We all know that 3M grows primarily with new products, generally products launched in the last 5 years. While MR have been the architect for all the big structural changes (SAP, Advance 3M, Spinco), the HUGE glaring problem is growth. And that falls on the CTO. Where are the big new products to grow mother mining? CTO can't claim credit for auto electrification products because that credit goes to the local technical VP. CTO is supposed to drive growth in broadly, all businesses, and that is sorely lacking. 3M employee jobs and company revenue is at stake, and sadly, while JB is a nice guy he is not effective!!!!
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CTO has a job since someone is needed for interviews with media to showcase 3M's perceived innovation capabilities.
Yeah / hang all of CTOC!!!
3M doesn't need 10% growth ('tho it would be nice). From where I am sitting, if 3M can get 2-3% volume growth that would be a great start. 2-3% volume growth + 3-4% product price growth = job stability for everyone + share price of $120!
3M doesn't have a CTO. The CTO of a technology driven company that has growth in it's mission, should be responsible for developing a pipeline of great new products. That pipeline is delivering a fraction of what it was 10 years ago. In fact, in some business groups the value of the pipeline is less than the cost of executing it. That is a complete and utter failure of the job description.
Sorry to be blunt but the whole of CTOC should be reassigned to something they are more able to do. Not sure what that is but it's clearly not innovation, new products or building new business.
You can't base it on Class 3 on its own in a vacuum. You have to take into consideration market saturation and competition. In addition, certain models of the iPhone was Class 4, but you're right that today's iPhone models are Class 3. And it shows with the slowing sales growth of the iPhone, and the acceptance of other brands of smartphone as being equivalent.
Ummm. iPhone sales leveled off a couple years ago.
@1pbo+1pg9YLo4
Tell that to Apple. iPhone sales have been growing inspite of each successive generation being class 3. Class 3 = line extension, so different size Command hooks count as class 3. Sure, there will be some cannibalization, but also some growth. All I know is that very "smart" people have been supporting class 5 projects over the last 10 years with very little to show. JB's data proves it!! As the saying goes, build on strength. The data shows 3M strength to be class 3 and 4. 3M is currently NOT growing. The same old formula is not working. Why not do more class 3 and 4 projects to grow 2-5%, then when the company has sufficient cash buy class 5. For example, 3M bought Membrana a few years back to get into a new space. The company just has to avoid buying the likes of Aearo or overpay for a company like KCI.
You don't really grow a company on Class 3 projects. Class 3 projects are just variations on current products. Of course their "success rate" is going to be higher than for a Class 5 game-changer. Easier to sell a different color, different size, etc than a whole new technology. You need the new technology to really grow. So many once-unique products are now commoditized --- and what is there to take their place?
Maybe the issue is who is selecting the Class 4 and 5 projects to work on.
Years ago, JB presented the success rates on class 5 projects in 3M. By definition, class 5 projects have a low success rate. But by any standards, 3M's success rate with class 5 projects was beyond HORRID!!! Yet, class 5 projects continue to be ubiquitous in all divisions and garner lots of resources. It is JB's job to reign in the percentage of class 5 (and 4 and 3) projects in the company. He has the data to prove his point, then does nothing about it. To me, that is ineffective. Put someone else in the position and drive class 3 and 4 projects to begin growing the company. JB's data showed 3M excelled at those class 4 (and 3) projects. SMH.
CTO will be among those blamed for this fiasco. Along with other C level and BT experts
I was working on a class 4/5 project when I was laid off. Management in my area just was not good at picking winner projects. Instead, projects that had EVP support received huge resources that ended up bleeding the company dry, with promises of huge sales that never materialized (year after year of "oh, we have so many big customers that are interested" ... for 5 years in a row!!!).
The company needs people who (1) can "make things happen", and (2) can pick winner projects.
And then lay off people working on Class 4 and 5....
