3M 2010 Annual Report Download - page 4

2 Driven to Innovate
still plenty more to grapple with. We know that growth
at a company like ours is not always achieved easily or
smoothly. There are always countless dials to turn and
multiple levers to push to keep things moving on the
right trajectory and in proper balance. As we’ve worked
to maintain that balance, we’ve learned a few things
about what we are good at and also about areas where
we still can improve. But there is no longer any doubt
that the people of 3M understand the calculus of higher
growth, how to get it and what to do to accelerate it.
We can all be proud of the way 3Mers have
demonstrated their ability to tackle several big
challenges at once. We’ve shown that we can
successfully manage a number of “boil the ocean”
programs simultaneously, for example, revitalizing
innovation, making major changes to our manufacturing
footprint, driving down taxes and localizing our
laboratories and leadership. We’ve been able to make
these important changes even as we continue to deliver
superior results.
Perhaps the most important of these efforts is the
rekindling of the innovative spirit at the company. If it
were possible to show you literally, you would see a
figurative forest fire of innovation taking place all across
the company. We’ve not seen anything like this since
the 1970s and it is utterly marvelous to see. While
everyone in the company, whether in sales, marketing,
manufacturing, procurement and administration has
played a vital role in driving this, 3M’s scientists, process
engineers and innovators still remain the single most
important competitive advantage we have, everywhere
in the world. They are the engine room of our progress,
and the collective imagination of our creative people is
ultimately the birthplace of our success. This vital and
core part of our culture is what we need to protect and
foster into the future. So long as we drive this creativity
and at the same time continue to run our manufacturing
operations at world-class levels, we have relatively few
things to fear.
Our people create technology and product platforms
unequalled in breadth anywhere . . . and as they do so,
they are inventing the future for 3M. In recent years
we’ve worked hard to unleash the power of 3M’s
scientists and process engineers by getting them back
in the business of invention. Their efforts have driven
the New Product Vitality Index (NPVI) to 31 percent in
2010, compared with numbers in the low twenties just a
few years ago. We did this through world-class science
and process engineering. The ability to leverage and
cross-pollinate science across multiple application and
markets is our heritage, but it is also our future.
In 2010, investments in Research and Development
and in New Business Ventures spurred those innovation
efforts. The time was right and 3M’s financial strength
could support these investments in our future. Yes,
investments of this type are somewhat risky, in that we
can’t always tell which will be successful and which
won’t since there is no data on the future. But the
alternative of not investing in our future is far more risky.
In the coming year we expect to see growing payoffs as
these ventures gain traction in the marketplace. But one
thing is clear: we are back in the innovation business,
creating chain reactions of new ideas and developing
multiple technology and product platforms through the
creative applications of science.
It makes us proud to say that 3M is probably the last of
the world’s great broad science-based companies. This
is the real basis of our competitive advantage, using
science from a vast array of patents and capabilities,
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