnight wanted to
come in," recalled William Vievering, the first lab employee--but an
important first step.
McKnight's move to center the business on research ended up
having the dual effect of not only testing ideas but also generating
them. He set the tone with his philosophy of "Listen to anybody with
an idea." When he received a letter in 1920 from an ink manufacturer
requesting bulk mineral samples (not one of 3M's businesses),
McKnight wanted to know what the correspondent would do with the
minerals. A Philadelphia inventor named Francis Okie had sent the
note, and he wanted to develop his invention of waterproof
sandpaper. McKnight realized that Okie's idea would rapidly be
accepted because it produced less friction than dry sandpaper and
didn't generate hazardous dust when used wet. He bought the rights
to the idea and hired Okie, and by 1921, 3M had released Wetordry
sandpaper, its first breakthrough product. As Richard Carlton, 3M's
director of manufacturing and author of its first testing manual,
wrote, "Every idea should have a chance to prove its worth, and this
is true for two reasons: (1) If it is good, we want it; (2) if it is
not good, we will have purchased peace of mind when we have proved
it impractical."
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