The company is not set up to encourage new products. If we micromanage costs and punish for inefficiency then how would anyone advocate to launch a new product with the complexity of setting up new lines and figuring out how to source materials. Class 3 and line extensions is all we do because it is safe. That doesn’t drive growth. That just replaces one product with another option which is how we end up with over 50K products
I'll give you one example: Chris Holmes with Cubitron II abrasives. He wasn't the product developer but he bet his career and ASD's future. He ended up saving ASD's very existence.
Shame all the brave executives have been driven from the company.
Wow. Varys’ 3 reasons are spot on! Especially the second. I saw so many good projects or product opportunities wither away because the divisions weren’t incentivized to actually do new stuff. For all its faults, NPVI metrics at least drove visibility of the importance of doing new products.
To: @1rdl+1pg9YLo4
In support of your comment, I had a kind, insightful (business / marketing) boss who gave me really good advice years ago. It was: specific to your career path, stay away from any corporate “opportunity” that uses the term Initiative in its name. Basically, it’ll be a short term, short sighted, unproven Project du Jour that makes for a good C suite PowerPoint presentation only. Resource su-k with no viable results and even less accountability. I’m sure readers can list their “Initiatives” that made this list. I’ll start: Mining Initiative, Defense Markets Initiative, Renewable Energy Initiative… and?
"Three, there is plenty of technical opportunity for growth in 3M still. All the business needs to to is take the technology off the shelf. I've personally witnessed at least half a dozen industry-changing advancements get shelved because nobody wants to grow a new business in 3M anymore."
In the 30+ years I have been at 3M, I have watched 3M spin up initiatives like Renewable Energy most recently, and time after time, they tout it as the next big thing, and 2 -3 years later move the execs out and lay off everyone else. The message this sends around taking risk is crystal clear. In earlier days many of these people could still find jobs internally, but it still basically told you that you were an id--t for taking the risk on this new venture. I can't name one of these that became a success unless you maybe want to go way back to Optical Systems, but that mainly survived by starting out small and eventually growing. It was like they set them up to fail.
If 3M gave pay increases and promotions based on the previous 5 year track record with 20% based on each years results then 3M would turn around. As a manager/VP/Supervisor, If you backed something that cost a lot and then was gone completely in 2 years then that is a -20% on your career path. Likewise if you wrote code that had to be redone completely then that is also another -20%. Nobody cares about the long run. If a Manager/Employee was actually held accountable they would need to be invested in success. Promotions should ONLY happen based on the 5th years results. You did something new that is making money for 5 years straight then congrats! You get a promotion. Lets make results matter. Note that the CEO would be let go by now based on these rules.
There are a few things to unwrap here.
- First, Banovetz has grossly misunderstood his chief duty within 3M: To be a cheerleader for the labs in public and a powerful advocate for the labs in the boardroom. The CTO should never, and I do mean never, advocate for smaller labs and shorter term thinking, there are plenty of others in 3M to do that. The CTO's job is to be a counter-balance to short term and incremental thinking. The last CTO who understood this was Palensky.
- Two, the lack of new product growth is not the fault of the lab. It is the fault of the division and BG presidents. Their incentives have been structured to punish, I repeat punish, divisions for trying new products/businesses to grow their divisions.
- Three, there is plenty of technical opportunity for growth in 3M still. All the business needs to to is take the technology off the shelf. I've personally witnessed at least half a dozen industry-changing advancements get shelved because nobody wants to grow a new business in 3M anymore.
CTO can't do much if it is the division lab VP making the new product decisions. And the lab VP also can't do a lot since new product decisions seem to be made by marketing. It's a death spiral. They need to return new product decision making back to the lab.
Don't just blame the current CTO. Going back at least 12 years or more, CTOs have been pretty ineffective.
In fact after being here for about 22 years now, I don't know a single executive who has contributed to a single new 3M product or technology .....and no championing a new product or technology does not count....we will know what that means.
I don't see how a CTO can do much after all the lab cuts over the last few years.
He still has a job because all the 3M leaders only care about their short term compensation. The majority are not committed to seeing the company win. They are like little kids at Halloween just filling up their bank accounts and network connections so they can land the next job when they destroy this company.