3M’s British CEO Encourages Product Innovation
1 October 2010
3M manufacture some recognisable products and brands such as, Post-it notes, Scotch tape, and Thinsulate insulation. They are probably less well known for being the leading manufacturers of abrasive discs, sheets, wheels and belts. 3M Abrasive brands include Scotch-Brite, Green Corp, Hookit, Trizact, Wetordry, Roloc, Cubitron and Cubitron II.
Many other manufactures rely on 3M technologies, such as Apple who use 3M parts in their phones. The company produces around 55,000 products in total. These are developed not only for the manufacturing industry, but also for Transport, Offices, Electronics, Electrical and Telecommunications, Security, Heath Care and Home and Leisure Sectors. Products range from Touch Screen monitors, car soap and sandblasters to custom fit dog collars, equine bandages and lint rollers.
Perhaps not surprisingly then, in 2009, their total revenue was $23.1 billion and net income was $3.2 billion in net income. George Buckley, the chairman and CEO of 3M and a 63 year-old Brit with a Ph.D. in electrical engineering said, "(Last year) even in the worst economic times in memory, we released over 1,000 new products." 3M is in fact at No.106 on the Fortune 500 and it has not been suffering significantly under the recession. Sales grew 21% and net income 43% in the first half of 2010.
3M maintains its success by investing in research to expand their product base. They award annual Genesis Grants, worth up to US $100,000, to company scientists.
George Buckley has laid out a clear business plan for the company. He wants the managers to protect and strengthen 3M’s core businesses, like abrasives, whilst developing products to be a part of future growth markets like renewable energy, water infrastructure, and mobile digital media.
Last year, George Buckley kept R&D spending at more than $1 billion and altogether, 3M employs 6,500 people (out of about 75,000) in R&D. The ethos is to create hundreds of new products year after year. The percentage of 3M’s revenue from products introduced in the past five years is a steady 30% and is predicted to reach the mid-30s by 2012. For the abrasives industry this means new products like, Cubitron II, which is a new industrial abrasive that is said to cut faster, last longer, sharpen itself, and require less elbow grease than any other abrasive on the market. Introduced last year, it’s selling incredibly well and suggests that 3M have more interesting developments in store for the abrasives industry over the coming years.