Chapter 100 Section 2 Dow Evergreen (3M)

The Dow Jones, the most influential stock index in the world, only covers 30 companies.However, these 30 companies are the most representative large companies in the US economy, with long-term stable development, and are related to the lifeline of the US economy.Dow Jones is constantly weeding out obsolete companies and absorbing new blood. Cisco, Intel and Microsoft have been added in recent years.And many once-great companies such as U.S. Steel and AT&T before the merger were eliminated.Due to the changes in the industry in the United States and the world, there are very few companies that have been in the Dow Jones Index for decades, and 3M is one of the rare companies.By 2007, 3M had 70,000 employees worldwide, achieved an output value of US$24 billion, and a net profit of US$4 billion.

Everyone learns about 3M differently.Many people know 3M because of its Scotch tape, and early PC users because it is a floppy disk. Housewives may know 3M through its dishcloths, and various practitioners of consumer electronics may know 3M. It is one of the largest LCD manufacturers in the world today, and there are many engineers who have dealt with 3M directly and indirectly.No one can quite tell what 3M does.Some readers may wonder what this company with its assortment of products has to do with our "top of the wave."I introduced it into this series because it is recognized as the most innovative company in the world, and it is one of the few evergreens that can continue to grow in the world economy where industries are constantly changing.

3M's past full name is Minnesota Mining and Manufacturing Company.Its acronym is three M, people used to call it 3M.Later, 3M was known to everyone, but no one knew its original name. Since 2002, it simply changed its name to 3M Company. 3M was born on the banks of Lake Superior in Minnesota in the early twentieth century. It was originally engaged in the mining industry, as you can see from its name.In order to compete with its peers, the boss of 3M encouraged workers to invent and create new products, and set up a research and development department. Those new products continued to replace existing products and became the company's new core business, making the company's continuous successful transformation. The most legendary story of 3M Company so far is the invention of Scotch tape.

It was Dick Drew, a little guy from 3M, who invented tape. One day in 1925, the technician Zall went to work in an automobile painting factory.At that time, two-color cars were popular in the United States, but painting was a hassle.The technology at that time was very backward. The workers of the automobile factory first sprayed one kind of paint on the car, and then used glue to paste old newspapers on the car to block the places that did not need to be painted, and then sprayed the second paint.It is difficult to control the quality of the newspaper with glue. If there is too little glue, the newspaper will not stick, and the second paint is not sprayed neatly; if too much glue is used, not only will it not be wiped clean, but it will also damage the appearance of the car body.Zhuoer overheard the complaints of the workers, and deliberately invented a tape that can be firmly attached to the joints of the two colors and can be easily torn off.

After Zhuoer went back, he started studying the tape in private. The boss didn't say anything when he saw that he was "not doing his job properly", letting him do what he wanted.Soon, Zall invented a kind of self-adhesive tape, named Scotch, the original intention was to spoof his boss in Scotland (Scotchland), unexpectedly this tape and its name became popular all over the world.Since then, adhesive tape has become the main business of 3M, and various adhesive tapes have been developed for different occasions.Don't underestimate these small tapes. Until ten years ago, its market was larger than that of the entire semiconductor industry, and 3M once controlled 40% of the global tape market.Not only that, but there is also a lot of knowledge in the tape. 3M's adhesive tape family includes hundreds of types of optically transparent double-sided tape, optically transparent adhesive, conductive tape, thermally conductive tape, insulating tape, shielding tape, high temperature tape, hot-melt tape, shading tape, black and white double-sided tape and warning tape, among which There are some we can neither name nor imagine their use.I myself once had an adventure with a special tape.That time I took the plane from Chicago to Seattle, and I waited in the plane for a long time before the plane took off.The captain told everyone that there was a door the size of a brick on the wing that couldn't be closed.It was midnight, and no mechanic could be found to fix it in a short time, and all the passengers were in a hurry.In the end, the airline decided to use a kind of "speed tape" to tape the loose door and send us to the sky.Along the way, I was worried and looked at the patch made of tape through the porthole of the plane from time to time, for fear that it would be blown off by the wind.To my relief, the plane flew at a speed of 900 kilometers per hour for more than three hours, and the tape was not blown away by the strong wind.From then on, I gradually realized that there is a lot of knowledge in a small tape.

3M has invented 60,000 kinds of large and small products so far, and half of the people in the world come into contact with 3M products directly or indirectly every day.One-third of the company's turnover comes from inventions in the past five years, a considerable portion of which is made by employees doing non-work research during working hours. 3M allows employees to spend 15% of their time doing whatever they like. Later, this practice was learned by Google and became Google's "20% project".Among the most innovative companies, 3M ranks ahead of Google and Apple, which are known for innovation.Innovation is the more fundamental reason why 3M has been prosperous for nearly a hundred years and has successfully transformed from a mining company to an electronics and daily necessities company.Because every employee of the company always has the string of innovation in their minds, 3M can always come up with some useful gizmos with the development of technology and industrial changes over time.And these seemingly small inventions can open up a big market.

