European action

Date: 2015-10-07; view: 462.

Perpetual innovation

When asked to explain its own success, 3M begins with technological innovation.

3M is among the 25 companies with the most patents in the world - 11 of the 25 are Japanese, 10 are American and only four are European. The company spends some 6.5% of its total sales on research and development, almost twice the American average. And that has increased from about 4.5% at the beginning of the 1980s. The increase - part of the response to the less sparkling performance in the mid-1980s - adds a not-insignificant $200 million a year to the research budget.

3M sees its future as lying increasingly outside the United States. Europe accounts for some 30% of the company's worldwide sales and one-quarter of its employees. That puts 3M among the 300 largest companies in Europe.

The company has had subsidiaries in the region for almost 40 years and now has 17 different companies on the conti­nent and 14 major R&D centres. Since 1984 a number of European Management Action Teams (EMATs) have been set up under the direction of Joe Warren, 3M's Brussels-based vice-president in charge of Europe.

Briefly, 3M worldwide is divided into four sectors: industrial and electronics (36% of sales); information and imaging technologies (28%); life sciences (22%); and commercial and consumer (14%). These four sectors are divided into 15 "strategic business centres" (SBCs) - for audio-visual products, abrasives, etc. - and each centre is responsible for three or four of the company's 50 operating divi­sions. The operating divisions are run like small businesses and 3M staff say that each has its own culture.

Global strategy is determined by the business centres in St Paul. European • input comes "via group directors (one for each business centre based at 3M's European headquarters in Brussels. In addition, the European organisation has a number of product managers 'most of them in Brussels¹ plus managing direc­tors in charge of each of the 17 European subsidiaries. These subsidiaries are run nationally, with a few exceptions - for example, the MD of Spain is also the MD of Portugal, and the MD of the UK is also MD of Ireland.

Each of the 40-plus EMATs corresponds roughly to an operating division and has between eight and ten members drawn from different functions and different countries. Typically they meet every four to six weeks. In theory they have collec­tive responsibility for achieving the com­pany's European goals; in practice they spend much of their time discussing the launch of new products.

Although 3M has only 150 Americans working for the company outside the United States (even in the UK there are only six American employees), the lan­guage of the EMATs is English. Since these were the first formal means for more junior employees of different nation­alities to get together, the early discus­sions tended to be dominated by the fluent English-speakers: the British, the Dutch and the Irish. Now the company insists that a certain level of proficiency in English is a prerequisite for joining an EMAT, and team members are being trained to learn how to accommodate different cultures.

The future depends on how well the company has learnt to adapt to change. One of the greatest changes in its markets is occurring in Europe, and much hangs on the ability of the EMATs to come up with products that will meet the fast- shifting demands of 3M's European customers.