Abstract

3M was a company known for its innovativeness. In nearly 100 years of existence, the company had launched several breakthrough products, most of which were the result of its employees’ creativity and inventiveness. However, 3M’s culture of innovation had started weakening in the 1990s, and its financial performance had become lackluster. James McNerney, who was the first outsider to become the CEO of 3M, joined the company in 2001. Analysts believed that McNerney would act as a change agent who would provide the impetus for 3M’s renewed growth. This case discusses the steps taken by McNerney to restore 3M’s growth. Some of the changes implemented under McNerney’s direction include, a reorganization of 3M’s businesses, changing the focus of the company’s research and development activities to bring a greater customer orientation, imposing financial controls, increasing the focus on the growing Chinese market, and a commitment to leadership training at the company. McNerney was also responsible for the rather controversial decision of implementing Six Sigma at the company. Despite the changes he made (some of which were considered rather radical) McNerney was quite popular with the board and employees of 3M. The reasons for his popularity are examined in the case. The case concludes with a commentary on McNerney’s successor George Buckley’s performance in the first year of his stint at the company, and questions whether he can live up to his predecessor’s popularity.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Study the relationship between leadership and strategy, and the impact of a change in leadership on a company’s overall strategy Examine the pros and cons of choosing people for top leadership positions from outside the company, and to analyze the impact

Keywords

James McNerney, 3M Company, George Buckley, General Electric Company , Six Sigma, Organizational Culture, Innovation, 15 Percent Rule, Leadership Training, 3M Acceleration, Accelerated Leadership Development program, Boeing Company, Restructuring