In the 1980s, with the popularization of personal microcomputers, the use of computer floppy disks increased greatly. By the peak of the mid-1990s, the global floppy disk market had reached US$300-400 billion.Readers who started using computers in the 1980s and 1990s must still remember 3M floppy disks, which are recognized as the best floppy disks, and of course they are also the most expensive.My own understanding of 3M started with 3M floppy disks. 3M has always occupied one-sixth of the global floppy disk market, and its market share is the highest among all floppy disk manufacturers.The floppy disk was invented by IBM. After IBM, there are hundreds of floppy disk manufacturers in the world, because the floppy disk is not a high-tech product. The reason why 3M was able to catch up with others and become the leader in this industry is that, in addition to its stable product quality, it mainly relies on an invention patent—a special anti-mold sleeve in a floppy disk.Readers who have dissected a floppy disk know that after opening the plastic casing of the floppy disk, you can see a white cloth protective film between the disk and the casing, which is the anti-mold cover of the floppy disk.Its function is to prevent the floppy disk from growing mold, and at the same time ensure that the disk will not be scratched by the plastic casing when it is rotated.Almost all floppy disk manufacturers know that the disk is the core of the floppy disk, and its quality is the most important, so there is no problem with a decent brand of floppy disk.However, the quality of this small anti-mold sleeve varies widely. In order to reduce costs, some cheap floppy disk manufacturers use very cheap paper sleeves. With such a small invention, 3M has turned into an annual turnover of hundreds of millions of dollars.Of course, when microcomputers were booming, 3M established a large storage device department. In addition to floppy disks, it also produced magnetic tapes, optical disks, and read-write devices.

Of course, the IT industry is updated very quickly, and a market may not exist for a few years, and new markets will continue to emerge at the same time.Most companies disappear as a product market declines.For example, we can no longer see the computer floppy disks that have been widely used for 20 years, the video and audio tapes that have been widely used for 30 years, and the photographic film with a history of more than 100 years.Many companies that specialize in these products, including the famous Kodak, have either closed their doors or are in decline.A company must continuously launch new products to make up for the shrinking market of old products.At the same time, new markets spawn new companies. 3M always has countless inventions as technical reserves, and when new markets arise, it can always catch the express train of emerging markets.We mentioned in the previous law of genetic determination that within a large company, the executives of existing departments will have a great say because they bring profits to the company, and will consciously or unconsciously obstruct the development of new product departments.In order to transform smoothly, the company must make up its mind to separate the old products while developing new ones.Therefore, when floppy disks, tapes, and other computer storage devices became slow-growing and low-margin products, 3M decisively separated this department and listed it separately, which is now Imation Corporation.

After floppy disks and computer storage devices, 3M's fastest-growing product was liquid crystal display products.Of course, liquid crystal products and storage devices are two different things. The invention of liquid crystal products was not done by engineers who developed computer floppy disks in 15% of the time, but by some scientists and engineers in 3M's original materials and chemical departments. Liquid crystal is a substance that has the dual characteristics of solid crystal and liquid at the same time. The word "liquid crystal" is named after this. It can flow and has the optical properties of crystal.Liquid crystals are very sensitive to electromagnetic fields. Under the action of electromagnetic fields, the arrangement of its molecules will change, so that the brightness of light can be determined by controlling the polarization direction of light, and a display film can be made according to this principle.Liquid crystal was invented by Austrian scientists more than 100 years ago, but it was used in display devices by Japan's Seiko Epson Company more than 80 years later. 3M is far from the inventor of liquid crystal display film, or even its early manufacturer, but it has come from behind and become the main manufacturer of liquid crystal display film in the world today.Now 40% of its annual revenue and one-third of its annual profit come from LCD products.And this performance also relies on a key invention - Bright Enhance Film (BEF for short).

The biggest problem of liquid crystal film as a display is insufficient brightness, and 3M’s light-enhancing film technology can double the light transmittance of liquid crystal film, so the display and TV produced by 3M’s LCD have high brightness, bright colors, and power saving . 3M therefore occupied a large LCD market.Since 2007, 3M's LCD sales have exceeded $10 billion. It is not difficult for a company to succeed for a period of time, but what is difficult is to be prosperous for a hundred years. As a century-old evergreen tree, 3M has many successful experiences worth learning from. 3M is also one of the most studied companies in business school tutorials.I personally think that there are three key reasons why it can continue to transform: two are easy to see and one is hidden behind.

The first rule of thumb is that most people who study management know that innovation is the soul of the company. 3M has always emphasized that one-third of its turnover must come from innovations in recent years, so that it can remain invincible in today's continuous technological development.In order to encourage innovation, the company not only allows employees to spend 15% of their working time on innovation, but also has great flexibility in their work arrangements and plans, so as to ensure that employees can let go. 3M even hopes that managers at all levels will be tolerant and tolerant to projects proposed by their subordinates that they do not agree with, so as not to stifle potentially successful inventions. The second is not hard to see but not easy to do. 3M will forcefully eliminate some products that seem to be making money but have a poor prospect at an appropriate time.When 3M's computer storage equipment and products were still making money, it sold it decisively.In the minds of many operators, there is no need to abandon old businesses to develop new businesses, not to mention that old businesses are still making money.However, as we pointed out in the previous law of genetic determination, the executives of the old business unit have a great say in the company because they have been making money for the company, and they are likely to hinder the company's transformation for the benefit of their own department.Therefore, a company with a long-term vision will sell a division with less than rosy prospects while it is still worth money. The third one is ignored by many people, that is, 3M's inventions and products are aimed at the majority of users, and they are consumable.Compared with products for enterprises, these products have relatively stable turnover, which is very, very important.As we mentioned earlier, when a company transforms, the biggest problem it encounters is Handan learning to walk.The old industry is in decline, and the income is decreasing, but in the new industry, it starts from scratch, loses the original advantages, and cannot make profits in a short time.In this way, the efficiency of the entire company declines, and it is easy to be abandoned by Wall Street investors.However, 3M has a large number of products, most of which have stable sales and profits, providing 3M with sufficient financial resources to ensure that its new products are launched and occupy the market.This is difficult for many companies, especially those specializing in enterprise products and services.Because enterprise-level products and services are too affected by the economic environment, income is relatively less stable than consumer products. These three experiences have ensured that 3M has continued to innovate and thrive for a century.These experiences have long been written into textbooks, but there are not many managers who can really do it, which shows that 3M is not simple.