James McNerney and 3M: Making a Good Company Better?

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Case Details:


Case Code : LDEN047 For delivery in electronic format: Rs. 400;
For delivery through courier (within India): Rs. 400 + Shipping & Handling Charges extra


Corporate Leadership

Case Length : 19 Pages
Period : 2001-2006
Pub Date : 2007
Teaching Note : Available
Organization : 3M Company
Industry : Diversified
Countries : USA


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.

Leadership and Entrepreneurship Case Studies | Case Study in Management, Operations, Strategies, Leadership and Entrepreneurship, Case Studies

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.


To study the relationship between leadership and strategy, and the impact of a change in leadership on a company's overall strategy

To examine the pros and cons of choosing people for top leadership positions from outside the company, and to analyze the impact of the changes an outsider can bring about in light of a company's culture

To examine the role of a change agent at a company with a long history and powerful culture, and to examine the challenges change agents face at such companies

To examine the leadership style of a popular leader who managed to make a positive impact despite his radical decisions, and to analyze the reasons for his popularity

To examine the issues involved in succeeding a charismatic and popular leader, and the challenges successors face in living up to their predecessors


  Page No.
3M's New CEO 1
Background 2
Jim Mcnerney 4
Changing 3M 5
Restructuring 5
R&D Changes and Market Orientation 6
Financial Discipline 7
The China Focus 8
Six Sigma 8
Cultural Changes 9
A Popular Leader 11
Looking Back 12
Big Shoes to Fill 12
Exhibits 14


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

3M's New CEO - Next Page>>


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